May 272019
 
 May 27, 2019  Posted by at 9:19 am Finance Tagged with: , , , , , , , , , , ,  


Pablo Picasso Landscape 1928

 

Europe’s Biggest Blocs Lose Grip On Power (BBC)
Centrist Bloc Loses Majority In EU (CNBC)
UK Tories And Labour Savaged As Voters Take Brexit Revenge (G.)
Nigel Farage Demands A Seat At Brexit Talks (R.)
US Efforts To Jail Assange For Espionage Grave Threat To Media (Rusbridger)
S&P 500 Would Be 19% Lower Between 2011 And Q1 2019 Without Buybacks (CNBC)
Fiat Chrysler Puts Merger Offer To Renault Board (R.)
China’s Small Bank Bailouts Duck Bankruptcy Test (R.)
US Army Twitter Question Highlights Toll Of America’s Wars (AFP)
Peru, Colombia, Ecuador And Bolivia Denounce Decision On Amazon Domain (R.)
World’s Rivers ‘Awash With Dangerous Levels Of Antibiotics’ (G.)

 

 

They’ve managed to fool people into thinking this has relevance. Both big blocks lose bigly, but they will still deliver Juncker’s successor. And the Commission decides the big issues. Yawn.

Europe’s Biggest Blocs Lose Grip On Power (BBC)

The big centre-right and centre-left blocs in the European Parliament have lost their combined majority amid an increase in support for liberals, Greens and nationalists. The centre-right European People’s Party remains the largest bloc, and is expected to form a pro-EU coalition. The Liberals and Greens had a good night, while nationalists were set for victory in Italy and France. Turnout was the highest for 20 years, bucking decades of decline. Populists gained ground in some countries but fell short of the very significant gains some had predicted.


In the UK, the newly-formed Brexit Party claimed a big victory, and a strong performance by the Liberal Democrats came amid massive losses for the Conservatives and Labour. Analysts said the EPP was likely to form a “grand coalition” with the Socialists and Democrats bloc, with support from the Liberals and Greens. The turnout bucked a long trend of decline in voter numbers, rising to just under 51% of eligible voters across the 28 member states.

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751 overpaid lackeys.

Centrist Bloc Loses Majority In EU (CNBC)

The EU Parliament will be much more fragmented over the next five years with the established centrist bloc set to fall short of securing a majority at this week’s election, early results show. The current projection from the European parliament is that center-right and center-left blocks will end up with a total of 329 seats out of 751.The lack of a majority for the centrist bloc — the center-right European People’s Party (EPP) and the center-left Socialist and Democrats (S&D) which has held power in Brussels for several decades — could further complicate decision-making at the European Union.


Pro-EU parties will hold onto two-thirds of the seats at the EU Parliament, but their nationalist opponents have also produced solid results. Italy’s anti-immigration Lega party has reportedly secured 28 seats, essentially doubling its level of national support. Euroskeptic groups in France and the U.K. look to have held the gains they saw in 2014 but that said, the results on Monday morning suggested a strong showing for Liberal and Green parties.

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Time for Corbyn to leave.

Fun: both sides, remain and leave, claim that overall, they won.

UK Tories And Labour Savaged As Voters Take Brexit Revenge (G.)

An insurgent Brexit party and reinvigorated Liberal Democrats have delivered a harrowing night for the Conservatives and Labour at the European elections, prompting profound soul-searching at the top of both major parties. Nigel Farage’s Brexit party humiliated the Conservatives in their rural heartlands but also made sweeping gains in cities such as Cardiff, Leeds and Sheffield, as well as in Hillingdon, the home of Boris’ Johnson’s seat where the Tories were pushed into fourth. Farage’s success campaigning in favour of a no deal Brexit is likely to push the Conservative leadership candidates into hardline positions on leaving the EU.

Jeremy Hunt, the foreign secretary, warned the Conservative were facing an “existential threat”, while Johnson said it was a “crushing rebuke” to the government’s failure to take the UK out of the EU. The night also confirmed an extraordinary revival of the Lib Dems, who overtook the Tories in Theresa May’s Maidenhead seat and came first in Jeremy Corbyn’s north London home of Islington. Overnight, the Brexit party gained 28 seats, with the Lib Dems in second on 15 seats. Labour held 10, having lost seven so far, the Green party won seven, a gain of four, and the Tories were languishing in fifth place, with just three seats.


The results so far show that the hard Brexit vote totalled 34.9% – with the Brexit party on 31.6% and Ukip on 3.3%. The overall total for pro-leave parties was up at 44% including the Conservatives on a historically low 9.1%. The pro-remain vote added up to 40.3% – with the Lib Dems on 20.3%, the Greens on 12.1%, the SNP on 3.5%, Change UK on 3.4% and Plaid Cymru on 1%. Labour, which tried to appeal to both sides with a soft Brexit pitch or a possible confirmatory referendum, was on 14.1%.

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A Brexit now would lead to civil war. Don’t do it. Postpone.

Nigel Farage Demands A Seat At Brexit Talks (R.)

Nigel Farage demanded a seat at Brexit negotiations on Monday after his new party swept to victory in the United Kingdom’s European Parliament election, warning that he would turn British politics upside down if denied. Farage, a bombastic 55-year-old commodities broker-turned anti-establishment supremo, won by riding a wave of anger at the failure of Prime Minister Theresa May to take the United Kingdom out of the European Union. As May’s Conservative Party prepares to pick a new leader, Farage had a warning for the next prime minister: A say in the United Kingdom’s biggest decision since World War Two.


“We should be part of the team now, that’s pretty clear,” Brexit Party leader Farage told Reuters at an election count in the southern English city of Southampton. After repeated delays to Brexit, Farage said the United Kingdom had to leave the EU on Oct. 31, the current deadline for Britain’s parliament to agree an exit deal. Farage would prefer to leave without a deal. “If we don’t leave on that day, then you can expect the Brexit Party to repeat this kind of surprise in the next general election,” he said.

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Alan Rusbridger is the former editor of the Guardian that publishes Luke Harding’s smear pieces on Assange. But now it’s the very same Guardian that feels threatened.

US Efforts To Jail Assange For Espionage Grave Threat To Media (Rusbridger)

As editor of the Guardian, I worked with Assange when we jointly (along with newspapers in the US and Europe) published other material Manning had leaked. Vanity Fair called the resultant stories “one of the greatest journalistic scoops of the last 30 years… they have changed the way people think about how the world is run”. The stories were, indeed, significant – but the relationship with Assange was fraught. We fell out, as most people eventually do with Assange. I found him mercurial, untrustworthy and dislikable: he wasn’t keen on me, either. All the collaborating editors disapproved of him releasing unredacted material from the Manning trove in September 2011. Nevertheless, I find the Trump administration’s use of the Espionage Act against him profoundly disturbing.


The Espionage Act was a panic measure enacted by Congress to clamp down on dissent or “sedition” when the US entered the First World War in 1917. In the subsequent 102 years it has never been used to prosecute a media organisation for publishing or disseminating unlawfully disclosed classified information. Nobody prosecuted under the act is permitted to offer a public interest defence. Whatever Assange got up to in 2010-11, it was not espionage. Nor is he a US citizen. The criminal acts this Australian maverick allegedly committed all happened outside the US. As Joel Simon, director of the Committee to Protect Journalists, has observed: “Under this rubric, anyone anywhere in the world who publishes information that the US government deems to be classified could be prosecuted for espionage.”

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Lowballing.

S&P 500 Would Be 19% Lower Between 2011 And Q1 2019 Without Buybacks (CNBC)

Buybacks have gotten a bad rap from both Republican and Democratic lawmakers this year. But the stock market would be trading at a much lower level without them. Data compiled by Ned Davis Research shows the S&P 500 would be 19% lower without buybacks. The firm looked at the S&P 5002 s performance between the first quarter of 2011 and the first three months of 2019. Then they subtracted the amount of net monthly repurchases to arrive to that conclusion. The broad market is up more than 125% in that time while net buybacks have totaled about $3.5 trillion. “Without focusing too much on numbers, we can say that the S&P 500 index would probably be lower today if not for buybacks versus other uses of cash”, Ed Clissold, chief U.S. strategist at Ned Davis Research, wrote in a note last month.

Lawmakers on both sides are bashing buybacks and want to make it harder for companies to repurchase their own stock. They argue that buybacks inflate corporate executives’ pay and share price at the expense of a company’s workers. In a Feb. 20 Medium post, Sen. Charles Schumer, D-NY, said companies should reinvest their capital differently. Earlier in February, Schumer and Sen. Bernie Sanders, I-VT — a presidential hopeful — proposed in a New York Times op-ed that companies should provide living wages and health benefits to workers if a buyback program is launched. “At a time of huge income and wealth inequality, Americans should be outraged that these profitable corporations are laying off workers while spending billions of dollars to boost their stock’s value to further enrich the wealthy few, ” the senators wrote in the op-ed.

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Still owned by governments, for Pete’s sake. What year is this?

Fiat Chrysler Puts Merger Offer To Renault Board (R.)

Fiat Chrysler has made a “transformative” merger proposal to Renault, the Italian-American carmaker said, in a deal that would create a new third-ranked global manufacturer. The proposal, finalised in overnight talks with Renault, was being discussed at a meeting of the French group’s board early on Monday. The deal would create a carmaker selling 8.7 million vehicles annually with a strong presence across key regions, automotive markets and technologies, FCA said. It would generate 5 billion euros ($5.6 billion) in estimated annual savings. The “broad and complementary brand portfolio would provide full market coverage, from luxury to mainstream,” it added.

If successful, the FCA-Renault tie-up would alter the competitive landscape for rival carmakers from General Motors to Peugeot maker PSA Group, which recently held inconclusive talks with FCA. It could also have profound repercussions for Renault’s 20-year-old alliance with Nissan, already weakened by the crisis surrounding the arrest and ouster of former chairman Carlos Ghosn late last year. The FCA-Renault plan would see the two carmakers merged under a listed Dutch holding company. After payment of a 2.5 billion-euro dividend to current FCA shareholders, each investor group would receive 50 percent of stock in the new company.


[..] The French government, Renault’s biggest shareholder with a 15% stake, supports the merger in principle but will need to see more details, its main spokeswoman said on Monday. France will be “particularly vigilant regarding employment and industrial footprint,” another Paris official said – adding that any deal must safeguard Renault’s alliance with Nissan, which had recently rebuffed a merger proposal from the French carmaker. The Italian government may also seek a stake in the combined group to balance France’s holding, a lawmaker from the ruling League party said on Monday. [..] Nissan, which is 43.4%-owned by Renault, would be invited to nominate a director to the 11-member board of the new combined company, under the plan presented on Monday.

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“Shanghai’s Pudong Development Bank was fined for using 1,493 shell companies to hide non-performing loans.”

China’s Small Bank Bailouts Duck Bankruptcy Test (R.)

China is ducking a bankruptcy test. Baoshang Bank, linked to missing billionaire Xiao Jianhua, has been brought under state control. Despite threats, Beijing remains wary of allowing even disgraced local lenders to fail. Interest in Baoshang, based in Inner Mongolia, comes thanks to its colourful history. Its biggest stakeholder – and a major borrower – was Tomorrow Holdings, run by Xiao until he vanished in 2017 from a Hong Kong hotel. The insurance conglomerate’s assets are now being sold off piecemeal. Rickety municipal lenders are common in China, even if Baoshang is more precarious than most: a 2018 analysis by Jason Bedford of UBS named Baoshang as one of a trio of lenders with Tier 1 capital adequacy ratios below 8 percent, the lowest in his national survey.


City banks held just 13% of total assets in the first quarter of 2019, and rural lenders another 7%, but they represent an outsize share of the country’s financial risk. As the state giants attract the best, government-guaranteed clients, small fry make do with the rest, which means more duff debt. Ruses to cover up the damage are not uncommon: in 2018, Shanghai’s Pudong Development Bank was fined for using 1,493 shell companies to hide non-performing loans. Other lenders, like Bank of Dalian, have been bailed out repeatedly. The People’s Republic rolled out a deposit protection scheme in 2015. This theoretically allows poorly run banks to collapse without hurting ordinary depositors. But work is still in progress. The national insurance fund had only $12 billion at the end of September, and officials were still talking about creating an implementation agency in March.

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What did the army expect would happen?

US Army Twitter Question Highlights Toll Of America’s Wars (AFP)

Days ahead of an annual holiday when Americans remember those who died while serving in the armed forces, the US Army’s Twitter account asked people how their time in the military affected them and received an outpouring of grief. The question drew some 10,000 replies since it was posted late last week — many of which were anonymous or included details that could not be independently confirmed, but which paint a harrowing picture of the toll America’s wars have taken on those who fought them. “OEF, OIF ptsd with chronic pain,” one Twitter user wrote, using the US military’s acronyms for the wars in Afghanistan and Iraq, and the abbreviation for Post-Traumatic Stress Disorder. The US launched the war in Afghanistan in 2001 and the Iraq war in 2003.


The conflicts left thousands of American service members dead and many more wounded. US troops are still deployed in both countries to this day. “My dad came back from fighting in Iraq and was abusive, constantly angry, paranoid, and following that went through a lot of therapy but his mental and physical health are still off and he was definitely changed through all he had been through,” another user wrote. “My son served and did one tour of OEF, he made it back, re-enlisted, and shot himself in the head,” said another. “The ‘Combat Cocktail’: PTSD, severe depression, anxiety. Isolation. Suicide attempts. Never ending rage. It cost me my relationship with my eldest son and my grandson. It cost some of my men so much more,” another Twitter user wrote. “How did serving impact me? Ask my family.”

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Priorities. Question should be: which came first?

Peru, Colombia, Ecuador And Bolivia Denounce Decision On Amazon Domain (R.)

The presidents of Peru, Colombia, Ecuador and Bolivia criticized a recent decision by the organization that manages internet protocol to grant global retailer Amazon Inc the rights to the .amazon domain. Amazon Inc has been seeking the exclusive rights to the .amazon domain name since 2012. But Amazon basin countries – including Peru, Colombia, Ecuador and Bolivia – have argued it refers to their geographic region and should not be the monopoly of one company. The four leaders – Peru’s Martin Vizcarra, Colombia’s Ivan Duque, Ecuador’s Lenin Moreno and Bolivia’s Evo Morales – vowed to join forces to protect their countries from what they described as inadequate governance of the internet.


Last week, the global Internet Corporation for Assigned Names and Numbers (ICANN), which oversees internet addresses, said it decided to proceed with the designation requested by Amazon Inc pending a 30-day period of public comment. The decision sets “a grave precedent by prioritizing private commercial interests above the considerations of state public policies, the rights on indigenous people and the preservation of the Amazon,” Vizcarra, Duque, Moreno and Morales said in a joint statement on Sunday after a gathering in Lima of the Andean Community regional bloc. They added that Latin American and Caribbean countries agreed in 2013 to reject any attempt to appropriate the Amazon name or any other name that refers to geography, history, culture or nature without the consent of countries in the region.

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Intelligent species.

World’s Rivers ‘Awash With Dangerous Levels Of Antibiotics’ (G.)

Hundreds of rivers around the world from the Thames to the Tigris are awash with dangerously high levels of antibiotics, the largest global study on the subject has found. Antibiotic pollution is one of the key routes by which bacteria are able develop resistance to the life-saving medicines, rendering them ineffective for human use. “A lot of the resistance genes we see in human pathogens originated from environmental bacteria,” said Prof William Gaze, a microbial ecologist at the University of Exeter who studies antimicrobial resistance but was not involved in the study. The rise in antibiotic-resistant bacteria is a global health emergency that could kill 10 million people by 2050, the UN said last month.


The drugs find their way into rivers and soil via human and animal waste and leaks from wastewater treatment plants and drug manufacturing facilities. “It’s quite scary and depressing. We could have large parts of the environment that have got antibiotics at levels high enough to affect resistance,” said Alistair Boxall, an environmental scientist at the University of York, who co-led the study. The research, presented on Monday at a conference in Helsinki, shows that some of the world’s best-known rivers, including the Thames, are contaminated with antibiotics classified as critically important for the treatment of serious infections. In many cases they were detected at unsafe levels, meaning resistance is much more likely to develop and spread.

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Don’t think I ever heard of this girl until recently. She’s haunting.

 

 

 

 

May 192019
 
 May 19, 2019  Posted by at 9:48 am Finance Tagged with: , , , , , , , , , , , ,  


Caravaggio The calling of St. Matthew 1599-1600

 

E-Commerce Crushes Mall Retailers One by One (WS)
Democrats Run Out Of Stunts To Pull From Impeachment Playbook (Turley)
Salvini and Le Pen Rally To Unite European Nationalists In Milan (EN)
Nigel Farage Faces Investigation By EU Parliament Over Undeclared Gifts (Ind.)
UK Tories Will Split If Boris Johnson Becomes Leader, Warn MPs (Ind.)
Labour Panics As Remain Voters Switch To Liberal Democrats (G.)
Boeing Acknowledges Flaw In 737 MAX Simulator Software (AFP)
France’s ‘Yellow Vests’ Mark Six Months Of Protests (AFP)
Four More Chinese Cities Warned Over Pace Of Home Price Growth (R.)
You’re Not Getting Enough Sleep—And It’s Killing You (Wired)

 

 

Changing the look and feel of our towns and cities beyond recognition.

E-Commerce Crushes Mall Retailers One by One (WS)

E-commerce sales in the first quarter soared 12.4% from a year ago to $127.3 billion (not seasonally adjusted), the Commerce Department reported on Friday. Last year, e-commerce sales blew through the $500-billion level for the first time ($513.6 billion). For 2019, e-commerce is on track to hit $575 billion, an increase of $61 billion. Over the past five years, e-commerce sales have doubled. On a seasonally adjusted basis, e-commerce sales in Q1 hit an all-time high of $137.7 billion. E-commerce includes sales by the online operations of brick-and-mortar retailers. The top ones have huge and thriving online operations: Walmart, Home Depot, BestBuy, and Macy’s in that order are the fourth through seventh largest e-commerce sites in the US, behind Amazon, eBay, and Apple. So this is the business Macy’s brick-and-mortar stores are in:

But none of the major retailers, with one exception, disclose just how much of their own booming e-commerce sales have eaten into their brick-and-mortar sales. Macy’s, for example, just reported a decline in net sales in Q1 compared to a year ago, but “double-digit growth in our digital business” – the only thing Macy’s said about its e-commerce sales. With overall revenues declining and e-commerce sales booming, its brick-and-mortar operations must have been beset by plunging sales. But Macy’s keeps this data secret.

[..] People say that e-commerce accounts for only a small portion of total retail sales (10.2% in Q1) and therefore doesn’t matter. But this is misleading because e-commerce has not yet made major inroads into sales at gasoline stations, auto dealers, and grocery and beverage stores that together account for 52% of all brick-and-mortar sales. With those taken out of the tally, e-commerce now amounts to 23.6% of the remaining 48% of retail sales.

The stores that are directly targeted by e-commerce are the classic mall stores: Department stores (Sears Holdings, Bon-Ton Stores); book stores (see Borders, B. Dalton, Waldenbooks); video stores (Blockbuster); music stores (Tower Records); hardware and hobby (Orchard Supply Hardware); toy stores (Toys ‘R’ Us); jewelry and accessory stores (Claire Stores); sporting goods stores (Sports Authority); electronics and appliance stores (Circuit City, CompUSA); clothing and clothing accessory stores (Limited Stores, Pacific Sunwear, Aeropostale); and shoe stores (Payless Shoe Source).

So yes, e-commerce is only 10.2% of total retail sales. But it has already killed entire retailer categories, such as video stores, and is killing others while it is leaving other retailer categories essentially unscathed, such as gas stations, auto dealers, and grocery stores – though that may change in the future.

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The chasm is a mile wide. And impeachment is even further away than that.

Democrats Run Out Of Stunts To Pull From Impeachment Playbook (Turley)

Democrats had called for Mueller to appear before them on Wednesday. Mueller did not show, despite Barr showing a willingness to have him testify. Instead, the committee called for a hearing with constitutional experts to discuss the executive privilege claims raised by the White House. I was one of those experts, and the hearing did not exactly turn out as the Democrats planned. They have insisted that President Trump had already waived privilege to undisclosed evidence shown to Mueller. The committee witnesses, however, agreed that there is no such waiver. Worse, the witnesses agreed that Barr could not release the “full and unredacted report” to Congress including any grand jury, or Rule 6(e), evidence. That is in direct contradiction to weeks of demands for the unredacted report along with a subpoena that demanded disclosure of the entire report.

The committee maintained that “neither Rule 6(e) nor any applicable privilege barred disclosure of these materials to Congress.” Yet, the expert witnesses it called on have now testified that is not true. As I noted to the committee, the subpoena, which is the very basis for the earlier contempt vote, was demanding an unlawful act from Barr, and the committee then held him in contempt for not committing that unlawful act. The key to setting up someone for contempt of Congress is to draft a subpoena that he might actually be able to legally fulfill. Notably, despite all of the punditry and cable news coverage of it, the contempt citation has not yet been submitted to the full House for a vote, let alone to a court for review. That is probably not because the contempt case is too strong.

[..] One reason for the waning audience is that Democrats are stepping on their own lines. The week that their witnesses were contradicting the position of the House Judiciary Committee and the staff was marketing Mueller CDs, Democrats held a closed door party caucus. In it, House Speaker Nancy Pelosi reportedly told Democratic members she has no intention of moving on impeachment. Imitating disgruntled Democratic voters, Pelosi said, “Some of our folks are a little bit ‘Why are we not impeaching the president?” She then added, “They get a little down.”

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Guy Verhofstadt, Brexit co-ordinator for the European Parliament: “What links Strache, Le Pen, Salvini & Farage? They are all far-right, they all do Russia’s bidding & they all want to destroy the EU. They say they are patriots, I say they are traitors to traditional European values & freedoms.”

Collusion all over again. Blame someone else, never yourself.

The right has no choice but to unite, the EU parliament contains blocks of parties from at least 7 nations that are required to get seats. But what do these people really agree on?

Salvini and Le Pen Rally To Unite European Nationalists In Milan (EN)

Nationalist parties from across Europe held a rally on Saturday in Milan promising to reshape the continent through next week’s EU parliamentary election. Headlining the event was Italian Deputy Prime Minister Matteo Salvini and Marine Le Pen of France’s National Rally (RN). The two populists are eager for their Europe of Nations and Freedom (ENF) group to become the third largest party in Brussels. “There are no extremists, racists or fascists in this square,” Salvini said. “Here you won’t find the far-right, but the politics of good sense. The extremists are those who have governed Europe for the past 20 years.” Thousands of flag-waving supporters of Salvini’s League party packed a rain-soaked central Milan square to see far-right and anti-immigrant leaders from 11 European Union countries present a common front in their battle to pull back power from Brussels.


“This is a historic moment,” said RN leader Marine Le Pen, “we say no to this immigration which has submerged our nations, putting our people at risk,” she said, playing up an issue that has helped fuel support for nationalist groups. Hundreds of opponents gathered on the sidelines, their boos, jeers and whistles sometimes drowning out the speakers. “Fascists leave Milan,” they chanted as Salvini took the stage. The ENF also includes Austria’s Freedom Party, Belgium’s Vlaams Belang and the Netherlands’ Party for Freedom, whose head Geert Wilders was present in Milan. But despite their shared dislike of immigration and the EU, Europe’s populists remain divided on many key issues on the continent, including budgetary discipline, migrant distribution and relations with Moscow.

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He hides £450,000. They can fine him £8,800. Nuff said.

Nigel Farage Faces Investigation By EU Parliament Over Undeclared Gifts (Ind.)

Nigel Farage is facing an investigation by European parliament authorities over claims that he failed to declare nearly half a million pounds in gifts from an insurance tycoon under investigation by the National Crime Agency. It was claimed this week that the Brexit Party leader has been given as much as £450,000 in kind by Arron Banks, including a chauffeur-driven car, rent and bills on a £4.4m Chelsea home, and lavish trips to the United States to meet with right-wing politicians. But none of the gifts, detailed in invoices seen by Channel 4 News, were declared on Mr Farage’s register of interests with the European parliament, which is designed to prevent MEPs from keeping their conflicts of interests secret. In a letter seen by The Independent, one of the European parliament’s quaestors – MEPs responsible for the body’s financial and administrative matters – calls on the parliament’s presidency to “investigate these apparent contraventions as a matter of urgency”.

The push for an inquiry comes days before British voters are set to go to the polls for the European parliament elections, with Mr Farage’s Brexit Party thought to be heading for a runaway victory with an anti-EU, anti-establishment message. “As you will be aware, the code of conduct for members of the European parliament with respect to financial interests and conflicts of interest, in particular Article 6(1) of the implementing measures, makes it clear that members shall disclose their attendance at events organised by third parties where the reimbursement of their travel, accommodation or subsistence expenses, or the direct payments of such expenses, is covered by a third party,” Catherine Bearder, the quaestor who is also a Liberal Democrat MEP, said in the letter to Antonio Tajani, president of the European parliament.

“I can see no reference to any of the reported travel or accommodation subsidies related to Mr Farage’s US tour on any of his declarations of financial interests on the parliament’s website.” She noted that Mr Banks was “currently under investigation by the National Crime Agency over the source of his funding for the Brexit campaign”. [..] Under European parliament rules, Mr Farage could be fined up to around €10,000 (£8,800) through withholding of his subsistence allowance if he is found to have broken the rules. [..] Last year, in a separate run-in with expenses rules, Mr Farage had his MEP salary docked by more than £35,000 to recoup misspent EU funds intended for the staffing of his office.

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Not a much loved man. For good reason if you ask me.

UK Tories Will Split If Boris Johnson Becomes Leader, Warn MPs (Ind.)

Electing Boris Johnson leader on a no-deal Brexit ticket would risk a permanent split in the Conservative Party, a former minister has warned. The former foreign secretary has established himself as firm favourite to succeed Theresa May as prime minister in a contest many in Westminster expect to be triggered within weeks. It comes as the prime minister prepares to deliver a speech on Brexit this week, in what a government source billed as a “bold offer” to MPs in a last-ditch attempt to build support for her beleaguered Brexit bill in the Commons. A poll conducted shortly after he confirmed he would stand on Thursday put him on 39 per cent support among party members, well ahead of his nearest rival Dominic Raab on 13 per cent.

But he must first win his way through an MPs’ vote onto the shortlist of two presented to the membership in the country. Foreign secretary Jeremy Hunt is currently thought to be leading in the race to sign up MP supporters, with Mr Johnson, Mr Raab and Michael Gove grouped together some way behind, and a wide range of other potential candidates yet to make real inroads. But Phillip Lee, who quit Ms May’s government last year over her EU withdrawal policy, told The Independent that Mr Johnson would risk the Conservatives’ hold on power and the future of the party if he took it down a no-deal route.

It would be a “sweet irony” if the Brexit figurehead found himself forced to deliver a Final Say referendum because there was no majority in parliament for no deal, he said. “I don’t think it is necessarily a personality who splits the party, I think the policy might,” said Mr Lee, who now chairs the Right to Vote group of Tory advocates of a referendum. “I don’t think a no-deal Brexit leaves the party intact. If that becomes the policy of the winning candidate, expect interesting times to follow.”

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More panic. Everybody panics now. Like they couldn’t have seen this coming.

Labour Panics As Remain Voters Switch To Liberal Democrats (G.)

Senior Labour figures were engaged in a desperate battle to shore up the party’s support on Saturday night, amid warnings that its stance on Brexit was helping to “detoxify the Lib Dems”. With just days left before the European elections at which Nigel Farage’s Brexit party is expected to triumph, shadow cabinet ministers are among those concerned that Labour’s ambiguous position on Brexit has helped revive the Lib Dems. It comes as new polling seen by the Observer suggests Vince Cable’s party is running in first place in London and could even beat Labour overall.

One senior party figure warned: “If the consequence of Labour’s Brexit position and this European election is to essentially detoxify the Lib Dems, then that’s a real problem.” Clive Lewis, a shadow Treasury minister, said “lifelong Labour voters” would not back the party this week due to its Brexit stance. He added: “It feels like we’ve given [the Lib Dems] the political equivalent of resuscitation.”

The fears came as it emerged that: • London mayor Sadiq Khan has pledged that he will campaign for Remain “day and night” in any second referendum, as he urged voters, in an article for the Observer, to back Labour to stop a Farage victory. • Theresa May is planning to make one last “bold offer” to MPs in a desperate attempt to secure support for her Brexit deal, including changes demanded by Labour, Democratic Unionist and Tory MPs and a new round of indicative votes. • Labour MPs revealed they were already drawing up attempts to stop a no-deal Brexit should a hardline Brexiter replace May as prime minister, with some suggesting that revoking Brexit had to be a fall-back option.

An Opinium poll for the Observer found that the Liberal Democrats have narrowly overtaken Labour as the favourite party of remain voters, with 29% of the group now backing Cable’s party and 28% backing Labour.

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Not the plane, the simulator. Nobody has one, and won’t before Christmas. But they intend to fly the planes by August.

Boeing Acknowledges Flaw In 737 MAX Simulator Software (AFP)

Boeing acknowledged Saturday it had to correct flaws in its 737 MAX flight simulator software used to train pilots, after two deadly crashes involving the aircraft that killed 346 people. “Boeing has made corrections to the 737 MAX simulator software and has provided additional information to device operators to ensure that the simulator experience is representative across different flight conditions,” it said in a statement. The company did not indicate when it first became aware of the problem, and whether it informed regulators. Its statement marked the first time Boeing acknowledged there was a design flaw in software linked to the 737 MAX, whose MCAS anti-stall software has been blamed in large part for the Ethiopian Airlines tragedy.

According to Boeing, the flight simulator software was incapable of reproducing certain flight conditions similar to those at the time of the Ethiopian Airlines crash in March or the Lion Air crash in October. The company said the latest “changes will improve the simulation of force loads on the manual trim wheel,” a rarely used manual wheel to control the plane’s angle. “Boeing is working closely with the device manufacturers and regulators on these changes and improvements, and to ensure that customer training is not disrupted,” it added. Southwest Airlines, a major 737 MAX customer with 34 of the aircraft in its fleet, told AFP it expected to receive the first simulator “late this year.”

American Airlines, which has 24 of the aircraft, said it had ordered a 737 MAX simulator that will be delivered and put into operation in December. Only Air Canada has a MAX simulator, industry sources told AFP. Currently, there is only one flight simulator specific to the 737 MAX in the United States, and it is owned by Boeing, according to FAA documentation. US airlines train their pilots flying the MAX on a simulator built for the 737 NG, the version preceding the 737 MAX in the 737 aircraft family. [..] US airlines have targeted August as the date they expect to resume flying on the 737 MAX.

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Every single week the press cites the government saying numbers are down. Not credible. And Macron still suffers from foot in mouth disease: “democracy is not played out on Saturday afternoons “

Democracy plays out everywhere and all the time.

France’s ‘Yellow Vests’ Mark Six Months Of Protests (AFP)

“Yellow vest” protesters turned out across France Saturday to mark six months of rallies against President Emmanuel Macron’s policies, but with their numbers dwindling, according to a government tally. A day after Macron appeared to draw a line under the movement, yellow jacket activists – named after the fluorescent vests they wear – marched in Paris and several other cities for the 27th consecutive week. The count from the interior ministry – routinely dismissed by yellow jackets – put the numbers across France at 15,500, of whom 1,600 marched in Paris. That was down again from last week’s count of 18,600, suggesting a steady decline. The yellow jackets’ own tally put the nationwide total at 41,000.


The numbers were nevertheless certainly down from the massive turn-out at the beginning of the movement, when nearly 300,000 people protested across the country on November 17 in what became one of the biggest challenges to Macron’s government. But many of those who turned out on Saturday were determined to keep going. “When I hear Macron say that he has done his bit, I can’t agree, and that motivates me even more,” said Virginie, an executive secretary marching in the southern city of Montpellier. On Friday, Macron said he felt he had answered the questions raised by the movement and that there was no more to be done politically. Those who had other ideas about how the country should be governed should run for office themselves, he said. “But democracy is not played out on Saturday afternoons,” he added.

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Free market: “..a fine line between preserving stability and hurting market sentiment..”

Four More Chinese Cities Warned Over Pace Of Home Price Growth (R.)

China’s housing regulator has urged four more cities to prevent their residential property markets from overheating in the latest sign that authorities are not about to relax their grip on the real estate business in order to spur the economy. The cities of Suzhou, Foshan, Dalian and Nanning have been told by the Ministry of Housing and Urban-Rural Development to stabilize land and housing prices as well as market expectations, the official Xinhua news agency reported late on Saturday. Six other cities were warned by the ministry last month to monitor the growth of home prices in their markets, after some cities, including, Foshan quietly started to relax some curbs since December to spur demand.


China’s home property market is a key plank of the economy, influencing tens of related sectors such as construction and financial services. The sector has held up well despite a slowdown in growth in the world’s second-biggest economy, with policymakers walking a fine line between preserving stability and hurting market sentiment. Renewed tensions between China and the United States over trade have also added pressure on Chinese policymakers to keep the domestic economy on a stable footing, while continuing to fend off risks such as housing bubbles. Average new home prices in China’s 70 major cities rose 0.6% in April, unchanged from the pace of growth in March, according to a monthly official survey.

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No coffee.

You’re Not Getting Enough Sleep—And It’s Killing You (Wired)

According to neuroscientist Matthew Walker, I’m doing serious damage to my health—and life—by not sleeping enough. “The decimation of sleep throughout industrialized nations is having a catastrophic impact on our health, our wellness, even the safety and education of our children. It’s a silent sleep loss epidemic. It’s fast becoming one of the greatest challenges we face in the 21st century,” Walker, an expert in sleep at UC Berkeley and author of the best-selling book Why We Sleep, told a rapt TED audience on Thursday.

[..] He ran down all the ways in which sleep deprivation hurts people: it makes you dumber, more forgetful, unable to learn new things, more vulnerable to dementia, more likely to die of a heart attack, less able to fend off sickness with a strong immune system, more likely to get cancer, and it makes your body literally hurt more. Lack of sleep distorts your genes, and increases your risk of death generally, he said. It disrupts the creation of sex hormones like estrogen and testosterone, and leads to premature aging. Apparently, men who only sleep five hours a night have markedly smaller testicles than men who sleep more than seven.

“Sleep loss will leak down into every nook and cranny of your physiology,” he said. “Sleep, unfortunately, is not an optional lifestyle luxury. Sleep is a nonnegotiable biological necessity. It is your life support system.” [..] Everyone is obsessed with sleep. And they know they’re not getting enough—hence the growing demand for sleeping pills, the emergence of sleep tracking devices (Walker wears an Oura Ring to track his), smart beds, Alexa integrations to put you to sleep, and mindfulness sleep apps. Arianna Huffington famously left journalism to found a company devoted to sleep and wellness.

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May 102019
 


James McNeill Whistler Symphony in White, No. 3 1867

 

US Hikes Tariffs On Chinese Goods, China Says To Strike Back (R.)
Historic Lawsuit Could “Wreak Havoc” On The Leveraged Loan Market (ZH)
The Real Muellergate Scandal (Craig Murray)
From Russiagate to Gunboat Diplomacy (Jacobin)
FBI’s Steele Story Falls Apart (Solomon)
Roger Stone Wins Right To Receive Unredacted Parts of Mueller Report (SC)
Chelsea Manning Released After 2 Months, Might Be Back In Jail In 6 Days (RT)
The Law Being Used to Prosecute Julian Assange Is Broken (Ekeland)
Swedish Prosecutor To Give Decision On Assange Rape Inquiry (G.)
The Revelations of WikiLeaks: No. 2 (Vos)
Facebook Co-Founder Calls For Breakup Of The Company (ZH)
UK Tories Could Come Sixth In European Elections (G.)
America, You Are Fired! (Dmitry Orlov)
Chernobyl Has Become A Refuge For Wildlife 33 Years Later (Conv.)
Ireland Second Country To Declare Climate, Biodiversity Emergency (RTE)

 

 

Keep talking!

US Hikes Tariffs On Chinese Goods, China Says To Strike Back (R.)

U.S. President Donald Trump’s tariff increase to 25% on $200 billion worth of Chinese goods took effect on Friday, and Beijing said it would strike back, ratcheting up tensions as the two sides pursue last-ditch talks to try salvaging a trade deal. China’s Commerce Ministry said it “deeply regrets” the U.S. decision, adding that it would take necessary countermeasures, without elaborating. The hike comes in the midst of two days of talks between top U.S. and Chinese negotiators to try to rescue a faltering deal aimed at ending a 10-month trade war between the world’s two largest economies. Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin talked for 90 minutes on Thursday and were expected to resume talks on Friday.


The Commerce Ministry said that negotiations were continuing, and that it “hopes the United States can meet China halfway, make joint efforts, and resolve the issue through cooperation and consultation”. With no action from the Trump administration to reverse the increase as negotiations moved into a second day, U.S. Customs and Border Protection imposed the new 25% duty on affected U.S.-bound cargoes leaving China after 12:01 a.m. EDT (0401 GMT) on Friday. Goods in the more than 5,700 affected product categories that left Chinese ports and airports before midnight will be subject to the original 10% duty rate, a CBP spokeswoman said.

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Don’t worry, Fed to the rescue.

Historic Lawsuit Could “Wreak Havoc” On The Leveraged Loan Market (ZH)

Ask any banker (or analyst) what the difference is between a junk bond and a loan, and you’ll most likely get a blank start in response: starting with the size of the loan market, which is now virtually identical to that of the high yield bond market, continuing through the standardization of loan terms, the growth of secondary trading, and all the way through to “protections” granted to loan investors, which in an age of exclusively covenant-lite issuance, no longer exist, and one can argue that at least superficially, a loan is effectively the same as a junk bond. And yet, there is one critical difference between the two: junk bonds are securities, while loans aren’t. That difference, however, may not be true for much longer.

As Bloomberg reports, a group suing JPMorgan Chase and other banks over a loan that went sour four years ago is alleging the underwriters engaged in securities fraud. If successful, the article contends correctly, the lawsuit will “radically transform the $1.2 trillion leveraged lending market” because should the plaintiff ultimately prevail in arguing that loans are de facto securities, it would dramatically alter how American companies raise debt, according to two industry groups that filed a brief supporting the defendants’ argument last week. “There are absolutely enormous market consequences if a court determines that leveraged loans are securities,” J. Paul Forrester, a partner at Mayer Brown told Bloomberg. “Leveraged loans and lenders would be potentially subject to the same offering and disclosure requirements as securities and would face the same regulatory oversight and enforcement consequences.”

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Well, whaddaya know, there are people who agree with me… The VIPS, Assange, it’s all I’ve been talking about. I said Mueller is a coward and a liar, Murray calls him deeply corrupt. Same difference.

The Real Muellergate Scandal (Craig Murray)

Robert Mueller is either a fool, or deeply corrupt. I do not think he is a fool. I did not comment instantly on the Mueller Report as I was so shocked by it, I have been waiting to see if any other facts come to light in justification. Nothing has. I limit myself here to that area of which I have personal knowledge – the leak of DNC and Podesta emails to Wikileaks. On the wider question of the corrupt Russian 1% having business dealings with the corrupt Western 1%, all I have to say is that if you believe that is limited in the USA by party political boundaries, you are a fool. On the DNC leak, Mueller started with the prejudice that it was “the Russians” and he deliberately and systematically excluded from evidence anything that contradicted that view.

Mueller, as a matter of determined policy, omitted key steps which any honest investigator would undertake. He did not commission any forensic examination of the DNC servers. He did not interview Bill Binney. He did not interview Julian Assange. His failure to do any of those obvious things renders his report worthless. There has never been, by any US law enforcement or security service body, a forensic examination of the DNC servers, despite the fact that the claim those servers were hacked is the very heart of the entire investigation. Instead, the security services simply accepted the “evidence” provided by the DNC’s own IT security consultants, Crowdstrike, a company which is politically aligned to the Clintons.

That is precisely the equivalent of the police receiving a phone call saying: “Hello? My husband has just been murdered. He had a knife in his back with the initials of the Russian man who lives next door engraved on it in Cyrillic script. I have employed a private detective who will send you photos of the body and the knife. No, you don’t need to see either of them.” There is no honest policeman in the world who would agree to that proposition, and neither would Mueller were he remotely an honest man.

[..] Mueller’s failure to examine the servers or take Binney’s evidence pales into insignificance compared to his attack on Julian Assange. Based on no conclusive evidence, Mueller accuses Assange of receiving the emails from Russia. Most crucially, he did not give Assange any opportunity to answer his accusations. For somebody with Mueller’s background in law enforcement, declaring somebody in effect guilty, without giving them any opportunity to tell their side of the story, is plain evidence of malice. Inexplicably, for example, the Mueller Report quotes a media report of Assange stating he had “physical proof” the material did not come from Russia, but Mueller simply dismisses this without having made any attempt at all to ask Assange himself.

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Where would US media be without Russia?

From Russiagate to Gunboat Diplomacy (Jacobin)

One of the things Russiagate skeptics found unsettling about the frenzy over supposed “collusion” was that it made war more likely. Not only did the now-debunked conspiracy theories and resulting political climate push officials into a more aggressive posture toward Russia, but once the Kremlin was returned to its status as the foreign policy elite’s Big Bad, it was easy to imagine a situation where the threat of a Russian bogeyman could be used to justify any number of unrelated foreign adventures. This appears to be exactly what’s happening with Venezuela right now. First there was Fareed Zakaria, who two months ago tried to goad Trump into attacking Venezuela by pointing to Russia’s support for Maduro.

“Putin’s efforts seem designed to taunt the United States,” he said (it might also have something to do with the billions of dollars Russia sank into the country), making reference to the Monroe Doctrine. He asked if Washington would “allow Moscow to make a mockery of another American red line,” warning that “if Washington does not back its words with deeds” the country could become another Syria. Zakaria concluded: “will Venezuela finally be the moment when Trump finally ends his appeasement?” More recently, Secretary of State Mike Pompeo charged that Russia had “invaded” Venezuela before claiming the Kremlin had dissuaded Maduro from fleeing the country at the last moment, something Pompeo has provided no evidence for but much of the media has treated as fact since.

National Security Advisor John Bolton has said that “this is our hemisphere” and “not where the Russians ought to be interfering.” Democratic Sen. Doug Jones echoed this sentiment on CNN, praising the Trump administration for saying “all options are on the table” to deal with Venezuela, something he suggested may have to be acted on “if there is some more intervention [by] Russia.” The national press, taking a break from warning about Trump being a dangerous authoritarian, has been demanding to know why he hasn’t been more aggressive toward the country over this. Particularly shameless was Florida Rep. Mario Díaz-Balart, who went on Tucker Carlson’s show to peddle half-baked innuendo as brazen as anything claimed in the lead up to the Iraq War. If Maduro’s government survived, he claimed, it would be “a green light, an open door for the Russians and for the Chinese and for others to increase their activity against our national security interest right here in our hemisphere.”

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John Solomon digs on. “She quoted Steele as saying, “Payments to those recruited are made out of the Russian Consulate in Miami..” [..] “It is important to note that there is no Russian consulate in Miami.”

FBI’s Steele Story Falls Apart (Solomon)

The FBI’s sworn story to a federal court about its asset, Christopher Steele, is fraying faster than a $5 souvenir T-shirt bought at a tourist trap. Newly unearthed memos show a high-ranking government official who met with Steele in October 2016 determined some of the Donald Trump dirt that Steele was simultaneously digging up for the FBI and for Hillary Clinton’s campaign was inaccurate, and likely leaked to the media. The concerns were flagged in a typed memo and in handwritten notes taken by Deputy Assistant Secretary of State Kathleen Kavalec on Oct. 11, 2016. Her observations were recorded exactly 10 days before the FBI used Steele and his infamous dossier to justify securing a Foreign Intelligence Surveillance Act (FISA) warrant to spy on Trump campaign adviser Carter Page and the campaign’s contacts with Russia in search of a now debunked collusion theory.

It is important to note that the FBI swore on Oct. 21, 2016, to the FISA judges that Steele’s “reporting has been corroborated and used in criminal proceedings” and the FBI has determined him to be “reliable” and was “unaware of any derogatory information pertaining” to their informant, who simultaneously worked for Fusion GPS, the firm paid by the Democratic National Committee (DNC) and the Clinton campaign to find Russian dirt on Trump. That’s a pretty remarkable declaration in Footnote 5 on Page 15 of the FISA application, since Kavalec apparently needed just a single encounter with Steele at State to find one of his key claims about Trump-Russia collusion was blatantly false.

In her typed summary, Kavalec wrote that Steele told her the Russians had constructed a “technical/human operation run out of Moscow targeting the election” that recruited emigres in the United States to “do hacking and recruiting.” She quoted Steele as saying, “Payments to those recruited are made out of the Russian Consulate in Miami,” according to a copy of her summary memo obtained under open records litigation by the conservative group Citizens United. Kavalec bluntly debunked that assertion in a bracketed comment: “It is important to note that there is no Russian consulate in Miami.”

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What if the relevant sections did get redacted?

Roger Stone Wins Right To Receive Unredacted Parts of Mueller Report (SC)

A federal judge in Washington ordered the Department of Justice to turn over any unredacted sections of Special Counsel Robert Mueller’s report on Russian activities during the 2016 presidential campaign that relate to Roger Stone. U.S. District Judge Amy Berman Jackson gave the prosecutors until Monday to “submit unredacted versions of those portions of the report that relate to defendant Stone and/or ‘the dissemination of hacked materials.” Judge Jackson would review the material in private to see if it is relevant to the case and to decide whether Stone and his defense team will have access to the material.

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Is this a game?

Chelsea Manning Released After 2 Months, Might Be Back In Jail In 6 Days (RT)

Whistleblower Chelsea Manning has been released from a Virginia prison where she spent the last 62 days for refusing to testify on her 2010 leak of classified military files before a grand jury. Manning was released from William G. Truesdale Adult Detention Center in Alexandria, Virginia, on Thursday after the term of the grand jury before which she was supposed to testify expired, her legal team said in a statement reported by the Sparrow Project. However, the WikiLeaks whistleblower and activist might soon be locked up again and has already been served with another subpoena, requesting that she testifies before a different set of jurors. “Unfortunately, even prior to her release, Chelsea was served with another subpoena.


This means she is expected to appear before a different grand jury, on Thursday, May 16, 2019, just one week from her release today,” her lawyers said. Despite having spent over two months behind bars, Manning has no intention to cave in to the demand and make herself available to a secret grand jury’s questioning, according to the statement. “Chelsea will continue to refuse to answer questions, and will use every available legal defense to prove to District Judge Trenga that she has just cause for her refusal to give testimony.” Manning insists that she already gave an “exhaustive testimony” on all the matters concerning her disclosure of military documents at a 2013 court martial. In an 8-page declaration filed to the Virginia court on May 6, Manning accused the US government of using the “corrupt and abusive tool” of grand jury to “harass and disrupt political opponents and activists.”

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Taking us back to Aaron Schwartz.

The Law Being Used to Prosecute Julian Assange Is Broken (Ekeland)

[..] the UK courts will evaluate the US’s request to send Assange to Virginia to stand trial in federal court for a single felony charge of conspiracy to commit unauthorized access to a government computer, a violation of the Computer Fraud and Abuse Act (CFAA). After Assange’s arrest, many reached out to ask me about the CFAA. For years, I’ve represented hackers in federal criminal cases nationally involving the CFAA, including Lauri Love, whom the US unsuccessfully tried to extradite from the UK. The US indicted Love in three separate federal courts in New York, New Jersey, and Virginia, for hacking of a number of government sites including NASA, the FBI, the United States Sentencing Commission, and the Bureau of Prisons.

This was part of #OpLastResort, in protest of the CFAA prosecution and death of computer science pioneer Aaron Swartz, whose suicide in 2013 was widely viewed as resulting from a draconian CFAA prosecution. Whether intended or not, the CFAA makes it easy for a prosecutor to bring felony computer crime charges even when there’s little or no harm. [..] The core problem with the Computer Fraud and Abuse Act is that it doesn’t clearly define one of the central things it prohibits: unauthorized access to a computer. The courts across the country aren’t any help on this front, issuing conflicting decisions both with other jurisdictions and often within their own. Under the CFAA, what is a felony in one jurisdiction is legal in another.

This lack of definitional clarity allows prosecutors to charge felonies even when the harms are minimal, questionable, or just political views that DOJ doesn’t like. This is a serious problem, given that much political speech and protest these days is done with computers. And DOJ has previously used the CFAA in a politically charged prosecution. In 2011, DOJ charged the politically outspoken Aaron Swartz under the CFAA for going into an open server closet at MIT, a mecca of modern American hacking, and downloading academic articles—many of which were publicly funded—for public distribution. Even though the extent of any harm was questionable—this was a mere copying of articles—DOJ charged him with felony unauthorized access to a computer, unauthorized damage to a protected computer, felony aiding and abetting of both, and wire fraud.

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All Swedes need to be deeply ashamed. Is it too much to ask of you to let your voices be heard? All I hear is silence.

Swedish Prosecutor To Give Decision On Assange Rape Inquiry (G.)

Sweden’s state prosecutor will announce on Monday whether she will reopen a preliminary investigation into a rape allegation against Julian Assange. The WikiLeaks founder is in prison in Britain after he was arrested last month after seven years holed up in the Ecuadorian embassy in London. The US wants to extradite him in a case relating to WikiLeaks’ massive release of sensitive military and diplomatic documents. Sweden’s legal tussle with the Australian Assange has dragged on for nearly a decade after he was accused by two Swedish women of sexual assault and rape in 2010.


The statute of limitations ran out on the sexual assault allegations in 2015 and the prosecutor dropped the investigation into the rape allegation in 2017 because Assange was in the Ecuadorian embassy, where he had taken refuge to avoid extradition. The prosecutor said at the time the investigation could be reopened if the situation changed. After Assange’s arrest last month, the lawyer representing the woman who accused Assange of rape asked for the investigation to be reopened. “At [a] press conference, the prosecutor will announce her decision, which will formally be made immediately before the press conference,” the Swedish prosecution authority said in a statement.

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Elizabeth Lea Vos is compiling a history of all WikiLeaks files.

The Revelations of WikiLeaks: No. 2 (Vos)

Three months after it published the “Collateral Murder” video, WikiLeaks on July 25, 2010 released a cache of secret U.S. documents on the war in Afghanistan. It revealed the suppression of civilian casualty figures, the existence of an elite U.S.-led death squad and the covert role of Pakistan in the conflict, among other revelations. The publication of the Afghan War Diaries helped set the U.S. government on a collision course with WikiLeaks founder Julian Assange that ultimately led to his arrest last month. The war diaries were leaked by then-Army-intelligence-analyst Chelsea Manning, who had legal access to the logs via her Top Secret clearance.

Manning only approached WikiLeaks, after studying the organization, following unsuccessful attempts to leak the files to The New York Times and The Washington Post. A major controversy surrounding the Diaries’ release were allegations that operational details were made public to the Taliban’s battlefield advantage and that U.S. coalition informants’ lives were put at risk by publishing their names. Despite a widely-held belief that WikiLeaks carelessly publishes un-redacted documents, only 75,000 from a total of more than 92,201 internal U.S. military files related to the Afghan War (between 2004 and 2010) were ultimately published.

WikiLeaks explained that it held back so many documents because Manning had insisted on it: “We have delayed the release of some 15,000 reports from the total archive as part of a harm minimization process demanded by our source.” Manning testified at her 2013 court-martial that the files were not “very sensitive” and did not report active military operations.

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Facebook: We’re Not A Monopoly, We’re “A Successful American Company”

Chris Hughes, Zuck’s former roommate, said in a NYT op-ed that Facebook should be split up. The reaction: no, we’re just successful, but we do need new laws, and Zuck himself has some great ideas for that.

Facebook Co-Founder Calls For Breakup Of The Company (ZH)

[..] would-be rivals can’t raise the money to take on Facebook. Nobody would finance them knowing that if they get too powerful, Facebook will run them out of business. Hughes doesn’t blame Zuckerberg for this; after all, he’s simply demonstrating the “virtuous hustle of a talented entrepreneur.” But this is exactly why the government should feel obligated to step in and “break up Facebook’s monopoly and regulate the company to make it more accountable to the American people.” Specifically, Hughes believes the FTC should work with the DoJ to undo the Instagram and Whatsapp acquisitions. There is some precedent for this, he says.

How would a breakup work? Facebook would have a brief period to spin off the Instagram and WhatsApp businesses, and the three would become distinct companies, most likely publicly traded. Facebook shareholders would initially hold stock in the new companies, although Mark and other executives would probably be required to divest their management shares. Until recently, WhatsApp and Instagram were administered as independent platforms inside the parent company, so that should make the process easier. But time is of the essence: Facebook is working quickly to integrate the three, which would make it harder for the F.T.C. to split them up. For what it’s worth, Hughes acknowledges his complicity in creating Facebook, and the fact that he didn’t speak out – or even question the company’s monopoly power – until after Cambridge Analytica.

But that’s the past: Already, support for breaking up big-tech monopolies is gaining traction among Democrats and Republicans alike. The fact that Hughes has decided to criticized his former co-founder (and one-time college buddy) in such a public forum might seem galling to some: After all, Hughes was transformed into a millionaire 500 times over largely because he had the good fortune of being assigned to the same dorm room as Zuckerberg at Harvard. But regardless, now that Hughes has broken the seal, will he inspire more of Facebook’s co-founders and former top employees speak out. It’s worth noting that in March, Chris Cox, one of Zuckerberg’s top deputies and a longtime FB executive, left the company. Cox’s decision to leave was reportedly due to ‘disagreement’s’ that were alluded to in a blog post.

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Torn between multiple lovers. The UK governed by a fringe party.

UK Tories Could Come Sixth In European Elections (G.)

Conservative officials fear the party could come sixth in the European elections, with their support plummeting to single digits. Candidates running in the election said the party was “almost in denial” that the poll was happening and continued to insist they would not need to take up their seats in the European parliament, despite fading prospects for a cross-party deal with Labour that would enable Brexit to happen before 2 July. The fears of a dismal performance have been stoked by the fact that the party plans to spend no money on candidate campaigning, will not publish a manifesto and is refusing to hold a launch.


One MEP said candidates were funding their campaigns out of their own pockets, unlike previous years when there was a central pot of funding available. They have been told they are allowed to have their own regional manifestos, but many are not bothering, and there will be no central party manifesto. “The thinking is that if we make no effort then we will have an excuse for having done so badly. But it is seriously embarrassing,” said one MEP. Another Conservative source said internal data showed the party could do worse than the Brexit party, Labour, the Lib Dems, Change UK and even potentially the Greens, with support at less than 10%. That would translate to only a handful of seats, down from the current 22.

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Nuclear is set to make a come back, because it is the only option to maintain our complex societies. He may have a point there. The ultimate desperation.

America, You Are Fired! (Dmitry Orlov)

Some ironies are just too precious to pass by. The 2016 US presidential elections gave us Donald Trump, a reality TV star whose famous tag line from his show “The Apprentice” was “You are fired!” Focus on this tag line; it is all that is important to this story. Some Trump Derangement Disorder sufferers might disagree. This is because they are laboring under certain misapprehensions: that the US is a democracy; or that it matters who is president. It isn’t and it doesn’t. By this point, the choice of president matters as much as the choice of conductor for the band that plays aboard a ship as it vanishes beneath the waves. I have made these points continuously since before Trump got into office. Whether or not you think that Trump was actually elected, he did get in somehow, and there are reasons to believe that this had something to do with his wonderfully refreshing “You are fired!” tag line.

[..] Financially ruinous and generally nonsensical schemes such as tar sands, shale oil and industrial-scale photovoltaics, wind generation and electric cars will only accelerate the process of sorting nations into energy haves and energy have-nots, with the have-nots wiping themselves out sooner rather than later. Leaving aside various fictional and notional schemes (nuclear fusion, space mirrors, etc.) and focusing just on the technologies that already exist, there is only one way to maintain industrial civilization, and that is nuclear, based on Uranium 235 (which is scarce) and Plutonium 239 produced from Uranium 238 (of which there is enough to last for thousands of years) using fast neutron reactors. If you don’t like this choice, then your other choice is to go completely agrarian, with significantly reduced population densities and no urban centers of any size.

And if you do like this choice, then you have few alternatives other than to go with the world’s main purveyor of nuclear technology (VVER-series light water reactors, BN-series fast neutron breeder reactors and closed nuclear fuel cycle technology) which happens to be Russia’s state-owned conglomerate Rosatom. It owns over a third of the world nuclear energy market and has a portfolio of international projects stretching far into the future that includes as much as 80% of the reactors that are going to be built. The US hasn’t been able to complete a nuclear reactor in decades, the Europeans managed to get just one new reactor on line (in China) while Japan’s nuclear program has been in disarray ever since Fukushima and Toshiba’s financially disastrous acquisition of Westinghouse. The only other contenders are South Korea and China. Again, if you don’t like nuclear—for whatever reason—then you can always just buy yourself some pasture and some hayfields and start breeding donkeys.

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Nuclear anyone?

Chernobyl Has Become A Refuge For Wildlife 33 Years Later (Conv.)

About 30 researchers from the United Kingdom, Ireland, France, Belgium, Norway, Spain and Ukraine presented the latest results of our work. These studies included work on big mammals, nesting birds, amphibians, fish, bumblebees, earthworms, bacteria and leaf litter decomposition. These studies showed that at present the area hosts great biodiversity. In addition, they confirmed the general lack of big negative effects of current radiation levels on the animal and plant populations living in Chernobyl. All the studied groups maintain stable and viable populations inside the exclusion zone. These studies showed that at present the area hosts great biodiversity.

In addition, they confirmed the general lack of big negative effects of current radiation levels on the animal and plant populations living in Chernobyl. All the studied groups maintain stable and viable populations inside the exclusion zone. A clear example of the diversity of wildlife in the area is given by the TREE project (TRansfer-Exposure-Effects, led by Nick Beresford of the UK’s Centre for Ecology and Hydrology). As part of this project, motion detection cameras were installed for several years in different areas of the exclusion zone. The photos recorded by these cameras reveal the presence of abundant fauna at all levels of radiation. These cameras recorded the first observation of brown bears and European bison inside the Ukrainian side of the zone, as well as the increase in the number of wolves and Przewalski horses.

Our own work with the amphibians of Chernobyl has also detected abundant populations across the exclusion zone, even on the more contaminated areas. Furthermore, we have also found signs that could represent adaptive responses to life with radiation. For instance, frogs within the exclusion zone are darker than frogs living outside it, which is a possible defence against radiation. Studies have also detected some negative effects of radiation at an individual level. For example, some insects seem to have a shorter lifespan and are more affected by parasites in areas of high radiation. Some birds also have higher levels of albinism, as well as physiological and genetic alterations when living in highly contaminated localities. But these effects don’t seem to affect the maintenance of wildlife population in the area.


European bison (Bison bonasus), boreal lynx (Lynx lynx), moose (Alces alces) and brown bear (Ursus arctos) in Chernobyl Exclusion Zone (Ukraine). Proyecto TREE/Sergey Gaschack

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Wondering what practical measures they have in mind. Renewables?

Ireland Second Country To Declare Climate, Biodiversity Emergency (RTE)

Ireland has become only the second country in the world to declare a climate and biodiversity emergency. The development came after a Fianna Fáil amendment to the Oireachtas report on Climate Action was accepted by both the Government and Opposition parties without a vote. Chair of the Climate Action Committee, Fine Gael’s Hildegarde Naughton, welcomed the outcome as “an important statement” but added “now we need action.” She said Minister for Climate Action Richard Bruton would speedily return to the Dáil with new proposals, and she looked forward to working “with all parties and none” to scrutinise them.


Green Party leader Eamon Ryan also welcomed the development, but warned that “declaring an emergency means absolutely nothing unless there is action to back it up. That means the Government having to do things they don’t want to do”. Deputy Bríd Smith, of Solidarity/People Before Profit, said she was “delighted” with the declaration, but added it will be “interesting to see” if the Government will support her Climate Emergency Measures Bill next month, which seeks to to limit oil and gas exploration.

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May 082019
 


 

 

The Psychology of Russiagate (Gabor Maté)
Trump Tax Returns Show Over $1 Billion In Business Losses In A Decade (G.)
White House Orders Don McGahn Not To Comply With Congressional Subpoena (G.)
‘Bond King’ Gundlach: US National Debt ‘Totally Out Of Control’ (CNBC)
The State of the American Debt Slaves, Q1 2019 (WS)
Stocks Could Drop 10-20% If China And US ‘Dig In’ On Trade War – Siegel (CNBC)
China Says April Trade Surplus $13.84 Billion, Far Below Expectations (CNBC)
Germany, Wealthy Regions Are Biggest Winners Of EU Single Market (R.)
Hackers Steal $41 Million Worth Of Bitcoin From Binance Crypto Exchange (R.)
A War Is Brewing Over Lithium Mining At The Edge Of Death Valley (LA Times)
People Who Publicly Fret About Assange Rape Allegations Are Lying (CJ)
Humanity Is About to Kill 1 Million Species in a Murder-Suicide (NYMag)

 

 

This is fantastic. Please watch. Trump as a traumatized man. Elected by a society deeply in denial about its own trauma.

The Psychology of Russiagate (Gabor Maté)

What’s interesting is that in the aftermath of the Mueller thunderbolt of no proof of collusion, there were articles about how people are disappointed about this finding. Now, disappointment means that you’re expecting something and you wanted something to happen, and it didn’t happen. So that means that some people wanted Mueller to find evidence of collusion, which means that emotionally they were invested in it. It wasn’t just that they wanted to know the truth. They actually wanted the truth to look a certain way. And wherever we want the truth to look a certain way, there’s some reason that has to do with their own emotional needs and not just with the concern for reality.

And in politics in general, we think that people make decisions on intellectual grounds based on facts and beliefs. Very often, actually, people’s dynamics are driven by emotional forces that they’re not even aware of in themselves. And I, really, as I observed this whole Russiagate phenomenon from the beginning, it really seemed to me that there was a lot of emotionality in it that had little to do with the actual facts of the case. There is no question that for a lot of people in this country, the election of Trump was a traumatic event. Now, when a trauma reaction happens, which is to say you’re hurt and you’re pained and you’re confused and you’re scared and you’re bewildered, there’s basically two things you can do about it.

One is you can own that I’m pained and I’m hurt and I’m bewildered and I’m really scared. And then try and look at what happened to bring me to that situation. Or you can instead of dealing with those emotions come up with some kind of explanation that makes me feel better about them. So that I’ve got this pain. I’ve got this bewilderment. I’ve got this fear. So what I’m looking at, what does it say about American society that a man like this could even run for office, let alone be elected? What does it say about American society that so many people are actually enrolled in believing that this man could be any kind of a savior? What does that say about the divisions and the conflicts and the contradictions and the genuine problems in this culture? And how do we address those issues?

You can look at that. Or you can say there must be a devil somewhere behind all this, and that devil is a foreign power, and his name is Putin, and his country is Russia. Now you’ve got a simple explanation that doesn’t invite you or necessitate that you explore your own pain and your own fear and your own trauma.

If the video does not show in your email, please go to the Automatic Earth site

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Is it just me, or is this a really strange way to present old news as new? They really can’t find anything on the man? Didn’t he even write a book about this?

Trump Tax Returns Show Over $1 Billion In Business Losses In A Decade (G.)

Donald Trump’s businesses lost a total of more than $1bn from 1985 to 1994, enabling him to avoid paying income taxes for eight of the 10 years, the New York Times reported on Tuesday. The newspaper, which said it obtained printouts from Trump’s official Internal Revenue Service tax transcripts, found that Trump’s core businesses, including casinos, hotels and apartment buildings, lost $1.17bn over a decade. Trump posted losses in excess of $250m in both 1990 and 1991, according to the records, which appeared to be more than double any other individual US taxpayer in an annual IRS sampling of high-income earners.


The New York Times report comes amid a fresh battle between Democrats in Congress and the Trump administration over the release of the president’s tax returns. On Monday, the US Treasury secretary, Steven Mnuchin, refused a request by the congressman Richard Neal, the Democratic chairman of the House ways and means committee, for Trump’s tax returns. Democrats want Trump’s tax data as part of their investigations of possible conflicts of interest posed by his continued ownership of extensive business interests, even as he serves as president. Responding to the New York Times’ revelations, Charles Harder, a lawyer for the president, said the tax information was “highly inaccurate”.

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Yeah, well, if they try to keep Russigate going at this point in time, it’s not going to be easy.

White House Orders Don McGahn Not To Comply With Congressional Subpoena (G.)

The White House has informed Congress that it has ordered the former counsel Don McGahn not to hand over documents subpoenaed by a congressional committee investigating the findings of the special counsel Robert Mueller. In a letter to the House judiciary committee chairman, Jerrold Nadler, the White House lawyer Pat Cipollone cited “significant Executive Branch confidentiality interests and executive privilege”. McGahn’s refusal is sure to set the Trump administration on course for another collision with the Democratic-led House over lawmakers’ pursuit of documents related to the Russia investigation.


In a subpoena, Congress had requested documents from McGahn pertaining to 36 matters, including discrete episodes in the Russia affair ranging from the resignation of the former national security adviser Michael Flynn to the 9 June 2016 Trump Tower meeting. Cipollone said McGahn “does not have the legal right to disclose these documents to third persons”. In a follow-up letter to Congress, a lawyer for McGahn said he intended to follow the White House direction. “Where co-equal branches of government are making contradictory demands on Mr McGahn concerning the same set of documents,” the letter reads, “the appropriate response for Mr McGahn is to maintain the status quo unless and until the committee and the executive branch can reach an accommodation.”

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“Using leverage ratios alone, “45%, not just of the BBB but the entire corporate bond market would be junk right now..”

‘Bond King’ Gundlach: US National Debt ‘Totally Out Of Control’ (CNBC)

U.S. debt has climbed to an alarming level, according to DoubleLine CEO Jeffrey Gundlach. “People are starting to realize that the deficit and debt are totally out of control,” Gundlach said on CNBC’s “Halftime Report” Tuesday. Gundlach said the “main reason” the yield curve between 3-year and 5-year Treasury notes is steepening is the ballooning deficit. Last year, U.S. national debt increased by more than 6% of GDP, he said. An even bigger deficit could mean trouble in a recession, said Gundlach, whose DoubleLine has $130 billion in assets under management. Gundlach — sometimes known as the “bond king” — also flagged trouble in the corporate bond market, which got “dragged down” in the “economic mess that we’re in.”


“The corporate bond market is so much worse today than it was in 2006,” he said. Among Gundlach’s concerns: a corporate bond market that has tripled in size, and a BBB-rated bond market that is now bigger than the junk-bond market. Using leverage ratios alone, “45%, not just of the BBB but the entire corporate bond market would be junk right now,” he said, citing figures from Morgan Stanley. A recession or downturn could “spark” a wave of downgrades from investment grade bonds into junk bonds, he said. “The economy is in such bad shape to withstand a downturn again,” Gundlach said. “The national debt is exploding while we’re having some of the best GDP year over year that we’ve had in recent years.”

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Jubilee.

The State of the American Debt Slaves, Q1 2019 (WS)

Consumer debt – or consumer “credit” more euphemistically – includes auto loans, student loans, credit-card debt, and personal loans, but it excludes housing related debt, such as mortgages and HELOCs. Growing consumer debt helps prop up the US economy because it means that consumers – they’re called “consumers” not “people” for a reason – spend money they don’t have. There is always a reckoning in the future, but to heck with the future, and so here we go. Credit card debt and other revolving credit, such as personal lines of credit, in Q1 rose 3.4% compared to Q1 last year, to $1.0 trillion (not seasonally adjusted), according to the Federal Reserve Tuesday afternoon. This was a record for a first quarter, when consumers cut back while they try to dig themselves out from under their shopping season debts. But it wasn’t good enough. Credit card balances in Q1 were flat with Q4 2008, despite a decade of inflation, population growth, and economic growth. Our debt slaves are lackadaisical:

The thing is, over the same period, nominal GDP rose 5.1%. And in terms of GDP, credit card debts actually fell, which explains the soft-ish retail data in the first quarter. In a very un-American way, consumers were again lackadaisical in charging up their credit cards to the max. Credit cards are a key element in the banking industry’s profits. At commercial banks, the average interest rate on credit-card plans is 15.1% and the average assessed interest rate is 16.9%, on $1 trillion in outstanding credit balances. This amounts to around $150 billion to $169 billion a year in interest income! These banks rely on consumers to spend money they don’t have. So why don’t they consume with sufficient energy? That’s a baffling question for economists.


Total auto loans and leases outstanding for new and used vehicles in Q1 rose by $44.5 billion from a year ago, or by 4.0%, to a record of $1.16 trillion, despite new-vehicle sales that declined in Q1 by 3.2%, though there was some strength in used vehicles sales. The increase in borrowing was due to higher transaction prices of new and used vehicles, the rising average loan-to-value ratio, and the lengthening average duration of loans:

Student loans rose by 4.9% year-over-year in Q1, or by $74 billion, to a new record of $1.6 trillion (not seasonally adjusted). It has doubled since the beginning of 2010. Confusingly, enrollment in higher-education, based on the latest data available from the National Center for Education Statistics fell by 7% between 2010 and 2016. In other words, fewer students are enrolled, but all combined they borrow more as tuition continues to rise, and as the entire industry feeds on those government-guaranteed student loans. This ranges from device makers, such as Apple, text-book publishers, concert-ticket sellers, and commercial real estate investors specializing in student housing. Every dime a student borrows is spent, and it props up Corporate America, the university financial complex (UFI, my term), and the US economy overall – with heck to pay later:

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The Fed is the only thing dominating markets. Not China.

Stocks Could Drop 10-20% If China And US ‘Dig In’ On Trade War – Siegel (CNBC)

Stocks could drop significantly if the United States and China dig in during trade talks, Wharton finance professor Jeremy Siegel told CNBC on Tuesday. Tensions between the U.S. and China are high as U.S. Trade Representative Robert Lighthizer said Monday that new tariffs on 25% of goods will go through on Friday. Siegel said this causes major risk to the downside. “If both sides dig in this market could go down 10% to 20%,” Siegel said on “Squawk Alley. ” “It’s a question of what happens on Friday. If it does happen on Friday, what is the retaliation of the Chinese? And that’s totally dominating the market for the next two or three weeks.”


Siegel said the market built in about a 90% chance that trade negotiations with China would be resolved. Since Trump’s tweets on Sunday threatening to raise tariffs the market, the market now projects no more than a 70% chance of a resolution, he said. This change is what is shocking the market downward, he said. The Dow Jones Industrial Average, S&P 500 and the Nasdaq Composite all closed down more than 1.6% on Tuesday. Investors are waiting to see how the trade talks with China go this week but Trump will be watching the market, Siegel said. “The strongest thing that Donald Trump has going for him in next year’s election is the economy and the stock market. He cannot afford that to falter,” said Siegel.

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Why is Reuters still polling economists?

China Says April Trade Surplus $13.84 Billion, Far Below Expectations (CNBC)

China posted a big miss in its overall trade surplus for April, as exports unexpectedly fell and imports surprisingly rose. The numbers came on Wednesday as the trade impasse between the U.S. and China continues to drag on. Customs data on Wednesday showed that trade surplus for April came in at $13.84 billion. That was far lower than the $35 billion economists polled by Reuters had expected, and below the $32.65 billion posted in March. Dollar-denominated exports also missed expectations in April, falling 2.7% from a year ago, according to data from the China’s General Administration of Customs. Economists polled by Reuters expected an increase of 2.3% from a year earlier.


However, April imports unexpectedly rose by 4% from a year ago, compared to a decline of 3.6% that economists predicted. Imports in March fell 7.6%. China’s trade surplus with the U.S., meanwhile, rose to $21.01 billion in April from $20.5 billion in March, the data showed. U.S. and Chinese officials have met several times in a bid to hammer out a trade deal, but Washington said this week that tariffs on Chinese products will increase on Friday, fueling fears that negotiations could be derailed. The outlook for Chinese exports will remain challenging even if a trade deal is reached with the U.S. soon, said Julian Evans-Pritchard, senior China economist at Capital Economics.

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In other news: the sky is blue. What I like here is they state everyone is better off because of the single market. I don’t even want to see their ‘proof’ for that.

Germany, Wealthy Regions Are Biggest Winners Of EU Single Market (R.)

The European Union’s industrial heartlands, its urban regions and Germany are the biggest beneficiaries of the bloc’s single market, according to a study that highlights the economic and social inequalities plaguing the bloc. The single market seeks to guarantee free movement of goods, capital, services and labor across the 28-nation EU. A report by the Bertelsmann Foundation found that Germany, Europe’s largest economy, benefited most in absolute terms from the single market, earning an extra 86 billion euros ($96 billion) a year because of it. It found that each German was on average 1,046 euros richer as a result of single market membership, while on average EU citizens were only 840 euros richer. “Not everyone profits equally from the single market, but everyone does gain,” said Aart De Geus, president of the Germany-based foundation.


The inequalities highlighted in the report are shaping EU politics ahead of this month’s European Parliament elections, in which some have called for a continent-wide minimum wage, while Italy, wrestling with low growth, has demanded the right to break European fiscal rules to finance tax cuts. Wealthy, advanced economies near the EU’s economic core such as Austria and the Netherlands are also far richer as a result of being members, the report showed, while poorer southern and eastern European countries benefit far less. “For countries like the Netherlands or Austria, the internal market is gold, since they have competitive sectors but are reliant on exports because they have small domestic markets,” said Dominic Ponattu, one of the study’s authors.

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Call me crazy, but isn’t this happening a little too often?

Hackers Steal $41 Million Worth Of Bitcoin From Binance Crypto Exchange (R.)

Hackers stole bitcoin worth $41 million from Binance, one of the world’s largest cryptocurrency exchanges, the company said on Wednesday, the latest in a string of thefts from cryptocurrency exchanges around the world. The 7,000 bitcoin were withdrawn by hackers using a variety of techniques, “including phishing, viruses and other attacks”, according to a post on Binance’s website by chief executive officer Zhao Changpeng. The post said user funds would not be affected because the company would use its secure asset fund for users to cover the loss.


Bitcoin’s price dropped by as much as 4.2 percent in early Asian trading as news of the hack broke, although it later recovered some of its losses. Zhao said on Twitter other crypto exchanges, including Coinbase, had blocked deposits from addresses linked to the hack. Last year, $950 million of cryptocurrencies was stolen from cryptocurrency exchanges and infrastructure services such as wallets, up nearly 260 percent from the previous year, research from U.S.-based cyber security firm CiptherTrace showed. Exchanges in Japan and South Korea accounted for 58 percent of the thefts last year, the research found.

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It ain’t easy being green.

A War Is Brewing Over Lithium Mining At The Edge Of Death Valley (LA Times)

A small Cessna soared high above the Mojave Desert recently, its engine growling in the choppy morning air. As the aircraft skirted the mountains on the edge of Death Valley National Park, a clutch of passengers and environmentalists peered intently at a broiling salt flat thousands of feet below. The desolate beauty of the Panamint Valley has long drawn all manner of naturalists, adventurers and social outcasts — including Charles Manson — off-road vehicle riders and top gun fighter pilots who blast overhead in simulated dogfights. Now this prehistoric lake bed is shaping up to be an unlikely battleground between environmentalists and battery technologists who believe the area might hold the key to a carbon-free future.


Recently, the Australia-based firm Battery Mineral Resources Ltd. asked the federal government for permission to drill four exploratory wells to see if the hot, salty brine beneath the valley floor contains economically viable concentrations of lithium. The soft, silvery-white metal is a key component of rechargeable lithium-ion batteries and is crucial to the production of electric and hybrid vehicles. The drilling request has generated strong opposition from the Center for Biological Diversity, the Sierra Club and the Defenders of Wildlife, who say the drilling project would be an initial step toward the creation of a full-scale lithium mining operation. They say lithium extraction would bring industrial sprawl, large and unsightly drying ponds and threaten a fragile ecosystem that supports Nelson’s bighorn sheep, desert tortoises and the Panamint alligator lizard, among other species.

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Why go into allegations that have no proven substance? There is no point in that which supports Assange. Tons of sympathy for Caitlin, but I really think this should be about Julian, not about her.

People Who Publicly Fret About Assange Rape Allegations Are Lying (CJ)

As a survivor of multiple sexual assaults, I have found it unspeakably infuriating the way this same patriarchal imperialist system which has allowed rape culture to thrive throughout the entirety of its existence has suddenly become deeply, deeply concerned about plot hole-riddled and completely unproven allegations against a man who just so happens to have published humiliating truths about that very same imperialist system. This same warmongering power structure which has never given a shit about women beyond our ability to fly a stealth bomber and squeeze new recruits out of our vaginas suddenly has the full force of its propaganda machine whipping liberals into a hysteria about allegations of acts that aren’t even illegal in the nations those liberals live in. Acts that these liberals have never even thought about pushing to make laws against in their own governments.


Do you know how you can be absolutely certain that anyone you see on social media rending their garments about Assange’s Swedish allegations is completely full of shit? Because no matter how hard you search through their post history, you will never, ever find any similarly enthusiastic push to ban the actions that Assange is accused of in their own government. In their own land, where their own daughters and sons will be impacted. They focus solely on shaky allegations against a target of the CIA and the Pentagon which are alleged to have happened in Sweden, a nation with very different sexual consent laws than the nations of these English-speaking concern trolls.

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Good headline.

Humanity Is About to Kill 1 Million Species in a Murder-Suicide (NYMag)

Human beings are more prosperous and numerous than we’ve ever been, while the Earth’s other species are dying off faster than at any time in human history. These two conditions are related. But if the second one persists long enough, we will be following our fellow organisms into the dustbin of geological history. This is the primary takeaway from a new United Nations report on our planet’s rapidly diminishing biodiversity. Humanity is reshaping the natural world at such scale and rapidity, an estimated 1 million plant and animal species are now at risk of extinction, according to the U.N. assessment.

Climate change is a major driver of all this death, but burning fossil fuels is far from our species’ only method of mass ecocide. We are also harvesting fish populations faster than they can reproduce themselves, annually dumping upward of 300 million tons of heavy metals and toxic sludge into the oceans, introducing devastating diseases and invasive species into vulnerable environments as we send people and goods hurtling across the globe, and simply taking up too much space — about 75 percent of the Earth’s land, and 85 percent of its wetlands, have been severely altered or destroyed by human development.

All this plunder has worked out fairly well for us, thus far. But all of our prosperity depends upon the natural world reproducing itself. As the New York Times notes, the U.N. has previously estimated that nature provides the economies of the Americas with $24 trillion worth of non-monetized benefits each year: “The Amazon rain forest absorbs immense quantities of carbon dioxide and helps slow the pace of global warming. Wetlands purify drinking water. Coral reefs sustain tourism and fisheries in the Caribbean. Exotic tropical plants form the basis of a variety of medicines. But as these natural landscapes wither and become less biologically rich, the services they can provide to humans have been dwindling.”

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There is no man or woman who can’t be touched

But you who come between them will be judged

-Leonard Cohen

 

 

 

 

Apr 252019
 
 April 25, 2019  Posted by at 9:03 am Finance Tagged with: , , , , , , , , , , , , ,  


Giovanni Bellini Pietà 1505

 

There Will Be No Soft Brexit Now. It’s No Deal, Revoke Or Another Vote (G.)
More British Families Than Ever Depend On Food Banks (Ind.)
Curbing Pensioner Benefits Could Help The Young (G.)
Deutsche Bank Handing Over Trump Loan Documents To NY Officials (AFP)
Former AG Mukasey Shreds CNN For Misleading Russia Conspiracy Theories (RT)
She Wrote The Patriot Act. Her Next Job Is With Facebook (ZH)
Iceland Court Orders Valitor (Formerly VISA) to Pay WikiLeaks $10 Million (GP)
Global Grounding Of 737 Max Will Cost Boeing More Than $1 Billion (G.)
Tesla Reports Another Doozie (WS)
Belt and Road Forum: China’s ‘Project Of The Century’ Hits Tough Times (G.)
Past Role and Current Risks from China – Anne-Stevenson Yang (HF)
Declare Capitalism Dead – Before It Takes Us All Down With It (Monbiot)
‘Death By A Thousand Cuts’: Vast Expanse Of Rainforest Lost In 2018 (G.)

 

 

There’s sweet poetic justice in the European elections playing a decisive role in what Brexit means.

There Will Be No Soft Brexit Now. It’s No Deal, Revoke Or Another Vote (G.)

Until recently, my view could have been summarised as follows: Brexit remains a lamentable event I will always oppose; but, in the absence of public permission to overturn it, a softer version would be less bad than a hard one, and could provide the fragile basis for an eventual form of reintegration with Europe down the line. At times in the past five months, ever since the UK and the EU struck the withdrawal agreement, a pragmatic compromise of this kind has seemed tantalisingly viable. Desperately though they tried through the winter, the hard Brexiteers failed to harden the original deal or take down May in the way they wanted. That left a space in the political centre.

So, when May finally made an opening to Labour in early April, there was a possibility that a Brexit compromise was on the cards – even at the eleventh hour and in spite of the immense party political difficulties it might entail for both. But it hasn’t happened. The talks between the government and Labour continue. But they are not going anywhere. This week both May and Jeremy Corbyn accused the other of dragging their feet. That could be a cunning joint deception, preparing their respective parties for a surprise deal. But it isn’t the case – believe me. There is an increasing air of unreality about the whole thing. On both sides of the table, the participants are looking over their shoulders at their own colleagues, not negotiating in earnest.

There are three big issues on the table in these talks. But there is no agreement on any of them. The first is over the terms of a future customs union and on single market alignment. The second, on which the two sides have had the biggest arguments, is on “future-proofing” any agreement against the next Conservative leader. The third is over the role, if any, of a confirmatory second vote. On each of these, May is unwilling to make concessions – or even to put options on the table – that would further divide the Tories, while Corbyn remains deeply reluctant to become co-owner of a joint agreement that might end in the overturning of Brexit.

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Parliament’s too busy with Brexit.

More British Families Than Ever Depend On Food Banks (Ind.)

Food bank use has soared to record levels, with the number of emergency supplies distributed across the UK having risen by nearly a fifth in one year, new figures show. Campaigners said it was “shameful” that a growing number of Britons were unable to feed themselves after data published by the Trussell Trust, the UK’s largest food bank provider, revealed 1,583,668 three-day emergency food supplies were distributed in the year to March 2019 – a 19 per cent rise on the previous year. More than half a million of these (577,618) went to children, fuelling concerns about rising child poverty, after government figures last month revealed that the number of youngsters living in absolute poverty had increased by 200,000 in a year – to a total of 3.7 million.


The figures have also prompted renewed criticism of the government’s flagship welfare reform, universal credit, as the Trussell Trust said issues with moving onto the new system were a “key driver” of increasing need, primarily due people having to wait five weeks for payment under the new system. Labour’s shadow work and pensions secretary Margaret Greenwood branded the sharp rise “shocking” and said the “need for emergency food parcels in one of the richest countries of the world” was “shameful”. “Nobody in our society should be forced to turn to food banks to survive. Despite ministers’ attempts to explain away food bank use, the Trussell Trust is very clear that cuts to social security and the five-week wait for universal credit payments are key reasons for the rise,” she added.

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Free TV licenses? What century is this? But seriously, this is why I think a UBI is inevitable. Taking from the old to give to the young is not an answer.

Curbing Pensioner Benefits Could Help The Young (G.)

Free TV licences for over-75s should be scrapped, the age threshold for free bus passes raised and the triple-lock on pensions abolished to close the widening gap between young and old in Britain, according to a Lords report. The House of Lords committee on intergenerational fairness and provision said it was time to rebalance government policy in favour of the young, to remove the risk of the social bonds between generations fraying further. For reasons of fairness and because many pensioner households across the UK have become better off on average than many working-age families, it called on ministers to curb several benefits targeted at older Britons.


The report said the triple-lock – which raises state pension payments in line with the highest of consumer price inflation, average earnings growth, or 2.5% – should be removed. The increase in annual pension payments should instead track average earnings, it said. Free TV licences based on age should be phased out but could be offered based on household income instead. The age when older people can apply for a free bus pass and receive winter fuel payments should also rise to at least five years after a person becomes eligible for the state pension, said the report. It added that this could be phased in to coincide with the state pension age rising to 67 from 2026.

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And there we go again.

NB: Deutsche just announced the death of the merger with Commerzbank.

Deutsche Bank Handing Over Trump Loan Documents To NY Officials (AFP)

Deutsche Bank has begun to provide documents on financing for some of President Donald Trump’s projects to New York State authorities, a source familiar with the matter told AFP on Wednesday. In mid-March, New York Attorney General Letitia James subpoenaed the German bank, demanding records related to loans and lines of credit granted to the Trump Organization. The money was intended to finance projects such as Trump hotels in Washington, DC, Miami and Chicago, another source told AFP last month on the condition of anonymity. It was unclear whether Deutsche Bank had provided all the documents requested.


“We remain committed to cooperating with authorized investigations,” a bank spokesman told AFP, while declining to comment on a CNN report that the company was handing over the documents. James’ office also declined to comment on the status of the documents regarding financing for the Trump Organization, the holding company that has been run by Trump’s sons Eric and Donald Trump Jr since he entered the White House. New York authorities also wanted records related to the Trump Organization’s failed attempt in 2014 to buy the Buffalo Bills football team, the source said on condition of anonymity.

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On CNN, no less: “In essence, panels of people sitting around a table inhaling their own exhaust, and getting high on it.”

Former AG Mukasey Shreds CNN For Misleading Russia Conspiracy Theories (RT)

Retired US Attorney General Michael Mukasey slammed CNN on its own network for what he said was flawed coverage of the special counsel investigation into US President Donald Trump. Appearing for a one-on-one interview on Cuomo Prime Time on Tuesday, Mukasey said CNN was “misleading a lot of people” in its coverage of the investigation, which sought to determine whether then-candidate Trump conspired with Moscow to win the 2016 presidential election. “You have a big audience – getting smaller by the minute now,” he said to host Chris Cuomo, who laughed nervously. Mukasey served as attorney general from 2007 to 2009 under the George W. Bush administration.


While the special counsel’s final report did not find evidence of a criminal conspiracy with Russia, the report was for weeks the subject of intense speculation in the media. Mukasey was not impressed with CNN’s performance in the lead-up to the report’s publication, as the network insisted on the collusion narrative. “Your network was devoting days of people sitting around and talking about a report whose contents they didn’t know – that they hadn’t seen,” Mukasey said. “In essence, panels of people sitting around a table inhaling their own exhaust, and getting high on it.” He added that CNN helped to whip the country into “a state of absolute hysteria” over the investigation. “Consider this,” he said, “[Trump is] being investigated for a crime that didn’t happen, and that he certainly didn’t commit.”

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Facebook = CIA.

She Wrote The Patriot Act. Her Next Job Is With Facebook (ZH)

Facebook announced Monday that Jennifer Newstead, a Trump appointee who served in the Department of Justice (DoJ) under President Bush, will join the social media company as General Counsel, supervising its global legal functions. Newstead replaces Colin Stretch, who announced in 3Q18 that he will exit. Stretch will remain with Facebook through the transition phase, expected to be completed in the coming months. “Jennifer is a seasoned leader whose global perspective and experience will help us fulfill our mission,” said Sheryl Sandberg, Facebook’s Chief Operating Officer. “We are also truly grateful to Colin for his dedicated leadership and wise counsel over the past nine years. He has played a crucial role in some of our most important projects and has created a strong foundation for Jennifer to build upon.”

Newstead brings a terrifying history of lobbying and legislating for an Orwellian style of mass electronic surveillance of Americans. The Hill explains she was credited with writing the controversial 2001 Patriot Act, a piece of legislation that stripped Americans of their First and Fourth Amendments in the name of fighting the War on Terror. In a 2002 statement, Assistant Attorney General Viet Dinh described Newstead’s role in drafting the Patriot Act: “Her enhanced leadership duties and her excellent service on a range of issues — including helping craft the new U.S.A. Patriot Act to protect the United States against terror — have earned her this important distinction. She is first among equals.”


Congress enacted the Patriot Act in the wake of September 11, 2001 attacks, the Act expanded the scope of the government’s surveillance powers to investigate terrorism, organized crime, and drug trafficking. It allowed government investigators to use roving wiretaps and the ability to collect telephone records from US carriers.

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That means Assange defense.

Iceland Court Orders Valitor (Formerly VISA) to Pay WikiLeaks $10 Million (GP)

The Icelandic court has ordered Valitor, formerly VISA Iceland, to pay WikiLeaks $10 million in damages over the 2011 banking blockade. Valitor had been ordered to process card payments for WikiLeaks in 2013 by the same court, and was told they would face daily penalties if they refused to comply. By not reinstating services, the company was fined $204,900 per month or $2,494,604 per year for continuing the blockade. On Wednesday, Icelandic media reported that the company has now been ordered to pay up. Valitor has stated that they are likely to appeal, according to WikiLeaks. WikiLeaks had launched a case against Valitor in Reykjavik back in June of 2012 over the unlawful suspension of financial services against Wikileaks.


Ten days after WikiLeaks published Cablegate, they were blockaded by Bank of America, VISA, MasterCard, PayPal and Western Union. The political effort to defund the organization lead to a wave of hacks and cyber attacks against the companies by transparency activists. “The blockade is outside of any accountable, public process. It is without democratic oversight or transparency. The US government itself found that there were no lawful grounds to add WikiLeaks to a US financial blockade. But the blockade of WikiLeaks by politicized US finance companies continues regardless,” WikiLeaks said in a statement at the time.

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Appears to be a real low amount. They lose a billion a month from not building 52 but 42 planes.

Global Grounding Of 737 Max Will Cost Boeing More Than $1 Billion (G.)

The global grounding of Boeing’s 737 Max jets will cost the company more than $1bn, the company said on Wednesday. In its first quarterly earnings report since the Lion Air and Ethiopian Airlines disasters, Boeing announced it had abandoned its 2019 financial outlook and halted share buy-backs in mid-March as it deals with the crisis. Dennis Muilenburg, Boeing’s chairman and chief executive officer, said: “We have great sorrow for the families affected. This weighs heavily on us.” He said the company’s first priority was to get the 737 Max back in the air and that the company was working closely with the Federal Aviation Administration (FAA) and other regulators to end the aircraft grounding.


The announcement was a sharp reversal from Boeing’s last earnings report in January, when executives unveiled plans to deliver more than 900 jetliners this year alongside higher sales and profits. The world’s largest plane-maker reported first-quarter revenue and cashflow below sharply lowered Wall Street estimates, largely due to stopping deliveries of the 737 Max jets, which were grounded in March after the two crashes. [..] Boeing cut production of the jets following the crashes to 42 aircraft per month, down from 52, and its operating cash flow in the first quarter was about $350m lower than a year earlier.

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Musk’s business models are all based on subsidies.

Tesla Reports Another Doozie (WS)

It would be a joke for a small niche automaker, specialized in luxury cars, with a global market share of less than 1% to get this kind of global attention. But Tesla is unique because of its extraordinarily ludicrous stock price. Though that price has come down by about 32% from its peak in June 2017, it’s still ludicrously high. More on that in a moment. We’re going to skip over all the glossy stuff and go straight to the financial statement, more specifically to the bottom line of the income statement, where Tesla reported a zinger of a net loss of $702 million, its third-worst quarterly net loss ever. We note here that part of Tesla’s business model is to sell taxpayer-funded pollution credits to other companies, but they’re not fully disclosed until Tesla files its 10-Q at a later date:

These pollution credits are pure profit. For Q1, Tesla disclosed only $15 million of these credits. For the full disclosure we have to wait until Tesla files its 10-Q report for Q1 at a later date, when no one pays attention. For example, in the miraculous third quarter last year, Tesla reported a profit of $311 million on October 24, and all the world was left speculating and digging into how it accomplished this. At the time, it disclosed $52 million in “regulatory credits,” as it calls them. But then on November 2, Tesla filed its 10-Q for that quarter, disclosing that $189.5 million of its $311 million in profits had come from the sale of those “regulatory credits,” a much larger amount than typical.


[..] at the price of $258.66 a share at the close today, Tesla has a market capitalization of $44.7 billion. By comparison, GM – and I’m no fan of GM at this price – which made $48 billion in net income over the past four years and whose revenues of $147 billion in 2018 were seven times the size of Tesla’s, has a market cap of $56.6 billion. And at peak Tesla nuttiness, there were long periods when the market cap of Tesla exceeded that of GM. So to have some fun, I created this chart to show the difference in market cap (GM minus Tesla) in billion dollars.

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“debt trap diplomacy”

Belt and Road Forum: China’s ‘Project Of The Century’ Hits Tough Times (G.)

As China fetes its Belt and Road initiative at a summit this week, Chinese officials will be working hard to defend the flagship project from growing international criticism. The three-day forum starting on Thursday is meant to promote Chinese leader Xi Jinping’s “project of the century”, a foreign policy initiative launched in 2013 to revive ancient trading routes between Asia and Europe, as well as build new links in the Middle East, Africa, and South America. But in contrast to its first summit two years ago, the Belt and Road Initiative (BRI) takes place in a much less welcoming environment. Critics say the initiative is an effort to cement Chinese influence around the world by financially binding countries to Beijing by way of “debt trap diplomacy”.


“The ‘Belt and Road initiative’ (BRI) is not a geopolitical tool but a platform for cooperation,” Chinese foreign minister Wang Yi said last week, ahead of the forum “We welcome all parties to take part in it.” This week’s event is especially important for Beijing, which uses the forum as a way to convince the international community, as well as its own citizens, of the success of the project. Beijing is likely to laud the memoranda of understanding signed at the event, which will conclude with a joint communique. [..] The event is to be attended by 37 leaders, including Russian president Vladimir Putin, Italian prime minister Giuseppe Conte, UK chancellor Philip Hammond, Pakistan’s prime minister Imran Khan and the heads of state of the 10 Asean (Association of South-east Asian Nation) states.

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“In this week’s episode of Hidden Forces, Demetri Kofinas speaks with China expert Anne Stevenson-Yang about the imminent dangers facing global financial markets in the event of a break in the renminbi-dollar peg.”

“I really have never seen a listed company in China that did not have material and significant fraud.” – Anne Stevenson-Yang”

Past Role and Current Risks from China – Anne-Stevenson Yang (HF)

The problem is that China generated a tremendous amount of money and credit since the GFC, in particular, and therefore risks a major devaluation in the value of the RMB should the country no longer be able to get the foreign exchange reserves it needs through a sustainable current account surplus. They are, at the moment, running a negative current account, a negative fiscal balance (of roughly 9% of GDP), their foreign exchange reserves are declining for the first time ever, while the country’s external debt has doubled in the last five years, increasing by an average of $70 billion per quarter since the beginning of 2017. More than half of this debt is short-term, which means it needs to be constantly rolled over.


Up until the Fed paused it’s tightening cycle, the rising interest rates coupled with new tariffs on Chinese goods were creating a pincer-like effect on China’s economy and on its ability to maintain its peg, forcing it to fund more of its dollar needs through borrowing at ever higher interest rates. China cannot maintain a credible peg between the RMB and the USD when its money supply is growing, by some calculations at more than 10x that of the United States over the last 10 years. This is a fundamental problem of accounting. If China were completely self-sufficient – if it had access to sufficient energy, food, base metals, etc. within its own borders – then its inability to obtain dollars would not be an issue. The problem is that it is desperately short these commodities as inputs for its manufacturing and domestic consumption.

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Not a Monbiot fan, but surely a discussion point. Unlike him, do come with an alternative.

Thunberg: ‘That future was sold so that a small number of people could make unimaginable amounts of money. It was stolen from us every time you said that the sky was the limit, and that you only live once.’

Declare Capitalism Dead – Before It Takes Us All Down With It (Monbiot)

Capitalism’s failures arise from two of its defining elements. The first is perpetual growth. Economic growth is the aggregate effect of the quest to accumulate capital and extract profit. Capitalism collapses without growth, yet perpetual growth on a finite planet leads inexorably to environmental calamity. Those who defend capitalism argue that, as consumption switches from goods to services, economic growth can be decoupled from the use of material resources. Last week a paper in the journal New Political Economy, by Jason Hickel and Giorgos Kallis, examined this premise. They found that while some relative decoupling took place in the 20th century (material resource consumption grew, but not as quickly as economic growth), in the 21st century there has been a recoupling: rising resource consumption has so far matched or exceeded the rate of economic growth.

The absolute decoupling needed to avert environmental catastrophe (a reduction in material resource use) has never been achieved, and appears impossible while economic growth continues. Green growth is an illusion. A system based on perpetual growth cannot function without peripheries and externalities. There must always be an extraction zone – from which materials are taken without full payment – and a disposal zone, where costs are dumped in the form of waste and pollution. As the scale of economic activity increases until capitalism affects everything, from the atmosphere to the deep ocean floor, the entire planet becomes a sacrifice zone: we all inhabit the periphery of the profit-making machine.

[..] The second defining element is the bizarre assumption that a person is entitled to as great a share of the world’s natural wealth as their money can buy. This seizure of common goods causes three further dislocations. First, the scramble for exclusive control of non-reproducible assets, which implies either violence or legislative truncations of other people’s rights. Second, the immiseration of other people by an economy based on looting across both space and time. Third, the translation of economic power into political power, as control over essential resources leads to control over the social relations that surround them.

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The only thing we’re acutally good at is destruction.

‘Death By A Thousand Cuts’: Vast Expanse Of Rainforest Lost In 2018 (G.)

Millions of hectares of pristine tropical rainforest were destroyed in 2018, according to satellite analysis, with beef, chocolate and palm oil among the main causes. The forests store huge amounts of carbon and are teeming with wildlife, making their protection critical to stopping runaway climate change and halting a sixth mass extinction. But deforestation is still on an upward trend, the researchers said. Although 2018 losses were lower than in 2016 and 2017, when dry conditions led to large fires, last year was the next worst since 2002, when such records began. Clearcutting of primary forest by loggers and cattle ranchers in Brazil dominated the destruction, including invasions into indigenous lands where uncontacted tribes live.

Losses were also high in the Democratic Republic of the Congo (DRC) and Indonesia. Indonesia is the only major country where government protections appear to be significantly reducing the losses. Ghana and Ivory Coast recorded the biggest percentage rises in rainforest destruction, driven by gold mining and cocoa farming. “We are nowhere near winning this battle,” said Frances Seymour from the World Resources Institute, part of the Global Forest Watch (GFW) network, which produced the analysis. “It is really tempting to celebrate a second year of decline since peak tree cover loss in 2016 but, if you look back over the last 18 years, it is clear that the overall trend is still upwards.”

“The world’s forests are now in the emergency room – it is death by a thousand cuts,” she said. “Band-Aid responses are not enough. For every hectare lost, we are one step closer to the scary scenario of runaway climate change.” There are many government and corporate efforts to combat deforestation, but they are not proving to be enough, Seymour said.

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Mar 112019
 
 March 11, 2019  Posted by at 10:06 am Finance Tagged with: , , , , , , , , , , , , ,  


Jean Metzinger Soldier playing chess 1915

 

Brexit Talks ‘Deadlocked’, Says Downing Street (G.)
Brexit Fallout On UK Finance Intensifies (R.)
How Central Bankers Blew Up The Global Economy (ABC.au)
What Fed Chair Powell Said On 60 Minutes (ZH)
China’s GDP Growth Could Be Half Of Reported Number – Pettis (SCMP)
Brookings Says China Overstated Size Of Its Economy By 12% (ZH)
Deutsche Bank Begins Talks Over Merger With Rival Commerzbank (G.)
Leaked Documents Reveal DOJ Protected Steele After FBI Shunning (KK)
How US Government and Media Spread Pro-War Propaganda (Greenwald)
US “Gets Its Ass Handed To It” In World War III Simulations (ZH)
Why The Shale Boom Left California Behind (Rapier)
Elderly Americans Are Dying Without Getting To Read Mueller’s Report (NW)

 

 

Crunch time starts tomorrow. The backstop is the big issue. EU cannot ‘budge’, because it would mean leaving Ireland out in the cold. It’s called the Irish backstop for a reason.

Brexit Talks ‘Deadlocked’, Says Downing Street (G.)

Downing Street has described the Brexit talks in Brussels as “deadlocked” after negotiations over the weekend failed to find a breakthrough on the Irish backstop. Theresa May and Jean-Claude Juncker, the European commission president, spoke on the telephone on Sunday evening, but plans for the prime minister to visit the Belgian capital to sign off on any compromise are on hold. The EU refuses to budge on the British proposal for what it believes is an attempt to build a unilateral exit mechanism into the Irish backstop, the arrangement that would keep the UK in a customs union to avoid a hard border on the island of Ireland.

The attorney general, Geoffrey Cox, is unlikely without such a concession to revise his legal opinion, given before the last vote on May’s deal, that the backstop could be in force “indefinitely”. The prime minister pledged in parliament to put her deal to the Commons on Tuesday but she is being urged by senior Conservative MPs to pull the vote if she fails to secure significant concessions from Brussels. Leading Tories have warned Downing Street it could face a second huge defeat similar to the historic 230-vote loss in January if the government goes ahead. They have advised May instead to replace the vote with a motion setting out the sort of Brexit deal that would be acceptable to Tory MPs, in the hope that this would trigger concessions from the EU.

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All they have left is finance. Austerity ate the rest.

Brexit Fallout On UK Finance Intensifies (R.)

More than 275 financial firms are moving a combined $1.2 trillion in assets and funds and thousands of staff from Britain to the European Union in readiness for Brexit at a cost of up to $4 billion, a report from a think tank said on Monday. UK lawmakers are due to vote on Tuesday on an EU divorce settlement. But with less than three weeks to go before Brexit day on March 29, it is still unclear whether the deal will be approved, whether departure from the EU will be delayed, or whether it will happen without agreement. The report by the New Financial think tank, one of the most detailed yet on the impact of Brexit on financial services, said Dublin alone accounted for 100 relocations, ahead of Luxembourg with 60, Paris 41, Frankfurt 40, and Amsterdam 32.

The independent think tank said half of the affected asset management firms, such as Goldman Sachs Investment Management, Morgan Stanley Investment Management and Vanguard, had chosen Dublin, with Luxembourg the next port of call, attracting firms like Schroders, JP Morgan Wealth Management and Aviva Investors. Nearly 90 percent of all firms moving to Frankfurt are banks, while two-thirds of those going to Amsterdam are trading platforms or brokers. Paris is carving out a niche for markets and trading operations of banks and attracting a broad spread of firms.

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This still needs to be explained, apparently.

How Central Bankers Blew Up The Global Economy (ABC.au)

We humans are a social lot. We just love being part of a pack, a member of a team. We crave acceptance, to the point where isolation or banishment ranks among the worst forms of punishment. Even when it comes to the dodgy art of forecasting, everyone seems to cluster around a central position, which kind of defeats the point of forecasting. And so, in July two years ago, when the groundswell of opinion began to shift — that the Reserve Bank would be raising interest rates — arguing otherwise was a fairly lonely position. As time went on, almost everyone shifted position as we dug in here, here and here.

To be fair, most of the highly paid, well-heeled professional market economists were being egged on by the authorities, and particularly the Reserve Bank, which was spinning the line that the next rate move was up. In the past fortnight, however, the pack suddenly has turned on its tail as fears about the global economy and a sudden slowdown in our own growth forced a rethink. The switch to a rate cut has turned into a stampede. Put aside all the complex formula. Forget the high-level macro-economic analysis. There’s a very simple reason the Reserve Bank couldn’t and can’t raise interest rates. There’s too much debt. Australian households are among the world’s most indebted when compared with their income.

And we’ve spent most of it on real estate. What these two graphs show is how the Reserve Bank, effectively, snookered itself. Back in 2012, when debt and housing prices already were elevated, it fired up the east coast housing market, and construction, to take up the employment slack as the mining boom unwound. But it created a monster. As housing went on a tear, the short-term sugar hit turned toxic. Employment took off. But housing became unaffordable to almost everyone under 35. And our household debt levels reached for the stars. The end result? It couldn’t cut rates if it needed. That would add heat to a dangerously inflated housing bubble. And it could never raise rates, because that would kill household spending.

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3 Stooges.

Nomi Prins: “Number of times the word “bubble” appeared in the 60 Minutes interview with Fed. Chair Jerome Powell. Zero.”

A central bank can have benefits, but not when it only serves the rich. If we don’t get rid of Fed and ECB, there’ll be very steep prices to pay.

Note: there’s a video at the link, but it started itself so I threw it out.

What Fed Chair Powell Said On 60 Minutes (ZH)

A decade after Ben Bernanke appeared on “60 Minutes”, vowing that the Fed could easily crush inflation, as it could “raise interest rates in 15 minutes”, of course with the occasional “pause” along the way should the S&P dip by 20% or so, current Fed Chairman Jerome Powell will follow in his footsteps on Sunday night, when surrounded by former Fed Chairs Bernanke and Yellen, he will try to reach beyond the Fed’s traditional audience of markets, journalists and lawmakers to counter the attacks from President Trump, even after the Fed’s paused on raising interest rates, said Sarah Binder, a professor of political science at George Washington University, quoted by MarketWatch.

“He wants to counter the president’s message that policy is all wrong,” Binder said. Binder said she was struck by the still photo of the “60 Minutes” interview that shows Powell alongside his two predecessors Janet Yellen and Ben Bernanke. “This puts a human face on the central bank. It says, ‘we’re the Fed and we’re here to help,’” Binder said. Bernanke also faced criticism when he went on “60 Minutes” in March 2009. The Fed was facing concerted attacks by lawmakers and populist “End the Fed” groups, who considering the record wealth divide in the US created by the central bank, were spot on.

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I’m going with Xiang Songzuo: “..China’s GDP growth for 2018 could be 1.67 per cent or even negative..”

China’s GDP Growth Could Be Half Of Reported Number – Pettis (SCMP)

If China’s bad debts were written down, its economic growth rate would be half the recorded number, a US economist at a prominent Chinese university has warned. In a speech in Shanghai this week, Michael Pettis, professor of finance at Peking University, warned that China’s debt is closely linked to the government’s perceived overstatement of its GDP. The government is accused of perpetuating the existence of “zombie companies”, by granting loss-making companies loans. Banks in turn treat these companies as creditworthy, whereas in reality they should be written off as bad debt, Pettis said. “If you believe there is bad debt that has not been sufficiently written down, you must believe that China’s GDP is overstated, relative to what it would be in any other country. That must be true,” Pettis said.

“If we are able to calculate GDP correctly, it would probably be half of the recorded number.” Pettis is not alone seeing troubles with China’s official growth number. In December, Xiang Songzuo, an outspoken professor from the Renmin University of China, who previously served as chief economist for Agricultural Bank of China, cited unidentified internal reports as saying that said China’s GDP growth for 2018 could be 1.67 per cent or even negative, a far cry from the official figures. Furthermore, a group of four economists published a paper this week arguing that China might have overstated its annual growth rate by 2 percentage points on average from 2008 to 2016. China’s official statistics agency said the country’s economic growth rate was 6.6 per cent in 2018.

The Chinese government said it would try to achieve an economic growth rate between 6.0 to 6.5 per cent in 2019, a moderate slowdown from previous years, but nevertheless a much faster rate compared with other major economies. Pettis is a renowned expert on China’s economy. For decades, he has been commenting on financial affairs in China and was among the early observers of the imbalances in the Chinese economy. He said in his speech on Wednesday that China’s growth will significantly decelerate as the country’s debt level rises.

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Brookings is many years late.

Brookings Says China Overstated Size Of Its Economy By 12% (ZH)

Since China managed to weather the fallout from the financial crisis without registering much of a slowdown in its “official” GDP figures, playing “guess the real growth rate” has become one of the most popular parlor games among the professional economist set. Whereas the stakes are much higher for academics on the mainland (one of whom was censored and threatened by government thugs after speculating that GDP growth on the mainland might be closer to 2%), researchers at American think tanks have freely offered estimates ranging from 2% to 4% (which, admittedly, would still put China well ahead of the US).

But as investors and economists once again cast a wary eye toward China as signs of flagging growth are once again threatening to sink the whole world into a recession, a team of researchers from the Brookings Institute has published a carefully researched paper detailing the exact mechanism by which authorities in Beijing inflate the country’s GDP figures, while estimating that China’s economy is roughly 12% smaller than the official figures would suggest. Brookings published the paper on Thursday, just two days after Party leaders at the annual National Party Congress lowered their economic growth forecast to between 6% and 6.5% of GDP.

Though the paper focused on the period between 2008 and 2016, it’s the latest evidence that China’s economic slowdown has been more severe than believed, and that the growth rate from last year – China’s worst since the early 1990s – might, in reality, be just under 6% (compared with 6.6%). According to Brookings, much of the manipulation in Chinese official government statistics takes place at the local level. In what the FT described as “a legacy of Maoist state planning”, authorities in Beijing hand down growth targets to local officials, who use it to goalseek the official statistics they hand back. “China’s national accounts are based on data collected by local governments. However, since local governments are rewarded for meeting growth and investment targets, they have an incentive to skew local statistics. China’s National Bureau of Statistics (NBS) adjusts the data provided by local governments to calculate GDP at the national level,” the study’s authors said.

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Two staggering drunks lean on each other so they can make it to the bar and continue drinking.

Deutsche Bank Begins Talks Over Merger With Rival Commerzbank (G.)

Deutsche Bank has begun tentative merger talks with rival Commerzbank, which would create Europe’s second biggest bank behind HSBC and fend off unwanted potential bidders such as French giant BNP Paribas. Reports in Germany’s Welt am Sonntag suggest that the banks have come under political pressure to consider a merger and avert a foreign takeover of Commerzbank, much the smaller partner in any deal. Deutsche is regarded as a bank of global importance, but has been plagued by three years of losses, boardroom battles, money laundering issues and its role as the biggest lender to the Trump business empire.

Despite Germany’s industrial dominance in Europe, it has only one bank in the continent’s top 20, and Berlin is understood to be keen to create a larger national champion. The combination of the two banks mean that Deutsche, currently fifth biggest, and Commerzbank, currently 23rd, will become Europe’s second biggest bank and only marginally behind HSBC. Deutsche Bank’s chief executive Christian Sewing was seen to be the main opponent of a merger, but investor pressure – Deutsche’ shares are trading at around €7.68 compared with €32 five years ago – is understood to have forced his hand. The talks are believed to be at a very early stage – “unofficial contacts in a very small group” according to Welt am Sonntag – but are likely to be welcomed by major shareholders.

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This is getting too stupid. But who’s going to investigate the DOJ and FBI?

Leaked Documents Reveal DOJ Protected Steele After FBI Shunning (KK)

Steele was cut off by the FBI for revealing his relationship with the Bureau to the media – but Ohr continued to pass information from Steele to his colleagues, regularly spoke to him via email and phone, and met up with him face-to-face on several occasions. Information watchdog Judicial Watch has released 339-pages of US Department of Justice records, revealing former Associate Deputy Attorney General Bruce Ohr remained in regular contact with ex-MI6 operative Christopher Steele after Steele’s status as a paid confidential informant was terminated by the FBI in November 2016.

“These smoking gun documents show Christopher Steele, a Hillary Clinton operative and anti-Trump foreign national, secretly worked hand-in-glove with the Justice Department on its illicit targeting of President Trump. These documents leave no doubt that for more than a year after the FBI fired Christopher Steele for leaking, and for some 10 months after Donald Trump was sworn in as president, Bruce Ohr continued to act as a go-between for Steele with the FBI and Justice Department. The anti-Trump Russia investigation, now run by Robert Mueller, has been thoroughly compromised by this insider corruption,” said Judicial Watch President Tom Fitton.

Whether an accurate appraisal or not, it’s clear from the assorted communications Ohr was determined to ensure Steele retained access to the Bureau, and this contact remained hidden from public view – for instance, when acting Attorney General Sally Yates was fired by Trump January 2017, Steele feared Ohr would be fired too, and texted him to express his “sympathy and support”. “If you end up out, I really need another contact point/number who is briefed. We can’t allow our guy to be forced to go back home. It would be disastrous all round, though his position right now looks stable. A million thanks,” Steele wrote. In response, Ohr assured the Orbis chief he could “certainly” give him an FBI contact “if it becomes necessary”.

On 6 March that year, Senator Chuck Grassley wrote to then-FBI Director James Comey, seeking clarity on the nature of Steele’s relationship with the FBI. The next day, Steele texted Ohr to say he was “very concerned” by the letter, and its “possible implications for our operations and sources…We need some reassurance…Really fundamental issues at stake here”. Days later, with Comey scheduled to testify before Congress, Steele told Ohr he was “a bit apprehensive” and hoped “important firewalls will hold”. On 24 March, Ohr and Steele discussed their “response” to the testimony, as he understood “an approach from the Senate Intelligence Committee” to Orbis was imminent.

On 26 October, Steele said he’s “very concerned” about documents the FBI intended to turn over to Congress about his work and “relationship with them”. “Can we have a word tomorrow please? Just seen a story in the media about the Bureau handing over docs to Congress…Peoples live may be engangered [sic],” he despaired.

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Same as it ever was.

How US Government and Media Spread Pro-War Propaganda (Greenwald)

[..] on February 23, when the narrative shifted radically in favor of those U.S. officials who want regime change operations in Venezuela. That’s because images were broadcast all over the world of trucks carrying humanitarian aid burning in Colombia on the Venezuela border. U.S. officials who have been agitating for a regime change war in Venezuela – Marco Rubio, John Bolton, Mike Pompeo, the head of USAid Mark Green – used Twitter to spread classic Fake News: they vehemently stated that the trucks were set on fire, on purpose, by President Nicolas Maduro’s forces. [..] on Saturday night, the New York Times published a detailed video and accompanying article proving that this entire story was a lie.

The humanitarian trucks were not set on fire by Maduro’s forces. They were set on fire by anti-Maduro protesters who threw a molotov cocktail that hit one of the trucks. And the NYT’s video traces how the lie spread: from U.S. officials who baselessly announced that Maduro burned them to media outlets that mindlessly repeated the lie. [..] While the NYT’s article and video are perfectly good and necessary journalism, the credit they are implicitly claiming for themselves for exposing this lie is totally undeserved. That’s because independent journalists – the kind who question rather than mindlessly repeat government claims and are therefore mocked and marginalized and kept off mainstream television – used exactly this same evidence on the day of the incident to debunk the lies being told by Rubio, Pompeo, Bolton and CNN.

On February 24, the day the lie spread, Max Blumenthal wrote from Venezuela, on the independent reporting Grayzone site, that “the claim was absurd on its face,” noting that he “personally witnessed tear gas canisters hit every kind of vehicle imaginable in the occupied Palestinian West Bank, and I have never seen a fire like the one that erupted on the Santander bridge.” He compiled substantial evidence strongly suggesting that the trucks were set ablaze by anti-Maduro protesters, including Bloomberg video showing them using Molotov cocktails, to express serious doubts about the mainstream narrative. On Twitter, in response to Marco Rubio’s lie, he wrote: “I did not see any Venezuelan government forces set fire to US aid trucks on the Colombian side of the border. And neither did you. Actually, the evidence so far is pointing in the other direction.”

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Is this going to have the neocons clamor for war today, before everyone understands it?

US “Gets Its Ass Handed To It” In World War III Simulations (ZH)

In simulated World War III scenarios, the U.S. continues to lose against Russia and China, two top war planners warned last week. “In our games, when we fight Russia and China, blue gets its ass handed to it” RAND analyst David Ochmanek said Thursday. RAND’s wargames show how US Armed Forces – colored blue on wargame maps – experience the most substantial losses in one scenario after another and still can’t thwart Russia or China – which predictably is red – from accomplishing their objectives: annihilating Western forces. “We lose a lot of people. We lose a lot of equipment. We usually fail to achieve our objective of preventing aggression by the adversary,” he warned.

In the next military conflict, which some believe may come as soon as the mid-2020s, all five battlefield domains: land, sea, air, space, and cyberspace, will be heavily contested, suggesting the U.S. could have a difficult time in achieving superiority as it has in prior conflicts. The simulated war games showed, the “red” aggressor force often destroys U.S. F-35 Lightning II stealth fighters on the runway, sends several Naval fleets to the depths, destroys US military bases, and through electronic warfare, takes control of critical military communication systems. In short, a gruesome, if simulated, annihilation of some of the most modern of US forces. “In every case I know of,” said Robert Work, a former deputy secretary of defense with years of wargaming experience, “the F-35 rules the sky when it’s in the sky, but it gets killed on the ground in large numbers.”

So, as Russia and China develop fifth-generation fighters and hypersonic missiles, “things that rely on sophisticated base infrastructures like runways and fuel tanks are going to have a hard time,” Ochmanek said. “Things that sail on the surface of the sea are going to have a hard time.” “That’s why the 2020 budget coming out next week retires the carrier USS Truman decades early and cuts two amphibious landing ships, as we’ve reported. It’s also why the Marine Corps is buying the jump-jet version of the F-35, which can take off and land from tiny, ad hoc airstrips, but how well they can maintain a high-tech aircraft in low-tech surroundings is an open question,” said Breaking Defense.

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Love Robert, but talking about shale is interesting only when you include industry debt.

Why The Shale Boom Left California Behind (Rapier)

Many people are unaware about California’s importance in the U.S. oil industry. In fact, 100 years ago California was the top oil producer in the U.S., responsible at one point for nearly 40% of U.S. oil production. California oil production rose throughout most of the 20th century, briefly eclipsing one million barrels per day in the early 1980s. Oil production began to decline there after peaking in 1985. The same pattern took place in many other states, and in fact was the case for the entire U.S., where oil production peaked in 1970, and then declined over the next 35 years. But the shale boom changed the trajectory of U.S. oil production.

Oil production that had fallen for decades reversed direction and began to surge about a decade ago. Almost every state with shale oil resources saw a similar surge in production. Since 2010, U.S. oil production has increased by 131%, with huge gains in oil production in the following states (among others): • North Dakota – up 634% • Colorado – up 508% • New Mexico – up 377% •Texas – up 330% • Oklahoma – up 238%. In fact, only three major oil-producing states have seen a decline in oil production since 2010: California, Louisiana, and Alaska. One of the graphics I created for my presentation shows the stark contrast between oil production in Texas and California as the shale boom unfolded.

During the 1980s and 1990s, oil production in Texas was declining faster than it was in California. Had that trajectory been maintained, Texas oil production may have fallen below California’s in about 2010. Instead, the shale boom has added nearly four million BPD of oil production in Texas. Millions of barrels were added in other states as well, and California began to slide down the ranks of leading oil producers. Just a few years ago California was still in 2nd place, but now it has slipped to 6th, behind Texas, North Dakota, New Mexico, Oklahoma, and Alaska.

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“.. And They’re Hot Happy About It”. Not the Onion, but Newsweek.

Elderly Americans Are Dying Without Getting To Read Mueller’s Report (NW)

As special counsel Robert Mueller’s investigation is reportedly coming to an end, elderly and sick Americans are trying to hold on to their lives so they can read the highly-anticipated report that has been nearly two years in the making. World War II veteran Mitchell Tendler—a man who survived numerous historic milestones, including the Korean War, Vietnam, Watergate and President BIll Clinton’s impeachment—fell sick on Dec. 29, at 93 years old, reported NPR. “I got a call at 11 o’clock. My mom said, ‘Well, Dad’s not feeling well—he really can’t stand,'” Tendler’s son, Walter, recalled. “Within a couple of hours they called 911 and got him into the ER because it wasn’t getting any better.”

Tendler survived two implantable defibrillators throughout his life. But while on his third, he started to fade. After he was provided painkillers by doctors, Tendler voiced his final thoughts. “It just was quiet for a little while,” Walter Tendler told the news outlet, “and then he just sits up in bed halfway and looks at me and he goes, ‘S***, I’m not going to see the Mueller report, am I?’ And that was really the last coherent thing that he said.” Richard Armstrong, a 94-year-old currently in hospice care in New Jersey, related to Tendler’s sentiments. “I know exactly how he feels. I feel the same way. I’ve been diagnosed with pancreatic cancer,” Armstrong told NPR.

“I was hoping to live to see the outcome of what I think it should be—justice. I’ll be surprised and disappointed if it isn’t.” After seeing Tendler’s words—shared on Twitter by Benjamin Wittes, a senior fellow at the Brookings Institution—Kristina Makansi, who lives in Arizona, thought about her mother who passed away at the age of 94 in January. “When I saw that tweet about the Mueller report and the old man on his deathbed, I thought, Oh my gosh, that’s the kind of thing that my mother would say,” she said. “I think she really wanted to see that justice was done… and that the investigation was allowed to proceed without any shenanigans and obstruction.”

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Mar 082019
 
 March 8, 2019  Posted by at 10:39 am Finance Tagged with: , , , , , , , , , , , , , ,  


Pablo Picasso Visage 1928

 

Paul Manafort Sentenced To 47 Months In Prison (ZH)
ECB’s Surprise Policy Moves Send Shivers Through Global Stock Markets (MW)
US Dollar Hits 52-Week High on New ECB Stimulus (WS)
China Exports Fall 20.7% In February; Trade Data Much Weaker (CNBC)
China’s February Trade Surplus With US Narrows Sharply To $14.72 Billion (R.)
US Households See Biggest Decline In Net Worth Since Financial Crisis (CNBC)
Fed QE Unwind Reaches $501 Billion, Balance Sheet Falls Below $4 Trillion (WS)
Germany Won’t Ban Huawei, Says Ready To Oppose US Pressure (RT)
May Urges EU To Agree Brexit Backstop Changes (BBC)
Corbyn Backtracks On Final Say Referendum (Ind.)
British Life Expectancy Falls By Six Months (G.)
Default Or Exit: A Battle Between Italy And The EU Is Inevitable (OR)
Blackout Darkens Much Of Venezuela (AFP)
This Jew Tells Speaker Pelosi: “You May Well Prove Ilhan Omar Correct” (Cohen)
Chelsea Manning Risks Jail To Fight WikiLeaks Grand Jury (SP)

 

 

Shimon Prokupecz from the courtroom: “Judge tells the courtroom that Manafort is not being sentenced for anything related to the Special Counsel’s investigation into Russian interference. Ellis said “He is not before the court for anything having to do with colluding with the Russian government”

So what’s the Guardian headline? “Trump-Russia figure Paul Manafort jailed”.

Paul Manafort Sentenced To 47 Months In Prison (ZH)

In a surprise decision that stands as a slap in the face to Special Counsel Robert Mueller, Judge Ellis handed Paul Manafort a surprisingly light sentence of 47 months -or just under four years in prison – rejecting federal sentencing guidelines that recommended Manafort face up to 24 years in prison – a sentence that would have effectively condemned him to die in jail. Manafort was also fined $50,000 (equivalent to a few of Manafort’s bespoke suits) and ordered to pay restitution of $25 million. At this rate, Manafort might be out before Mueller finally wraps up his probe.

Early in the trial, Manafort appeared headed for a stiff sentence despite showing up in court in a wheelchair and green prison jumpsuit. Initially, after a lengthy review of Manafort’s charges, Ellis, who presided over Manafort’s August trial, said he would reject his lawyers’ request for leniency and accused the former Trump campaign executive of not being entirely forthcoming with the court about his finances. Furthermore, he refused to give him credit for accepting responsibility for his crimes, and also rejected his lawyers’ argument that the fact that Manafort hadn’t been found complicit in Russian collusion detracted from the charges for which he was convicted. When it came time for their statement, prosecutors told the judge Manafort offered little meaningful help during his 50 hours of meetings with investigators, and that the main reason he spent so much time with investigators was because he had lied.

But when it came his turn to speak, Manafort sounded genuinely contrite, telling the judge he felt “humiliated and ashamed” for what he’d done, and that the last two years had been “the most difficult years for my family and I.” “I appreciate the fairness of the trial you conducted,” he said. “My life is professionally and financially in shambles.” In the first indication that the sentence would be lighter than many had anticipated, the judge told Manafort and the court that he felt the federal sentencing guidelines were too stiff, and that Manafort had led an “otherwise blameless” life. Ellis recommended that Manafort – who is reportedly suffering from gout and other unspecified health issues – serve his sentence in a Cumberland, Maryland prison camp. He also credited him with nine months already served.

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The power of central banks is destructive in every possible sense.

ECB’s Surprise Policy Moves Send Shivers Through Global Stock Markets (MW)

Mario Draghi has been grumbling about the deleterious side effects of trade tensions and other geopolitical worries for months, but the ECB’s surprise policy moves in the face of a slowing global economy appeared to bring the danger home to investors. Stocks on Wall Street fell alongside European equities, underlining rising worries among investors that weakness in the global economy could prove to be a drag on U.S. growth. While analysts had expected the ECB president to strike a dovish tone, policy makers went much further than anticipated.

First, the ECB extended its so-called forward guidance on ultralow interest rates, saying it doesn’t expect to begin lifting them until at least early 2020. That’s compared to its earlier plan to leave them on hold at least through the end of this summer. Second, the ECB launched its third iteration of a program of cheap loans — known as targeted long-term refinancing operations, or TLTROs — to eurozone banks. It all came as ECB staff slashed their macroeconomic forecasts, including reducing the outlook for 2019 GDP growth to 1.1% from a previous 1.7% and signaling that inflation will take even longer to reach the central bank’s target of near but just below 2%. Price stability is the ECB’s sole policy mandate.

Draghi’s comments on the economy were getting the blame from analysts and investors for a decline in European and, in part, U.S. stocks. The pan-European Stoxx Europe index ended 0.4% lower, while on Wall Street, the S&P 500 and the Dow Jones Industrial Average ended with a loss of more than 200 points, or 0.8%, after declining 320 points at its session low. European government bonds rallied and the euro extended a decline versus the U.S. dollar.

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Draghi just scared friend and foe. Get rid of him, and his job. The damage is unthinkable.

US Dollar Hits 52-Week High on New ECB Stimulus (WS)

The Dollar Index (DXY), which tracks the dollar against the euro, yen, pound sterling, Canadian dollar, Swedish krona, and Swiss franc, and which is dominated by the euro, jumped 0.83% to 97.71 at the moment, hitting at least briefly its 52-week high, as the euro slumped 1.1% against the dollar, following the ECB’s announcement earlier today. But it wasn’t just a one-day event for the dollar, but an eight-day rally in an uptrend that started in early February. The real worry is the economy in the Eurozone – despite the fabulous stimulus the ECB has heaped on it for years, including a brutal negative-interest-rate policy and massive QE that has inflated the ECB’s balance sheet to over 40% of Eurozone GDP (by comparison, the Fed’s balance sheet is down to 19.5% of US GDP).

The Eurozone economy is deteriorating rapidly. In the post-meeting press conference today, ECB president Mario Draghi announced that the ECB had slashed its economic growth forecast for the Eurozone to 1.1% for 2019, a sharp cut from its forecast of 1.7% growth at the December meeting, and down from its 1.9% growth forecast last summer. “Incoming data have continued to be weak, in particular in the manufacturing sector, reflecting the slowdown in external demand compounded by some country and sector-specific factors,” the statement says.

Instead of admitting that its radical experimental monetary policies were a colossal error as the economic growth is now dwindling despite or because of the stimulus, and instead of gradually raising its policy rates above the rate of inflation to end its brutal “financial repression,” and instead of shedding the bonds on its balance sheet to push up long-term interest rates and force a restructuring of the bogged-down European economy so that it would liquidate or restructure the debts of zombie companies and lighten the load of restructured companies to allow them to have a fresh start – all of it at investors expense – the ECB does the opposite.

It promises new bank liquidity programs in the Eurozone which is already drowning in central-bank liquidity, to get banks to lend more to these zombie companies and keep them from restructuring their debts.

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When did that big Party meeting end?

China Exports Fall 20.7% In February; Trade Data Much Weaker (CNBC)

China on Friday reported worse than expected trade data for the month of February, customs data showed amid Beijing’s trade dispute with the U.S. Dollar-denominated exports plunged 20.7 percent for the month of February from a year ago, missing economists’ expectations of a 4.8 percent decline, according to a Reuters poll. January exports had risen 9.1 percent from a year ago. Dollar-denominated imports fell 5.2 percent in February from a year ago, missing economists’ forecast of a 1.4 percent fall. January imports had fallen 1.5 percent on-year. China’s February trade balance was also significantly weaker than expected at $4.12 billion. Economists polled by Reuters had expected the overall trade balance to come in at $26.38 billion.

The country’s trade balance in January had been $39.16 billion. China’s politically sensitive trade surplus with the U.S. narrowed sharply to $14.72 billion in February from $27.3 billion in January. Although the 20.7 percent decline in Chinese exports for the month of February was a “big number” and the market will be “clearly disappointed,” the negative number should not come as a surprise as investors have been expecting a slowdown both globally and in China, said Sarah Lien, director and client portfolio manager at Eastspring Investments. “There are a lot of headwinds; there’s a lot of moving parts in market,” Lien told CNBC.

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So no currency manipulation needed?

China’s February Trade Surplus With US Narrows Sharply To $14.72 Billion (R.)

China’s trade surplus with the United States narrowed to $14.72 billion in February, from $27.3 billion in January, customs data showed on Friday. For January-February combined, China’s trade surplus with the U.S. stood at $42.1 billion. China’s large trade surplus with the United States has long been a sore point with Washington, and is at the center of a bitter dispute between the two countries. In 2018, the two governments imposed tit-for-tariffs on goods worth hundreds of billions of dollars.

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Do note: what wealth there is, or is measured, sits in real estate and stocks, the very two biggest bubbles blown by the Fed. Net worth my donkey.

US Households See Biggest Decline In Net Worth Since Financial Crisis (CNBC)

Americans’ net worth fell at the highest level since the financial crisis in the fourth quarter of 2018 as sliding stock market prices ate into the household balance sheet. Net worth dropped to $104.3 trillion as the year came to an end, a decrease of $3.73 trillion from the third quarter, according to figures released Thursday by the Federal Reserve. The fall amounted to a drop of 3.4 percent. Much of the slide came due to Wall Street’s woes, as the stock market suffered a precipitous decline that started in October and briefly reached bear market status. Equities skidded as investors began to fear that the Fed would keep raising interest rates even as economic conditions began to deteriorate. By the time the market drop ended in late December, households saw $4.6 trillion worth of equity value deteriorate.

The decline was offset somewhat by a $300 billion increase in real estate value. The overall move was the second-highest quarterly dollar drop since the Fed began tracking the statistic. Overall, financial assets totaled just more than $85 trillion at the end of the year, while real estate value was $29.2 trillion. Household net worth has been rising strongly since the crisis and is up 73 percent since 2009. After suffering their worst Christmas Eve in history, stocks staged a turnaround and ultimately saw their best two-month start to a year since at least 1991. The Dow Jones Industrial Average is off about 1.6 percent in March though still up more than 9 percent year to date.

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Cui bono.

Fed QE Unwind Reaches $501 Billion, Balance Sheet Falls Below $4 Trillion (WS)

Over the next few months, the Fed is expected to announce its new plan for its balance sheet. Meanwhile, as we’re riveted to the edge of our seat, the old plan continues on autopilot, and February was one of the few months when the Treasury “roll-off,” as Chairman Jerome Powell likes to call it, hit the “caps.” In February, the Fed shed $57 billion in assets, according to the Fed’s balance sheet for the week ended March 6, released this afternoon. This slashed the assets on its balance sheet to $3,969 billion, the lowest since December 2013. Via its “balance sheet normalization,” the Fed has now shed $501 billion. And since peak-balance-sheet at the end of 2014, the Fed has shed $547 billion:

During peak-balance-sheet at the end of 2014, total assets ($4.52 trillion) amounted to 26% of GDP. Today’s assets amount to 19.4% of GDP. In the years before QE started, the balance sheet ran around 6% of GDP. By comparison, the ECB’s balance sheet assets now exceed 40% of GDP, and the Bank of Japan’s assets amount to 101% of GDP. February’s drop of $57 billion is larger than the scheduled QE unwind that is capped at $50 billion. But the Fed has other activities that impact the balance sheet. QE revolved around Treasury securities and mortgage-backed securities (MBS). And so does the QE unwind.

[..] On February 15, three issues of Treasury securities on the Fed’s balance sheet totaling $43.5 billion matured. On February 28, three issues totaling $12.5 billion matured. This brought the total for the month to $56 billion – above the cap of $30 billion. So the Fed reinvested $26 billion in new Treasury securities and allowed $30 billion of Treasuries to “rolled off” the balance sheet without replacement. This reduced the total balance of Treasury securities by $30 billion, to $2,175 billion, the lowest since December 2013 – and down by $290 billion since the QE unwind began. This has whittled down the Treasuries acquired during the infamous “QE Infinity” by about one-third:

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When it comes to things like 5G networks, which cross borders, the rest of Europe has little choice but to follow Germany.

Germany Won’t Ban Huawei, Says Ready To Oppose US Pressure (RT)

Germany does not intend to prevent Chinese tech giant Huawei from developing 5G networks, the country’s economy minister said, adding that the EU stands ready to defend its interests, should a trade war with Washington escalate. Berlin will not pre-emptively ban any specific companies from bidding for contracts to develop the country’s next generation 5G mobile network, despite immense pressure from the United States to ostracize Huawei, Peter Altmaier said on Thursday evening, during a debate on ZDF television. “No, we will not want to exclude any company,” he stressed, explaining that the government is capable of implementing enough safeguards to protect Germany’s future networks.

Ignoring Washington’s earnest ‘concerns’ that, through Huawei systems, the Chinese government is planning to spy on the entire world, German authorities produced a list of telecom security requirements on Wednesday. Part of the new German rules requires certifying any security-related components with Germany’s IT security agency. The 5G network “may only be sourced from trustworthy suppliers whose compliance with national security regulations and provisions for the secrecy of telecommunications and for data protection is assured,” Germany’s Economic Ministry and the Federal Network Agency said in their guidelines. Thus Huawei, which has recently sued the US government demanding to see any proof behind their claims, can participate in the tendering process if it meets the requirements set out by Berlin.

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3 weeks to D-Day. Cue blame game.

May Urges EU To Agree Brexit Backstop Changes (BBC)

Theresa May will urge the EU to help get her Brexit deal through the Commons by agreeing legally binding changes to the controversial backstop. On Friday, she will say the EU’s actions will “have a big impact on the outcome” when MPs vote on it next week. But Labour’s Sir Keir Starmer said it was now “clear” the PM “will not be able to deliver the changes she promised to her failed Brexit deal”. The EU says the UK must come forward with new ideas to break the deadlock. The UK is due to leave on 29 March.

Mrs May will visit workers in Grimsby, Lincolnshire, on Friday, days before the second “meaningful vote” in the Commons on the withdrawal deal she has negotiated with the EU. She will tell them: “Just as MPs will face a big choice next week, the EU has to make a choice too. “We are both participants in this process. It is in the European interest for the UK to leave with a deal. “We are working with them but the decisions that the European Union makes over the next few days will have a big impact on the outcome of the vote.”

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Has Corbyn done anything not wrong?

Corbyn Backtracks On Final Say Referendum (Ind.)

Labour has admitted it will not support a new referendum on Brexit in all circumstances, in a major blow to those in the party campaigning for one. Sources close to the Labour leadership confirmed that the party is not advocating a referendum on anything other than a “damaging Tory Brexit” and will not support one if Britain leaves the EU on terms that Labour backs. The Independent has learnt that the issue was the subject of a row between Mr Corbyn’s shadow ministers that pitted Keir Starmer and Emily Thornberry against Brexit-backing frontbenchers led by Jon Trickett. As it dawned on Labour Remainers today, a prominent MP who backs the People’s Vote campaign warned that a failure of the party to follow through on the pledge to back a new referendum would be seen as a “betrayal”.

It comes as deputy leader Tom Watson is in the process of forming a new “social democrat” group within the party, while eight MPs have quit the party, in large part over Brexit policy, to form the new Independent Group. Labour said last week that it would support a vote on any “credible” exit plan passed by parliament, and shadow ministers took to the airwaves to promise to demand a “confirmatory referendum” on “whatever deal may or may not pass through parliament”. However, sources have now told The Independent that the party will only support a referendum on a “damaging Tory Brexit” deal. Crucially, it is understood that Labour does not consider this to include the type of arrangement being proposed by former Conservative ministers Sir Oliver Letwin and Nick Boles, who Mr Corbyn held talks with yesterday. Their plan would keep the UK in the single market and a customs union with the EU.

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This should panic the country like nothing else. But instead all the talk is Brexit and they’re signaling the advantages for pension schemes of people dying younger.

British Life Expectancy Falls By Six Months (G.)

British adults’ life expectancy has been cut by six months in the biggest reduction in official longevity forecasts. The Institute and Faculty of Actuaries, which calculates life expectancy on behalf of the UK pension industry, declined to speculate on why longevity is deteriorating for men and women in England and Wales. Some analysts, however, blame austerity and cuts in NHS spending, others point to worsening obesity, dementia and diabetes. The institute said it now expects men aged 65 to die at 86.9 years, down from its previous estimate of 87.4 years, while women who reach 65 are likely to die at 89.2 years, down from 89.7 years. The actuaries said the evidence of slowing life expectancy that first emerged around 2010-11 is “a trend as opposed to a blip”. Falling longevity has accelerated.

Last year’s analysis cut forecasted life expectancy by two months. This year it took off another six months. Compared with 2015, projections for life expectancy are now down by 13 months for men and 14 months for women. Flat or falling longevity has major implications for health, finance and government policy. The state pension age is planned to rise to 68 in 2037, and the government has floated the idea of increasing it to 70 but will come under pressure to backtrack if longevity drops. [..] Pension companies have already begun to cash in on falling expectations. This week Legal & General said it was releasing £433m of the reserves it holds to pay future pensions because of the reductions in longevity expectations.

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European parliament elections in May. That will bring a lot into the open.

Default Or Exit: A Battle Between Italy And The EU Is Inevitable (OR)

There is a dual Italian crisis brewing in the European Union. On the one hand, it is a political, or even geopolitical, crisis. Italy is undermining the unity of the European Union; blocking the EU’s recognition of those behind the coup in Venezuela as the legitimate authority; preventing the expansion of sanctions against Russia; and even supporting the ‘yellow vest’ movement in France, which is arousing the anger of the French government. On the other hand, the crisis is economic in nature. Italy is once more sliding into a recession (economic growth was negative in the country); Italian banks are again facing financial problems; and the business media has already estimated that the Italian economic crisis could blow up the entire European banking system.

There is a strong possibility that the EU’s leaders will soon be faced with a choice: try to save Italy (and the whole of Europe) from yet another crisis or set an example by punishing the Italian government for the country’s independent economic and foreign policies. In turn, Italian Prime Minister Giuseppe Conte’s government will most likely have its own dilemma to deal with: bow down and sell its principles to get help from Brussels or go all out and regain Italian independence. The choice will not be easy and either decision will be painful. Neither ending to this Italian drama could really be called happy. As this headline in The Telegraph quite rightly notes: “Crisis brewing in Italy will lead to default, exit from the euro, or both.”

[..] To really understand the Italian problem, it should be borne in mind that, as a member of the European Union and the eurozone, Italy does not have full national sovereignty, especially when it comes to economic matters. It does not control the monetary policy of the European Central Bank and cannot even prepare a budget in line with the wishes of its own government or parliament without the risk of running into sanctions or fines from the European Commission. What’s more, Italian eurosceptic politicians suspect that the European Commission (in which the main roles belong to people hand-picked by Germany, France and the US) is punishing Italy and literally strangling its economy because of a political dislike of the Italian government’s geopolitical actions.

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If this happens more often it won’t be a coincidence.

Blackout Darkens Much Of Venezuela (AFP)

Most of Venezuela plunged into darkness on Thursday evening as a blackout served up more misery for people enduring an economic crisis that has fueled a potent challenge to President Nicolas Maduro’s rule. The socialist government quickly blamed the outage affecting 23 of the country’s 24 states on what it called sabotage of a major hydroelectric dam. In Caracas, traffic lights went out and the subway system ground to a halt, triggering gridlock in the streets and huge streams of angry people trekking long distances to get home from work. The blackout in the capital was total and hit at 4:50 pm (2050 GMT), just before nightfall. Caracas is one of the world’s most crime-ridden cities so people set out for home early, well before the sun went down.

Commerce was shut down because most transactions are done with debit or credit cards. Hyperinflation has rendered the local currency, the bolivar, almost worthless. Telephone services and access to the internet were also knocked out. The capital’s international airport was hit, according to social media posts from would-be travelers. A Copa Libertadores football game in the city of Barquisimeto was postponed. As night set in, the nationwide outage dragged on and some people in Caracas banged pots and pans – a traditional Latin American method of letting off steam. About seven hours after the mess started, the lights did come back on in some buildings in eastern Caracas.

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But campaign finance!

This Jew Tells Speaker Pelosi: “You May Well Prove Ilhan Omar Correct” (Cohen)

Speaker Nancy Pelosi is reportedly still considering a symbolic “show vote” in Congress on an anti-Semitism and “hate” resolution – which would offer all the authenticity and honesty of a Soviet show trial. If Pelosi proceeds, it will prove Rep. Ilhan Omar’s point about the inordinate influence wielded over Congress by the “Israel-right or-wrong”/AIPAC lobby and its power to stifle criticism of Israel. The anti-Omar resolution, whether mentioning Omar or not, was originated by two Democrats who are among Congress’s most longstanding pro-Israel diehards: Eliot Engel and Nita Lowey. Both endorsed Bush’s Iraq invasion. Both opposed Obama’s Iran nuke deal. Both supported Trump’s move of the U.S. embassy to Jerusalem.

I’m a proud Jew raised in a liberal family that supported civil rights and human rights. My experience growing up during the 1950s and 1960s was typical of many Jewish Americans. Like many Jews with this background, I’ve grown increasingly ashamed of Israel. For 40 years, Israel has been ruled mostly by a series of right-wing governments – more and more openly racist and abusive of Palestinian rights. It’s not the land of tree-planting, kibbutzim and “a country treating its Arab minority nicely” that we were sold as youngsters. That’s why a large number of proud Jewish Americans – raised to believe in civil liberties and open discussion – are appalled by the campaign to muzzle Rep. Ilhan Omar, as well as Speaker Pelosi’s role in it. We’re also appalled that human-rights-abusing Israel is virtually off-limits to debate.

[..] Rep. Omar has made a simple and undeniable point – that AIPAC (American Israel Public Affairs Committee) and the funding it [receives] influences exert extraordinary power over Congress. Disputing that point is flat-earther terrain. The Capitol Hill farce of an “anti-hate” resolution would provide still more evidence on behalf of her argument.

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We lock up our best, brightest and bravest. It’s the only way we can continue on our present paths. But there should be a big Hollywood movie in the works about Chelsea Manning as a role model for all young Americans.

Chelsea Manning Risks Jail To Fight WikiLeaks Grand Jury (SP)

Chelsea Manning will face a closed contempt hearing after she refused to answer questions during proceedings held by a grand jury in Alexandria, Virginia, that is investigating WikiLeaks. The WikiLeaks grand jury investigation has been ongoing in some form or another in Alexandria since at least December 2010. It was convened by the Justice Department in response to disclosures Manning made to WikiLeaks in 2010, when she was an intelligence analyst for the United States Army. What Manning disclosed exposed war crimes, diplomatic misconduct, and other instances of wrongdoing and questionable conduct by U.S. government officials. But she arrested, subject to a court-martial, and convicted of violating the Espionage Act and other related offenses.

She received a 35-year sentence and was released after six years in military prisons because a grassroots campaign successfully pressured President Barack Obama to commute her sentence. “A judge will consider the legal grounds for my refusal to answer questions in front of a grand jury. The court may find me in contempt and order me to jail,” Manning stated. On March 6, Manning appeared before the grand jury after she was granted immunity for her testimony. “All of the substantive questions pertained to my disclosures of information to the public in 2010—answers I provided in extensive testimony during my court-martial in 2013. I responded to each question with the following statement: ‘I object to the question and refuse to answer on the grounds that the question is in violation of my First, Fourth, and Sixth Amendment, and other statutory rights.’”

Manning added, “In solidarity with many activists facing the odds, I will stand by my principles. I will exhaust every legal remedy available. My legal team continues to challenge the secrecy of these proceedings, and I am prepared to face the consequences of my refusal.” She could face up to 18 months in jail if she is found “in contempt” of court. A legal attempt to quash the subpoena prior to her appearance before the grand jury was rejected by a federal judge on March 5. Grand juries can be empaneled for 18 months, or if they are “special” grand juries, they may last up to 36 months. Over the past eight years, the grand jury has presumably gone through multiple iterations, either being renewed or relaunched.

According to a report from the Washington Post, the grand jury is interested in whether WikiLeaks editor-in-chief Julian Assange solicited Manning to disclose documents. Manning testified during her court-martial about accounts linked to WikiLeaks, or WLO, that she communicated with. It is possible she communicated with Assange, but they never exchanged identifying information. “No one associated with the WLO pressured me into giving more information. The decisions that I made to send documents and information to the WLO and the website were my own decisions, and I take full responsibility for my actions,” Manning asserted. The grand jury would like to try and poke holes in Manning’s testimony to try and build a case against Assange and possibly other staff members of WikiLeaks.

Read more …

Mar 052019
 
 March 5, 2019  Posted by at 10:15 am Finance Tagged with: , , , , , , , , , , , ,  


Vincent van Gogh Weaver 1884

 

China Warns Of ‘Tough Struggle’, Cuts Growth Target To Lowest Since 1990 (G.)
China’s Largest Property Developer To Sell All Homes At A 10% Discount (ZH)
Relying On Central Banks For Growth Is A Bad Idea (Das)
Theresa May ‘Did Not Understand EU When She Triggered Brexit’ (G.)
Dear Europe, Brexit Is A Lesson For All Of Us: It’s Time For Renewal (Macron)
EU Must Learn From Brexit And Reform – Macron (G.)
The Prisoner Says No To Big Brother (John Pilger)
White House Lambasts Trump Probe (BBC)
Fox News’s Propaganda Isn’t Just Unethical, It’s Enormously Influential (Vox)
Manafort Asks Judge to Revisit Order on Lies to Special Counsel (CN)
Britain Puts New Roof On Skripal House of Horrors (Galloway)
Sunset Boulevard with Chimp (Kunstler)
Heatwaves Sweeping Oceans ‘Like Wildfires’ (G.)
World’s Rarest Orangutan Under Threat In Indonesia From Dam Project (G.)

 

 

To reiterate from yesterday, Xiang Songzuo, professor at Renmin University in Beijing, former deputy director at the People’s Bank of China and chief economist at the Agricultural Bank of China, said in a speech in December that real GDP growth was 1.67%, and now says: “I think this year, regulators will encourage more shadow banking financing, particularly to the private sector.”

Perhaps the biggest takeaway today is that China is failing to increase domestic demand, long predicted to be the country’s saving grace.

China Warns Of ‘Tough Struggle’, Cuts Growth Target To Lowest Since 1990 (G.)

China has set its lowest growth target in nearly three decades as premier Li Keqiang warned of “tough” challenges facing the world’s second-largest economy. He set the country’s growth at 6.0 to 6.5%, down from a target of 6.5% last year. In 1990, growth sank to 3.9% because of international sanctions sparked by the Tiananmen square protests. Growth in 2018 was 6.6%, the slowest rate since 1990. Speaking at the opening of the National People’s Congress, China’s legislative body, on Tuesday, Li said: “We will face a graver and more complicated environment as well as risks and challenges … We must be fully prepared for a tough struggle.”

Li’s state-of-the-nation-style address comes as the ruling Chinese Communist Party faces a difficult year amid a slowing economy, a trade war with the US, and diplomatic tensions over Huawei, the Chinese tech giant. Domestically, China has been hit by public health scandals as well as protests by workers, students, and small pockets of activists. Striking a sombre tone, Li stressed the “severe challenges” China is faced last year, including trade frictions, “mounting protectionism and unilateralism” and slowing domestic demand. “Downward pressure on the Chinese economy continues to increase, growth in consumption is slowing, and growth in effective investment lacks momentum. The real economy faces many difficulties,” Li said.

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The people who gave you empty cities.

China’s Largest Property Developer To Sell All Homes At A 10% Discount (ZH)

“Property accounts for roughly 70 per cent of urban Chinese families’ total assets – a home is both wealth and status. People don’t want prices to increase too fast, but they don’t want them to fall too quickly either,” said Shao Yu, chief economist at Oriental Securities. “People are so used to rising prices that it never occurred to them that they can fall too. We shouldn’t add to this illusion,” Shao added, echoing Ben Bernanke circa 2005. The bottom line is that just like true price discovery for US capital markets is prohibited (and sees Fed intervention any time there is an even modest, 10-20% drop in asset prices) or else the risk of an all out panic is all too real, in China true price discovery is also not permitted, however when it comes to the country’s all important, and wealth effect boosting, real estate.

Which is a problem, because whereas China suddenly appears to be suffering from all the conventional signs of deflation in the auto retail sector, where as we noted previously, neither lower prices nor easier loans have managed to put a dent the ongoing demand plunge the same ominous price cuts – which are clearly meant to boost flagging demand – are starting to emerge in China’s housing sector. Case in point, according to China’s Paper, Hui Ka Yan, the Chairman of Evergrande, China’s biggest property developer, and China’s second richest person announced it must ramp up home sales and to do that it would sell all its properties at a 10% discount after its home sales tumbled in January amid a cooling market.

[..] In November, Evergrande, which carries the industry’s largest debt pile of any Chinese housing developer, was caught in a vicious funding squeeze and raised eyebrows with a $1.8BN, 5-year bond deal, which it had to pay a whopping 13.75% coupon, prompting analysts to say the move “carried a whiff of desperation.” The fact that chairman Hui Ka Yan, China’s second-richest person, bought $1bn of it himself, added to a sense that outside investors were shunning the company. In many ways, Evergrande had no choice: after the property market boomed for the past three years, helping to power the economy through Xi Jinping’s crucial political transition year of 2017, in 2018 the market slowed sharply, after local governments shifted focus to controlling frothy prices and China Development Bank, the policy lender, phased out a $1 trillion subsidy program for homebuyers in smaller cities, where Evergrande’s projects are concentrated, the FT reported.

Even the official China News Service, usually a cheerleader for the economy, acknowledged recently that the property market “was a bit chilly”. Nomura chief China economist Ting Lu put it more starkly, forecasting a “frigid winter”. The bigger problem for Evergrande, which had $208 billion in total liabilities at the end of June 2018 — the most of any Chinese developer — including $43bn maturing in 2019, is that should China’s housing market suffer a steep downturn, it will likely be the company to suffer the most, if for no other reason than its massive leverage which stood at a net debt to equity ratio of 400%.

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I like and appreciate Satiayit Das, but the Fed doesn’t make grand policy errors, it simply protects its clients with public money. Since it does that by killing off price discovery, let’s stop talking about ‘markets’.

Relying On Central Banks For Growth Is A Bad Idea (Das)

Just since December 2018, central banks have collectively injected as much as $500 billion of liquidity to stabilize economic conditions. The U.S. Federal Reserve has put interest rate increases on hold and is contemplating a halt to its balance-sheet reduction plan. Other central banks have taken similar actions, fueling a new phase of the “everything bubble” as markets careen from December’s indiscriminate selling to January’s indiscriminate buying. The monetary onslaught appears a reaction to financial factors – falling equity markets, rising credit spreads, increased volatility – and a perceived weakening of economic activity, primarily in Europe and China.

If they heeded Walter Bagehot’s oft-cited rule, central banks would act only as lenders of last resort in times of financial crisis, lending without limit to solvent firms against good collateral at high rates. Instead, they’ve become lenders of first resort, expected to step in at any sign of problems. U.S. central bankers are currently debating whether quantitative-easing programs should be used purely in emergency situations or more routinely. Since 2008, the global economy has grown far too dependent on huge central bank balance sheets and accommodative monetary policy. The U.S. economic boom President Donald Trump loves to tout is largely fake, engineered by artificial policy settings.

Such dependence is dangerous and, for various reasons, could well backfire. For one thing, central banks are poor forecasters. GDP growth, inflation and labor markets may prove more resilient than feared, remaining at or above trend. Key risks, such as the trade dispute between the U.S. and China, may recede. Financial markets and asset prices have already recovered substantially. It’s possible that central banks may be forced to make another U-turn to reduce the risk of reflating asset price bubbles and overheating economies. This flip-flop would be destabilizing and affect decisionmakers’ credibility.

Printing money was always going to be easier than withdrawing it later. In effect, central banks are boxed into a situation where they can’t normalize policy and must maintain low rates and abundant liquidity, lest they destabilize fragile asset markets and spur low growth and disinflation. This state of “infinite QE” risks miscalculations and major policy errors. If central banks are, as is now fashionable to state, the only game in town, then the game is lost.

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The Tories thought they could get deals done with separate EU countries.

Theresa May ‘Did Not Understand EU When She Triggered Brexit’ (G.)

Theresa May and her circle of advisers did not understand how the European Union works, and consequently followed a negotiating strategy in 2016 that was doomed to fail, the former UK ambassador to the EU Sir Ivan Rogers has said. Speaking to the Institute for Government on Monday, Rogers said the people around the prime minister at the start of the article 50 process “didn’t know very much about European councils or that much about the EU”. Rogers, who resigned a year ago and has developed a reputation for producing some of the most caustic assessments of the misunderstandings between the UK and the EU, said the UK lived under the illusion that it could circumvent Brussels by making direct deals with the major capitals.

He said: “Capitals obviously matter, but I think having lived through this with a number of prime ministers, a number of different negotiations … that reflex in the British system always to think that we can deal direct with the organ grinders and not the monkeys: it never works like that. “It didn’t work like that in the Cameron renegotiation either. That stuff is not done in the way British politics works, leader to leader. It’s done via the bureaucrats, and the sherpas, and the people at the top of the institutions.” Rogers also warned that the chances of a no-deal Brexit sticking for long were close to zero. “The UK and EU know there is no chance of no-deal Brexit being the long-term end state, as the UK would quickly come back to the negotiating table,” he said. “There is not a world where we are going to end up with no deal.”

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A 25% approval rating won’t keep Little Napoleon from designing grande plans. More Europe!

Dear Europe, Brexit Is A Lesson For All Of Us: It’s Time For Renewal (Macron)

Never since the second world war has Europe been so essential. Yet never has Europe been in such danger. Brexit stands as the symbol of that. It symbolises the crisis of a Europe that has failed to respond to its peoples’ need for protection from the major shocks of the modern world. It also symbolises the European trap. The trap lies not in being part of the European Union; the trap is in the lie and the irresponsibility that can destroy it. Who told the British people the truth about their post-Brexit future? Who spoke to them about losing access to the EU market? Who mentioned the risks to peace in Ireland of restoring the border? Retreating into nationalism offers nothing; it is rejection without an alternative. And this is the trap that threatens the whole of Europe: the anger mongers, backed by fake news, promise anything and everything.

Europe is not a second-tier power. Europe in its entirety is a vanguard: it has always defined the standards of progress. In this, it needs to drive forward a project of convergence rather than competition: Europe, where social security was created, needs to introduce a social shield for all workers, guaranteeing the same pay for the same work, and an EU minimum wage, appropriate to each country, negotiated collectively every year. Getting back on track also means spearheading the environmental cause. Will we be able to look our children in the eye if we do not also clear our climate debt?

The EU needs to set its target – zero carbon by 2050 and pesticides halved by 2025 – and adapt its policies accordingly with such measures as a European Climate Bank to finance the ecological transition, a European food safety force to improve our food controls and, to counter the lobby threat, independent scientific assessment of substances hazardous to the environment and health. This imperative needs to guide all our action: from the Central Bank to the European commission, from the European budget to the Investment Plan for Europe, all our institutions need to have the climate as their mandate.

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Not the Onion. The man who has his police maim his own citizens now says “the people will really take back control of their future”.

EU Must Learn From Brexit And Reform – Macron (G.)

Macron later said: “The Brexit impasse is a lesson for us all”. In a nod to the Brexiters’ campaign slogan “take back control”, he said that in a changed Europe “the people will really take back control of their future”. In a suggestion the UK would deepen its future relationship with the EU, he said that “in this new Europe, the UK, I am sure, will find its true place”. The call for a Europe-wide agency “for the protection of democracies” to shield against electoral interference from outside powers comes as campaigning for May’s European parliament elections gets underway. Security officials are preparing for potential attempts by Russia-linked hackers to sway the vote and potentially deepen divisions in the bloc.

“There’s a strong likelihood that people will try to manipulate the debates and falsify the European election results,” the EU’s security commissioner, Julian King, told France’s Alsace newspaper last week. The May vote is shaping up as a continental clash between populist and Eurosceptic movements on the one hand, and pro-European internationalists on the other. Macron, who has faced months of gilets jaunes or yellow vest anti-government protests, has sought to style himself as a progressive voice against nationalism. His centrist party La République En Marche is narrowly ahead of Marine Le Pen’s far-right National Rally in French polls – a re-run of his face-off with Le Pen in the 2017 presidential election.

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John Pilger gave this speech at a rally in Sydney for Julian Assange recently, organised by the Socialist Equality Party. Unfortunate name.

The Prisoner Says No To Big Brother (John Pilger)

Whenever I visit Julian Assange, we meet in a room he knows too well. There is a bare table and pictures of Ecuador on the walls. There is a bookcase where the books never change. The curtains are always drawn and there is no natural light. The air is still and fetid. This is Room 101. Before I enter Room 101, I must surrender my passport and phone. My pockets and possessions are examined. The food I bring is inspected. The man who guards Room 101 sits in what looks like an old-fashioned telephone box. He watches a screen, watching Julian. There are others unseen, agents of the state, watching and listening. Cameras are everywhere in Room 101. To avoid them, Julian manoeuvres us both into a corner, side by side, flat up against the wall.

[..] Julian is a distinguished Australian, who has changed the way many people think about duplicitous governments. For this, he is a political refugee subjected to what the United Nations calls “arbitrary detention”. The UN says he has the right of free passage to freedom, but this is denied. He has the right to medical treatment without fear of arrest, but this is denied. He has the right to compensation, but this is denied. As founder and editor of WikiLeaks, his crime has been to make sense of dark times. WikiLeaks has an impeccable record of accuracy and authenticity which no newspaper, no TV channel, no radio station, no BBC, no New York Times, no Washington Post, no Guardian can equal. Indeed, it shames them. That explains why he is being punished.

For example: Last week, the International Court of Justice ruled that the British Government had no legal powers over the Chagos Islanders, who in the 1960s and 70s, were expelled in secret from their homeland on Diego Garcia in the Indian Ocean and sent into exile and poverty. Countless children died, many of them, from sadness. It was an epic crime few knew about. For almost 50 years, the British have denied the islanders’ the right to return to their homeland, which they had given to the Americans for a major military base. In 2009, the British Foreign Office concocted a “marine reserve” around the Chagos archipelago. This touching concern for the environment was exposed as a fraud when WikiLeaks published a secret cable from the British Government reassuring the Americans that “the former inhabitants would find it difficult, if not impossible, to pursue their claim for resettlement on the islands if the entire Chagos Archipelago were a marine reserve.”

The truth of the conspiracy clearly influenced the momentous decision of the International Court of Justice. WikiLeaks has also revealed how the United States spies on its allies; how the CIA can watch you through your iPhone; how Presidential candidate Hillary Clinton took vast sums of money from Wall Street for secret speeches that reassured the bankers that if she was elected, she would be their friend. In 2016, WikiLeaks revealed a direct connection between Clinton and organised jihadism in the Middle East: terrorists, in other words. One email disclosed that when Clinton was US Secretary of State, she knew that Saudi Arabia and Qatar were funding Islamic State, yet she accepted huge donations for her foundation from both governments. She then approved the world’s biggest ever arms sale to her Saudi benefactors: arms that are currently being used against the stricken people of Yemen. That explains why he is being punished.

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Nadler et al sent Julian Assange a request for documents. Imagine the brain damage required for that. Other than that, from what I get, there’s nothing new. All 81 requests concern people who’s already sent docs before, to Mueller and elsewhere.

White House Lambasts Trump Probe (BBC)

House of Representatives Judiciary Committee Chairman Jerry Nadler, a Democrat, said it was the “obligation” of Congress to “provide a check on abuses of power” by the White House. Mr Nadler, whose committee has the power to conduct impeachment hearings, also said it was “very clear” that the president had obstructed justice. But Mr Nadler told ABC News it was too early to discuss removing the president from office. President Trump dismissed Mr Nadler’s probe as a “political hoax”, but added: “I co-operate all the time with everybody.” Democrats, who took control of the House of Representatives in January, have vowed to open investigations into the president and White House.

More than five House committees are now investigating alleged attempts by Russia to meddle in the 2016 election campaign, the president’s tax returns and potential conflicts of interest involving Mr Trump’s family. Those inquiries are in addition to the investigation by Special Counsel Robert Mueller, who is expected to file his report soon. In a statement, White House press secretary Sarah Sanders said: “Today, Chairman Nadler opened up a disgraceful and abusive investigation into tired, false allegations already investigated by the special counsel and committees in both chambers of Congress. “Chairman Nadler and his fellow Democrats have embarked on this fishing expedition because they are terrified that their two-year false narrative of ‘Russia collusion’ is crumbling.

[..] Trump Organization chief financial officer Allen Weisselberg, longtime Trump personal assistant Rhona Graff and ex-White House counsel Don McGahn are also on the list of names released by the House Judiciary Committee. Donald Trump Jr has previously been forced by members of Congress to answer questions about a June 2016 meeting at Trump Tower, in which he sat down with a Kremlin-linked lawyer who had offered dirt on Mr Trump’s opponent Hillary Clinton. Wikileaks, and its founder Julian Assange, have also been sent documents requests by the committee. Wikileaks published emails stolen from the Democratic National Committee and released them during the 2016 campaign, causing political embarrassment to Mrs Clinton and her campaign team.

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Yes, Trump has Fox. The other side has just about everything else: CNN, MSNBC, NYT, WaPo, ABC, Politico, etc etc etc. Doesn’t someone who writes pieces like this one see the irony?

Fox News’s Propaganda Isn’t Just Unethical, It’s Enormously Influential (Vox)

Jane Mayer, the New Yorker’s longtime star investigative reporter, has a fantastic new longform piece out detailing the extent to which the Fox News Channel has become propaganda television for the Trump administration. Many of the basic points — like Fox’s bending of ethical standards to accommodate Sean Hannity, the collaborative relationship between Fox and Trump in shaping the news agenda, and the extent to which Trump at times seems to take his policy cues from Fox & Friends – will be familiar to Vox readers. But Mayer adds critical new insights into the arc of change at the network during a period when CEO Roger Ailes was deposed and then died, vice president Bill Shine left to become White House communications director, and the company’s owner Rupert Murdoch has restructured his media holdings and prepared to pass the baton to his son.

She also adds a couple of key scoops, including: • A Fox reporter named Diana Falzone had pieced together the entire Stormy Daniels story before the election, but network executives killed the story, demoted her, and then, after she sued them, reached a settlement with her that included a nondisclosure agreement. • “Trump ordered Gary Cohn, then the director of the National Economic Council, to pressure the Justice Department to intervene” and sue to block AT&T’s proposed takeover of Time Warner. (The DOJ did sue, though they denied this was due to improper interference from the White House, and ended up losing in court.) • “During the Bush Administration’s disastrous handling of Hurricane Katrina, Fox’s ratings slumped so badly, a former Fox producer told me, that he was told to stop covering it.”

Fox’s propaganda broadcasting matters. It’s a somewhat underexplored topic in political science research, but the information that’s available suggests that right-wing propaganda broadcasting — led by Fox but also including Sinclair Broadcast Group — has a decisive influence on American politics. [..] A study by Emory University political scientist Gregory Martin and Stanford economist Ali Yurukoglu estimates that watching Fox News translates into a significantly greater willingness to vote for Republican candidates. Specifically, by exploiting semi-random variation in Fox viewership driven by changes in the assignment of channel numbers, they find that if Fox News hadn’t existed, the Republican presidential candidate’s share of the two-party vote would have been 3.59 points lower in 2004 and 6.34 points lower in 2008. Without Fox, in other words, the GOP’s only popular vote win since the 1980s would have been reversed and the 2008 election would have been an extinction-level landslide.

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Interesting twist. But under wraps.

Manafort Asks Judge to Revisit Order on Lies to Special Counsel (CN)

Former Trump campaign chairman Paul Manafort asked a federal judge Monday to reconsider her earlier ruling that Manafort violated his plea agreement by lying about his contacts with suspected Russian spy Konstantin Kilimnik. The details of the request remain under seal for now, but a short order from U.S. District Judge Amy Berman Jackson entered into the docket in the case shows it is a request to reconsider her earlier decision based on new evidence. The docket entry specifically references a supplemental filing last month from Special Counsel Robert Mueller’s office that informed Jackson of new information relevant to Manafort’s plea deal that came up in an interview with longtime Manafort associate Rick Gates.

Jackson said in the short order Monday she will “deem [Manafort’s] filing as a motion for reconsideration” of her earlier decision. The motion is under seal for now, but Manafort and Mueller’s office will discuss whether portions of the filing may become public, according to the order. Manafort is scheduled to be sentenced in Washington, D.C., on March 13. He pleaded guilty to head off a second criminal trial after a federal jury in Virginia found him guilty last year of various financial crimes. In Washington, Manafort pleaded to conspiring to defraud the United States, obstruction of justice and violations of lobbying laws in relation to work he did on behalf of a pro-Russian political party in Ukraine.

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Britain would fall apart if it could no longer unite vs Russia.

Britain Puts New Roof On Skripal House of Horrors (Galloway)

In 12 months of shifting sands, one thing remains as its original foundations: the British state narrative on Salisbury stands as a castle in the air. One year from the dastardly fate of Sergei and Yulia Skripal, no one is a step forward on what happened to them, how, why, or of course where they are. One year ago, a nerve agent was allegedly sprayed onto their front doorknob. One year later, their house needs a new roof as a result. And why the roof? And why only the roof? I don’t know what happened to the stricken pair but then, neither do you, however much you’ve followed the story in Britain’s mass media. In fact, the more you’ve read, the more confused you’re likely now to be. There are some things I do know, however. The first is that the Russian state had as little to gain from attacking this pair in broad daylight on a Salisbury street with a signature Soviet-developed weapon, ‘novichok,’ as I said at the time.

It was exactly 100 days before the World Cup, just days before President Putin’s re-election. If – and it’s a big if – the Russian state wanted to kill the Skripals, many things would’ve been different. Firstly, they would’ve been dead. Yulia would’ve been dead in Russia where she lived. And Sergei would’ve been dispatched at a less sensitive time by rather more reliable, less identifiable means, and by rather less comical killers. The killers would not have flown directly from and back to Moscow. They would not have entrusted their egress to the Sunday service of Wiltshire public transport. They would not have smiled up at every CCTV camera they could find. They would not have stayed at a downscale small hotel in East London, they would not have smoked drugs there, and they would not have noisily entertained a prostitute in their room. They would not have left traces of their nerve agent in their hotel room.

They would not have spent a mere hour scoping Salisbury the day before the alleged poisoning of the Skripals. Nor would they have returned by public transport to London for their sex and drug party, only to retrace their steps by public transport the next day. If they were going to kill a man and his daughter, they would not have trusted nerve agent on a doorknob when there was no conceivable way of knowing who’s hand would touch it. Yulia? Sergei? The milkman? Any Tom, Dick or Harry in the street (or any of their children)? If they were going to smear nerve agent on a doorknob, they would’ve done it in the dark – not at noon the next day, when anyone or any camera could watch them doing so, yet no one did. Quite apart from the salient fact that by noon the victims had already left the house never to return to it.

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Very sorry to see what Jacko was up to.

Sunset Boulevard with Chimp (Kunstler)

If you want some insight into how deep the collective public psychosis of this land runs, check out Dan Reed’s four-hour documentary about the late Michael Jackson streaming on the HBO cable network. The film apparently provoked outrage when it premiered at the Sundance Festival recently, as if it were in bad taste to disclose the icon’s peccadillos in these days of Progressive intersectional triumph. Mr. Jackson methodically assembled a harem of catamites as his show business fame exploded and he struggled with the personal horror of developing into a full-grown man. He solved that problem by restricting his social consort to little boys while surgically metamorphosing into a schematic approximation of a woman — interesting, since he repeatedly referred to women as “evil,” but then his greatest hit was the self-revealing song, Bad.

Everybody and his uncle’s-second-cousin in Hollywood at the time must have known what the deal was with him but they went along with the gag that he was the reincarnation of Peter Pan, just a harmless character out of Show Biz’s own catalog of manufactured mythology, something they could understand, a framing device to spin cotton candy out of the truth that Mr. Jackson was simply a child-molester. [..] perhaps, Leaving Neverland signals an interesting turning point in the madness that has gripped this country for years, and especially the bewitched, bothered, and bewildered thinking class, lost in its labyrinth of sacred monsters. This year 2019 — and especially the coming springtime — promises to be a time of spectacular reversals in politics, manners, and markets.

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Most of you will be eating yellyfish in your lifetime, it’s not just your kids anymore.

Heatwaves Sweeping Oceans ‘Like Wildfires’ (G.)

The number of heatwaves affecting the planet’s oceans has increased sharply, scientists have revealed, killing swathes of sea-life like “wildfires that take out huge areas of forest”. The damage caused in these hotspots is also harmful for humanity, which relies on the oceans for oxygen, food, storm protection and the removal of climate-warming carbon dioxide the atmosphere, they say. Global warming is gradually increasing the average temperature of the oceans, but the new research is the first systematic global analysis of ocean heatwaves, when temperatures reach extremes for five days or more. The research found heatwaves are becoming more frequent, prolonged and severe, with the number of heatwave days tripling in the last couple of years studied.

In the longer term, the number of heatwave days jumped by more than 50% in the 30 years to 2016, compared with the period of 1925 to 1954. As heatwaves have increased, kelp forests, seagrass meadows and coral reefs have been lost. These foundation species are critical to life in the ocean. They provide shelter and food to many others, but have been hit on coasts from California to Australia to Spain. “You have heatwave-induced wildfires that take out huge areas of forest, but this is happening underwater as well,” said Dan Smale at the Marine Biological Association in Plymouth, UK, who led the research published in Nature Climate Change. “You see the kelp and seagrasses dying in front of you. Within weeks or months they are just gone, along hundreds of kilometres of coastline.”

The damage global warming is causing to the oceans has also been shown in a series of other scientific papers published in the last week. Ocean warming has cut sustainable fish catches by 15% to 35% in five regions, including the North Sea and the East China Sea, and 4% globally, according to work published by Pinsky and colleagues.

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More victims of European fossil fuel replacements. This is so easy to solve: pay them to NOT build that dam. Demand phasing out of palm oil, in fuel and food.

World’s Rarest Orangutan Under Threat In Indonesia From Dam Project (G.)

Environmentalists in Indonesia have lost a court challenge to a Chinese-backed dam project in Indonesia that will rip through the habitat of the most critically endangered orangutan species. On Monday, the state administrative court in North Sumatra’s capital, Medan, ruled that construction can continue despite critics of the 510-megawatt hydro dam providing evidence that its environmental impact assessment was deeply flawed. Experts said the dam would flood and in other ways alter the habitat of the orangutan species, which numbers only about 800 primates, and was likely to make it impossible to ensure the species survived.

Scientists announced the discovery of the species, Pongo tapanuliensis, in November after DNA analysis and field study revealed unique characteristics. The population, with frizzier hair and distinctively long calls, was previously believed to be Sumatran orangutans, also critically endangered. Without special protection, it is in danger of rapid extinction, according to scientists. The species is found only in the Batang Toru forest, where the dam will be built. Announcing the decision of a three-judge panel, presiding Judge Jimmy C Pardede said the witnesses and facts presented by the Indonesian Forum for the Environment, the country’s largest environmental group, in its case against the North Sumatra provincial government were irrelevant.


A newly-discovered species of orangutan, the Pongo tapanuliensis, is only found in the forest where the dam will be built. Photograph: HANDOUT/Reuters

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Mar 022019
 


Jean-Francois Millet Charity1859

 

Japan ‘Rooting For Donald Trump’ In China Trade War (SCMP)
Donald Trump Asks China To Abolish Tariffs On US Farm Produce (AFP)
China Welcomes Delay On US Tariff Hike (R.)
Canada Approves Huawei Exec’s Extradition, Sparking Ire From China (R.)
China Bans 23m From Buying Plane, Train Tickets In ‘Social Credit’ System (G.)
EU Ready To Give Britain More Guarantees ‘Backstop’ Is Temporary (R.)
Britain’s Witchfinders are Ready to Burn Jeremy Corbyn (Cook)
Greece Has Until March 11 To Implement Prior Actions – EU (K.)
Moody’s Upgrade Of Greek Rating Paves Way For 10-Year Bond Issue (XInhua)
Wikileaks and Russiagate: Trust Us, We’re The CIA (NM)
Why the Mueller Report Might Disappoint Almost Everybody (Time)

 

 

Some sur[prising numbers in those graphs.

Japan ‘Rooting For Donald Trump’ In China Trade War (SCMP)

A Japanese minister has urged the United States not to “monopolise” the concessions it extracts from China as part of any trade war deal, urging US President Donald Trump to share them with the rest of the world. Tamaki Tsukada, deputy director general for economic affairs within Japan’s foreign ministry, said: “We should be vigilant about what kind of agreement is reached between the US and China, and make sure that Trump will not monopolise whatever benefits he extracts out of China.” Tsukada, speaking at an event in Hong Kong on Thursday, said that while most countries are against any form of trade conflict in theory, many will be “rooting for Trump” in his ongoing tariff war with China, hoping that it leads to real structural reform within China, the benefits of which can be enjoyed by other trading nations.

“We need to recognise that all the heavy lifting will have to be done by the US. There’s a kind of alter ego of criticising on the surface, but at the same time rooting for Trump to get more out of China,” Tsukada told the Asia Trade Summit, organised by The Economist magazine. Negotiations between the US and China are continuing, with the US suspending the planned tariff increase from 10% to 25%. The deadline was due to be on Friday, but no further hard deadline will be imposed, the office of the United States Trade Representative (USTR) confirmed this week. POLITICO reported on Thursday that a document detailing the proposed trade deal, stretching to 140 pages, has been written and that it includes a “significant enforcement mechanism”. If China is found to violate any provision of the deal, tariffs would “snap back” into place, or even be expanded.

China, meanwhile, would not be allowed to retaliate with tariffs, under the terms of the deal, POLITICO reported. [..] Many are looking at the US-Japan trade war in the 1980s for historical guidance as to what will happen and indeed, the parallels are great. “It is important that [the deal] is transparent, and the benefits are extended, that’s the lesson we can share with our Chinese colleagues out of our lessons in the 1980s and 1990s,” Tsukada said. [..] At its peak, Japan accounted for nearly 60 per cent of America’s total trade deficit through the late-1980s and early-1990s. But it in the mid-80s, it agreed to punitive trade reform that would scythe the deficit, under pressure from then US president Ronald Reagan and his trade negotiators, among whom was current US trade representative Robert Lighthizer.

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$14 billion worth of soybeans schlepped halfway across the planet to feed pigs.

And you’d like to tell me we have a sunny future?

Donald Trump Asks China To Abolish Tariffs On US Farm Produce (AFP)

Donald Trump has urged China to abolish tariffs on agricultural products imported from the United States – adding that trade talks between the rival powers were going well. “I have asked China to immediately remove all Tariffs on our agricultural products (including beef, pork, etc.),” the US president wrote on Twitter. He said his request was based on the fact that negotiations with China were “moving along nicely” – and his delay last week of a planned tariff increase on Chinese exports. “This is very important for our great farmers – and me!” he added. After months of trade war, the US and China agreed to a 90-day truce to work out their differences.

It was scheduled to end on Friday, but Trump lifted the ultimatum to increase tariffs after he was satisfied by progress made in several rounds of talks in Beijing and Washington. A White House economic official, Larry Kudlow, said on Thursday the two countries were on the brink of a “historic” trade agreement. A meeting between Trump and his Chinese counterpart, Xi Jinping, was also expected this month. After the latest round of talks in February, US agriculture secretary Sonny Perdue tweeted that China had committed to buying “an additional” 10m tonnes of soybeans as a “show of good faith”. US farmers rely greatly on such trade with China: in 2017, around a third of US soybean production – worth $14bn -– was exported there, where it is used to feed pigs.

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He might actually pull it off.

China Welcomes Delay On US Tariff Hike (R.)

China said on Saturday that it welcomed the release of language from the United State Trade Representative’s office (USTR) delaying a scheduled hike in U.S. tariffs on $200 billion worth of Chinese goods. In a statement posted on the website of the Ministry of Commerce, citing an unidentified official at China’s State Council Tariff Commission, China said that it was aware of the USTR’s announcement to maintain tariffs at 10 percent until further notice, and welcomed the step. The USTR released language to delay a scheduled hike in tariffs on Chinese goods from 10 percent to 25 percent on Friday, ahead of the publication of a notice next Tuesday. President Donald Trump had announced the delay on Sunday as trade talks between the two sides had made progress.

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It’ll take years. But the Huawei issue will be resolved way before that.

Canada Approves Huawei Exec’s Extradition, Sparking Ire From China (R.)

Canada has approved extradition proceedings against the chief financial officer of Huawei Technologies, prompting a furious reaction from China. Meng Wanzhou, the daughter of Huawei’s founder, was detained in Vancouver last December and is under house arrest. In late January, the US justice department charged Meng and Huawei with conspiring to violate US sanctions on Iran. Meng will appear in a Vancouver court on 6 March, when a date will be set for her extradition hearing. “Today, department of Justice Canada officials issued an authority to proceed, formally commencing an extradition process in the case of Ms Meng Wanzhou,” the government said in a statement.

China, whose relations with Canada have deteriorated badly over the affair, denounced the decision and repeated previous demands for Meng’s release. Foreign ministry spokesman Lu Kang said in a statement on Saturday that Beijing “deplores and firmly opposes the Canadian side’s obstinately moving forward the so-called judicial process”. He said: “This is a severe political incident. We once again urge the US side to immediately withdraw the arrest warrant and extradition request for Ms Meng Wanzhou and urge the Canadian side to immediately release Ms Meng Wanzhou and ensure that she returns to China safe and sound.”

Legal experts had predicted the government of prime minister Justin Trudeau would give the go-ahead for extradition proceedings, given the close judicial relationship between Canada and the United States. It could be years, though, before Meng is sent to the United States, since Canada’s slow-moving justice system allows many decisions to be appealed. A final decision will probably come down to the federal justice minister, who will face the choice of angering the United States by rejecting the extradition bid, or China by accepting it.

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2017: 6.15 million flight bans. 2018: 17.5 million. Progress.

China Bans 23m From Buying Plane, Train Tickets In ‘Social Credit’ System (G.)

China has blocked millions of “discredited” travellers from buying plane or train tickets as part of the country’s controversial “social credit” system aimed at improving the behaviour of citizens. According to the National Public Credit Information Centre, Chinese courts banned would-be travellers from buying flights 17.5 million times by the end of 2018. Citizens placed on black lists for social credit offences were prevented from buying train tickets 5.5 million times. The report released last week said: “Once discredited, limited everywhere”. The social credit system aims to incentivise “trustworthy” behaviour through penalties as well as rewards. According to a government document about the system dating from 2014, the aim is to “allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step.”

Social credit offences range from not paying individual taxes or fines to spreading false information and taking drugs. More minor violations include using expired tickets, smoking on a train or not walking a dog on a leash. Local governments and agencies have been piloting aspects of the system, which will eventually give every Chinese citizen a personalised score. Critics saidauthorities in China were using technology and big data to create an Orwellian state of mass surveillance and control. Authorities have previously used blacklists to limit the travel of some citizens, but the social credit system appears to have expanded the practice. China’s supreme court said in 2017 that 6.15 million citizens had been barred from taking flights because of social credit offences.

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Provided Britain guarantees 1,2,3 etc. Nothing changes.

EU Ready To Give Britain More Guarantees ‘Backstop’ Is Temporary (R.)

The European Union is ready to give Britain more guarantees that the Irish “backstop” is only intended to be temporary, the bloc’s chief Brexit negotiator said on Friday. “We know that there are misgivings in Britain that the backstop could keep Britain forever connected to the EU,” Michel Barnier said in an interview with Germany’s Die Welt newspaper to be published on Saturday. “This is not the case. And we are ready to give further guarantees, assurances and clarifications that the backstop should only be temporary.” The backstop, an arrangement designed to prevent the return of “hard” border infrastructure between EU member Ireland and British-ruled Northern Ireland if there is no trade deal after Brexit that makes it unnecessary, has become the main point of contention in the proposed Brexit deal.

“We will not reverse the backstop,” Barnier added. “It’s an insurance. We don’t want to make use of it. And this is also the case when you insure your house. It’s only intended for the worst-case scenario.” [..] Prime Minister Theresa May has said that, if British lawmakers once more reject her withdrawal agreement in a vote due to take place by March 12, they will get to vote on asking her to request that the EU delay Brexit. Barnier said EU guarantees that the backstop is temporary could come as part of the political agreement setting out expectations for Britain’s relationship with the bloc after it leaves.

He told Die Welt that any extension must be intended specifically to solve the impasse. He added that he saw little risk of the remaining 27 EU leaders opposing a delay to Britain’s exit, currently set down as March 29, as long as Britain was serious about finding a solution. “The question that the EU27 will ask is: What (is it) for? The answer cannot be that Britain wants to postpone a problem. One would want to solve it.” [..] any decision to allow an extension would have to be unanimously approved by EU leaders at a summit on March 21.

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Didn’t Trump patent “witchhunt”?

Britain’s Witchfinders are Ready to Burn Jeremy Corbyn (Cook)

In an earlier era, the guilt of women accused of witchcraft was tested through the ducking stool. If a woman drowned, she was innocent; if she survived, she was guilty and burnt at the stake. A foolproof system that created an endless supply of the wicked, justifying the status and salaries of the men charged with hunting down ever more of these diabolical women. And that is the Medieval equivalent of where the British Labour party has arrived, with the suspension of MP Chris Williamson for anti-semitism. Williamson, it should be noted, is widely seen as a key ally of Jeremy Corbyn, a democratic socialist who was propelled unexpectedly into the Labour leadership nearly four years ago by its members.

His elevation infuriated most of the party’s MPs, who hanker for the return of the New Labour era under Tony Blair, when the party firmly occupied the political centre. Corbyn’s success has also outraged vocal supporters of Israel both in the Labour party – some 80 MPs are stalwart members of Labour Friends of Israel – and in the UK media. Corbyn is the first British party leader in sight of power to prefer the Palestinians’ right to justice over Israel’s continuing oppression of the Palestinians. For these reasons, the Blairite MPs have been trying to oust Corbyn any way they can. First through a failed re-run of the leadership contest and then by assisting the corporate media – which is equally opposed to Corbyn – in smearing him variously as a shambles, a misogynist, a sympathiser with terrorists, a Russian asset, and finally as an “enabler” of anti-semitism.

This last accusation has proved the most fruitful after the Israel lobby began to expand the definition of anti-semitism to include not just hatred of Jews but also criticism of Israel. Labour was eventually forced to accept a redefinition, formulated by the International Holocaust Remembrance Alliance, that conflates anti-Zionism – opposition to Israel’s violent creation on the Palestinians’ homeland – with anti-semitism. Once the mud stuck through repetition, a vocal group of Labour MPs began denouncing the party for being “institutionally anti-semitic”, “endemically anti-semitic” and a “cesspit of anti-semitism”. The slurs continued relentlessly, even as statistics proved the accusation to be groundless. The figures show that anti-semitism exists only in the margins of the party, as racism does in all walks of life.

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Because what use are thumbscrews if you don’t tighten them enough from time to time to inflict more pain?

Greece Has Until March 11 To Implement Prior Actions – EU (K.)

Greece has until the Eurogroup meeting of eurozone finance ministers on March 11 to complete all of the pending prior actions it needs to secure the disbursement of 1-billion-euro from creditors, the Euro Working Group decided in Brussels on Friday. If Greece fails to implement the measures demanded by then, the decision on the next tranche will be deferred to April, the EWG said after hearing representatives of the lenders on Greece’s second post-bailout review, which was presented on Friday morning.

Lenders have yet to agree with the government’s plans for protecting the primary residence of debtors from foreclosure and are also seeking a new tender for the sale of the state-owned Public Power Corporation’s lignite mines, among other measures that are still pending. The German and Dutch representatives, moreover, suggested that the disbursement should be put off even longer in order to ensure that Greece is sticking to its commitments.

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And here’s today’s news from China. Don’t think the EU is happy with Moody’s.

Moody’s Upgrade Of Greek Rating Paves Way For 10-Year Bond Issue (XInhua)

Rating agency Moody’s announced on Friday it has upgraded Greece’s sovereign credit rating by two notches to “B1” with a stable outlook, from the “B3” rating with a positive outlook it had granted Greece just over a year earlier. Economists expected this upgrade to assist Greece in its next foray in the markets, probably with a 10-year bond. In a statement, Moody’s explained that its upgrade reflected the strengthening of Greece’s economy thanks to the implementation of reforms, the likelihood of a sustained strong fiscal performance, and the enhancement of public debt sustainability. Greek bond yields in the secondary market have already dropped to a decade-low, with the 10-year note’s rate standing at 3.65 percent on Friday.

“Greece benefits from the fact it has no open fronts at this stage and the international juncture is favorable, with the Italian crisis out of the way,” University of Athens Associate Professor of Economics Dimitris Kenourgios told Xinhua. He added that the upgrade by Moody’s is set to benefit the Greek government’s plans for a full return to the markets, even if the country’s sovereign rating remains well below investment grade by all rating agencies. In this context economists expect Greece to tap the markets with a benchmark 10-year bond soon, the first since March 2010, albeit for only a small amount of money. “Tapping the markets with a 10-year note for just 2.5 billion to 3 billion euros does not really make much of a difference for the economy. It is all to be done for appearances,” commented Giorgos Stratopoulos, a financial analyst at think tank E-Kyklos in Athens.

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And people tell me I can’t say Mueller’s a coward for his handling of Assange.

Wikileaks and Russiagate: Trust Us, We’re The CIA (NM)

Mueller’s indictment of 12 Russian intelligence (GRU) officers last year looked like a proper, formal, legal 29-page document with lots of details alleging that Russian officers had “hacked into the computer networks of the… Democratic National Committee (DNC)” and released the hacked documents to “Organisation 1”, now recognised as Wikileaks. The mainstream media certainly treated the indictments (a fancy word for ‘accusations’) as convictions in a court of law. They didn’t even feel the need to report the assessment of former NSA technical director William Binney, who says that if the DNC emails had been hacked, as per Muller’s indictments, the NSA would know about it. The NSA would possess records of the hack, including where the hack came from, says Binney, stressing “if it were the Russians, NSA would have a trace route to them and not equivocate on who did it.”

[..] the US national security establishment, with its long history of misleading the public, has been successfully misleading the public about Julian Assange since 2010. Successfully enough, as I explored in Part 2, for populations to tolerate Assange’s political imprisonment for journalism, in the form of arbitrary detention, for over eight years. “Trust us” they said in 2010. Wikileaks is harming innocents. In reality, however, there is “not a single shred of evidence that any of [Wikileaks’] disclosures caused anyone harm” writes journalist and author Nozomi Hayase. Vice President Joe Biden even admitted as much in 2010, saying that Wikileaks’ releases had done “no substantive damage” other than to be “embarrassing”. The Western War on Terror, in contrast, has killed somewhere between 500,000 and 1.3 to 2 million people since 9/11.

“Trust us” Wikileaks is a terrorist organisation. In truth, it is a media organisation. So ruled a UK tribunal in 2017. “Trust us,” Assange has been charged with rape. The fact is that no charge has ever been brought against Julian Assange, and the women involved in the Swedish investigation did not accuse Assange of rape. In text messages, one of the women said that police had “made up” the accusations. According to an official statement by Stockholm’s former Chief District Prosecutor and Director of the Stockholm Regional Prosecution Authority, the investigation was irregular from start to finish. Sweden itself sought to close the investigation, which was only ever a preliminary one, in 2013, by interviewing Assange in the Ecuadorian embassy. The UK, however, did not agree.

“Trust us, though”, Assange is evading ‘British Justice.’ Not extradition to the US. He is free to leave the Ecuadorian Embassy at any time. And yet, in 2017 the US DoJ accidentally revealed that a sealed indictment containing secret charges does indeed await Julian Assange in the United States, confirming what Wikileaks has been saying for years. “But trust us. THIS time. We’re telling the truth now. Honest. He’s a Russian agent. And a Putin apologist. And Donald Trump’s stooge. And a Kremlin puppet. Donald Trump is all Julian Assange’s fault. It’s true.

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Time’s Renato Mariotti has been banging on about collusion for two years, and now that there appears to be none, simply says it was never about that. Not his fault, but yours for believing him.

Why the Mueller Report Might Disappoint Almost Everybody (Time)

After endless hype, special counsel Robert Mueller may be about to submit his report. It is impossible to know what his conclusions will be. But after so much speculation, one outcome seems likely: Mueller will disappoint just about everyone — especially President Trump’s critics. And it won’t be his fault. This is due in part to Trump’s successful disinformation crusade, which has worked to raise a nearly impossible and definitely illogical bar for Mueller to clear: proving “collusion” and charging a grand criminal conspiracy involving the Trump campaign and the Russian government. But it is also due to Trump’s critics, who have responded to Trump’s “No collusion!” mantra by shouting back, “Yes, collusion!”

The word collusion appears nowhere in the order authorizing Mueller’s investigation. There is not even a relevant crime called “collusion.” What Mueller is tasked with is investigating “any links and/or coordination between the Russian government and individuals associated with” the Trump campaign. If “links and/or coordination” also don’t sound like crimes, that’s because they aren’t. While Mueller is directed to charge and prosecute crimes he discovers, his is primarily a counterintelligence investigation — not a criminal one — the purpose of which is to identify threats to our national security, potentially including the President of the United States and his associates.

[..] Mueller’s report in fact could change very little. If Senate Republicans stand firm behind Trump, he will remain in office and the public will be left to speculate about the result of the many ongoing investigations of Trump’s campaign, his businesses and his Inaugural committee for years to come, as federal prosecutors investigate. Current Attorney General William Barr may be required by law not to release certain portions of the report or may try to hide the bulk of it from the public, though the latter seems just about politically impossible now. We do not know what Mueller will do. But especially given these indicators and constraints, any outsize expectations seem misguided. And despite being fueled by Trump’s critics, they will make it easier for Trump to declare a win even if there is compelling evidence he committed crimes.

Trump has obstructed justice before our very eyes, from the firing of then FBI Director James Comey to the public pressure he put on now former Attorney General Jeff Sessions to resign after recusing himself, among many other examples. The public’s obsession with crimes that may never be charged has taken the focus away from that serious offense (which, for what it’s worth, is arguably a form of “collusion”). As the Mueller investigation ends and, ideally, becomes public, it is an opportunity to refocus on what has actually happened: Trump campaign officials have committed crimes, the President has obstructed justice in plain sight, and Trump has been implicated in breaking campaign-finance law. At last, we can address reality instead of what may be fantasy.

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“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

– President Theodore Roosevelt, “Citizenship in a Republic,” 1910

 

Mar 012019
 


Salvador Dali Eggs on the plate (without the plate) 1932

 

Tax Cuts A Year Later – Did They Deliver? (Roberts)
The Death Of Cash Has Been Greatly Exaggerated – Look At The $100 Bill (MW)
China Trade Talks Made ‘Fantastic’ Progress Last Week -Kudlow (CNBC)
China’s Shadow Debt Burden Much Larger Than Believed (ZH)
Growing China Downdraft Chills Asia Factory Activity (R.)
CPAC On Socialism, Bernie Sanders And 2020: ‘Trump Will Win, 100%’ (G.)
Claim Trump Had Prior Knowledge Of WikiLeaks Fails Hilariously (Dore)
Trump Says Cohen Lied ‘95% Instead Of 100%’ In Testimony To Congress (G.)
The Case That Could Bring Down Canada’s Justin Trudeau (G.)
Anti-Maduro Allies Regroup After The Fight For Humanitarian Aid (CNBC)
Disclosing Subpoena for Testimony, Chelsea Manning Vows to Fight (NYT)
The Grey Wall Of China: Inside The World’s Concrete Superpower (G.)

 

 

Well, they delivered something. But that’s a much bigger topic than just tax cuts, that’s Fed policy.

Lance is trying to utterly confuse us with an absolute overkill of graphs all in one place. But the gist is clear.

Tax Cuts A Year Later – Did They Deliver? (Roberts)

I received a lot of push back on my views when the “mainstream” analysis was the tax cuts would jump start economic growth. Of course, with 2017’s Q1 economic growth coming in at a meager 0.7% annualized, it would certainly seem to be needed. But as I questioned then: “Do tax reductions lead to higher economic growth, employment and incomes over the long-term as promised?” Speaking to NBC’s Meet the Press, VP Mike Pence argued at the time he was confident that eventually, the deficit would decline as it would be overcome by surging economic “growth” thanks to the tax cuts it will fund. [..] As shown in the chart below, changes to tax rates have a very limited impact on economic growth over the longer term.

Reagan’s tax cuts were effective because they were “timely” due to the economic, fiscal, and valuation backdrop which is diametrically opposed to the situation today. “Importantly, as has been stated, the proposed tax cut by President-elect Trump will be the largest since Ronald Reagan. However, in order to make valid assumptions on the potential impact of the tax cut on the economy, earnings and the markets, we need to review the differences between the Reagan and Trump eras. My colleague, Michael Lebowitz, recently penned the following on this exact issue.

‘Many investors are suddenly comparing Trump’s economic policy proposals to those of Ronald Reagan. For those that deem that bullish, we remind you that the economic environment and potential growth of 1982 was vastly different than it is today.” [..] The differences with today’s economic and market environment could not be starker. The tailwinds provided by initial deregulation, consumer leveraging, declining interest rates, and inflation provided huge tailwinds for corporate profitability growth. The chart below shows the ramp up in government debt since Reagan versus subsequent economic growth and tax rates.

While wages did rise marginally over the last, due more to tightness in the labor market rather than tax cuts, corporations failed to share the wealth. In fact, the ratio of profits to workers wages have materially worsened since the enactment of tax cuts.

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Going to the mattresses. To be honest, it’s always been clear that trying turn the US into a cashless society is the stuff for revolution.

The Death Of Cash Has Been Greatly Exaggerated – Look At The $100 Bill (MW)

The stock market is coming off its best January in years, the economy appears to be holding up well, interest rates are still low, cryptos and mobile payments continue to gain traction — it’s not exactly a cash-friendly climate at the moment. Then what’s going on with the $100 bill? A decade ago, $20 and $1 bills were both far more prevalent than the Benjamins. As you can see by this chart from Deutsche Bank’s Torsten Slok, the currency hierarchy has shifted dramatically since then.

In 2017, the $100 bill took the crown as the most popular U.S. bill, doubling since 2007, which has helped drive the sharp rise in currency and other liquid assets as a share of GDP:

But why? Deutsche Bank’s Slok mulled a few possibilities. “It could be driven by a global fear of negative interest rates in Europe and Japan,” he said. “Or it could be a savings vehicle for U.S. households worried about another financial crisis, or it could be driven by more demand from the global underground economy.” Of course, we know it’s not because more people are using the $100 bill as pocket money. Smaller bills are still far more popular in that regard. Just look at the average lifespan of each bill:

So what’s that telling us? Mattresses everywhere are getting increasingly stuffed with $100 bills instead of being put to work in the stock market or elsewhere. That speaks to the frame of mind of the Average Joe as much as anything else.

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“Lighthizer said after the testimony [..] that formal steps would be taken to abandon plans of raising tariffs on Chinese goods.”

China Trade Talks Made ‘Fantastic’ Progress Last Week -Kudlow (CNBC)

National Economic Council Director Larry Kudlow said Thursday that trade talks between the U.S. and China are going great, noting the two countries are making “fantastic” progress in meetings last week. “Last week was fantastic,” Kudlow told CNBC’s “Squawk on the Street.” “We’re making great headway on nontariff barriers and tariffs regarding various commodities such as soybeans and energy and beef. We have mechanisms with regard to enforcement, which is -I think- unparalleled.” “The progress has been terrific,” Kudlow added. But “we have to hear from the Chinese side. We have to hear from President Xi Jinping, of course. I think we’re headed for a remarkable, historic deal.” U.S. equities briefly pared some of their losses following Kudlow’s remarks.

Kudlow also said China has expressed willingness to make key structural changes to prevent intellectual property theft, a highly contested issue in these negotiations. Kudlow’s comments follow testimony from Robert Lighthizer, the U.S. trade representative. Lighthizer told members of the House Ways and Means Committee that China needed to do more than just buy more U.S. goods for the two countries to strike a permanent trade deal. But Lighthizer said after the testimony, according to The Wall Street Journal, that formal steps would be taken to abandon plans of raising tariffs on Chinese goods. This is a clear signal that a trade deal could come in the near future. “Lighthizer has worked miracles on this Chinese deal,” Kudlow said. “We’ve never come this far on China trade.”

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News item by news item my long held ideas of the importance of the shadow banks for China’s official growth numbers are being confirmed.

China’s Shadow Debt Burden Much Larger Than Believed (ZH)

[..] a team of S&P credit analysts warned in an October report that China’s debt burden might be much larger than previously believed. Against a backdrop of soaring corporate defaults, the team from S&P warned that investors could safely tack on another ~40% of debt/GDP to China’s total (with even more likely hidden from view) after a careful analysis of a new source of shadow debt being tapped by local governments to further their development plans. These Local Government Financing Vehicles, or LGFVs, represented “an iceberg with titanic credit risks” as local officials had increasingly turned to these sources of shadow financing to finance development projects while bureaucrats in Beijing struggled to turn off the credit taps.

Now that Beijing has reckoned with the idea that now is not the time to try and contain the country’s massive debt load, even as the percentage of bad debt balloons, it increasingly appears that these measures might be too little, too late for investors who financed these LGFVs, as the Wall Street Journal revealed in a report about how a local government in China’s impoverished South had caused a stir by stiffing its creditors after racking up a debt pile – largely through these LGFVs – equivalent to roughly three times the government’s annual revenue.

While putting a number on the amount of shadow debt in the system is difficult due to the opacity of the Chinese financial system, one economist at a domestic think tank estimated that off-balance-sheet borrowings by local governments could be as much as 23.6 trillion yuan, as of the end of 2017, meaning that total is likely higher today, as governments have been forced to tap these vehicles during Beijing’s deleveraging campaign. The proliferation of private funds and other money-raising channels for local governments makes it difficult for economists and for Beijing to track the total amount of borrowings. Official figures pegged the sum of local and central government debt at 29.95 trillion yuan ($4.457 trillion) in 2017, roughly 36% of the economy.

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South Korea “exports contracted 11.1 percent in February from a year earlier, their biggest drop in nearly three years, with shipments to major buyer China slumping 17.4 percent.”

Growing China Downdraft Chills Asia Factory Activity (R.)

Weak demand in China and growing global fallout from the Sino-U.S. trade war took a heavier toll on factories across much of Asia in February, business surveys showed on Friday. Activity in China’s vast manufacturing sector contracted for the third straight month, pointing to more strains on its major trading partners and raising questions over whether Beijing needs to do more to stabilize the slowing economy. In many cases, business conditions were the worst Asian companies have faced since 2016, with demand weakening not only in China but globally. Japan’s factory gauge fell at the sharpest pace in 2-1/2 years as slumping orders prompted plants to cut production, while separate data from South Korea showed its exports plummeted.

“The weakening trend in Chinese import demand weighed heavily on exports across the rest of the region,” said Sian Fenner, lead Asia economist at Oxford Economics. [..] China watchers are looking to Premier Li Keqiang’s work report to the annual meeting of parliament next week for clues on further stimulus plans. Li will set out the government’s economic targets for the year on Tuesday. Sources have told Reuters Beijing will set a 2019 growth target of 6.0-6.5 percent, down from around 6.5 percent in 2018. China reported economic growth cooled to 6.6 percent last year, its weakest pace since 1990, but some analysts believe actual activity is much weaker.

[..] In Japan, the Markit/Nikkei Manufacturing Purchasing Managers Index (PMI) fell into contraction territory as both domestic and foreign orders slumped. “We need to be mindful that uncertainty over the global economic outlook is heightening,” Bank of Japan board member Hitoshi Suzuki said on Thursday, after data showed the biggest drop in industrial output in a year in January. Readings from South Korea — the first economy in Asia to report trade data each month – were equally grim. Its exports contracted 11.1 percent in February from a year earlier, their biggest drop in nearly three years, with shipments to major buyer China slumping 17.4 percent.

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“Once deeply resistant to Trump, CPAC is now like a religious gathering full of Trump idolatry. “Make America Great Again” (Maga) hats and sweaters are much in evidence..”

CPAC On Socialism, Bernie Sanders And 2020: ‘Trump Will Win, 100%’ (G.)

“The favourite in the Democratic race is Bernie Sanders because the way he makes socialism sound,” said Brandon Morris, 32, wearing a Maga cap. “Most citizens don’t know how the system works; once I tell them, they see it will fall apart.” Morris, a nurse from Gainesville, Florida, who is African American, added: “I’m against socialism because I see it as a form of slavery. The rich will get richer and the poor will get poorer. Cory Booker and Kamala Harris talk about Medicare for All and that will kill doctors’ incentives to work hard. Look at Cuba.” Like Trump, Sanders ran in 2016 warning of a rigged system and the downsides of global trade and, like Trump, he thrived in midwestern states against Hillary Clinton. Less than a week after declaring his 2020 candidacy, Sanders had already raised $10m, well ahead of any of his rivals.

Wearing a Maga cap and stars and stripes jacket, Sam Lee, the communications director of conservative group Grand Opportunity USA, said: “I think Sanders has the ability to generate a base. He’s genuine. It’s the same thing as Trump: they’re very upfront about who they are. But Trump will win, 100%.” Lee rejected candidates such as Harris and Elizabeth Warren as “background noise”, adding: “Every election has people who aren’t going to make it and I don’t think they could.” Fran Wendelboe, the treasurer of the conservative organisation the 603 Alliance in New Hampshire, the first state to hold a primary, said: “Among the young voters, Bernie Sanders still seems popular. I think he still has great traction. Elizabeth Warren doesn’t seem to be getting much – she should get out of the race. But they’re all trampling themselves to get as far to the left as they can. Nobody’s going to beat Trump.”

Mike Wertz, a self-employed property appraiser, said: “It’s hard to run against Santa Claus: Bernie Sanders is Santa Claus because he says he would give everything away free. But Trump is still popular.” Wertz, 52, from Stevensville, Maryland, dismissed the prospects of Joe Biden, the former vice-president who is yet to declare whether he will mount a third bid for the White House. “Biden would get exposed. He stumbles around and says silly things. Trump would bring that out of him; he wouldn’t let Biden get away with it. If Biden said something stupid, Trump would tweet it in about 30 seconds.”

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Just to show you my views are not alone. Jimmy Dore and Aaron Maté.

Someone mailed me yesterday talking about the conservatism of my columns. Never saw that before. And I don’t agree. Raging against the empty narratives of the anti-Trump machine does not make me a Trump supporter. People should read more carefully. The world is not divided into two camps.

Claim Trump Had Prior Knowledge Of WikiLeaks Fails Hilariously (Dore)

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Cohen and the Democrats lost it all when he said at the start he never wanted a White House job.

Trump Says Cohen Lied ‘95% Instead Of 100%’ In Testimony To Congress (G.)

Donald Trump claimed on Thursday that Michael Cohen lied about almost everything during his explosive congressional testimony the day before – but told the truth by saying he had no evidence that Trump colluded with Russia. Speaking in Vietnam after meeting the North Korean leader, Kim Jong un, Trump said Cohen, his former legal fixer, lied “95% instead of 100%” of the time during a hearing of the House oversight committee on Wednesday. “I was impressed,” said Trump. Trump falsely claimed several times that Cohen had testified that there had been “no collusion”. In fact, Cohen said he did not know any “direct evidence” of collusion. “But I have my suspicions,” he told members of Congress.

Trump said of Cohen: “He lied a lot, but it was very interesting, because he didn’t lie about one thing. He said no collusion with the Russian hoax. And I said, ‘I wonder why he didn’t just lie about that too, like he lied about everything else.’” Cohen delivered a scathing account of his 10 years as Trump’s enforcer, calling the president a racist conman, implicating him in a series of felonies and estimating that Cohen had threatened 500 people on Trump’s behalf. He said Trump’s eldest son, Donald Jr, had been involved in a criminal conspiracy to pay hush money to a pornographic actor, Stormy Daniels, who alleged she had an affair with the elder Trump. Federal prosecutors in New York continue to investigate.

Cohen confirmed that Trump was under federal investigation for undisclosed crimes and warned that Trump may try to cling to power even if his re-election campaign fails next year. He also alleged that Trump knew in advance of plans by WikiLeaks to publish Democratic party emails, which US authorities say were stolen by Russian intelligence operatives, and that Donald Jr was to meet with Russians at Trump Tower. But, Cohen said, he knew of no direct evidence that Trump or his campaign colluded with Russia’s interference in the 2016 election campaign. US intelligence agencies concluded that the Russian operation was aimed at boosting Trump’s chances.

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Trudeau’s riding has lots of SNC-Lavalin jobs. But he may have gone too far.

The Case That Could Bring Down Canada’s Justin Trudeau (G.)

What is going on in Canada? Canada’s prime minister, Justin Trudeau, is facing the biggest political scandal of his administration. The affair centres around allegations that his former attorney general, Jody-Wilson Raybould, was improperly pressured by some of his closest advisers to prevent the prosecution of a large Canadian engineering firm over accusations of fraud and bribery. Thus far, the scandal has been politically costly; Gerald Butts, a longtime friend of Trudeau’s, and his closest adviser, resigned two weeks ago. Wilson-Raybould has resigned, too. A handful of polls are showing the scandal is politically unpopular for the governing Liberals – which is worrying for them, given there is a federal election in October.

What is the company accused of? SNC-Lavalin, based in Montreal, is accused of paying C$48m worth of bribes in Libya to Muammar Gaddafi’s family, in order to secure lucrative contracts. The bribery is alleged to have occurred between 2001 and 2011. If found guilty, the company would be barred from bidding on federal projects for a decade. SNC-Lavalin employs nearly 50,000 people worldwide, with 3,400 in Quebec. Company executives have been lobbying fora “deferred prosecution agreement”, which in effect allows them to pay a fine in lieu of a criminal prosecution, with no ban on bidding for contracts. But federal prosectors have decided to pursue a trial.

This is where the scandal is centred: the prime minister and his aides, along with the finance minister, have been accused of pressing Wilson-Raybould to intervene and asking prosecutors to accept a deferred prosecution agreement. Wilson-Raybould declined to override the judgment of her top legal team.

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Nobody is willing to say yes to intervention.

Anti-Maduro Allies Regroup After The Fight For Humanitarian Aid (CNBC)

Venezuela’s opposition has formally urged the international community to keep all options on the table, after deadly clashes broke out in border towns over the weekend. On Saturday, at least three people were killed and hundreds more were left injured, Reuters reported, as opposition activists tried to defy a government ban to bring food supplies, hygiene kits and nutritional supplements into the country. It comes at a time when the South American nation is in the midst of the Western Hemisphere’s worst humanitarian crisis in recent memory. President Donald Trump has consistently refused to rule out the prospect of military intervention in Venezuela and the country’s opposition leader, Juan Guaido, has called on the international community to “keep all options open.”

U.S. Secretary of State Mike Pompeo tweeted over the weekend that Washington would “take action against those who oppose the peaceful restoration of democracy in Venezuela.” To be sure, the prospect of U.S.-led military intervention is clearly being signaled as a form of “action.” “I think large-scale U.S. military intervention remains unlikely, though the chances are increasing — that’s worrying,” Tom Long, assistant professor in the department of politics and international studies at the University of Warwick, told CNBC via email. “More than the deadly clashes, what I worry could push towards military action is the lack of options remaining for the opposition and its international allies to increase pressure,” he added.

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We can only guess as to why Chelsea picks the NYT to divulge details about this. We don’t have to guess as to why the NYT picks it up; it wants to repeat this one again:

” In recent years, Mr. Assange and WikiLeaks have become notorious for their role in disseminating Democratic emails stolen by Russian hackers as part of the Russian government’s covert efforts to damage the 2016 Democratic presidential nominee, Hillary Clinton, and help Donald J. Trump win.”

And Chelsea now helps them do it.

Disclosing Subpoena for Testimony, Chelsea Manning Vows to Fight (NYT)

Chelsea Manning, the former Army intelligence analyst convicted in 2013 of leaking archives of secret military and diplomatic documents to WikiLeaks, revealed in an interview on Thursday that she had been subpoenaed to testify before a grand jury — and vowed to fight it. The subpoena does not say what prosecutors intend to ask her about. But it was issued in the Eastern District of Virginia and comes after prosecutors inadvertently disclosed in November that Julian Assange, the founder of WikiLeaks, has been charged under seal in that district. Ms. Manning, who provided a copy of the subpoena to The New York Times, said that her legal team would file a motion on Friday morning to quash it, arguing that it would violate her constitutional rights to force her to appear.

She declined to say whether she would cooperate if that failed. “Given what is going on, I am opposing this,” she said. “I want to be very forthright I have been subpoenaed. I don’t know the parameters of the subpoena apart from that I am expected to appear. I don’t know what I’m going to be asked.” [..] Ms. Manning said that her lawyers have been talking about the subpoena with an assistant United States attorney in the Eastern District, Gordon D. Kromberg. After an inadvertent court filing revealed that Mr. Assange has been charged under seal, it was Mr. Kromberg who successfully argued before a judge that any such charges remain a secret and should not be unsealed. Moreover, she said, Mr. Kromberg told her lawyers in vague terms that prosecutors wanted to talk to her about her past statements.

During her court-martial, Ms. Manning delivered a lengthy statement about how she came to copy archives of secret documents and send them to WikiLeaks, including her online interactions with someone who was likely Mr. Assange. “It’s disappointing but not surprising that the government is continuing to pursue criminal charges against Julian Assange, apparently for his role in uncovering and providing the public truthful information about matters of great public interest,” said Barry Pollack, a lawyer for Mr. Assange. [..] In recent years, Mr. Assange and WikiLeaks have become notorious for their role in disseminating Democratic emails stolen by Russian hackers as part of the Russian government’s covert efforts to damage the 2016 Democratic presidential nominee, Hillary Clinton, and help Donald J. Trump win.

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“Since 2003, China has poured more cement every two years than the US managed in the entire 20th century.”

The Grey Wall Of China: Inside The World’s Concrete Superpower (G.)

In the suburbs south of Beijing, what could one day be the world’s busiest airport is rapidly taking shape. Nicknamed “the starfish” due to the striking design by Zaha Hadid Architects, the Beijing Daxing international airport is set to open in October, and could eventually handle more than 100 million passengers a year. While the 52,000-tonne steel exoskeleton covering the airport’s six concourses immediately catches the eye, what lies beneath is familiar to many Chinese mega-projects: concrete – 1.6m cubic metres of it. Located 67km south of the capital, the airport sprawls across 780,000 sq metres – about a third of the size of Edinburgh. It aims to process 72 million passengers a year, and will have four runways by 2025, but there is a longer-term vision for additional runways and talk of 200 million passengers. Beijing’s existing international airport in the north-east, which will stay open, already handles around 96 million passengers a year.


Photograph: Sipa Asia/Rex/Shutterstock

The new airport is just the latest chapter in the story of how China became the concrete superpower of the 21st century. Since 2003, China has poured more cement every two years than the US managed in the entire 20th century. Even after a dip in recent years, China uses almost half the world’s concrete. The construction sector – roads, bridges, railways, urban development and other concrete-and-steel projects – accounted for one-third of the expansion of the Chinese economy in 2017. China is already home to the largest concrete structure in the world – the Three Gorges Dam across the Yangtze River. Sometimes touted as China’s “new Great Wall”, the dam includes 27.2m cubic metres of concrete and its hydroelectric power station is the world’s largest power station in terms of capacity.

Like all of China’s concrete achievements, the Three Gorges Dam has been mired in controversy. Around 1.4 million people were displaced by the project, and there were complaints that the rehousing settlements were inadequate or that compensation money disappeared into local government coffers. More than 100 workers died in the construction process, and archaeological and cultural sites were flooded. None of this prevented Li Yongan, general manager of the Three Gorges Corporation, from declaring in 2006 that the dam was “the grandest project the Chinese people have undertaken in thousands of years”.

Li only had to wait seven more years to be outdone by yet another Chinese feat of concrete. In 2013, the eastern route of the South-to-North Water Diversion Project opened, connecting the Grand Canal in China’s east with the capital in the north. The project is a multi-decade plan to divert the water from China’s lush south to its arid north, where water scarcity is an acute problem. The waterway has already cost around $80bn (£61bn), making it the most expensive infrastructure project in the world. In the first phase alone, it has used more than double the amount of concrete in the Three Gorges Dam: 65m cubic metres. The project ultimately aims to transport fresh water a distance of more than 4,300km.

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