China Archives - Page 2 of 65 - The Automatic Earth

China’s economy showed further signs of strain in July with output at its factories falling to its lowest level in 17 years, while investment and retail sales also slowed, official data showed Wednesday. The figures are the latest to highlight how the world’s second-largest economy is being battered by an escalating trade war with the United States, weak global demand and deteriorating conditions at home. Industrial output increased 4.8 percent on-year in July, down from 6.3 percent in June and marking the weakest pace since 2002. It was also well below the 6.0 percent forecast by economists in a Bloomberg News survey.

“Given the complicated and grave external environment and the mounting downward pressure on the economy at home, the foundation for sustainable and healthy growth of the economy still needs to be consolidated,” said Liu Aihua, a spokeswoman for the National Bureau of Statistics, which released the data. The data also suggested China’s billion-strong army of consumers were showing signs of increasing thriftiness. Retail sales – which have long been a bright spot for the economy – slowed to a 7.6 percent rise last month, sharply down from 9.8 percent in June.

I was wondering when someone would bring this up.

• US Senator Warns China On Hong Kong Trade Status (R.)

A prominent U.S. senator warned China on Tuesday Hong Kong could lose its special U.S. trade status if Beijing intervenes directly to crack down on increasingly violent pro-democracy protests in the city. A leading Republican also said the Trump administration must make clear to Beijing it would face “profound consequences,” including sanctions, if it intervened directly. “I can assure you that if China comes down hard on the protesters that there will be action in Congress to enforce the autonomy agreements that were entered into that are part of the special recognition of Hong Kong,” Senator Ben Cardin told Reuters. He said such action had bipartisan support.

Cardin, a Democrat, has co-sponsored bipartisan legislation that would require the U.S. government to provide annual justification for the continuation of special treatment afforded to Hong Kong. A 1992 U.S. law affords Hong Kong preferential treatment in matters of trade and economics compared with China. Areas of special treatment include visas, law enforcement and investment. Cardin said Hong Kong enjoyed the special status in exchange for the “one country-two systems” arrangement guaranteeing it a high degree of autonomy and human rights after its handover to China from Britain in 1997. “If China interferes with the autonomy of Hong Kong, then it does affect our agreements in regard to Hong Kong as far as the trade zone is concerned,” Cardin said.

Cory Gardner, another leading senator who is Republican chair of the Senate’s East Asia subcommittee, said on Twitter the Trump administration “must make clear to Beijing that any crackdown in Hong Kong will have profound consequences for China, including imposition of U.S. sanctions.” “The voice of the people of Hong Kong must be heard without fear of repression and retaliation. The Hong Kong government must fully guarantee the democratic rights of Hong Kongers, while Beijing must fully respect Hong Kong’s autonomy. The world is watching,” Gardner said.

Cardin was sharply critical of President Donald Trump’s failure to take a stronger line on Hong Kong and his characterization of the protests there earlier this month as “riots” that were a matter for China to deal with. “The president has not been clear that the United States stands with the people of Hong Kong in protecting their human rights and the autonomy,” Cardin said. “It is inconceivable that the president would put the blame on those who are seeking to protect their rights.” “The president was wrong to give China an excuse to come down against the protesters,” Cardin said.

Might work.

• UK Should Give British Nationality To Hong Kong Citizens – MP (G.)

The UK should give Hong Kong citizens full UK nationality as a means of reassurance amid the current standoff with Beijing, the chair of the influential Commons foreign affairs committee has argued. Tom Tugendhat said this should have happened to people in the formerly British-ruled territory in 1997, when it was handed back to Chinese control, and that doing so now would reassure Hong Kong’s people that they were supported by the UK. Hong Kong has been gripped by 10 weeks of large-scale and occasionally violent pro-democracy demonstrations, which have been met by a sometimes brutal police response, and increasingly trenchant threats from Beijing. On Monday, two Chinese state media outlets ran video footage showing armoured personnel and troop carriers purportedly driving to Shenzhen, which borders Hong Kong, prompting concerns about military intervention.

Under the so-called “one country, two systems” arrangement that had Hong Kong returned to Chinese rule, Beijing considers the population to be Chinese nationals. However, a number of people in the territory hold what is known as a British national (overseas) passport, which gives some rights, for example to stay in the UK for up to six months, but no automatic ability to live permanently or work. Tugendhat said: “The UK had obligations to Hong Kong citizens before 1997, and the extension of overseas citizenship, which is in many ways a second-tier citizenship, was a mistake, and I think it’s one that should be corrected. At a time when there are clearly tensions in Hong Kong, the UK could reassure many Hong Kong citizens that their existing rights are recognised by the UK, and they are valued.”

NY Times now reports that both of Jeffrey Epstein’s two guards fell asleep and falsified records to cover up their failure to check on him for three hours before he died.

Yeah, right.

• Shrieking Heard From Jeffrey Epstein’s Jail Cell The Morning He Died (CBS)

On the morning of Jeffrey Epstein’s death there was shouting and shrieking from his jail cell, a source familiar with the situation told CBS News. Corrections officers attempted to revive him while saying “breathe, Epstein, breathe.” Congress is the latest to start investigating Epstein’s apparent suicide over the weekend, with new reports raising questions about the federal jail where he was being held. One of Epstein’s guards at the Metropolitan Correctional Center on the night he died was reportedly not a regular corrections officer. On Monday, Attorney General William Barr criticized the detention center where the disgraced financier was held.

“We will get to the bottom of what happened and there will be accountability,” Barr said. “I was appalled and frankly angry to learn of the MCC’s failure to adequately secure this prisoner.” Government investigators raided the alleged sex trafficker’s private island in the Virgin Islands Monday. With Epstein gone, potential co-conspirators involved in his alleged sex-trafficking network are shifting into focus. British socialite Ghislaine Maxwell is one of four women accused of recruiting underage girls for sex. She’s denied those claims in the past and has not been charged with a crime. Maxwell is said to be Epstein’s ex-girlfriend turned business associate. Her current location is unknown.

“She was more of a partner in his obsession, really,” said Miami Herald reporter Julie Brown, who spent more than two years looking into Epstein’s controversial 2008 plea deal. “And there are allegations that she was involved in having sex with some of these girls as well.” Court documents from 2011 reveal Epstein controlled several apartments in a building just blocks from his $77 million New York townhouse and allegedly housed “underage girls from all over the world.”

This could get very big.

• Google Insider Turns Over 950 Pages Of Docs And Laptop To DOJ (SAC)

A former Google insider claiming the company created algorithms to hide its political bias within artificial intelligence platforms – in effect targeting particular words, phrases and contexts to promote, alter, reference or manipulate perceptions of Internet content – delivered roughly 950 pages of documents to the Department of Justice’s Antitrust division Friday. The former Google insider, who has already spoken in to the nonprofit organization Project Veritas, met with SaraACarter.com on several occasions last week. He was interviewed in silhouette, to conceal his identity, in group’s latest film, which they say exposes bias inside the social media platform. Several weeks prior, the insider mailed a laptop to the DOJ containing the same information delivered on Friday, they said. The former insider is choosing to remain anonymous until Project Veritas’s James O’Keefe reveals his identity tomorrow (Wednesday).

He told this reporter on his recent trip to Washington D.C. that the documents he turned over to the Justice Department will provide proof that Google has been manipulating the algorithms and the evidence of how it was done, the insider said. Google CEO Sundar Pichai told the House Judiciary Committee in December, 2018, that the search engine was not biased against conservatives. Pichai explained what algorithm’s are said Google’s algorithm was not offensive to conservatives because its artificial intelligence does not operate in that manner. He told lawmakers, “things like relevance, freshness, popularity, how other people are using it” are what drives the search results. Pichai said even if his programmers were anti-Republican, the process is so intricate that the artificial intelligence could not be manipulated and it was to complicated to train the algorithm to fit their bias.

The insider says Google is aware most people are unaware or not knowledgeable about these advanced IT systems and therefore unable to determine who is telling the truth. “I honestly think that a free market can fix this issue,” he told this reporter at a meeting in Washington D.C. “The issue is that the free market has been distorted and what’s happened is that the distortion is so grotesque and the engineering is so repulsive, all we need to do is just expose what’s going on. People can hear that it is bad but that can be bias. But when they see what Google has actually written with the documents, this will actually be taught in universities of what totalitarian states can do with this type of capability.” “It will be so revolting that it doesn’t matter what the solution is, a solution will just form as a reaction to this manipulation they have done,” the Google insider said.

Slaves.

• US Student Debt Defaults Have ‘Grown Stunningly’ (Y!)

Total U.S. household debt increased for the 20th consecutive quarter this year, rising by $192 billion to $13.86 trillion, according to the New York Fed. And the data reveals an unsettling truth about student loan balances, which are at alarming levels of missed payments. Fed researchers noted that “in the second quarter of this year, the outstanding severely derogatory balance is comprised of 35 percent defaulted student loans, which have grown stunningly since 2012.” Severely derogatory refers to “any stage of delinquency paired with a repossession, foreclosure, or ‘charge of’” (meaning that the lender has removed the debt from its books),” the report explained.

The increase in overall household debt was “boosted primarily by a $162 billion gain in mortgage installment balances,” the Fed’s Quarterly Report on Household Debt and Credit explained. While consumer spending has been resilient amid the U.S.-China trade war, two components within household debt are seeing worsening performance. Student loans are the biggest red flag.

While outstanding student debt declined slightly from $1.49 trillion in Q1 to $1.48 trillion this quarter — a “typical change” for the quarter, the report stated — the proportion of student loan borrowers who are unable to pay back their loans has increased rapidly. And the pressure to repay their student loans — which in many cases exceeds tens of thousands of dollars — affects borrowers in several ways. A separate study by JPMorgan Chase Institute, which looked at 4.9 million checking accounts, found that some families are spending up to 17% of their annual income as they repay their debts. They’re even putting off “basic necessities,” in some cases, the study noted.

War on pensions and savings.

• Danish Bank Launches World’s First Negative Interest Rate Mortgage (G.)

A Danish bank has launched the world’s first negative interest rate mortgage – handing out loans to homeowners where the charge is minus 0.5% a year. Negative interest rates effectively mean that a bank pays a borrower to take money off their hands, so they pay back less than they have been loaned. Jyske Bank, Denmark’s third largest, has begun offering borrowers a 10-year deal at -0.5%, while another Danish bank, Nordea, says it will begin offering 20-year fixed-rate deals at 0% and a 30-year mortgage at 0.5%. Under its negative mortgage, Jyske said borrowers will make a monthly repayment as usual – but the amount still outstanding will be reduced each month by more than the borrower has paid.

“We don’t give you money directly in your hand, but every month your debt is reduced by more than the amount you pay,” said Jyske’s housing economist, Mikkel Høegh. In recognition of how puzzling the new mortgage is for customers, the bank’s FAQ is littered with questions and statements such as Hvordan kan det lade sig gøre? (How is that possible?) and Ja, du læste rigtigt (Yes, you read that right). The mortgage is possible because Denmark, as well as Sweden and Switzerland, has seen rates in money markets drop to levels that turn banking upside-down. Høegh said Jyske Bank is able to go into money markets and borrow from institutional investors at a negative rate, and is simply passing this on to its customers. But the flipside is that savers will see nothing paid in interest on their deposits – and may also suffer as they go negative.

Richard Werner: “ECB crushes German community banks, making up 80% of banks and the bulk of lending to the real economy and SMEs, forcing them to join the ECB-induced property bubble Germany, in pursuit of its official program to reduce the number of banks & commentators wonder why economy tanks.”

• Germany: The End Of A Golden Decade (Brzeski)

It’s official: the German economy shrank by 0.1% quarter-on-quarter in the second quarter of the year, from +0.4% QoQ in the first quarter. On the year, the economy still grew by 0.4%, calendar and seasonally adjusted. GDP components will only be released at the end of the month, but available monthly data and the press release of the Statistical Agency suggest that private and government consumption were slightly up but trade and the construction sector were a drag on growth. Today’s GDP report definitely marks the end of a golden decade for the German economy. Since the end of the 2008/09 recession, the economy has grown by an average of 0.5% QoQ every quarter. In fact, the economy grew in 35 out of the last 40 quarters.

However, under the surface of these impressive headline numbers, a worrisome trend has emerged. Since 3Q 2018, the economy has been in a de facto stagnation, with quarterly GDP growth at an average of zero percent. Trade conflicts, global uncertainty and the struggling automotive sector have finally brought the German economy down on its knee. In particular, increased uncertainty, rather than direct effects from the trade conflicts, have dented sentiment and hence economic activity. Who remembers that one year ago, the biggest problem for the German economy was supply-side constraints? Last summer the entire economy was close to overheating; now the lack of demand has become a pressing issue.

Even worse, this transition has taken place without the expected boost to investments. While the slowdown of the industry is not really new, recent developments show that the resilience of the domestic economy to external shocks is crumbling. Profit warnings, first lay-offs, an increase in short-time work schemes, falling consumer confidence and weaker activity in the service sector have sounded the alarm bells. Let’s be clear: the fact that the German economy is currently in stagnation is not the most disconcerting message after a long period of strong growth. It is the weakening of the domestic economy that is most worrisome.

They’re going to do Bernie 2016 all over again.

• Tulsi Gabbard Remains Low in ‘Approved’ DNC Polls Despite Popularity (LR)

The Democratic party has a candidate problem. Twenty-four candidates are currently in the race, and after two rounds of primary debates, the field still feels crowded. The DNC is hoping that their stricter qualification rules for the September and October debates will significantly thin the pack. For these debates, candidates must get 130,000 unique donors and reach 2% or higher in four different DNC-approved polls. As of this article’s publication, only nine candidates have qualified: Joe Biden, Bernie Sanders, Elizabeth Warren, Kamala Harris, Pete Buttigieg, Beto O’Rourke, Cory Booker, Amy Klobuchar, and Andrew Yang. Julian Castro, the former Secretary of Housing and Urban Development, is one qualifying poll away from meeting the criteria as well.

The only other candidate that is close to doing so is Hawaii Representative Tulsi Gabbard, who saw a massive uptick in donors after her debate performance in which she roasted Harris. Since then, Gabbard has shot past the 130,000 donor threshold, and as of Aug. 11, she was sitting at 159,514 individual donors. That took care of one-half of the qualification criteria for the next two debates. Where Gabbard is seeing some struggles is in the polling numbers. Well, sort of. The reality is that since June 28 (the first day of the time in which polls can be counted towards September qualification), Gabbard has hit 2% or higher in eight different polls, which is more than the already-qualified Klobuchar and Yang.

Yet, the DNC only counts one of those as an approved poll, meaning Gabbard still needs three more polls to her resume. If she can’t do that, missing the September debates will be a de facto death blow to her campaign. Gabbard, a staunch anti-war candidate, has been getting the ‘Ron Paul treatment’ from the DNC and the media since ABC’s first primary debate. While her appeal to the voters has been demonstrated (as she was the most googled candidate after each debate), she’s still getting push back. It seems almost improbable that Gabbard can continually pull between 2 and 3% in some polls and then struggle to register even 1% in what the DNC counts as polls.

“Within the GDP framework, the aspect of funding economic activity never emerges. In this framework goods emerge because of people’s desires.”

• GDP Growth Isn’t the Same Thing as Economic Growth (Shostak)

To gain insight into the state of an economy, most financial experts and commentators rely on a statistic called the Gross Domestic Product (GDP). The GDP framework looks at the value of final goods and services produced during a particular time interval, usually a quarter or a year. This statistic is constructed in accordance with the view that what drives an economy is not the production of wealth but rather its consumption. What matters here is the demand for final goods and services. Since consumer outlays are the largest part of the overall demand, it is commonly held that consumer demand is the key driver of economic growth.

All that matters in this view is the demand for goods, which in turn will give rise almost immediately to their supply. Because the supply of goods is taken for granted, this framework ignores the whole issue of the various stages of production that precede the emergence of the final good. However, in order to manufacture a car, there is a need for coal to be employed in the production of steel, which in turn will be employed to manufacture an array of tools. These in turn are used to produce other tools and machinery and so on, until we reach the final stage of the production of a car. The harmonious interaction of the various stages of production results in the final product.

Within the GDP framework, the aspect of funding economic activity never emerges. In this framework goods emerge because of people’s desires. In the real world, it is not enough to have demand for goods – one must have the means to accommodate people’s desires. The means are various final goods that are required to sustain various individuals in the various stages of production. [..] The GDP framework is hostile to savings given that in this framework more savings weakens consumption and weakens the so-called Keynesian multiplier. The GDP framework gives the impression that it is not the activities of individuals that produce goods and services, but something else outside these activities called the “economy.” However, at no stage does the so-called “economy” have a life of its own independent of individuals. The so-called economy is a metaphor—it does not exist.

This is going to the courts.

• Speaker Will ‘Fight With Every Breath’ To Stop Johnson Closing Parliament (G.)

The House of Commons Speaker, John Bercow, has said he will “fight with every breath in my body” to stop Boris Johnson from proroguing parliament to force through a no-deal Brexit without the consent of MPs. Bercow, who has previously said he did not believe it would be possible to suspend parliament to force through no deal, gave his strongest signal yet he was prepared to personally intervene to stop prorogation. Speaking at the Edinburgh festival fringe, the Speaker said he would insist on the right of parliament to continue to sit and debate. “The one thing I feel strongly about is that the House of Commons must have its way,” he said. “And if there is an attempt to circumvent, to bypass or – God forbid – to close down parliament, that is anathema to me.

“I will fight with every breath in my body to stop that happening. We cannot have a situation in which parliament is shut down. We are a democratic society and parliament will be heard. “Nobody is going to get away, as far as I’m concerned, with stopping that happening. Nobody should be afraid to say what he or she thinks.” Asked by an audience member if parliament was able to stop a no-deal Brexit, Bercow replied: “Yes.” Speaking in the Commons in June, Bercow warned the then-Tory leadership candidates that prorogation was not an option. “That is simply not going to happen. It is just so blindingly obvious that it almost doesn’t need to be stated, but apparently, it does and therefore I have done,” he told MPs.

Led by Donkeys: Hi @BorisJohnson & @MichaelGove, we heard about your plan to spend £100m on a No Deal advertising campaign. The thing is you’re both liars who can’t be trusted to tell the public the truth. So we’re doing it for you. More details at http://NoDealBrexit.info (location: Salisbury)

Thatcher said there’s no such thing as “society”. And now there isn’t.

• Britain Is Being Stripped Of Its Social Infrastructure (G.)

Whole swaths of Britain experience a blackout and the country lights up with fury. Cabinet minsters, the press, members of the public rightly demand answers: why was Newcastle airport plunged into darkness? Who is responsible for rail services being halted for hours? Threats are issued of a whopping fine, an official inquiry, heads rolling. Days of rage for a power cut of less than an hour. When it works, infrastructure is invisible. Point out the crumbliness, by all means, and lament the dangerous compromises – but as long as the wretched system judders on, voters shrug and politicians look the other way. Until the day the bridges collapse, the trains seize up and the lights no longer come on. By which time it is too late for anything but blame in 24-point headlines.

Between these two extremes lies a much rarer phenomenon, which blights Britain today. We are right in the middle of an infrastructure breakdown – we just haven’t named it yet. You’ll know what I mean when we list the component parts. More than 760 youth clubs have shut across the UK since 2012. A pub closes every 12 hours. Nearly 130 libraries were scrapped last year, and those that survive in England have lopped off 230,000 opening hours. Each of the above is a news story. Each stings a different group: the books trade, the real-ale aficionados, the trade unions. But knit them together and a far darker picture emerges. Britain is being stripped of its social infrastructure: the institutions that make up its daily life, the buildings and spaces that host friends and gently push strangers together.

Public parks are disappearing. Playgrounds are being sold off. High streets are fast turning to desert. These trends are national, but their greatest force is felt in the poorest towns and suburbs, the most remote parts of the countryside, where there isn’t the footfall to lure in the businesses or household wealth to save the local boozer. When I am out reporting it is not uncommon to go into a suburban postcode short of money yet still bustling with people – but the banks have nearly all cleared out, the church has gone and all that’s left of the last pub is an empty hulk. The private sector has buggered off, the state is a remote and vengeful god who dispenses benefits or sanctions, and the “big society” never made it out of the pages of a report from a Westminster thinktank.

“After the saga went viral, with more than 12,000 retweets, Twitter itself stepped in and joined the calls for Dorothy to be returned to the internet, tweeting #FreeDorothy.”

• Teen’s Tweets From Smart Fridge Go Viral After Mother Confiscates Phone (G.)

A resourceful teenager has taken the rise of increasingly powerful smart home devices to its logical conclusion – tweeting from her family’s smart fridge after her mother confiscated her phone. The 15-year-old Ariana Grande fan known only as “Dorothy” was barred from using her phone but managed to find a number of innovative ways to reach her thousands of followers – a handheld Nintendo device, a Wii U gaming console, and finally, her family’s LG Smart Refrigerator. Dorothy, who declined to share her last name, says her mother disciplined her two weeks ago after she got too distracted while cooking and caused a fire. “She took all my tech so I’d pay more attention to my surroundings,” said the teen, who messaged the Guardian from her cousin’s iPad because she was still facing a tech ban.

“I felt mortified! I was worried because I’ve been bored all summer and Twitter passes the time for me.” The user was worried about losing her “mutuals” – accounts she follows that follow her back – and devised other ways to get tweets out. Her self-described “fan account” is used primarily to send tweets about Ariana Grande. Dorothy then sent a tweet saying: “my mom took my phone and my nintendo ds so i have no choice but to use my wii … thank u all for the support and love.” The tweet’s source label, which indicates the device from which a tweet was sent, confirmed that the tweet came from a Wii U. Finally, after her mother apparently took her Wii U away as well, she sent a tweet from her LG Smart refrigerator: “I’m talking to my fridge what the heck,” she said.

The speed at which this is happening is literally more than we can comprehend.

• More Than Half Of World’s Forest Wildlife Lost In 40 Years (Ind.)

The amount of wildlife in the world’s forests has plummeted by more than half (53 per cent) in just over 40 years, conservationists have found. Humanity is killing the Earth’s greatest natural ally in the fight against climate breakdown, our forests, according to the report by the WWF. The charity is calling on world leaders to declare a planetary emergency and develop a “new deal for nature and people” to halt climate breakdown, restore nature and fix food systems. The first ever global assessment of forest biodiversity shows that habitat loss and degradation, chiefly caused by people, account for 60 per cent of the threats to forests and forest species.

The report, ‘Below the Canopy’, written jointly by WWF and ZSL, found the drops in wild animal and bird populations were greatest in tropical forests such as the Amazon rainforest, where there is the most wildlife to lose. Monitored populations of forest-living birds, mammals, amphibians and reptiles declined, on average, by 53 per cent between 1970 and 2014, the most recent year with available data. Protecting and restoring forests must be at the heart of the global plan, the charity says. WWF says that forests, which are home to more than half of the world’s land-based species, are vital to the health of the planet, absorbing damaging greenhouse gases.

The report outlines how in the vast tropical forests of South America and Africa, the carbon locked in would decline if large birds and primates in particular were lost. “When animals are lost from forests this has severe implications for forest health, the livelihoods of more than a billion humans who depend on forests, and our opportunity to mitigate against climate disaster,” WWF says.

Day’s Edge Productions / WWF-US

Minoan fresco depicting a bull leaping scene, found in Knossos, 1600-1400 BC

Debt Rattle August 10 2019

Aug 102019

August 10, 2019 Posted by Raúl Ilargi Meijer at 9:39 am Finance Tagged with: Assange, China, CNN, Democrats, Epstein, extinction, giant river animals, Hong Kong, nationalization, Tulsi Gabbard, Wellington 18 Responses »

Henri Matisse Open window, collioure 1905

• Albert Edwards: “Chinese Authorities Lost Control Back In 2015” (ZH)

• China Nationalizes Third Bank Since May (SCMP)

• US, China Step Up War Of Words Over Hong Kong (AFP)

• Who’s Afraid of Tulsi Gabbard? (Matt Taibbi)

• Rude Awakening (Kunstler)

• Huge Cache Of Records Details How Jeffrey Epstein And Madam Lured Girls (MH)

• If You’re A Sexual Predator, It Pays To Be A Rich One (MH)

• Assange’s Persecution Rides on Feeble Lies (Floth)

• 40 Rebuttals to CNN’s Bias on Assange (Fidel Narváez)

• Conductor Boots Racially Abusive Teenage Girl Off Wellington Train (Stuff)

• Giant River Animals On Verge Of Extinction (G.)

The last time I said something critical about the Chinese economy I was accused of sinophobia. Kid you not.

• Albert Edwards: “Chinese Authorities Lost Control Back In 2015” (ZH)

.. what Edwards focused on in his latest periodic report was China in the wake of the intensification of the trade/currency war and the recent historic breach of the 7.00 Yuan floor, and in typical style, Edwards cautioned that “investors may be underestimating the turmoil that is now stirring under the surface in China. All may not be as stable as investors suppose.” One of Edwards’ key argument is, as we said earlier today, that contrary to popular opinion, it is not China that is winning the trade war – after all it has the benefit of time, while Trump has to win (or lose) the war ahead of the 2020 presidential election – but rather it is Trump who has the upper hand (today’s news of a 3rd major Chinese bank failure/bailout in as months certainly underscores Edwards’ claim). In this context, he asks the following rhetorical question:

“… what happens if this consensus is wrong? What if China is in a far more vulnerable situation than investors realise? US economic data has been poor of late but it hasnit been great in China either. I think the chart below showing a rapidly contracting jobs market will be a key concern to the Chinese authorities. Indeed, our own China economist, Wei Yao, described the economy being on shaky ground in a recent note.”

… we will only touch on Edwards’ next point, which not surprisingly, refers to China’s growing bank instability, and which notes that “more concerning are the ructions in the banking sector after the recent bailout of Baoshang Bank. Wei writes “It would not be an overstatement to say that Baoshang’s fallout is a milestone in China’s deleveraging reform and financial liberalisation. The deleveraging process is bound to expose weak institutions along the way, and it is only a matter of time before counter-party risk reaches the interbank market. …When the deleveraging process enters the very core of the financial system, the risk of things going terribly wrong rises”

Main question here is how widespread this is.

• China Nationalizes Third Bank Since May (SCMP)

China’s sovereign wealth fund has taken over Heng Feng Bank, a troubled lender linked to fugitive financier Xiao Jianhua, in the third case in as many months of the state exerting its grip over wayward financial institutions. Central Huijin Investment, a subsidiary of the China Investment Corporation that acts as the Chinese government’s shareholder in the country’s four biggest banks, has emerged as a strategic investor in Heng Feng, according to a brief report overnight by Shanghai Securities News, published by state news agency Xinhua. The investment was a breakthrough in Heng Feng’s debt restructuring led by the Shandong provincial government, the state-owned newspaper said, without citing a source or providing financial details.

Huijin’s investment would increase Heng Feng’s capital adequacy, improve the troubled bank’s management and enhance its operational capability, the paper said. [..] It’s also the second of several banks in Xiao’s financial empire to be put under state ward, after the May 24 nationalisation of Baoshang Bank in Inner Mongolia’s Baotou city. Xiao’s Tomorrow Group, which owned 89 per cent of Baoshang, had misappropriated large sums from the bank, triggering serious credit risks that prompted the government to step in, the central bank said. [..] The Chinese government’s first nationalisation of a private bank since 1998 has led to a collective collapse in the stock prices of China’s listed banks, driving their valuations to record lows, amid fears that the shakeout would affect more lenders, and that the largest and best capitalised institutions would be called upon to bail them out.

Don’t be surprised if the US extradites a few Chinese diplomats soon.

• US, China Step Up War Of Words Over Hong Kong (AFP)

The United States and China have stepped up an increasingly harsh war of words over pro-democracy protests in Hong Kong, as Beijing seeks to push its accusations that the mass demonstrations are being fueled by foreign powers. In the latest exchange, Washington on Friday called out Beijing-backed news outlets for sharing “dangerous” reports after a newspaper revealed personal information about an American diplomat in Hong Kong who met with pro-democracy activists. “Official Chinese media reports on our diplomat in Hong Kong have gone from irresponsible to dangerous. This must stop,” State Department spokeswoman Morgan Ortagus posted on Twitter.

Beijing has increasingly pitched the anti-government protests in the semi-autonomous city as funded by the West, at one point describing violent unrest in the city as “the work of the US.” But China has provided little evidence for the claim beyond supportive statements from some Western politicians. The Hong Kong-based, pro-Beijing Ta Kung Pao reported that the political unit chief of the US Consulate General in Hong Kong, Julie Eadeh, had met with members of the political party Demosisto — including prominent democracy activist Joshua Wong. It shared details on Eadeh’s career as well as her family members’ names.

The Office of the Commissioner of the Ministry of Foreign Affairs of China in Hong Kong denounced Ortagus’ remarks as “blatant slander against China” that had “again exposed US gangster logic.” Ortagus, however, said that “Chinese authorities know full well, our accredited consular personnel are just doing their jobs, just like diplomats from every other country.” “Foreign diplomats in the United States, including Chinese ones, enjoy open access to all elements of American politics, civil society, academia, and business,” she added.

Kamala Harris support went from 20% to 7% in a week.

• Who’s Afraid of Tulsi Gabbard? (Matt Taibbi)

“It just shows,” says Hawaii congresswoman Tulsi Gabbard, “that launching a smear campaign is the only response to the truth.” Gabbard, 38, burst into headlines after a July 31 Democratic Party presidential debate, when she went after California Senator Kamala Harris’s record as Attorney General of the State of California. The “smear campaign” refers to the bizarre avalanche of negative press that ensued, as reporters seemed to circle wagons around a Harris, a party favorite. The Gabbard-Harris exchange was brief but revealing, as a window into a schism in the Democratic Party. Harris was elected Attorney General of California in 2010. She frequently sought moderate or even conservative positions on issues like criminal sentencing, drug enforcement, and prison labor.

These stances were standard among Democrats back when being “tough on crime” was considered an essential component of the “electability” argument. The Democratic electorate has changed, becoming especially concerned about mass incarceration. However, the party has not quite caught up. Gabbard exposed these divisions in the July 31 event, when she said: “She put over 1500 people in jail for marijuana, and then laughed about it when asked if she ever smoked marijuana.” The Detroit crowd cheered all the way through Gabbard’s next point, about Harris’ blocking the introduction of DNA evidence in a murder case. The applause unnerved Harris, who looked like someone dented her car. She’d been at 20 points in a July 2 Quinnipiac poll; after a multi-week slide that culminated with Gabbard’s attack, Harris was at 7 percent, a “distant fourth” behind Joe Biden, Elizabeth Warren, and Bernie Sanders.

Having wounded a presumptive frontrunner backed by nearly $25 million in campaign funds, Gabbard instantly became the subject of a slew of negative leaks, tweets, and press reports. Many of these continued the appalling recent Democratic Party tradition of denouncing anything it doesn’t like as treasonous aid to foreign enemies. Harris national press chair Ian Sams tweeted, “Yo, you love Assad!”, a reference to Gabbard’s controversial visit with Syrian president Bashar al-Assad in 2017. He then tweeted a link to an insidious February 2 NBC News story, which asserted that Gabbard’s campaign was the beneficiary of Russian bots.

Harris herself meanwhile gave a sneering interview to Anderson Cooper. “This is going to sound immodest,” she said, but as a “top-tier candidate,” she could “only take what [Gabbard] says and her opinion so seriously.” She added Gabbard was an “apologist for an individual, Assad, who has murdered the people of his country like cockroaches.”

“.. the Democratic Party first lost its mind, and then committed suicide.”

• Rude Awakening (Kunstler)

Speaking of “stabbing motherfuckers in the heart,” why are the “progressives” who moiled outside Senator Mitch McConnell’s house the other night not cooling their heels in a federal lock-up for threatening to assassinate a public official? That’s the usual procedure. How difficult would it be to locate them? Nobody has even asked — a peculiar development. Twitter boss Jack Dorsey took the predictable “progressive” action of banning Senator McConnell’s election campaign account for posting a video of the very mob looking to “stab motherfuckers in the heart” outside his house. That should be good, at least, for a hearty lawsuit against Twitter that might raise the consciousness of the 23-year-old wokester myrmidons Jack Dorsey hired to pretend that their diligent bannings of non-woke Tweeters are the work of supposed “algorithms” — as well as Mr. Dorsey himself, the arrogant prick behind it all.

Any decent psychological detective can conclude why the Left, including especially the Democratic Party — formerly a pillar of our political system — has gone insane. Losing a national election two and half years ago traumatized the base. In the process, the party made the rueful discovery that it was devoid of reality-based political ideas. This prompted the adoption of reality-optional excuses for failure masquerading as political ideas: Russia did it! Trump was “Putin’s puppet.” That clinically paranoid meme, and the massive investigatory activity it provoked, ended in more failure, so profound that the party still can’t face it.

But the Democratic Party must sense that it is about to be held accountable for all that. The Deep State officials who acted out that shadow-play on its behalf, with all its seditious overtones, are about to be frog-marched into the grand juries any week now. The party itself, or at least its executive gang, the DNC, may be included in the clean-up operation. It’s really hard to see how the party survives that. Its loyal historians will probably say that some motherfucker stabbed it in the heart. More factually, the Democratic Party first lost its mind, and then committed suicide.

Julie K. Brown’s take at the Miami Herald. Brown is one of the initiators of the entire investigation.

• Huge Cache Of Records Details How Jeffrey Epstein And Madam Lured Girls (MH)

A chilling picture of how hundreds of girls and young women from around the world were trafficked for sex by Jeffrey Epstein, his madam, Ghislaine Maxwell, and — allegedly — a number of powerful business and world leaders emerged Friday in court documents unsealed in New York. The documents, the largest cache to be released in the 13 years since Epstein’s case began, offer brutal details about Epstein’s trafficking of teenage girls in Palm Beach, New York and overseas — as well as Maxwell’s obsessive and often abusive quest to provide him with new girls over a span of years in the early to mid 2000s.

Virginia Roberts Giuffre, whose 2015 federal defamation suit against Maxwell was the source of the documents, provided testimony and evidence to substantiate her claims of exploitation at the hands of Epstein and Maxwell through photographs, plane logs and even a medical record from Presbyterian Hospital in New York where Giuffre was taken by Epstein after a particularly abusive sex episode. Her story was also corroborated by an ex-boyfriend, whom she told about the abuse at the time, and another woman who worked as an assistant for Maxwell and Epstein named Johanna Sjoberg. Sjoberg, who was a college student at Palm Beach Atlantic University when she was recruited by Maxwell, said that Maxwell’s primary role in Epstein’s life was to provide him with young girls at least three times a day.

“He explained to me that, in his opinion, he needed to have three orgasms a day. It was biological, like eating,’’ Sjoberg said in a sworn deposition in 2015. The names of some prominent, wealthy men Giuffre says she was directed to have sex with are spattered throughout the approximately 2,000 pages released Friday. They include: the late scientist Marvin Minsky, modeling scout Jean-Luc Brunel, former New Mexico Gov. Bill Richardson, 71, former Sen. George Mitchell, 85, Hyatt hotels magnate Tom Pritzker, 69, and prominent hedge fund manager Glenn Dubin, 62. Giuffre has previously identified Epstein’s lawyer, Alan Dershowitz, 80, and Prince Andrew, 59, as two of the people with whom she had sex.

All the men have issued denials, with some of them, including Dershowitz, insisting that they never met Giuffre. No charges have been filed against anyone other than Epstein, who was indicted last month in New York on two counts of sex trafficking. Some of the testimony released Friday is difficult to read, as when one 15-year-old Swedish girl, shaking and crying in fear, told a butler who worked for two of Epstein’s closest friends that she had been taken to Epstein’s island in the Caribbean and ordered to have sex with him and others. The butler, in a sworn statement, said the girl, visibly traumatized, told him that Epstein and Maxwell had physically threatened to harm her and seized her passport to keep her on the island, according to the butler’s statement.

Also from the Miami Herald. Epstein was abusing girls while serving a sentence for abusing girls.

• If You’re A Sexual Predator, It Pays To Be A Rich One (MH)

The more we learn about Jeffrey Epstein’s 13 months in so-called custody at the Palm Beach County Stockade, the clearer is the lesson: It definitely helps to be rich, even if you’re a sexual predator. Last week, Gov. Ron DeSantis finally ordered the Florida Department of Law Enforcement to investigate Epstein’s coddled life while serving 13 months of an 18-month sentence after pleading guilty in 2008 to two felony counts of prostitution. One of those crimes involved soliciting sex from a minor, serial behavior of Epstein’s that had caught the attention of the FBI. A 53-page federal indictment resulting from that probe was spiked by then-U.S. Attorney Alex Acosta, paving the way for the multimillionaire’s mysteriously lenient plea deal.

Even the most jaded observers of the justice system wouldn’t expect that royal treatment would be given to a slimy perv who recruited high school girls to visit his Palm Beach mansion and give him massages. Yet, according to records from the jail and sheriff’s department, Epstein enjoyed perks that no other convicted sex criminal would ever have the gall to request. He took the concept of “work release” to a whole new level. He was allowed to leave the stockade 12 hours a day, six days a week, and upon his return stayed in a mostly empty wing of the facility. For Epstein, jail wasn’t an incarceration so much as an inconvenience. Deputies were given permission to leave his cell unlocked while he was there. He was more of an out-mate than an inmate.

Sometimes he got to watch TV in a room normally reserved for attorneys visiting jailed clients. During his daily road trips, he was followed by off-duty deputies who were paid $126,000 for their respectful supervision. The officers often wore business suits and addressed him as “Mr. Epstein.” [..] Attorney Bradley Edwards, who represents some of Epstein’s female accusers, said he knows of women who were brought to Epstein for sex while he was away from the stockade during the day. Those claims will be part of the new FDLE investigation.

“..a dog snarling into the hole of a rabbit does not confine it there..”

• Assange’s Persecution Rides on Feeble Lies (Floth)

The official US reaction to Melzer’s report has naturally been to decry the content. It starts upon this with a certain fable of righteousness, which implies that a dog snarling into the hole of a rabbit does not confine it there: “Mr Assange voluntarily stayed in the embassy to avoid facing lawful criminal charges pending against him. As such his time in the embassy did not constitute confinement and was in no way arbitrary.” Like the term ‘confinement,’ the word ‘arbitrary’ is a weasel in this particular fable. It does not function in human rights law to imply any lack of rationale, but to identify the rationale of some authority as crucially unprincipled. Where such a fault applies it is likely to be ignored, misrepresented and/or distracted from by the culpable authority.

Hence, as in the quote above, they tend to assert some righteous motive, real or fictional, as centrally vindicating. It is common and wrong for those reprimanded to respond this way, since their place is to respect the findings of UN appointees and if necessary, reasonably correspond with them. The entire point of international law is that countries are legally held to account. In terms of the presently relevant human rights covenants, this involves a regime of independent assessment as to whether they are complying with the covenants they ratified. No brute enforcement applies here and the system should work perfectly well without it, if only the signatories abide by it in good faith.

In this primary and neglected context, the account that the US has given of itself has been a spectacular self-incrimination. The two sentences quoted above happen to assert the main premise of Assange and appointees from the UN who saw fit to defend him. For it is plainly implied in the quote that staying in the embassy was the logical means he appropriated to avoid negative repercussions intentionally prepared for him by the US in response to his publishing.

Fidel Narváez worked at the Ecuador embassy in London Assange stayed in. They became friends.

• 40 Rebuttals to CNN’s Bias on Assange (Fidel Narváez)

Having worked as a diplomat at the Ecuadorian embassy in London for six out of the seven years that Julian Assange lived there as a political refugee, unlike others, I am privy to what actually happened there. I am alarmed by CNN’s June 15th 2019 story, alleging Assange turned the Ecuadorian embassy in London into a command post for election meddling. The story contains several substantive shortcomings and too many factual errors. I warned CNN about them when I was approached during their “investigation,” but none of my points were included in the article. It is clear that CNN was not looking for balance in their publication, choosing instead to make assertions without showing actual proof, and to use props such as irrelevant CCTV images, a sensationalist collage and a miniature image of unreadable documents to make it seem as though the story was based on evidence.

CNN’s story is based on the wrong premise that publishing information about an election—in this case the 2016 US presidential election—constitutes interference. Nobody refutes the authenticity of the material and nobody claims that the information was not in the public interest. In fact, New York Times editor Dean Baquet stated that had his newspaper obtained the same material, and regardless of the source or means by which the information had been obtained, the New York Times would have published it. Following CNN’s own logic, all major newsrooms should also be called “election interference centers,” which is how CNN chooses to call the embassy where Julian Assange received political asylum while he was the publisher of WikiLeaks. CNN implies criminality in something that is a legitimate exercise in journalism.

Prior to CNN’s story, the best example of this type of completely unsubstantiated reporting was the Guardian’s front page story “Manafort Held Secret Conversations With Assange In The Ecuadorian Embassy”, which was preceded by another libelous article entitled “Russia’s Secret Plan To Help Julian Assange Escape From UK.” Both of these stories were absolutely false; both were written by the same authors and propped using the same sources: reports written by employees of a private company in charge of security at the Ecuadorian embassy, as well as information provided by anonymous agents of Ecuador’s intelligence services.

Nice.

• Conductor Boots Racially Abusive Teenage Girl Off Wellington Train (Stuff)

A Wellington train was literally stopped in its tracks after a teenage girl racially abused a male passenger for speaking Hindi on his cellphone. The passenger was reportedly yelling, “go back to your own country, don’t speak that language here”. Unhappy with the teenager’s actions, conductor JJ Phillips told her to get off the train which was travelling on the 8.35pm service from Wellington Railway Station bound for Upper Hutt on Thursday. Unwilling to comply, the teenager told Phillips that she wasn’t getting off, so the conductor called police. “She said she was getting off at the next stop, and the conductor said ‘no you can get off at this one, I’m not putting up with that nonsense’,” a passenger told RNZ.

“We were just in awe that she had the courage to say ‘this isn’t on and I’m not going to put up with it, no matter who you are and whether you’re a paying customer or not – you can get off the train and find your own way home.'” A Transdev spokeswoman said the teenager was “acting aggressively, swearing and repeating racist comments to several customers on the train who were speaking in other languages”. Despite passengers objecting, the girl continued and the conductor was alerted to the situation. “Manager JJ Phillips asked the customer to stop the behaviour, then when she did not, she was asked to leave the train. The comments persisted so JJ phoned the Police who removed the customer at Ngauranga.”

The train continued after the teenager had been left with police. Phillips then apologised for the delay, telling the passengers that behaviour wasn’t acceptable in New Zealand – and she was rewarded with a round of applause.

“Across Europe, North Africa and Asia, populations have plunged by 97% since 1970. ”

• Giant River Animals On Verge Of Extinction (G.)

Populations of the great beasts that once dominated the world’s rivers and lakes have crashed in the last 50 years, according to the first comprehensive study. Some freshwater megafauna have already been declared extinct, such as the Yangtze dolphin, and many more are now on the brink, from the Mekong giant catfish and stingray to India’s gharial crocodiles to the European sturgeon. Just three Chinese giant softshell turtles are known to survive and all are male. Across Europe, North Africa and Asia, populations have plunged by 97% since 1970. The killing of the animals for meat, skins and eggs is the cause of the decline, along with humanity’s ever growing thirst for freshwater for crops, its many dams, as well as widespread pollution.

The scientists assessed 126 species, covering 72 countries, and found numbers had plunged by an average of 88%. Many of the creatures are keystone species in their ecosystems, such as beavers, and the researchers said their loss will have knock on effects on all fauna and flora and on the many millions of people that depend on the waterways for their livelihoods. “The results are a wake-up call to us about the plight of these species,” said Zeb Hogan from the University of Nevada, US, who participated in the research team. “Many of them are at risk of extinction, and almost all of them need our help. It’s a race now to see what can be understood and protected before it’s too late.”

The Mekong river in southeast Asia is home to more giant fish species than any other river on Earth and Hogan has worked there for two decades. But he said populations have dropped to almost zero as the rapidly increasing human population has escalated the pressure on them. The Mekong is also home to the world’s largest catfish, which can weigh almost 300kg (661lb), and the biggest carp and freshwater stingray species. All are now classified as critically endangered, one step from extinction.

On August 10, 1897, German chemist Felix Hoffmann synthesized acetylsalicylic acid (ASA) in a stable form usable for medical applications. In 1899 it was marketed for the first time under the trade name Aspirin.

Debt Rattle August 7 2019

Aug 072019

August 7, 2019 Posted by Raúl Ilargi Meijer at 9:15 am Finance Tagged with: Brexit, China, Cummings, Epstein, Erdogan, EU, liquidity, Mifsud, PNG, Putin, Salisbury, Skripal, Svengali, USD, yuan 11 Responses »

Pablo Picasso Portrait of Dora with bun 1937

• The Future Of Britain Is In The Hands Of Unelected Svengali Cummings (Oborne)

• No-Deal Brexiteers Are Winning Because They Want It More (Sky)

• UK Too Desperate To Secure US Trade Deal – Larry Summers (G.)

• Brexit: Michael Gove Accuses ‘Wrong And Sad’ EU Of Intransigence (G.)

• Met Police Examine Vladimir Putin’s Role In Salisbury Attack (G.)

• China State Banks Seen Supporting Yuan In Forwards Market (R.)

• Forget China, The Fed Has A Much Bigger Problem On Its Hands (ZH)

• Papua New Guinea Asks China To Refinance Its National Debt (G.)

• Chinese Port Plans Put Pacific Back In Play (R.)

• Pentagon Set to Prevent “Unacceptable” Turkish Invasion Of Northern Syria (ZH)

• The Mainstream Media Wants the Mifsud Story to Just Go Away (ET)

• Epstein’s Mysterious Manhattan Apartment Building On East 66th Street (BI)

Conservative journalist/editor Peter Oborne says the exact same thing I said a few days ago in A Tale of Two Cummings. Boris Johnson is just a figurehead.

Nigel Farage is complaining that the Tories want him and his Brexit party to step aside, but that’s Cummings and his polls that show Farage is too unpopular.

• The Future Of Britain Is In The Hands Of Unelected Svengali Cummings (Oborne)

Cummings is no longer in the shadows, operating behind the scenes — this Svengali is out in the open. Indeed, he seems to relish being seen in public, striding ostentatiously into Downing Street every morning. Now, we are all familiar with his shaven head, scruffy T-shirts, crumpled appearance and contemptuous and appraising eyes, his newspapers and bundles of documents carried in a Vote Leave bag. According to some papers, and many ministers and civil servants I have spoken to recently, this is the man who is truly running Britain. It’s Cummings who oversees the No 10 grid which controls the timing of announcements and public events. It’s in this capacity that he dispatches the PM up and down Britain, photographed in hospitals, sharing selfies with nurses, and on construction sites wearing a hard hat.

It is also Cummings, not Johnson, who determines political strategy — hence the huge public spending announcements on health, extra police and other issues. Indeed, it looks very much as if Johnson has become the public face of Cummings. And this, I am afraid, is profoundly disturbing. No one ever voted for Cummings, he has little experience of life outside politicking yet he has been given unprecedented power at a moment of immense crisis in the national fortunes. Within hours of Johnson becoming Tory leader two weeks ago, newly anointed special adviser Cummings called ‘his’ staff together in the magnificent Downing Street first-floor state room. He told them that he plans to deliver Brexit ‘by any means necessary’.

Quoting Michael Jordan: “Some people want it to happen. Some wish it to happen. Others make it happen.”

• No-Deal Brexiteers Are Winning Because They Want It More (Sky)

Consider this: we now have a prime minister and a government, buttressed by a not inconsiderable rump of the Conservative party, who have made it clear that there is not a convention they are not willing to break, an institution they are not willing to smash, a precedent they are not willing to burn, in the pursuit of their goal. The PM and his coterie have said that they would prorogue parliament because it might stand in their way; that they are willing to schedule an election far in excess of the usual time limits because it would ensure our exit on the 31 October. In so doing they would therefore go against yet more precedent in pursuing a highly tendentious policy during an election period (where normally a caretaker administration would do little of controversy).

And now, we have news that the prime minister would squat in Number 10 after he loses a confidence vote in the House of Commons. He is even willing to do so, apparently, if the Commons coalesces around an alternative prime minister, despite the fact the Cabinet Manual (the closest we have to a constitution) makes it clear that this is quite unacceptable and that it would risk the neutrality of the Queen. All of this would be constitutional vandalism. Brexit then, “whatever the cost”, as Dominic Cummings has said. It is a nihilistic vision of politics and indeed, a most unusual one for self-described “Conservatives” but it is, relentless and clear-sighted. Indeed, its recklessness has imbued this administration with a strange purpose and energy.

Larry craves attention.

• UK Too Desperate To Secure US Trade Deal – Larry Summers (G.)

The former US treasury secretary Larry Summers has said he does not believe that a “desperate” UK would manage to secure a post-Brexit trade deal with Washington, as Dominic Raab, the new foreign secretary, heads to the US to scope out the potential for such an agreement. Summers, who was a senior official under Bill Clinton and Barack Obama, said the UK was in a weak position when it came to negotiating with trade partners. He told BBC Radio 4’s Today programme on Tuesday: “Britain has no leverage, Britain is desperate … it needs an agreement very soon. When you have a desperate partner, that’s when you strike the hardest bargain.”

Despite warm words from Donald Trump about a trade deal, Summers said: “We have economic conflict with China and, even on top of that, the deterioration of the pound is going to further complicate the negotiating picture. “We will see it as giving Britain an artificial comparative advantage and make us think about the need to retaliate against Britain, not to welcome Britain with new trade agreements.” Even if the two countries could come to an agreement, Summers said, the UK was in a weak negotiating position. “Britain has much less to give than Europe as a whole did, therefore less reason for the United States to make concessions,” he said. “You make more concessions dealing with a wealthy man than you do dealing with a poor man.”

The UK says the EU doesn’t want to talk, and vice versa. The demand to take the backstop out is a perfect dealbreaker. It can only lead to a no-deal Brexit. Re: Cummings.

• Brexit: Michael Gove Accuses ‘Wrong And Sad’ EU Of Intransigence (G.)

Michael Gove has accused the European Union of intransigence over Brexit talks, calling it “wrong and sad”, as divisions between the UK and Brussels became further entrenched with the government seemingly intent on a no-deal departure. Gove, who is in charge of no-deal preparations, reiterated Boris Johnson’s position that the only route to progress would be the EU starting again with withdrawal negotiations, something Brussels has repeatedly and consistently ruled out. Adding to the impression of Johnson’s hardening position, newly released government read-outs of the prime minister’s phone calls with a series of EU leaders over recent days showed he delivered the same uncompromising message to them.

While the Irish prime minister, Leo Varadkar, insisted on Tuesday that a no-deal departure was not inevitable, both he and the country’s finance minister, Paschal Donohoe, warned of a significant and long-term change to relations between the countries if it did happen. Downing Street has increasingly pushed the message that Brexit will happen on 31 October under any circumstances – even intimating that No 10 believes the mandate of the 2016 Brexit referendum would overrule even a blocking vote in parliament.

There is increasing worry among some MPs that Johnson could try to force through a no-deal Brexit against the will of the Commons, with his de facto chief of staff, Dominic Cummings, reportedly threatening No 10 staff with the sack if they dissent. The government’s official position is still that it is seeking a formalised departure, albeit only if Brussels ditches the Irish backstop border insurance policy and reopens the withdrawal agreement.

And of course Britain is anxious to keep the Skripal narrative going. In reality, all it would take is to present the man.

• Met Police Examine Vladimir Putin’s Role In Salisbury Attack (G.)

Scotland Yard has examined the role of the Russian president, Vladimir Putin, in the novichok nerve agent attack in Salisbury, it has been revealed. Putin is assessed by UK intelligence agencies as having been “likely” to have approved of the attack in March 2018 on Sergei Skripal, a former Russian military officer, and his daughter, both of whom were left seriously ill but survived. Dawn Sturgess later died after coming across a discarded perfume bottle used by two Russian intelligence agents to carry the military grade nerve agent. Two Russian agents have been charged over the attack, and Britain wants them extradited and has issued a European arrest warrant (EAW) and Interpol red notice for their detention.

The Metropolitan police assistant commissioner Neil Basu, the head of UK counter-terrorism policing, said the investigation into the attack was continuing. Basu said the issues involved in bringing charges over the attack were complex. “You’d have to prove he [Putin] was directly involved,” he said. “In order to get an EAW, you have to have a case capable of being charged in this country. We haven’t got a case capable of being charged. “We’re police officers, so we have to go for evidence. There has been a huge amount of speculation about who is responsible, who gave the orders, all based on people’s expert knowledge of Russia. I have to go with evidence.”

“The movement in forward points may reflect a tightening in USD (dollar) liquidity..”

• China State Banks Seen Supporting Yuan In Forwards Market (R.)

China’s state banks have been active in the onshore yuan forwards market this week, using swaps to tighten dollar supply and support the Chinese currency, four sources with knowledge of the matter told Reuters. The spot value of the yuan has fallen sharply this week against the dollar as tensions between China and the United States escalated and prompted fears that their trade war could shift into a currency war. The sources said banks had conducted significant amounts of buy-sell swaps in the onshore market on Tuesday. Buy-sell swaps help to reduce the supply of dollars that the market can access to short-sell the yuan. “Yesterday big banks were all selling one-year onshore forward swaps, then in the afternoon the spot dollar-yuan fell,” said a trader at a foreign bank in Shanghai.

One state bank also was seen active in offshore forward swaps, two traders at foreign banks with knowledge of the matter said. On Wednesday, one-year onshore dollar-yuan forwards were at 175 points, down from 321 points on Monday, according to Refinitiv data. One-year offshore dollar-yuan forwards were at 459 points, down from 640 points on Monday. “The movement in forward points may reflect a tightening in USD (dollar) liquidity when some market participants need to buy spot dollars and sell them back in forwards. Meanwhile, the spot and outright moves were also partly due to a stabilization in RMB (yuan) sentiment on Tuesday,” said Frances Cheung, head of macro strategy for Asia at Westpac in Singapore.

Liquidity.

• Forget China, The Fed Has A Much Bigger Problem On Its Hands (ZH)

The Fed may have launched its first easing cycle since 2007 and liquidity-sapping quantitative tightening may finally be over, but Powell may have a much bigger problem on his hands – one which has nothing to do with China, and everything to do with a dramatic drain of liquidity in the market over the next two months.

We first hinted at this last week when we noted that as part of the recently completed debt ceiling deal, instead of taking its time in replenishing the cash balance (green line in the chart below), the US Treasury will scramble to rebuild its cash balance up to $350 billion, from today’s level of $133 billion (gray line), a process which as we said last Wednesday will “significantly tighten up liquidity in the banking system and potentially result in turmoil in funding and money markets as the world is flooded with an issuance of T-Bills” as the Treasury seeks to fill the $217 billion cash hole, which will lead to a substantial liquidity withdrawal from the broader financial system as shown in the following Nordea chart.

The problem, in a nutshell, is that traditionally such a rapid liquidity withdrawal leads to weaker risk appetite, a far stronger USD and lower treasury yields, while widening the LIBOR/OIS spread and further depressing the already negative EURUSD cross-currency basis. While we cautioned about all this last week (even before the FOMC announcement), it appears that our appreciation of just how severe this problem may be for the Fed and capital markets was overly optimistic, because according to a new analysis by Bank of America’s Mark Cabana, the Fed may have no choice but to resume Quantitative Easing and start expanding its balance sheet again – potentially as early as 4Q – in order to ease funding pressures expected during the coming wave of Treasury supply.

Debt denominated in dollars by any chance?

• Papua New Guinea Asks China To Refinance Its National Debt (G.)

Papua New Guinea has asked China to refinance its entire government debt in a blow to Australia’s attempts to counter China’s influence in the region. The request marks a “significant shift” in regional politics and PNG’s allegiances, according to Pacific experts. Australia has traditionally been the largest aid donor and most important ally of PNG, but in recent years ties between China and PNG have strengthened. PNG’s prime minister, James Marape, visited Australia two weeks ago at the invitation of his counterpart, Scott Morrison, in his first international visit since becoming the Pacific nation’s leader at the end of May.

In a speech during his visit, Marape said he wanted PNG to move away from an “aid-donor” relationship with Australia within 10 years, and step up alongside its neighbour as a leader in the Pacific region. However, on Tuesday, after a meeting with Xue Bing, the Chinese ambassador in Port Moresby, Marape requested that China refinance its debts of A$11.8bn (27bn kina, or US$7.95bn). PNG’s debt sits at around 32.8% of its GDP. “[The prime minister] requested the ambassador to inform Beijing on a bid to assist the government of PNG refinance its existing country’s K27bn debt,” said Marape’s office in a statement seen by the Guardian.

“He suggested that both the Bank of PNG and [China’s] People’s Bank will take the lead with the department of treasury in ensuring that consultations are under way,” the statement continued. “It suggest a significant shift in the relationship between Australia and Papua New Guinea and Papua New Guinea and China,” says Matthew Clarke, professor of international development at Deakin University. “In the past Australia would have been the natural country to turn to for this sort of refinancing, but now we see China’s place in the region shift and it becomes potentially a much more dominant player in the donor relationship.”

“The United States, and allies including Japan, Australia and New Zealand, are actively expanding their diplomatic postings in the Pacific to counter China’s influence..”

• Chinese Port Plans Put Pacific Back In Play (R.)

Early in the morning, before sunrise, low tide on the Samoan island of Savai’i reveals the remnants of an old American airstrip, washed away by decades of erosion, cyclones and tsunamis. The World War II site in Asau, which also hosts a 1960s-era concrete wharf in its well-protected natural harbor, is being considered for a new port to be developed by China, according to the Samoan government and the area’s highest ranking chief, Masoe Serota Tufaga. The proposed construction of a facility that could be turned into a military asset in hostile times has worried the United States and its regional allies, which have dominated international influence in the vast waters of the South Pacific since 1945.

Sitting at his coconut and cocoa plantation on the hills above the port site, Tufaga told Reuters he would abide by any government deal for a Chinese-developed port even though he was concerned about Beijing’s growing influence. “The government and China came here to look at it – they offered it,” said 71-year-old Tufaga, who has the final say over land-use agreements affecting Asau. “If China wants to operate this, it’s too hard for us to say to the government, no, we can not allow China here. The people are looking for some jobs. “That’s right – it’s money. It’s money.”

The United States, and allies including Japan, Australia and New Zealand, are actively expanding their diplomatic postings in the Pacific to counter China’s influence, and warning island nations that Beijing-funded projects needed to make financial sense. China is using “predatory economics” to destabilize the Indo-Pacific and the United States is working with its partners to address the region’s pressing security needs, U.S. Defence Secretary Mark Esper said in Sydney on Sunday.

Erdogan bluff. I hope.

• Pentagon Set to Prevent “Unacceptable” Turkish Invasion Of Northern Syria (ZH)

Turkey has for days been poised to unilaterally invade northern Syria over US objections, which Ankara officials say is to establish a 32 kilometer (20 mile) zone inside the war torn country, giving Turkey complete control of a region where the Syrian Kurdish YPG operates (People’s Protection Units). Turkey has long considered the US-backed group, which forms the core of the Syrian Democratic Forces (SDF), to be a terrorist extension of the outlawed PKK. The Pentagon has condemned the impending Turkish unilateral move, with US Defense Secretary Mark Esper telling reporters early Tuesday that it would be unacceptable and thwarted by Washington, though it’s unclear how far the Pentagon would be willing to go.

“What we’re going to do is prevent unilateral incursions that would upset, again, these mutual interests that the United States, Turkey and the SDF share with regard to northern Syria,” Esper said. Crucially, according to ABC News, US officials “have made clear that an invasion is an extremely risky venture that could threaten the safety of U.S. forces working with the SDF…”. On Sunday Turkish President Recep Tayyip Erdogan said that his forces would launch an operation in Syria east of the Euphrates River at an unspecified start date, and noted that the US and Russia had been notified. In ongoing negotiations this summer the US and Turkey have clashed over just such a “safe zone,” given Turkey wants the area completely clear of Kurdish armed groups, which the Pentagon simultaneously backs.

Turkish defense officials have lately threatened their “patience is limited” as the army builds up its forces along the border. The Foreign Ministry on Friday warned, “We won’t let this process be dragged out. If our expectations aren’t met, we are fully capable of taking whatever measures [are needed] to ensure our national security.”

If Mifsud is an FBI asset, there are zero Russians left in the story.

• The Mainstream Media Wants the Mifsud Story to Just Go Away (ET)

John Solomon of The Hill is reporting that an audiotape containing professor Joseph Mifsud’s deposition has been given to both U.S. Attorney John Durham’s investigators and to the Senate Judiciary Committee. “I can report absolutely that the Durham investigators have now obtained an audiotape deposition of Joseph Mifsud, where he describes his work, why he targeted George Papadopoulos, who directed him to do that, what directions he was given, and why he set that entire process of introducing Papadopoulos to Russia in motion in March of 2016, which is really the flashpoint the starting point of this whole Russia collusion narrative,” Solomon told Fox News’ Sean Hannity.

“I can also confirm that the Senate Judiciary Committee has also obtained the same deposition,” he said. Mifsud, who I have written about extensively in previous columns, is the key that turns the lock to the lid of this Pandora’s box that we refer to as “Spygate.” So I’m wondering why Solomon appears to be the only mainstream reporter pursuing this Mifsud story. I suspect it’s because many DNC Media outlets, after having fallen deeply and passionately in love with the Trump-Russia collusion hoax, are reluctant to call attention to something that would be the final nail in its coffin. The last thing the mainstream media wants right now would be for Mifsud to go on the record with both Durham’s investigative team and with Congress to say he was working for the FBI and was only pretending to be a Russian agent.

If Mifsud was an FBI asset sent to entrap Papadopoulos, then there are no real Russian agents anywhere in this entire Trump-Russia collusion story. Ponder what that means for a minute. You can’t save the Russian collusion narrative, if you can’t find any real Russians anywhere in the story. The FBI under James Comey will then be seen as having engaged in an operation to entrap people, and “Russian agents” turn out to be fakes working for the FBI and who were making fake offers of Russian help to the Trump campaign.

But nobody knew a thing.

• Epstein’s Mysterious Manhattan Apartment Building On East 66th Street (BI)

Before his extended stay in New York’s Metropolitan Correctional Center began in July, disgraced sex offender Jeffrey Epstein dwelled in some of the city’s most exclusive real estate, laying his head in a palatial Upper East Side townhouse and conducting his mysterious business out of a landmarked mansion on Madison Avenue. But it hasn’t been all private islands and 7,000-acre ranches for the half-billionaire. For decades Epstein has run some of his operations quietly out of a squat Second Avenue residential building owned by his brother, Mark Epstein, and frequently visited by the former Israeli Prime Minister Ehud Barak. According to property records and court filings, Jeffrey Epstein has long housed girlfriends, associates, employees, and businesses in a handful of units at 301 East 66th St.

There are 200 units at the address, and the majority of them are owned on paper by his brother’s development firm, Ossa Properties. While Ossa nominally owns the units connected to Jeffrey Epstein, the aforementioned records and filings show that Epstein effectively controls them. The postwar white-brick high-rise sits atop a nail salon, a coffee shop, and an Italian restaurant along a traffic-choked stretch of Second Avenue. Topped by a green canopy, the front door opens to a doorman guarding a hallway that leads to a light-filled lobby decorated with two couches and an armchair. Though the building shares a ZIP code with Epstein’s townhouse, its share of the neighborhood east of Park Avenue is less upscale, catering more to families and young professionals than foreign heads of state.

Debt Rattle August 6 2019

Aug 062019

August 6, 2019 Posted by Raúl Ilargi Meijer at 8:53 am Finance Tagged with: Boris, Brexit, China, currency, farm products, manipulator, May, PBOC, RMB, Sinn Fein, Sturgeon, Venezuela, yuan 11 Responses »

Piet Mondriaan Avond (Evening): The Red Tree 1908-10

• Yuan, Futures Surge After PBOC Fix Is Stronger Than Expected (ZH)

• China’s Yuan Steadies But Stocks Plunge As Trade Tensions Grow (R.)

• Kyle Bass: Yuan Would Collapse 30%-40% If China Stopped Supporting It (CNBC)

• US Designates China As Currency Manipulator For First Time In 25 Years (R.)

• China State Media Says US ‘Destroying International Order’ (R.)

• China Confirms It Is Suspending US Farm Products Purchases (CNBC)

• Trump Orders Freeze On All Venezuelan Government Assets In US (AFP)

• Hold the Teddy Bears and Candles (Kunstler)

• Fourth Turning Economics (Jim Quinn)

• Things Fall Apart (Michael Krieger)

• Sinn Féin Joins the Great Disruption (Fintan O’Toole)

• Nicola Sturgeon: ‘Talking To Theresa May Was Soul Destroying’ (Sky)

Anything above/below 7.10 is deemed to risky in Beijing. For now.

• Yuan, Futures Surge After PBOC Fix Is Stronger Than Expected (ZH)

In the aftermath of the US shockingly designating China a currency manipulator – for the first time in over 25 years – there was a tense period of several hours in which it appeared that all bets were off, and that with both the US and China seemingly going full tilt, China would fix the Yuan not only far weaker than its Monday rate, but also weaker than expected according to an imputation of the country’s currency basket, which was 6.9736, well below the previous fixing of 6.9225, the first fixing below 6.90 in 2019 and the catalyst for the overnight plunge in risk assets. Heck, some even speculated that Beijing may fix the Yuan below 7.00 vs the USD, if not launch a couple of nukes at the US for good measure.

It wasn’t meant to be though: shortly after 9pm EST, the PBOC lifted the kimono so to speak… and the market collectively exhaled when China revealed that while it had indeed fixed the onshore yuan weaker than Monday, it did so stronger relative to both the 7.00 proverbial line in the sand, and which would have been a retaliatory declaration of outright currency war, but also relative to the expected fixing, with the number coming at 6.9683. In kneejerk reaction, a wave of relief washed over the market, sending the offshore Yuan surging, and reversing all prior session losses which had dragged it as low as 7.14 just moments ahead of the fix, to above 7.10 last…

Presented as a strength, this is instead perhaps China’s biggest weakness: “.. this is something that we control rather than markets or whatever other pressures.”

• China’s Yuan Steadies But Stocks Plunge As Trade Tensions Grow (R.)

China’s tumbling yuan steadied on Tuesday as authorities took steps to contain its slide while stocks plunged after Washington labelled Beijing a currency manipulator, marking a sharp escalation in U.S. trade tensions. The currency has slumped 2.3% over the past three days and broken past the symbolic 7-per-dollar level, pounding stocks and pushing bonds higher as investors feared the yuan’s value has become a new front in the U.S.-China trade war. On Monday, U.S. Treasury Secretary Steven Mnuchin said Washington would designate China a currency manipulator, its first such move since 1994, sending both the onshore and offshore yuan to record lows..

The People’s Bank of China’s firmer-than-expected yuan fixing on Tuesday helped pull the currency away from these lows as did an announced bond sale in the offshore market, seen as signs authorities wanted to stem the rout. “(China is) seizing the narrative on the renminbi,” said Andy Wong, multi-asset senior investment manager at Pictet Asset Management in Hong Kong. “Rather than being pressured to signal that 7 is just a psychological level, they are … saying this is something that we control rather than markets or whatever other pressures.”

“.. they are trying to hold this whole thing together.”

“they have to have dollars to sell to buy their own currency to hold it up..”

• Kyle Bass: Yuan Would Collapse 30%-40% If China Stopped Supporting It (CNBC)

Hedge fund manager and Hayman Capital Management founder Kyle Bass said on Monday that without state support, China’s currency would plunge. “What’s happening in China is they have to have dollars to sell to buy their own currency to hold it up. If they were to ever free float their currency, I think it would drop 30% or 40%,” Bass told CNBC’s “Closing Bell.” “And the reason is they claim to be 15% of global GDP in dollar terms, but less than 1% of global transactions settled in their own currency,” Bass added. “And so, they prop their currency up…everyone calling them a currency manipulator – they are trying to hold this whole thing together.” Bass’s comments came after the Chinese yuan crossed a closely watched barrier against the U.S. dollar.

The onshore Chinese yuan changed hands above 7 against the dollar, the currency’s weakest levels against the greenback since 2008. The new lows for the yuan came after U.S. President Donald Trump unexpectedly announced fresh tariffs on Beijing last week that are set to take effect from Sept. 1. China on Monday said it could slap tariffs on U.S. agricultural goods that it bought recently, state-run media Xinhua reported. Bass, known across Wall Street for his prescient bets against subprime mortgages during the financial crisis in 2008, is also a noted China bear. The hedge fund manager has previously admonished American corporations for pushing Trump to strike a deal with Beijing too quickly and told CNBC as recently as June that the U.S. has leverage over China and should pressure negotiators into a better settlement.

Which allows for much higher tariffs.

• US Designates China As Currency Manipulator For First Time In 25 Years (R.)

The U.S. government has determined that China is manipulating its currency and will engage with the International Monetary Fund to eliminate unfair competition from Beijing, U.S. Treasury Secretary Steven Mnuchin said in a statement on Monday. The move brings already tense U.S.-Chinese relations to a boil and fulfills U.S. President Donald Trump’s promise to label China a currency manipulator for the first time since 1994. The U.S. action follows China allowing its yuan to weaken past the key 7-per-dollar level on Monday for the first time in more than a decade. Beijing later said it would stop buying U.S. agricultural products, inflaming a yearlong trade war with the United States.

The sharp 1.4% drop in the yuan comes days after U.S. President Donald Trump stunned financial markets by vowing to impose 10% tariffs on the remaining $300 billion of Chinese imports from Sept. 1, abruptly breaking a brief ceasefire in a bruising trade war that has disrupted global supply chains and slowed growth. The news knocked the dollar sharply lower and bolstered the price of gold . The Treasury Department said a statement from the People’s Bank of China (PBOC) on Monday made clear that Chinese authorities had ample control over the yuan exchange rate.

The PBOC said Monday it would “continue to … take necessary and targeted measures against the positive feedback behavior that may occur in the foreign exchange market.” “This is an open acknowledgement by the PBOC that it has extensive experience manipulating its currency and remains prepared to do so on an ongoing basis,” the Treasury statement said. It said China’s actions violate its commitment to refrain from competitive devaluation as part of the Group of 20 industrialized countries. Treasury said it expected China to adhere to those commitments and not target China’s exchange rate for competitive purposes.

“..Trump’s election campaign pledge was to lift import tariffs to 45% on China.”

• China State Media Says US ‘Destroying International Order’ (R.)

China’s official Communist Party newspaper said on Tuesday that the United States was “deliberately destroying international order”, a day after Washington branded Beijing a currency manipulator in a rapidly escalating trade dispute. The accusation, which followed a sharp slide in the yuan on Monday, has driven an even bigger wedge between the world’s largest economies and crushed any lingering hopes for a quick resolution to their year-long trade war. The dispute has already spread beyond tariffs to other areas such as technology, and analysts caution tit-for-tat measures could widen in scope and severity, weighing further on global economic growth.

In a strongly-worded editorial, the People’s Daily said the United States was holding its own citizens to ransom, without mentioning the latest U.S. decision. The responsibility of big countries is to provide the world with stability and certainty while creating conditions and opportunities for the common development of all countries, according to the editorial. “But some people in the United States do just the opposite,” it said. [..] The yuan has tumbled 2.3% in three days since President Donald Trump’s sudden declaration last week that he will impose 10% tariffs on $300 billion of Chinese imports from Sept. 1.

But it appeared to steady on Tuesday amid signs that China’s central bank may be looking to stem the slide, which has sparked fears of a global currency war. “Naming China a currency manipulator could open the door for U.S. tariffs to eventually increase to more than 25% on Chinese goods,” according to a note from DBS Group Research. “Apart from naming China a currency manipulator, Trump’s election campaign pledge was to lift import tariffs to 45% on China.”

Try to buy from Brazil instead?

• China Confirms It Is Suspending US Farm Products Purchases (CNBC)

China confirmed reports that it was pulling out of U.S. agriculture as a weapon in the ongoing trade war. A spokesperson for the Chinese Ministry of Commerce said Chinese companies have stopped purchasing U.S. agricultural products in response to President Trump’s new 10% tariffs on $300 billion of Chinese goods. “This is a serious violation of the meeting between the heads of state of China and the United States,” the Minister of Commerce said in a statement Monday that was translated via Google. The department also said it would “not rule out” tariffs on newly purchased agricultural goods after August 3.

China is one of the largest buyers of U.S. agriculture. Bloomberg News reported that Beijing may stop importing them completely in response to new tariffs by the United States. According to reports by Chinese State media, it would also consider slapping tariffs on U.S. agricultural products that it already bought. Those stories helped exacerbate fears on Wall Street pushing stocks to their worst day of the year. Now that China has confirmed the reports, it could add to pressure on equities. Stock futures fell Monday, implying a 480 point drop Tuesday.

This is ridiculous. Know when you’ve lost.

• Trump Orders Freeze On All Venezuelan Government Assets In US (AFP)

President Donald Trump on Monday ordered a freeze on all Venezuelan government assets in the United States and barred transactions with its authorities, in Washington’s latest move against President Nicolas Maduro. Trump took the step “in light of the continued usurpation of power by Nicolas Maduro and persons affiliated with him, as well as human rights abuses,” according to the order. The Wall Street Journal said the move was the first against a Western Hemisphere government in over 30 years, and imposes restrictions on Caracas similar to those faced by North Korea, Iran, Syria and Cuba. Asked last week if he was considering a “blockade or quarantine” of Venezuela, Trump responded: “Yes, I am.”

The order affects “all property and interests in property of the Government of Venezuela that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person.” These assets “are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in,” the order said. The measure also bars transactions with Venezuelan authorities whose assets are blocked. It prohibits “the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order,” as well as “the receipt of any contribution or provision of funds, goods, or services from any such person.”

“This abyss of missing social relations is made worse by the everyday physical settings for everyday lives based on nothing: the wilderness of parking lots that America has turned itself into.”

• Hold the Teddy Bears and Candles (Kunstler)

In a nation afflicted by fads, crazes, manias, and rages, mass murder is the jackpot for nihilists — begging the question: why does this country produce so many of them? Answer: this is exactly what you get in a culture where anything goes and nothing matters. Extract all the meaning and purpose from being here on earth, and erase as many boundaries as you can from custom and behavior, and watch what happens, especially among young men trained on video slaughter games. For many, there is no armature left to hang a life on, no communities, no fathers, no mentors, no initiations into personal responsibility, no daily organizing principles, no instruction in useful trades, no productive activities, no opportunities for love and affection, and no way out.

This abyss of missing social relations is made worse by the everyday physical settings for everyday lives based on nothing: the wilderness of parking lots that America has turned itself into. Such is the compelling myth of the New World as a wilderness that we obliged ourselves to re-enact it, minus nature, including human nature, especially what may be noble and sacred about human nature. The old truism sticks: when nothing is sacred, everything is profane, and what could be more profane than slaughtering your fellow humans en masse, for no good reason? Just because you felt like it at the time? Another time, you might feel like scarfing some tacos, or checking in on the free porn sites, or tweaking some crushed-up oxycontin.

One message from the culture of anything-goes-and-nothing-matters comes through loud and clear: if it feels good, do it! And if you feel bad, do something to make yourself feel better. The wonder is that the way we live these days hasn’t turned more people into homicidal maniacs, considering how many are out there feeling bad in this grotesque landscape of incessant motoring, vivid purposelessness, and lost aspiration — unless these bloody skirmishes are the precursor to some more general outbreak of murderous havoc. It’s not hard these days to imagine the political animus ratcheting up to something like a new civil war. If it works out that way, it will be the most psychologically confused political event of modern history.

Don’t make the ideas too big.

• Fourth Turning Economics (Jim Quinn)

The specific details of each crisis change, but economic catalysts have initiated all previous Fourth Turnings and led ultimately to bloody conflict. There is nothing in the current dynamic of this Fourth Turning which argues against a similar outcome. The immense debt, stock and real estate bubbles, created by feckless central bankers, corrupt politicians, and spineless government apparatchiks, have set the stage for the greatest financial calamity in world history. Rather than taking the bitter medicine of purging the system of bad debt and allowing zombie banks and corporations to die, the ruling class has chosen to ramp up the debt orgy and reward themselves and their cronies with ill-gotten riches, while impoverishing the masses.

Their arrogance and hubris have grown to vast proportions and will eventually result in a bloody backlash from those they have screwed over. The election of Donald Trump over the hand-picked candidate of the oligarchy, was a reaction to the raping and pillaging of Main Street by the greedy soulless psychopaths in suits on Wall Street and in the halls of the Eccles building in Washington D.C. The average hard-working American has seen eight years of “government of the bankers, by the bankers, for the bankers”. Wall Street was bailed out and rewarded with the ability to borrow at 0% from their captured Federal Reserve. Zombie corporations were kept alive with low interest debt, with no adjustment for risk.

The cowardly politicians drove the national debt from $11.5 trillion to over $20 trillion, while accomplishing minimal GDP growth (negative growth using a real inflation rate), and enriching mega-corporations and the top .1%. Meanwhile, risk averse senior citizens, depending upon some interest income to survive, were thrown under the bus by Bernanke, Yellen and Powell. It was the deplorables in flyover country, the blue-collar workers in Pennsylvania, Michigan, Wisconsin and Ohio, and senior citizens in Florida who voted their wallets, which had been picked by establishment politicians for the previous eight years.

Again, big ideas. You easily get lost in those.

• Things Fall Apart (Michael Krieger)

The primary shift that’s occurring is the U.S. empire has lost its ability to dictate all terms to all countries at all times. This capacity to dictate has been enforced via a two-pronged approach for decades. The prongs are global military dominance and control of the financial system. The first is threatened by the fact we’ve already entered a world in which it’s easier to frustrate global empire than it is to maintain it. We’ve seen this manifest in numerous places over the course of the 21st century. The war in Afghanistan is an ongoing failure despite it being the longest conflict in U.S. history, and the Iraq war (based on fake news) resulted in the death of hundreds of thousands and merely strengthened Iran’s position in the region.

Meanwhile, U.S. regime change plans in Syria were thwarted despite the empire’s best efforts, and Trump’s deranged crew of neocons still can’t even get rid of Maduro in Venezuela. Deny it all you want, but the geopolitical map has fundamentally changed. Meanwhile, the financial system itself (a tremendous source of U.S. imperial power) is also fundamentally broken. The first major failure in this regard happened back on August 15, 1971 when Richard Nixon closed the gold window.

Whether you believe this was a primary contributor to many of the negative trends that emerged afterwards likely depends on your personal ideology, but it’s undeniable that shortly after this event we started to see a major ramp up in the financialization of everything as well as a stagnation in median wage growth. A global buildup of financialization and fraud-based financial products played a key role in bringing us to where we are today, and also culminated in the second major failure of the global financial system in 2008. That was the moment when serious reform and severe consequences for the criminal perpetrators of economic collapse could’ve reset the system and brought the world back to a sustainable path, but we all know that’s not what happened.

“It does not deny that no-deal would be awful – it welcomes this awfulness as the Great Disruption that completes the Irish national revolution.”

• Sinn Féin Joins the Great Disruption (Fintan O’Toole)

The first – and at the moment by far the most decisive – group of Great Disruptors consists of the disaster capitalists fronted by Johnson. Their Utopia is Singapore. They believe, as Priti Patel, Dominic Raab, Liz Truss and other Tory young Turks wrote in Britannia Unchained in 2012, that the British have grown lazy and useless, their buccaneering spirit sapped by a culture of dependency. They see no-deal as the Big Bang that will blow the welfare state, environmental standards and labour protections to smithereens. Out of this chaos will come a new Global Britain of very low taxes for the rich, unregulated hyper-capitalism and boundless “free” markets.

The second group is the high command of the Labour Party around Jeremy Corbyn. Their Utopia is Socialism in One Country. They believe that a no-deal Brexit will free Britain from the wishy-washy social market capitalism of the EU and thus ultimately from capitalism itself. They have their roots in the socialist distaste for the European project that was, it is easy to forget, once the mainstream of British Euroscepticism. In that mentality, the EU was seen as a last, desperate attempt to shore up a dying capitalist system. Thus, on the far side of a no-deal Brexit, lies the workers’ paradise that is the inevitable outcome of history.

The third group of Great Disruptors is Sinn Féin. Their Utopia is, of course, a United Ireland. They ostensibly oppose a no-deal Brexit, and indeed Brexit itself. But beneath this opposition lies the belief that the worse Brexit is, the quicker we will have a Border poll and the more likely it is that Protestants in Northern Ireland will swim for the green lifeboat to avoid going down with the British ship. Alongside the disaster capitalism of Johnson’s faction and the disaster socialism of Corbyn’s, there is this disaster nationalism. It does not deny that no-deal would be awful – it welcomes this awfulness as the Great Disruption that completes the Irish national revolution.

If that isn’t scathing, what is?

“I started the meeting off by saying, ‘before we get onto Brexit, fantastic shoes’, and in that instant I could see in her eyes, that she didn’t have an answer in the script before her for this. “So it became, what should have been a light-hearted moment, really quite awkward.”

• Nicola Sturgeon: ‘Talking To Theresa May Was Soul Destroying’ (Sky)

Nicola Sturgeon has delivered a brutal verdict on the current and former prime ministers, claiming Boris Johnson tried to put his arm around her back and that talking to Theresa May was “soul destroying”. In a candid and indiscreet interview, Scotland’s first minister said her conversation with Mr Johnson last week was “crazy”, while Mrs May would never depart from a script, which made conversation awkward. Ms Sturgeon’s withering disclosures came in an Edinburgh Fringe Festival event with broadcaster Iain Dale in which she claimed there was growing support for Scottish independence. Asked by Mr Dale about the difference between her meetings with Mrs May and her first encounter with Mr Johnson at her Bute House official residence, she replied: “It was a very different experience.

“I don’t want to be too derogatory or pejorative about Theresa May. She’s obviously no longer prime minister, but having conversations with Theresa May was pretty soul destroying. “She would never depart from a script, no matter where you tried to take the conversation. “I remember in one meeting, going in and trying to think about how can we get this meeting off on a sort of gentler start before we immediately got into the areas where we disagreed. “And she had, as she often did, a fantastic pair of shoes, a really stylish pair of shoes. And I quite like shoes, so I started the meeting off by saying, ‘before we get onto Brexit, fantastic shoes’, and in that instant I could see in her eyes, that she didn’t have an answer in the script before her for this. “So it became, what should have been a light-hearted moment, really quite awkward.

“So talking to Boris, at least it was like having a conversation, albeit a bit of a crazy one. [..] “Boris Johnson is a prime minister that the vast of majority of people in Scotland, had they been given any choice, would not have chosen to give the keys of Number 10 Downing Street to. “He’s a prime minister who is intent on taking us out of Europe against our will, looks intent on taking us out without a deal and the catastrophe that would bring about I think is well understood here. “So I wasn’t overly thrilled to be standing on the steps of Bute House welcoming Boris Johnson as prime minister.”

Will China Retreat Into Itself?

Aug 052019

August 5, 2019 Posted by Raúl Ilargi Meijer at 7:30 pm Primers Tagged with: BRI, CCP, central control, China, devaluation, dollar, Europe, foreign reserves, forex, renminbi, Russia, tariffs, trade talks, US, yuan 16 Responses »

Odilon Redon Peyrelebade landscape 1880

It’s never easy to gauge what exactly is happening in China, or why the CCP Politburo takes the decisions it does. Today, or overnight, is no exception to that. However, one thing that appears certain, but which I don’t see reflected in all the analyses, is that Beijing pushing the value of the renminbi (yuan) down below 7 to the USD in one fell swoop, is a major setback for Xi Jinping and his government.

Yes, China may have given up hope of reaching positive conclusions in its trade talks with the US. And yes, some may think, even in China itself, that devaluing the currency is a tool that can be useful in a potential currency war. But there’s another side to this coin. It’s not even about the value itself, or the change in it, it’s the heavy-handed way it’s executed.

China wants, and desperately needs too, for the yuan to be a force in global financial markets. In very simple terms this is true because if it then wants to buy something, it can simply print the money for it. But only about 1% of global trade today is executed in yuan. That is not nearly enough. It means China needs dollars and euros, all the time. And devaluing the yuan means the country needs even more of those.

You’d almost think: why would you want to do that? What are the long-term prospects for a move like this? You’re telling forex markets that the value of the yuan is not trustworthy, because if Xi or the PBOC decides in the next five minutes that it should go up or down by 10% or 20%, they can do it. The Fed and ECB also have tools to manipulate their currencies (re: interest rates), but none of that magnitude.

The crux of the dilemma probably lies in the Belt and Road Initiative (BRI), which I’ve been saying for years is just China’s way to sell its overcapacity and overproduction abroad. Sure, there may be loftier goals, and surely in the glitzy brochures, but the fact remains that China has tried to be an economic miracle, doing in 10 years what took the US a century, and it never slowed down its growth, at least not voluntarily, even if that might have been a wise move.

Already lately, purchases by Chinese citizens and companies of real estate and businesses abroad have been curtailed, and not a little bit, by Beijing. There’s no better way to convince Chinese people of the miracle’s success than to let them travel the world and spend there, but that, too, may well soon be cut. It kills foreign reserves.

If Beijing could charge participating countries in the Belt and Road Initiative in yuan, and they could pay for the overcapacity’s steel and cement and what not in yuan, that could be a game-changing program for the entire planet. But these countries have no reason to hold yuan, other than the BRI itself. And they, too, were watching the overnight move above 7 and must have thought: let’s be careful now.

And to top it all off, China right now needs for these countries to pay in dollars instead of yuan, because its foreign reserves are shrinking so fast. It’s Catch-22 all the way down. China’s need for dollars goes against everything BRI stands for.

Could the move hurt the US as well? Absolutely. But the long-term view behind the tariffs, and the talks China appears to have lost faith in, is to move the US away from its near all-encompassing addiction to Chinese production, and to move at least some of that production back home. Problem of course is, that is precisely what China’s miracle growth has been built on.

If the US starts bringing production home, who is Beijing going to sell its (over-)production to? Yes, I hear you, to the BRI countries. But there it runs into the currency problems mentioned before. To Europe? The top of that trade route is also behind us. Europe will have to follow the US to an extent, and also bring factories back to the continent (and not just to Germany either).

China could perhaps sell more than it does today to Russia. But that country still does produce a lot of things, and has been forced to be much more self-sufficient due to US and EU sanctions. It’s also a mighty small market compared to 350 million North Americans and 500 million Europeans, who are on average much richer than your average Russian to boot.

There is a way for China to make the yuan more important in global trade (but devaluation is definitely not that way): Beijing could let go of its central and total control over the value of its currency, and let forex markets figure it out. That would give traders -and everyone else- faith in the value. Problem with that is, this is not how central control communist governments think.

Beijing wants both: central total control AND a prominent place in world trade. And it may take them a long time to figure out that is not going to happen, unless of course they first conquer the entire world militarily. That is not an option, at least not for the foreseeable future. Come see me next century.

It wouldn’t be the first time for me to say I can see China retreat into itself, into its own borders and culture and market (1.3 billion people!). If the Communist Party wants to remain in power, and there’s no doubt it does, this may be only possible choice going forward. If growth has indeed left the miracle -as many observers think-, it can implode in very rapid succession. And even if growth hasn’t yet evaporated, it may well very soon. Without the growth, there is no miracle anymore.

And if China can no longer grow its exports, its domestic growth will also become a thing of the past. Domestic consumption can only grow as long as exports do too. Seen from that angle, the problems with trade and the currency look downright ominous. If you need dollars that badly, and you notice that you’re already getting fewer of them, not more, you’re in trouble.

Devaluing your currency may afford you some temporary respite, but it can’t possibly solve your troubles. It can make them much worse though.

I think China has wanted too much too fast, got carried away and forgot to take care of a few potential barriers to its growth, in particular the standing its currency had and still has in the world, and the grinding need for dollars that stems from it. And the Communists have no answer to this problem.

Debt Rattle July 31 2019

Jul 312019

July 31, 2019 Posted by Raúl Ilargi Meijer at 9:09 am Finance Tagged with: Boeing, China, CIA, Corbyn, dieselgate, DNC, FAA, FBI, Good Friday, Hong Kong, Monsanto, tax returns, Trump, VW, Wikileaks, xenophobia 10 Responses »

Gustav Klimt Field of poppies 1907

• Judge Dismisses DNC Suit Against Trump Campaign, Russia, WikiLeaks (Pol.)

• Trump Wants To Rein In Intelligence Agencies (R.)

• Trump’s Tax Returns Required Under New California Election Law (LAT)

• FAA Hopes Global Regulators Simultaneously Approve Boeing 737 MAX (R.)

• China Probes Small Bank Shareholdings As Risk Worries Persist (R.)

• China Gathers Forces On Hong Kong Border Amid Unrest (ZH)

• German Prosecutors Charge Ex-VW Boss With Fraud (AFP)

• Jeremy Corbyn’s Finest Hour? (Varoufakis)

• Mess With Good Friday And We’ll Block UK Trade Deal, US Politicians Warn (G.)

• Dominic Cummings: Tories Do Not Care About Poor People Or NHS (G.)

• Toxic History Of Monsanto In The UK (OffG)

• Xenophobia About Russians Is Never Condemned In Western Media (Ryan)

Judge said DNC “claims entirely divorced from the facts”.

• Judge Dismisses DNC Suit Against Trump Campaign, Russia, WikiLeaks (Pol.)

A federal judge has dismissed a lawsuit the Democratic National Committee filed against the Trump campaign, the Russian government, WikiLeaks and various Trump campaign officials over alleged involvement in the hacking of Democratic Party email accounts during the 2016 presidential race. U.S. District Judge John Koeltl rejected the central theory of the racketeering suit: that the Trump campaign, campaign aides and Trump allies abetted the theft of the emails by encouraging WikiLeaks to publish the messages and by urging they be released when they would be of maximum political benefit to then-candidate Donald Trump. Koeltl said such actions were protected by the First Amendment when taken by people not involved in the actual hacking.

“Even if the documents had been provided directly to the Campaign [and] the Campaign defendants … they could have published the documents themselves without liability because they did not participate in the theft and the documents are of public concern,” the judge wrote in an 81-page opinion. “The DNC cannot hold these defendants liable for aiding and abetting publication when they would have been entitled to publish the stolen documents themselves without liability.” The judge said the DNC’s suit did not allege that anyone beyond the Russian Federation took part in the hacking of the Democratic Party computer systems or email accounts. And he concluded that WikiLeaks could not legitimately be sued as a recipient of that information because what it released was of genuine public interest.

“The DNC’s published internal communications allowed the American electorate to look behind the curtain of one of the two major political parties in the United States during a presidential election,” Koeltl wrote. “This type of information is plainly of the type entitled to the strongest protection that the First Amendment offers.” Koeltl, a Manhattan-based appointee of President Bill Clinton, also rejected the DNC’s contention that fundraising-related records amount to trade secrets that get special protection under the law. “The DNC’s interest in keeping ‘donor lists’ and ‘fundraising strategies’ secret is dwarfed by the newsworthiness of the documents as a whole,” the judge wrote. “If WikiLeaks could be held liable for publishing documents concerning the DNC’s political financial and voter-engagement strategies simply because the DNC labels them ‘secret’ and trade secrets, then so could any newspaper or other media outlet.”

They turned on him.

• Trump Wants To Rein In Intelligence Agencies (R.)

U.S. President Donald Trump on Tuesday defended his choice for the next U.S. spy chief as someone who could “rein in” intelligence agencies that “have run amok,” fueling concerns Trump seeks assessments that support his own views. Trump’s choice of Republican Representative John Ratcliffe of Texas as the next director of national intelligence, has been greeted with scant enthusiasm by his fellow Republicans and charges by former intelligence officials and Democrats that he is unqualified and will frame intelligence to suit the president.

Ratcliffe, a member of the House Intelligence Committee for six months, would replace Dan Coats, whose judgments on Iran, North Korea and Russia’s interference in the 2016 elections clashed with Trump’s views, earning the president’s disdain. Returning to the White House from an appearance in Virginia, Trump on Tuesday said Ratcliffe “is going to do an incredible job, if he gets approved” by the Senate. “I think we need somebody like that in there,” he continued. “We need somebody strong that can rein it in. Because, as I think you’ve all learned, the intelligence agencies have run amok. They have run amok.” Trump denied he had a “conflict” with Coats, saying he was “a friend of mine” and a “terrific person.” But, he added, “Dan made statements and they were a little confused.”

Overreach.

• Trump’s Tax Returns Required Under New California Election Law (LAT)

President Trump will be ineligible for California’s primary ballot next year unless he discloses his tax returns under a state law that immediately took effect Tuesday, an unprecedented mandate that is almost certain to spark a high-profile court fight and might encourage other states to adopt their own unconventional rules for presidential candidates. The law, signed by Gov. Gavin Newsom on his final day to take action and passed on a strict party-line vote in the Legislature, requires all presidential candidates to submit five years of income tax filings. They must do so by late November in order to secure a spot on California’s presidential primary ballot in March. State elections officials will post the financial documents online, although certain private information must first be redacted.

“As one of the largest economies in the world and home to one in nine Americans eligible to vote, California has a special responsibility to require this information of presidential and gubernatorial candidates,” Newsom said in a statement that accompanied his signature on the bill approved by the Legislature earlier this month. “These are extraordinary times and states have a legal and moral duty to do everything in their power to ensure leaders seeking the highest offices meet minimal standards, and to restore public confidence. The disclosure required by this bill will shed light on conflicts of interest, self-dealing, or influence from domestic and foreign business interest.”

Trump, who is not singled out by the law but is clearly its inspiration, is likely to fight back. “The Constitution is clear on the qualifications for someone to serve as president and states cannot add additional requirements on their own,” said Tim Murtaugh, communications director for the president’s reelection campaign. “The bill also violates the 1st Amendment right of association, since California can’t tell political parties which candidates their members can or cannot vote for in a primary election.”

That potato is darn hot.

• FAA Hopes Global Regulators Simultaneously Approve Boeing 737 MAX (R.)

The U.S. Federal Aviation Administration hopes civil aviation authorities around the world will decide at about the same time to allow the Boeing 737 MAX to resume flying, the agency told Congress on Tuesday in a letter seen by Reuters. The FAA and other regulators grounded the plane in March after two fatal crashes in five months killed 346 people. Acting FAA Administrator Dan Elwell said in letters to Senators Susan Collins and Jack Reed that the agency “hopes to achieve near simultaneous approval from the major civil aviation authorities around the world” but added that every regulator will make its own determination. “We are working with our colleagues from the European Union, Canada and Brazil to address their concerns,” he wrote.

Collins will chair a Senate Appropriations subcommittee hearing Wednesday that will feature four senior FAA officials, including Ali Bahrami, who oversees aviation safety. Boeing Co Chief Executive Dennis Muilenburg told analysts last week he was confident the MAX would be back in service as early as October after a certification flight in “the September time frame.” Ryan Air Chief Executive Michael O’Leary said Monday that he had been told that flight would be delayed until October. Boeing on Tuesday reiterated Muilenburg’s recent comments. Elwell said in his letter the FAA “will lift the 737 MAX grounding order only when it is safe to do so.”

Shareholders buy each other’s stock with borrowed money and then use it as collateral to borrow more money..

• China Probes Small Bank Shareholdings As Risk Worries Persist (R.)

China is sharpening its scrutiny of small banks’ shareholders amid fears that loans from the lenders to big investors could prove a weak point in the country’s financial system, jolted by the state’s weekend rescue of one lender and recent takeover of another. While nominally small, China’s numerous small city commercial banks risk having outsized significance because of their close ties to the rest of the banking system as well as with bigger shareholders, many of whom are giant companies. Earlier this month, the China Banking and Insurance Regulatory Commission (CBIRC) asked banks and some other financial firms for details of any investor building up stakes of 5% or more without required regulatory approvals.

The regulator also asked the firms if they had disclosed all business transactions with their main owners, according to a regulatory notice seen by Reuters. Regulators have also conducted spot checks at some smaller banks in the last two months to probe possible misuse of capital linked to shareholders and transferring of ownership interests, said four people with direct knowledge of the matter. The scrutiny comes amid concerns that some debt-heavy Chinese private enterprises have amassed substantial stakes in smaller banks without regulatory approval and are using the lenders for their personal borrowings.

“There may be many shareholders using small Chinese banks as ATM machines, but I don’t think we have enough understanding of bank ownership to know,” said Andrew Collier, managing director of Hong Kong-based Orient Capital Research. “Certainly if there are under-capitalized corporates as majority shareholders of the less well-funded smaller banks you could have a bank run,” he said, adding the regulators have so far done a good job of rescuing ailing financial firms.

Blame outsiders: “..this is the creation of the U.S.”

• China Gathers Forces On Hong Kong Border Amid Unrest (ZH)

Massive anti-Beijing protests which have gripped Hong Kong over the past month, and have become increasingly violent as both an overwhelmed local police force and counter-protesters have hit back with force, are threatening to escalate on a larger geopolitical scale after the White House weighed in this week. With China fast losing patience, there are new reports of a significant build-up of Chinese security forces on Hong Kong’s border, as Bloomberg reports: “The White House is monitoring what a senior administration official called a congregation of Chinese forces on Hong Kong’s border.”

From nearly the start of the protests which began over a proposed extradition bill (which would see Hong Kong citizens under legal accusation potentially extradited to the mainland) interpreted as major Chinese overreach inside historically semi-autonomous Hong Kong, officials in Beijing have suggested an “external plot” afoot, more recently alleging the hidden hand of the United States. The latest charge made Tuesday by mainland government officials is that the still escalating Hong Kong unrest is the “creation of the US” — something which the Trump admin official speaking under anonymity to Bloomberg firmly denied.

On Monday Secretary of State Mike Pompeo said during a press interview that “protest is appropriate” and that “we hope the Chinese will do the right thing” regarding respecting Hong Kong’s historic “one country, two systems” status. This was enough to elicit a quick response alleging US meddling out of Beijing on Tuesday. It’s clear that Mr. Pompeo has put himself in the wrong position and still regards himself as the head of the CIA,” Chinese Foreign Ministry spokeswoman Hua Chunying said at a news briefing. “He might think that violent activities in Hong Kong are reasonable because after all, this is the creation of the U.S.”

Here’s thinking fraud is a serious offence in Germany.

• German Prosecutors Charge Ex-VW Boss With Fraud (AFP)

German prosecutors said Monday they had charged former Volkswagen chief executive Martin Winterkorn and four other managers over “dieselgate”, bringing the cheating scandal back into the headlines just as VW battles to move on from the affair. Prosecutors in Brunswick, near VW’s Wolfsburg HQ in northern Germany, said they had charged Winterkorn and four other managers. Among the accusations against the former chief executive were “a particularly serious case of fraud”, “infraction of the law against unfair competition” and “breach of trust”. Winterkorn was CEO during a period when VW fitted 11 million diesel-powered vehicles worldwide with so-called “defeat devices” – software that made them appear less polluting in the lab than in real driving conditions.

Such allegations have hit other German manufacturers since, with Mercedes-Benz maker Daimler confirming Sunday it was facing a regulatory probe, reportedly over 60,000 vehicles. At the helm from 2007 to 2015, Winterkorn, a trained engineer, had a reputation as a detail-obsessed executive who was familiar with “every screw” of each VW model. The group admitted to the fraud in September 2015, beginning a drawn-out process of fact-finding and legal action that has so far seen it pay out $33 billion in fines, compensation and buyback schemes, much of it in the United States.

Wishful thinking?!

• Jeremy Corbyn’s Finest Hour? (Varoufakis)

Since the 2016 referendum, a civil war-like atmosphere has made it increasingly impossible for Leavers and Remainers to hold a civilized conversation. Corbyn valiantly tried to keep Labour’s Leavers and Remainers together by seeking an honorable compromise: The UK would formally leave the EU, to respect the referendum’s outcome, while remaining in as many of the bloc’s structures as possible – including a customs union. Instead of applauding Corbyn for this tricky balancing act, his opponents within the Labour Party, together with a liberal establishment unprincipled enough to deliver all Leavers to Nigel Farage and Johnson, attacked him with extraordinary viciousness. But that was then and this is now.

With Johnson as prime minister, and his strategy crystal clear, Corbyn’s task is to expose the truth about Johnson’s no-deal Brexit – namely, that it means a Trump-deal Brexit – and put forward Labour’s plan to end the interminable Brexit ordeal immediately. Corbyn must first show voters that a Johnson government will turn the UK into a vassal state of a Trumpian US and of the multinationals eager to usurp the country’s cherished institutions (especially the National Health Service). Johnson will bind the UK to a global alliance of populist/nationalist regimes and destroy Britain’s chances to lead Europe and the world with a Green New Deal that overhauls a failed UK business model based on low taxes, low wages, low investment, zero-hour contracts, and unregulated finance.

Corbyn’s second task is to offer an alternative for ending the humiliation of the ongoing negotiations. That means committing to revoke Article 50 to allow a Labour government time to implement a green-investment, anti-austerity policy agenda in tune with the party’s progressive internationalism, while simultaneously organizing a Citizens’ Deliberative Assembly to formulate the question(s) to be put to voters in a second Brexit referendum. A general election fought over these two unequivocal alternatives, Johnson’s and Corbyn’s, would empower the UK’s people, at last, to determine their country’s future.

Boris wants to ditch the backstop, and that automatically messes with Good Friday.

• Mess With Good Friday And We’ll Block UK Trade Deal, US Politicians Warn (G.)

Any future US-UK trade deal would almost certainly be blocked by the US Congress if Brexit affects the Irish border and jeopardises peace in Northern Ireland, congressional leaders and diplomats have warned. Boris Johnson has presented a trade deal with the US as a way of offsetting the economic costs of leaving the EU, and Donald Trump promised the two countries could strike “a very substantial trade agreement” that would increase trade “four or five times”. Trump, however, would not be able to push an agreement through a hostile Congress, where there would be strong bipartisan opposition to any UK trade deal in the event of a threat to the 1998 Good Friday agreement, and to the open border between the two Irelands.

Johnson’s rise to power, and his demand for the EU to drop the backstop, which is intended to safeguard the open border after Brexit, has galvanised determination in Congress to make a stand in defence of the landmark accord, to which the US is guarantor. “The American dimension to the Good Friday agreement is indispensable,” said Richard Neal, who is co-chair of the 54-strong Friends of Ireland caucus in Congress, and also chairs the powerful House ways and means committee, with the power to hold up a trade deal indefinitely. “We oversee all trade agreements as part of our tax jurisdiction,” Neal, a Democratic congressman from Massachusetts, said in a phone interview. He pointed out that such a complex trade deal could take four or five years, even without the Northern Ireland issue.

He said it as an observer, it’s not what he wants.

• Dominic Cummings: Tories Do Not Care About Poor People Or NHS (G.)

Voters are right to think Tory MPs largely do not care about poorer people or the NHS, according to Dominic Cummings in comments that have emerged from two years ago. Boris Johnson’s new senior adviser and a key architect of Brexit gave his damning view on Conservative MPs at a conference in 2017, where he said: “People think, and by the way I think most people are right: ‘The Tory party is run by people who basically don’t care about people like me.’ “That is what most people in the country have thought about the Tory party for decades. I know a lot of Tory MPs and I am sad to say the public is basically correct. Tory MPs largely do not care about these poorer people. They don’t care about the NHS. And the public has kind of cottoned on to that.”

Cummings is now integral to Johnson’s administration, which has a majority of just two and is relying on Conservative and DUP MPs to back his Brexit strategy of taking the UK out of the EU by 31 October – unless he suspends parliament to achieve a no-deal exit. Ian Lavery, the chair of the Labour party, said it was a “staggering admission from the prime minister’s right-hand man”. “As Dominic Cummings says himself, the Conservatives don’t care about anything apart from looking after their rich friends – whether that means selling off our NHS to American corporations in pursuit of a Trump trade deal, or giving tax cuts to big businesses while cutting public services. We need a general election and a Labour government to protect our health service from the likes of Boris Johnson,” Lavery said.

Shattering.

• Toxic History Of Monsanto In The UK (OffG)

A special report in the Observer newspaper in the UK on 23 June 2019 asked the question: Why is life expectancy faltering? The piece noted that for the first time in 100 years, Britons are dying earlier. The UK now has the worst health trends in Western Europe. Aside from the figures for the elderly and the deprived, there has also been a worrying change in infant mortality rates. Since 2014, the rate has increased every year: the figure for 2017 is significantly higher than the one in 2014. To explain this increase in infant mortality, certain experts blame it on ‘austerity’, fewer midwives, an overstrained ambulance service, general deterioration of hospitals, greater poverty among pregnant women and cuts that mean there are fewer health visitors for patients in need.

While all these explanations may be valid, according to environmental campaigner Dr Rosemary Mason, there is something the mainstream narrative is avoiding. She says: “We are being poisoned by weedkiller and other pesticides in our food and weedkiller sprayed indiscriminately on our communities. The media remain silent.” Mason begins by offering a brief history of Monsanto in the UK. In 1949, that company set up a chemical factory in Newport, Wales, where it manufactured PCBs until 1977 and a number of other dangerous chemicals. Monsanto was eventually found to be dumping toxic waste in the River Severn, public waterways and sewerage. It then paid a contractor which illegally dumped thousands of tons of cancer-causing chemicals, including PCBs, dioxins and Agent Orange derivatives, at two quarries in Wales – Brofiscin (80,000 tonnes) and Maendy (42,000 tonnes) – between 1965 and 1972.

Monsanto stopped making PCBs in Anniston US in 1971 because of various scandals. However, the British government agreed to ramp up production at the Monsanto plant in Newport. In 2003, when toxic effluent from the quarry started leaking into people’s streams in Grosfaen, just outside Cardiff, the Environment Agency – a government agency concerned with flooding and pollution – was hired to clean up the site in 2005. Mason notes that the agency repeatedly failed to hold Monsanto accountable for its role in the pollution (a role that Monsanto denied from the outset) and consistently downplayed the dangers of the chemicals themselves. In a report prepared for the agency and the local authority in 2005 but never made public, the sites contain at least 67 toxic chemicals. Seven PCBs have been identified, along with vinyl chlorides and naphthalene. The unlined quarry is still leaking, the report says:

“Pollution of water has been occurring since the 1970s, the waste and groundwater has been shown to contain significant quantities of poisonous, noxious and polluting material, pollution of… waters will continue to occur.” Apart from these events in Wales, Mason outlines the overall toxic nature of Monsanto in the UK. For instance, she discusses the shockingly high levels of weedkiller in packaged cereals. Samples of four oat-based breakfast cereals marketed for children in the UK were recently sent to the Health Research Institute, Fairfield, Iowa, an accredited laboratory for glyphosate testing. Dr Fagan, the director of the centre, says of the results: “These results are consistently concerning. The levels consumed in a single daily helping of any one of these cereals, even the one with the lowest level of contamination, is sufficient to put the person’s glyphosate levels above the levels that cause fatty liver disease in rats (and likely in people).”

“A list of 10 “ground rules” for befuddled Westerners seeking to unravel the enigma that is Russia..”

• Xenophobia About Russians Is Never Condemned In Western Media (Ryan)

Pretending to ‘understand’ Russia has become quite the lucrative business for Western media professionals in recent years – and “leading” Russia expert extraordinaire Keir Giles is the latest to believe he has cracked the code. Generous Giles has published a list of 10 “ground rules” for befuddled Westerners seeking to unravel the enigma that is Russia – but before we delve into the finer details, let’s add some important context. This Russia whisperer is a “senior consulting fellow” at Chatham House – a British think tank receiving funding from the Foreign Commonwealth Office (FCO), the UK Ministry of Defence, the British Army and the US embassy, as well as an impressive array of arms manufacturers.

Very often, those posing as ‘experts’ on Russia pepper their analysis with outright xenophobia. Yet, this problematic and bigoted language is rarely noticed by their admiring peers because, as I have written before, “the Russians” are an exception to current cultural rules around political correctness. Xenophobia, when it is about Russians, is never condemned in Western media and ‘think tank’ circles. Rather, it has become an essential component of any celebrated ‘analysis’ of the country and its actions. Recall a recent New York Times article which claimed corruption is in the Russian “DNA” and sharing is “not the Russian way.” Before that, there was James Clapper, former US Director of National Intelligence, telling NBC that Russians are “genetically driven” to lie and cheat. Now, enter Giles.

Debt Rattle July 30 2019

Jul 302019

July 30, 2019 Posted by Raúl Ilargi Meijer at 9:28 am Finance Tagged with: backstop, blame game, Boris, Brexit, China, EU, globalism, hack, Huawei, Ireland, overshoot, sterling 11 Responses »

Odilon Redon The winged man (The fallen angel) 1880

• Pound Worth Just 85 Euro Cents At UK Airports (Ind.)

• Boris Johnson Refuses To Meet EU Leaders Unless They Scrap Backstop (G.)

• EU Rejects Dominic Raab’s ‘Easier’ No-Deal Brexit Claim (G.)

• Boris Johnson’s New Brexit Chief Wants To Scrap Workers’ Rights (Ind.)

• Things to Come (Kunstler)

• Fake Cash, Fake Accounting: China Regulators Halt 46 IPOs, Bond Offerings (WS)

• US Firms See Little Clarity On Huawei As US-China Talks Resume (R.)

• Capital One: Information Of Over 100 Million People In US, Canada Hacked (R.)

• The World is Not Enough (Statista)

• Lost Cities and Climate Change (SciAm)

In currency markets, sterling is still worth 10% more than the euro, not 15% less. Three years ago it was worth 25% more. Scary to think what a no-deal Brexit could do. Well, unless you’re a short seller.

• Pound Worth Just 85 Euro Cents At UK Airports (Ind.)

The pound has sunk well below €1 at Britain’s biggest airports – while the dollar is at parity. At the ICE desk at Heathrow airport on Tuesday morning, The Independent was quoted £117 for buying €100 – making each pound worth just 85 euro cents. At Gatwick airport on Monday night, the rate was £1 = €0.90. With commission added to a €100 transaction, the cost in sterling was £116. The interbank rate at 7am sank below £1 = €1.09, as the downward pressure on the pound continued. The currency market has marked down sterling as the prospect of a no-deal Brexit appears increasingly likely. At the peak of the holiday season, prices for British travellers will be at a two-year high.

The best rates for the euro found by The Independent were for “click and collect” transactions at London bureaux de change: €1.08 at branches of Thomas Exchange Global or ICE at Waterloo station. The interbank rate for dollars was £1 = $1.21, but Moneycorp at Gatwick airport was quoting parity: £1 = $1. Anyone changing £1,000 into the US currency and immediately back to sterling would lose over one-third of their money, receiving just £648.

I don’t see how they could scrap the backstop, Brussels must stand up for its member state, Ireland. No choice. For Brussels, Ireland is a full-fledged nation. For London, it still doesn’t appear to be.

• Boris Johnson Refuses To Meet EU Leaders Unless They Scrap Backstop (G.)

Boris Johnson is refusing to sit down for talks with EU leaders until they agree to ditch the Irish backstop from the Brexit withdrawal agreement, despite invitations to meetings from the German chancellor, Angela Merkel, and the French president, Emmanuel Macron. His official spokeswoman said the prime minister had made clear that he wanted to strike a deal, but that there was no point in holding face-to-face talks unless the EU agreed to reopen the agreement. But on a visit to the Trident nuclear base at Faslane in Scotland on Monday, Johnson painted a more optimistic picture of the prospects for talks, telling reporters there was “ample scope” to achieve a new deal.

He said: “We are not aiming for a no-deal Brexit at all. What we want is to get a deal and I’ve had some interesting conversations with our European partners. I’ve talked to [the European commission president] Jean-Claude [Juncker] and Angela Merkel and we’re reaching out today to [the Irish prime minister] Leo Varadkar. The feeling is, yes there’s no change in their position, but it’s very, very positive.” But he added: “They all know where we are: we can’t accept the backstop, it was thrown out three times, the withdrawal agreement as it stands is dead and everybody gets that. But there is ample scope to do a new deal and a better deal.”

While Johnson has spoken to Merkel and Macron, there are no plans to accept their invitations to visit without a change in their position on the backstop. Irish officials are understood to view the delay in contacting Varadkar as indicative of an unwillingness to enter serious talks. Varadkar is adamant that the backstop must stay to prevent a return to a hard border on the island of Ireland and preserve the integrity of the single market.

Remember this? We ignored the crimes, subversion, contempt of parliament. And now he’s in charge. Determined to take us out of Europe on Oct 31. By any means possible. That’s why he’s back.
Because Johnson knows:he’ll do *anything* to get it over the linepic.twitter.com/DHGc9kO8BS

— Carole Cadwalladr (@carolecadwalla) July 28, 2019

Blame Games ‘R’ Us.

• EU Rejects Dominic Raab’s ‘Easier’ No-Deal Brexit Claim (G.)

European Union officials have rejected Dominic Raab’s claim that negotiating a free-trade deal would be “much easier” after a no-deal Brexit. While the foreign secretary contends that leaving the EU without an agreement would ease the way to solving the disputed Irish border question, European sources fear a no-deal Brexit would trigger an acrimonious blame game. “It would mean the complete breakdown of political relations and I don’t think there would be much trust on the EU side with the Tories, or with the prime minister,” a senior diplomat said. “Eventually we would get around it because we are pragmatic, but this would be really, really bad, because of all the rhetoric around blaming.”

A second diplomat, speaking before Raab’s intervention, argued that all contact would cease after a no-deal Brexit. “Our phones will not be connected at that time … I don’t think they will be connected to someone who has reneged on their obligations,” they said. European officials agree that a precondition of talks would be a British pledge to honour the three core parts of the withdrawal agreement – citizens’ rights, the Irish border and the financial settlement. At the weekend, the EU budget commissioner, Günther Oettinger, told Der Tagesspiegel the UK’s credit rating would be hit if Boris Johnson carried out his threat not to honour payments promised to the EU. Tanja Fajon, the Social Democrat member of the European parliament’s foreign affairs committee, said: “To negotiate a free trade agreement usually takes years and I believe the UK doesn’t have that time after a no-deal Brexit.”

The UK has been instrumental in defining EU law for 40 years. Now they want to cherry-pick? That would put any future trade deals at risk. Unfair competition.

• Boris Johnson’s New Brexit Chief Wants To Scrap Workers’ Rights (Ind.)

Boris Johnson’s new Brexit chief wants to scrap Theresa May’s commitment to protect British workers’ rights, and has suggested Brexit is an opportunity to escape the EU’s “heavy labour market regulation”, The Independent can reveal. Just two months ago David Frost said he was opposed to the approach advocated “by the leaders of both major political parties”, and argued that EU rights should not automatically be written into law after Brexit. Mr Frost, former chief executive of the London Chamber of Commerce and Industry, was appointed last week by Mr Johnson to replace Olly Robbins as Downing Street’s EU chief, a role that will see him leading any future talks with Brussels.

“Business organisations have often in the past criticised the EU’s drift towards heavy labour market regulation,” Mr Frost said in May 2019 in an article reproduced on the London Chamber of Commerce and Industry website. “So I will take some persuading it will be a good outcome if the EU is able to set new UK labour market rules without any UK say – as currently seems to be envisaged by the leaders of both major political parties.” Theresa May committed the government to maintaining the current level of European Union workers rights, and also went even further, legislating for parliament to automatically be given votes on staying aligned with the bloc’s rules when future legislation emerges.

The “dynamic alignment” plans were unveiled by the government in a failed bid to get Labour MPs to back the withdrawal agreement. Additionally, during the transition period included in the withdrawal agreement, the UK would have to accept rights with no say at all, as rejected by Mr Frost. Brussels has also suggested the UK would have to stay aligned with future EU workers’ rights, as well as environmental and social legislation, past the end of the transition period – if it wants a trade agreement. Chief negotiator Michel Barnier has said the bloc would seek non-regression clauses to ensure Britain does not backslide on rules and try to undercut its neighbours.

“Now, there is just suspicion that we’ve reached the limits of borrowing. Soon it will be a fact and that fact will upend everything we’ve been doing. ”

• Things to Come (Kunstler)

The economic contraction ahead will put this borderline psychotic country through some interesting ch-ch-ch-changes. Mr. Trump now fully owns the Potemkin status quo of record stock markets poised against a withering rot of human capital at the core of an industrial society in sunset mode. Leadership at every corner of American life — politics, business, media — expects an ever-higher tech magical updraft of fortune from an increasingly holographic economy of mere fugitive appearances in which everybody can get more of something for nothing. The disappointment over how all this works out will be epic.

Globalism is wobbling badly. It was never what it was cracked up to be: a permanent new plateau of exquisitely-tuned international economic cooperation engineered to perfection. It was just a set of provisional relations based on transient advantage. As it turned out, every move that advantaged US-based corporations blew back ferociously on the American public and the long-term integrity of the social order. Sinister as it seems, the process was simply emergent: a self-organizing evolution of forces previously set in motion. And, like a lot of things in history, it seemed like a good idea at the time.

“Off-shoring” US industry jacked up corporate profits while it decimated working class livelihoods. In return, that large demographic got “bargain shopping” at Walmart, a life of ever-upward revolving debt, and dead downtowns. The country got gigantic trade deficits and government debt loads. In effect, globalism compelled America to borrow as much as possible from the future to keep running things the way they were set up to run. Now, there is just suspicion that we’ve reached the limits of borrowing. Soon it will be a fact and that fact will upend everything we’ve been doing.

What is real in China?

• Fake Cash, Fake Accounting: China Regulators Halt 46 IPOs, Bond Offerings (WS)

On Monday, Jinhe Biotechnology and Liande Automatic Equipment disclosed in filings that they had been ordered by the China Securities Regulatory Commission (CSRC) to suspend their plans to sell bonds. On Sunday night, four companies — Hunan Baili Engineering Sci&Tech, Jiaao Enprotech Stock, MLS Co., and Woer Heat-Shrinkable Material Co. – disclosed in filings that they had been ordered by the CSRC to suspend their IPOs in Shanghai and Shenzhen. Regulators also stopped four IPOs on Shanghai’s Star Market, which itself debuted just last week with great fanfare. The 25 stocks listed on it gained 140% on the very first day, followed by steep declines the second day.

[..] On Sunday, two companies disclosed that their bond offerings were stopped by regulators, according to Yicai. On Friday, seven companies disclosed that their bond offerings have been halted. In total, regulators suspended 46 IPOs and bond offerings, based on filings made at the Shanghai and Shenzhen stock exchanges, including Shanghai’s Star Market, as of Monday, according to the South China Morning Post. The reason: these companies had chosen Ruihua Certified Public Accountants as their auditors. Ruihua, the second largest audit firm in China, has been embroiled in scandals involving large amounts of fake data, including fake cash, on its clients’ books. The fakeness of this cash became obvious when these companies defaulted on debt that they could have easily serviced with the cash they claimed to have on their books but didn’t. And Ruihua had just signed off on those fake books.

“..the department has yet to respond to any of a total of around 50 license requests from about 35 companies..”

• US Firms See Little Clarity On Huawei As US-China Talks Resume (R.)

A month after President Donald Trump said he would allow U.S. companies to resume selling to blacklisted Chinese telecommunications giant Huawei HWT.UL, his administration has done little to clarify what sales will be permitted. The lack of clarity on what U.S. firms can supply to the world’s top producer of telecommunications equipment as long as it’s on a so-called “entity list” is likely to cast a shadow over this week’s U.S.-China trade negotiations in Shanghai. Trump had pledged to allow the sales as a goodwill gesture to President Xi Jinping when the two met last month and agreed to restart talks to try to resolve their year-long trade war.

China, for its part, agreed to restart large-scale agricultural purchases. U.S. chipmakers cheered Trump’s announcement, which administration officials clarified afterwards meant the government would issue export licenses in cases where there is no national security risk and where the items are “non-sensitive” and readily replaced by rivals. But the department has yet to respond to any of a total of around 50 license requests from about 35 companies, sowing uncertainty in the industry and in Beijing. “At this stage, there is mass confusion,” said William Reinsch, a former Commerce official, adding that the plan for case-by-case decisions “maximizes the uncertainty.”

No information is safe.

• Capital One: Information Of Over 100 Million People In US, Canada Hacked (R.)

Capital One Financial Corp said on Monday that personal information including names and addresses of about 100 million individuals in the United States and 6 million people in Canada were obtained by a hacker who has been arrested. The suspect, a 33-year-old former Seattle technology company software engineer identified as Paige Thompson, made her initial appearance in U.S. District Court in Seattle on Monday, the U.S. Attorney’s office said. According to a complaint filed in the District Court for the Western District of Washington at Seattle, Thompson posted information from her hack, which occurred between March 12 and July 17, on coding platform GitHub. Another user saw the post and notified Capital One of the breach.

Law enforcement officials were able to track Thompson down as the page she posted on contained her full name as part of its digital address, the complaint said. Capital One said it identified the hack on July 19. A representative for the U.S. Attorney’s office said it was not immediately clear what the suspect’s motive was. The incident is expected to cost between $100 million and $150 million in 2019, mainly because of customer notifications, credit monitoring and legal support, Capital One said. The hacker did not gain access to credit card account numbers, but about 140,000 Social Security numbers and 80,000 linked bank account numbers were compromised, Capital One said. Other personal information accessed included phone numbers and credit scores.

Are we immune to this yet?

• The World is Not Enough (Statista)

Earth Overshoot Day came on July 29 this year. This is the second time the day, which marks the time at which humanity has used up its allotment of natural planetary resources for the year, occurred in the month. It had occurred in August between 2010 and 2017. The day, whose existence is highlighted by the NGO Global Footprint Network, means that all humans on Earth for this year have already used up more natural resources than mother nature can reproduce annually. Emissions, but also of resources like wood or fish and the use of land for crops, are among the things counted in when calculating Earth Overshoot Day.

Industrialized nations have the biggest share in pushing its date forward, as seen in the organization’s country profiles. The U.S. is the biggest offender. If all nations lived like U.S. residents, the resources of five Earths would be needed each year in order for the natural environment to regenerate. The U.S. overshoot day is therefore on March 15. Australia, which had been ahead of the U.S. for some years, now had its overshoot day on March 31, with 4.1 “Earths” used annually. India was among the countries whose style of living would use up less than a whole Earth each year if practiced globally, which also has to do with poverty still being widespread in the country.

“The scariest thing about climate change is what it will make us do to each other.”

• Lost Cities and Climate Change (SciAm)

Not far from my grandmother’s house is a ghost city. At Angel Mounds on the Ohio river about eight miles west of Evansville, there are a few visible earthworks and a reconstructed wattle-and-daub barrier. There is almost nothing left of the people who build these mounds; in a final insulting erasure, the site is now named after the white settler family who most recently farmed the land. There are traces of other dead villages along the Ohio and Mississippi rivers, mounds scattered from present-day Indiana to Arkansas and Alabama. In southern Illinois, a few miles from the Missouri border, hidden among empty corn and soy fields, is the center of that dead civilization’s gravity: the lost city of Cahokia.

Cahokia was larger than London, centrally planned, the Manhattan of its day. Most people there would have come from somewhere else. There were defensive foundations, playing fields, and a magnificent temple. There would have been sacred ceremonies and salacious gossip. It must have been a very exciting place to live. And then, relatively abruptly, it ceased to exist. We know of the city only because of the physical traces left behind. Few stories of Cahokia have survived; it disappeared from oral tradition, as if whatever happened to it is best forgotten. The archaeological record shows traces of the desperation and bloodshed that almost always accompany great upheavals: skeletons with bound hands, pits full of strangled young women.

The North American Drought Atlas, a historical record of climate conditions pieced together from the rings of old trees, provides a hint of what might have happened. The tenth century CE, when the Cahokia civilization would have developed, marked a distinct shift in the regional climate from persistent drought to rainier conditions more suitable for agriculture, centralization, and civilization. But the good times were not to last. In the middle of the fourteenth century, the climate swung back toward drought. This shift was likely associated with shifting temperature patterns in the ocean that affected the jet stream, pulling cool air down from the Arctic and displacing rainfall patterns.

These changes are attributable to some combination of natural internal climate variability and externally forced changes from solar activity and increased volcanic eruptions. Their effects were profound. In Europe around the same time, a confluence of natural factors perhaps related and perhaps separate from the forces drying out the Mississippi Valley caused it to rain heavily in the summer of 1314. The rains continued into the winter, and then into the next year, and then the next. Crops rotted in the fields, and the entire continent went hungry. Contemporaneous historical records complain of rain and famine, villages forced to eat dogs and cats, the dead, and even each other.

Debt Rattle July 29 2019

Jul 292019

July 29, 2019 Posted by Raúl Ilargi Meijer at 8:41 am Finance Tagged with: Assange, Boeing, Boris, Brexit, China, entrapment, insulin, Melzer, oil, Papadopoulos, poverty, Ratcliffe 14 Responses »

Odilon Redon Fallen angel 1872

• A New US Oil Production Peak Looks Imminent (Robert Rapier)

• China’s Wobbly Giants (Fortune)

• Business Lobby Group CBI Says UK, EU Not Ready For No-Deal Brexit (BBC)

• Johnson Told No-Deal Brexit Will Crush Domestic Policy Plans (G.)

• More Than 4 Million In UK Are Trapped In Deep Poverty (G.)

• Ratcliffe Tapped To Replace Coats As US Spy Chief (R.)

• Work On Production Line Of Boeing 737 MAX ‘Not Adequately Funded’ (BBC)

• Insulin Is Our Oxygen: Bernie Sanders Rides Another Campaign Bus To Canada (G.)

• Papadopoulos To Head To Greece To Retrieve $10,000 Payment (Fox)

• US Wants To ‘Make An Example’ Of Assange In Jail, UN Expert Claims (SMH)

Cheap money blows bubbles, but…

• A New US Oil Production Peak Looks Imminent (Robert Rapier)

The resurgence of U.S. oil production over the past decade diminished OPEC’s control of the global oil markets. In less than eight years, U.S. oil production climbed from under 6 million barrels per day (BPD) to more than 12 million BPD. This surge is arguably the only reason oil prices today aren’t above $100/barrel (bbl). OPEC’s current strategy seems to be to wait for U.S. production to begin declining so they can begin to regain control of the oil markets. They may not have to wait all that long.

In last week’s article, I covered the slowdown in oil production growth in the Permian Basin. This is the most important oil-producing region in the U.S., but of course it isn’t the only one. And while most of the coverage of the resurgence of U.S. oil production has been primarily focused on shale oil and tight oil, U.S. offshore oil production has also made a big jump. Over the past decade, Gulf Coast oil production in the U.S. rose from about 1.2 million BPD to about 2.0 million BPD.

Thus, I thought today it might be instructive to look at the trends in total U.S. oil production. Note that in the previous graphic, it looks like production may be starting to turn down right at the end of the time frame. In fact, the Energy Information Administration (EIA) has reported a slight downward trend in U.S. oil production since May. The key question is whether this is an anomaly, or the beginning of a sustained trend. Applying the same analysis that I did last week to Permian Basin production – which looked at year-over-year production changes – it becomes clear that overall U.S. production growth is declining even faster than Permian Basin production growth.

“.. state-owned enterprises account for 80% of the revenue generated by Chinese companies..”

• China’s Wobbly Giants (Fortune)

In China, publication of the Fortune Global 500 has become a major media event. Companies advancing even a place or two rush out press releases. Those making the list for first time bask in the achievement; this year’s most notable Chinese debutant, smartphone maker Xiaomi, celebrated by doling out $24 million in stock to its 20,000 employees. The 2019 list gives Chinese firms something special to crow about: the number of Chinese firms rose to a record 129, including 10 from Taiwan, overtaking the 121 firms from the United States.

[..] the most striking characteristic of China’s presence on the Global 500 remains the overwhelming—and growing—dominance of state-owned firms. A calculation by Hong Kong’s South China Morning Post found that, if firms from Hong Kong and Taiwan are excluded, state-owned enterprises account for 80% of the revenue generated by Chinese companies on the 2019 list, up from 76% last year. Derek Scissors, resident scholar at the American Enterprise Institute, argues the prevalence of state-owned behemoths among Chinese firms “reveals more weakness than strength.”

He questions whether firms like Ping An Insurance Group (No. 29) and Huawei Technologies (No. 61) are truly private; doubts the veracity of financial results reported by China’s state-owned firms; and notes that Chinese SOEs are mostly sleepy monopolies. The vast revenue of state-owned Chinese companies on the Fortune 500, he concludes, “primarily represents waste.” Former Financial Times China correspondent Richard McGregor offers a more nuanced explanation for the ascendance of China’s state-owned giants in his new book Xi Jinping: The Backlash. For China watchers, the entire book is a must-read, but this excerpt published recently in The Guardian, summarizes Richard’s account of how and why Xi sought to bolster state-owned enterprises at the expense of private enterprise.

What is it, 100 days until Halloween?!

• Business Lobby Group CBI Says UK, EU Not Ready For No-Deal Brexit (BBC)

The Confederation of British Industry (CBI) has warned the government that neither the UK nor the EU is ready for a no-deal Brexit on 31 October. “While the UK’s preparations to date are welcome, the unprecedented nature of Brexit means some aspects cannot be mitigated,” said the CBI. It has published practical steps it says the UK, EU and firms can take. A government spokesman said the UK has increased the pace of planning for no-deal. The CBI had previously said leaving the EU with a deal was essential to protect the economy and jobs. New Prime Minister Boris Johnson has made Michael Gove responsible for planning a no-deal Brexit. Mr Gove has said the UK government is currently “working on the assumption” of a no-deal Brexit.

He said his team still aimed to come to an agreement with Brussels but, writing in the Sunday Times, he added: “No deal is now a very real prospect.” The CBI’s report What Comes Next? The Business Analysis Of No Deal Preparations advises what measures businesses can take to reduce the worst effects. The advice is based on a study of existing plans laid out by the UK government, European Commission, member states and firms. “And although businesses have already spent billions on contingency planning for no deal, they remain hampered by unclear advice, timelines, cost and complexity,” the CBI says. “Larger companies, particularly those in regulated areas such as financial services, have well-thought-through contingency plans in place, though smaller firms are less well prepared.”

They’re stuck on the backstop: “Johnson may well find that having left one political union, he spends an increasing proportion of his time trying to keep another together..”

• Johnson Told No-Deal Brexit Will Crush Domestic Policy Plans (G.)

Boris Johnson’s ambitious domestic agenda would be crushed by the pressing needs of the emergency that would follow a no-deal Brexit, a new report by a Whitehall thinktank has concluded. The Institute for Government (IfG) warned there is “no such thing as a managed no deal” and the hard Brexiters predictions of a “clean break” from the EU will not materialise. Johnson will begin his first full week in Downing Street by ramping up planning for the possibility of a no-deal Brexit on 31 October, with more than £1bn to be announced within days for preparations by Sajid Javid, the chancellor. He sent out a raft of cabinet ministers over the weekend to talk about “turbo-charging” preparations as part of a publicity blitz, making clear that the UK will be heading for no deal unless EU leaders agree to replace the Irish backstop.

The new prime minister is also heading to Scotland, Wales and Northern Ireland in the coming days to promise to “strengthen the union”, but he faces a difficult meeting with Ruth Davidson, the Scottish Conservative leader, on Monday as she warned over the weekend that she cannot sign up to his no-deal Brexit strategy. In its report on no deal, the IfG predicted that the union of the United Kingdom would come under “unprecedented pressure” in the event of a no-deal Brexit, with Northern Ireland “most acutely affected”. It said that legislation to introduce direct rule in Northern Ireland with immediate effect would be needed to get through a no-deal Brexit if the devolved government is not restored by the end of October. “Johnson may well find that having left one political union, he spends an increasing proportion of his time trying to keep another together,” it said.

[..] In another sign of the uncertainty Johnson faces, the owner of Vauxhall warned on Sunday that it will close its Ellesmere Port plant with the loss of 1,000 jobs if Brexit renders it unprofitable. “No deal is a step into the unknown: the prime minister’s second 100 days will be even more unpredictable than his first,” the report says, adding that the EU is unlikely to agree to negotiate any “side deals” to soften the impact. “Rather than ‘turbo-charging’ the economy, as Johnson has suggested, the government is more likely to be occupied with providing money and support to businesses and industries that have not prepared or are worst affected by a no-deal Brexit – as well as dealing with UK citizens in the EU, and EU citizens here, who have been similarly caught out,” it says.

[..] Dominic Cummings, the mastermind behind Vote Leave, who has been hired as Johnson’s special adviser, has been tasked with delivering Brexit “by any means necessary”. In a meeting with fellow special advisers, he made it clear that he believes No 10 can outmanoeuvre parliamentary critics of no deal and force Brexit to happen by 31 October. However, leading former cabinet ministers – Philip Hammond, David Gauke and Rory Stewart – are all preparing to join the cross-party battle to make sure parliament has a say on the form of the UK’s departure. One source close to the group said Cummings’s confidence of being able to proceed with a no deal if necessary was “misplaced”, while another former cabinet minister described the senior No 10 adviser as a “master of disinformation and spin”.

While all attention and funding goes towards Brexit…

• More Than 4 Million In UK Are Trapped In Deep Poverty (G.)

More than 4 million people in the UK are trapped in deep poverty, meaning their income is at least 50% below the official breadline, locking them into a weekly struggle to afford the most basic living essentials, an independent study has shown. The Social Metrics Commission also said 7 million people, including 2.3 million children, were affected by what it termed persistent poverty, meaning that they were not only in poverty but had been for at least two of the previous three years. Highlighting evidence of rising levels of hardship in recent years among children, larger families, lone parent households and pensioners, the commission urged the new prime minister, Boris Johnson, to take urgent action to tackle growing poverty.

The commission’s chair, Philippa Stroud, a Conservative peer, said there was a pressing need for a concerted approach to the problem. “It is time to look again at our approach to children, and to invest in our children as the future of our nation,” she said. Campaigners said the commission showed austerity had undermined two decades of anti-poverty policy. “By cutting £40bn a year from our work and pensions budget through cuts and freezes to tax credits and benefits, the government has put progress into reverse,” said Alison Garnham, the chief executive of Child Poverty Action Group.

He was strong in the Mueller hearing.

• Ratcliffe Tapped To Replace Coats As US Spy Chief (R.)

U.S. President Donald Trump said on Sunday he would nominate Representative John Ratcliffe, a Texas Republican who strongly defended him at a recent congressional hearing, to replace Dan Coats as the U.S. spy chief. Coats, the current U.S. director of national intelligence who has clashed with Trump over assessments involving Russia, Iran and North Korea, will step down on Aug. 15, the president said as he announced his decision on Twitter. “John will lead and inspire greatness for the Country he loves,” Trump said, thanking Coats “for his great service to our Country” and saying an acting director will be named shortly. The post of director of national intelligence, created after the Sept. 11, 2001 attacks on the United States, oversees the 17 U.S. civilian and military intelligence agencies, including the CIA.

Ratcliffe, a member of the House of Representatives intelligence and judiciary committees, defended Trump during former Special Counsel Robert Mueller’s testimony on Wednesday about his two-year investigation of Russian interference in the 2016 presidential election and possible obstruction of justice. Ratcliffe also accused Mueller of exceeding his authority in the report’s extensive discussion of potential obstruction of justice by Trump after the special counsel decided not to draw a conclusion on whether Trump committed a crime. The congressman agreed that Trump was not above the law, but said the president should not be “below the law” either.

“My family won’t fly on a 737 Max.”

• Work On Production Line Of Boeing 737 MAX ‘Not Adequately Funded’ (BBC)

A former Boeing engineer has told the BBC’s Panorama programme that work on the production line of the 737 Max plane was not adequately funded. The aircraft is currently grounded after two crashes which killed 346 people. The 737 Max is the company’s fastest selling plane and has earned the company billions of dollars in sales. Boeing denies the claims and says it’s committed to making the 737 Max one of the safest aircraft ever to fly. Adam Dickson worked at Boeing for 30 years and led a team of engineers who worked on the 737 Max. He said they were under constant pressure to keep costs down. “Certainly what I saw was a lack of sufficient resources to do the job in its entirety,” he says. “The culture was very cost centred, incredibly pressurised. Engineers were given targets to get certain amount of cost out of the aeroplane.”

Mr Dickson said engineers were under pressure to downplay new features on the 737 Max. He said by classifying them as minor rather than major changes, Boeing would face less scrutiny from the US regulator, the Federal Aviation Administration. “The goal was to show that those differences were so similar to the previous design that it would not require a major design classification in the certification process. There was a lot of interest and pressure on the certification and analysis engineers in particular, to look at any changes to the Max as minor changes.” He said that downplaying the changes reduced scrutiny in a way that could impact safety. Now even his own family have fears about the plane’s safety. “My family won’t fly on a 737 Max. It’s frightening to see such a major incident because of a system that didn’t function properly or accurately.”

“How does it happen 10 minutes away from the American border in Michigan, people here are paying one-10th of the price for the vitally important drug they need to stay alive?”

• Insulin Is Our Oxygen: Bernie Sanders Rides Another Campaign Bus To Canada (G.)

When Hunter Sego realized the insulin he needed to manage his Type 1 diabetes cost more than $1,400, he called his mother in a panic. His family had insurance. He did not believe it was possible a one-month supply of “life saving” medication could cost so much. The price tag was correct. Then a student and football player at DePauw University, he began to ration his insulin, using a quarter of what had been prescribed. He lost weight. His grades dropped. He struggled on the field. Fortunately, his mother found out and stopped him from rationing his insulin – a practice that is increasingly common and potentially deadly.

On Sunday, Sego and his mother, Kathy, drove seven hours from Indiana to join a caravan of roughly a dozen patients with Type 1 diabetes on a bus to Canada with Vermont senator and presidential candidate Bernie Sanders. The Americans – wearing glucose monitors on their arms and shirts that said “diabetic” – set out to buy insulin for a fraction of its cost at home. Sanders’ northern sojourn, a trip his campaign sponsored, was designed to highlight the rising cost of prescription drugs in the US, which the senator said was the result of “incredible corruption and greed” on the part of the US pharmaceutical industry.

“How does it happen 10 minutes away from the American border in Michigan, people here are paying one-10th of the price for the vitally important drug they need to stay alive?” Sanders asked, calling the disparity a “national embarrassment”. In his remarks outside of the Olde Walkerville Pharmacy in Windsor, Sanders vowed that as president he would appoint an attorney general to investigate the pharmaceutical industry for what he described as “collusion” between the major drug companies. “Prices go up and up and up at the same level for the same companies,” he said. “So what you do is you throw these people in jail if they engage in price-fixing.”

How many agents are going to be on his tail?

• Papadopoulos To Head To Greece To Retrieve $10,000 Payment (Fox)

Former Trump adviser George Papadopoulos told Fox News’ Maria Bartiromo in an exclusive interview that he is heading back to Greece to retrieve $10,000 that he suspects was dropped in his lap as part of an entrapment scheme by the CIA or FBI — and federal investigators want to see the marked bills, which he said are now stored in a safe. Papadopoulos said on “Sunday Morning Futures” he was “very happy” to see Devin Nunes, R-Calif., grill former Special Counsel Robert Mueller about the summer 2017 payment during last week’s hearings — even though Mueller maintained, without explanation, that the matter was outside the scope of his investigation.

“I was very happy to see that Devin Nunes brought that up,” Papadopoulos said. “A man named Charles Tawil gave me this money [in Israel] under very suspicious circumstances. A simple Google search about this individual will reveal he was a CIA or State Department asset in South Africa during the ’90s and 2000s. I think around the time when Bob Mueller was the director of the FBI. “So, I have my theory of what that was all about,” Papadopoulos added. “The money, I gave it to my attorney in Greece because I felt it was given to me under very suspicious circumstances. And upon coming back to the United States I had about seven or eight FBI agents rummaging through my luggage looking for money.”

According to Papadopoulos, “the whole setup” by the “FBI likely, or even the special counsel’s office,” was intended to “bring a FARA [Foreign Agents Registration Act] violation against me.” The FARA statute played a key role in the prosecutions of former Trump aides, including Michael Flynn and Paul Manafort. Papadopoulos previously told Bartiromo in May that he wanted authorities to take a look at the money trail. “I actually want Congress, [Bill] Barr, [DOJ Inspector General Michael] Horowitz, and [U.S. Attorney John] Huber to review the bills because I still have the bills and I think they are marked,” Papadopoulos said. “These bills that are still in Athens right now must be examined by the investigators because I think they are marked and they’re going to go all the way back to DOJ, under the previous FBI under [James] Comey, and even the Mueller team.”

But the torture just continues…

• US Wants To ‘Make An Example’ Of Assange In Jail, UN Expert Claims (SMH)

The United States government has promised that Julian Assange will get a fair trial on espionage charges, rejecting the accusation of a United Nations expert that the administration “intends to make an example of him” with excessive charges and jail time. It has challenged the assessment of the expert, the UN’s Special Rapporteur on Torture Nils Melzer, that Assange would “be exposed to a real risk of torture or other cruel, inhuman or degrading treatment or punishment” if he ended up in a US jail. But Melzer has warned that extradition to the US would severely and dangerously worsen Assange’s already fragile psychological state.

The WikiLeaks founder is in a London jail awaiting a legal fight against extradition to the US, where he has been charged with conspiracy to receive and disclose top secret documents allegedly obtained from army whistleblower Chelsea Manning in 2010. Assange’s team are expected to argue he will not receive a fair trial if the extradition takes place, and that extradition would be dangerous to his health – arguments bolstered by the damning independent report from Melzer. In May, after visiting Assange in Belmarsh Prison for an interview and psychological examination, Melzer concluded that the US, Britain, Sweden and Ecuador shared responsibility for the “psychological torture” of Assange.

On Sunday new details emerged of Melzer’s conclusions, after the publication of letters that Melzer sent to the respective governments of those countries. The UN Human Rights Commissioner also published two responses received from the US and Sweden which strongly rejected Melzer’s claims and arguments. In his letters, Melzer gave new details of Assange’s prison regimen. At the time of his visit Assange was shut in his cell for about 20 hours a day, eating all his meals in the 2 metre by 3 metre space with “a bed, a cupboard, a note-board, basic sanitary installations, a plastic chair and a medium sized window”. Melzer called for Assange to be given access to the prison library and gym, and expressed concern that his situation “severely hampers his ability to adequately prepare” for his legal fight.

Debt Rattle July 28 2019

Jul 282019

July 28, 2019 Posted by Raúl Ilargi Meijer at 9:25 am Finance Tagged with: arctic, Boeing, Boris, Brexit, China, Cummings, FAA, foreign reserves, glaciers, Hong Kong, imperialism, tankers 8 Responses »

Pablo Picasso Portrait of Dora Maar 1937

• UK Top Civil Servant Urged To Block Dominic Cummings Appointment (Ind.)

• Johnson’s Key Adviser Dominic Cummings Must Face Sanctions, Demand MPs (G.)

• UK To Ramp Up Funding For No-Deal Brexit Preparations (R.)

• Ex-Chancellor Hammond Plots With Labour To Kill Johnson’s No-Deal Brexit (G.)

• China Retreats Globally (F.)

• How Close Is China To A Financial Crisis? (F.)

• FAA Let Boeing Sign Its Own Safety Certifications On 737 MAX (ZH)

• Tanker Seizures and Resurgent Imperialism (Craig Murray)

• Hong Kong Protesters Defy Police Again On Sunday (AFP)

• Alaskan Glaciers Melting 100 Times Faster Than Previously Thought (NatGeo)

The name Cummings dominates the news. In the US there’s Elijah Cummings, attacks on whom by Trump are making the word ‘racist’ popular again in the Dems camp suddenly. In the UK it’s Dominic Cummings, Boris Johnson’s key adviser, who draws the ire of MPs.

As I wrote a few days ago, Boris bringing in Dominic Cummings can only mean elections. Because that’s what he’s good at, and he wouldn’t come in for other reasons. Another aspect is Cummings doesn’t play second fiddle. He’s got the key to no. 10 now. So not only does the UK have its second unelected PM in a row, the PM has handed power to someone in the shadows. To ensure Brexit.

• UK Top Civil Servant Urged To Block Dominic Cummings Appointment (Ind.)

The head of the civil service has been urged to block the appointment of Brexit mastermind Dominic Cummings to a senior Downing Street role. Boris Johnson’s decision to invite Mr Cummings to become a key No 10 adviser has sent shockwaves through Westminster, coming only months after he was found in contempt of parliament for refusing to give evidence to the Commons fake news inquiry. The move also sparked fears among Tory moderates about the new prime minister’s Brexit approach, as Mr Cummings was the architect of Vote Leave’s Take Back Control slogan and the pledge to claw back £350m a week from the EU for the NHS. The Liberal Democrats have written to Sir Mark Sedwill, the UK’s most senior mandarin, urging him to intervene as they warned the news should “send shivers down the spines” of the British public.

Layla Moran MP argued the Brexiteer’s conduct fell short of necessary Whitehall standards due to his admonishment for contempt and his involvement in Vote Leave’s “misleading” campaign about NHS funds. She also pointed to the decision by Mr Cummings to leak a confidential Digital, Culture, Media and Sport Committee report, when he reportedly declared “f*** the charlatans embargo” before posting the document on his personal blog. Ms Moran told The Independent: “The appointment of Dominic Cummings should send shivers down the spines of UK citizens. This is a man who has peddled lies and flouted the truth for sheer, cynical political gain. “The dark arts that he proffers should have no place in government, and no place in Downing Street.

[..] Mr Cummings is respected among Brexiteers as being instrumental to the success of the 2016 referendum campaign, but his vocal criticism of MPs and civil servants has ruffled feathers. Since the referendum, Mr Cummings has described Brexit as a “train wreck”, and said triggering Article 50 too early was like “putting a gun in your mouth and pulling the trigger”. He also branded David Davis, the former Brexit secretary, “thick as mince and lazy as a toad”, and described the Tory European Research Group as “useful idiots for Remain”.

Just as I said a few days ago: “In his new role at Downing Street Cummings appears to be getting Johnson on an election footing..”

• Johnson’s Key Adviser Dominic Cummings Must Face Sanctions, Demand MPs (G.)

Prominent MPs on the committee investigating fake news and disinformation want Boris Johnson’s aide Dominic Cummings, who has been found in contempt of parliament, to face sanctions in his new role at the heart of government. These could include docking his salary, denying him a security pass and putting pressure on the prime minister to force him to give evidence to parliament. Johnson’s decision to appoint Cummings as a key adviser outraged many MPs because it came less than four months after parliament unanimously passed a motion, tabled by the government, to censure him for failing to testify at the fake news inquiry. Some also have concerns about his role as mastermind of the Brexit campaign. The official Vote Leave group has been found to have broken electoral law and referred to the police.

“This is someone who campaigned to take back control for parliament, and yet has decided the only person who shouldn’t be accountable to parliament is him,” said MP Sarah Wollaston, who has left the Tory party and sits as an independent. “What does that say about the prime minister’s attitude to parliament? It’s a terrible error of judgment.” Wollaston admitted there was no mechanism to enforce motions holding individuals in contempt of parliament. But members of the committee that originally summoned Cummings to give evidence say they want to recall him again, and have suggested a range of sanctions. “We need to demand that he attends to give evidence and call on Boris Johnson [to ensure] that he does attend. We would expect the prime minister to fully support our call for evidence,” said Jo Stevens, one of the MPs on the committee.

She also suggested any decision to give him a security pass should be closely scrutinised. “Everyone who works in parliament has to go through a very stringent security procedure. How can someone who oversaw a campaign that is the subject of a serious criminal investigation pass that test? He will have access not just to parliament but to the inner sanctum of No 10. There are obvious and serious security implications to that.” [..] In his new role at Downing Street Cummings appears to be getting Johnson on an election footing; the Conservative party Facebook page has fielded hundreds of ads since his appointment. Although they are spending relatively small amounts, the range of ads allow them to test voters’ responses and gather data on those who do interact with the advertisements.

Don’t think one billion will do much. Especially if it’s spent on PR campaigns.

• UK To Ramp Up Funding For No-Deal Brexit Preparations (R.)

New British finance minister Sajid Javid plans to announce spending of around 1 billion pounds to make sure the country is properly prepared for a possible no-deal Brexit in October, a newspaper reported. Javid told the Sunday Telegraph he would overhaul the British Treasury’s approach to Brexit, starting with “significant extra funding” announcements in the coming days to get Britain fully ready to leave the European Union on Oct. 31, with or without a deal. The extra spending would include financing a major public information campaign for individuals and businesses.

The Sunday Telegraph also quoted Javid as saying he had plans for 500 new Border Force officers and possible new infrastructure around the country’s ports. Javid’s predecessor Philip Hammond, who opposed leaving the EU without a transition deal, was accused by Brexit supporters of failing to spend enough money to get Britain ready for a no-deal Brexit, undermining its negotiating position with Brussels.

BIG fight coming up.

• Ex-Chancellor Hammond Plots With Labour To Kill Johnson’s No-Deal Brexit (G.)

The former Tory chancellor Philip Hammond held private talks with Labour’s Brexit spokesman Keir Starmer shortly before Boris Johnson entered Downing Street last Wednesday, to plot cross-party moves aimed at preventing the new prime minister agreeing to a no-deal Brexit. The meeting in the House of Commons – which took place shortly after Hammond had resigned from the government – is evidence of the fierce backlash Johnson faces from MPs of all parties if he tries to defy parliament and take the UK out of the EU without an agreement on 31 October.

It is understood that the former political opponents Hammond and Starmer agreed to work together through the summer recess with other leading parliamentarians who oppose no deal, including former Tory ministers Oliver Letwin and Dominic Grieve, to thrash out how best to use parliamentary votes to torpedo no deal. On Saturday night Starmer confirmed that Johnson’s arrival in No 10 had spurred more cross-party discussions at high levels involving senior Tories sacked by Johnson, or who chose to resign, as opponents of no deal prepared a cross-party counter-offensive against his new hard-Brexit cabinet and government.

“The political direction of travel under Boris Johnson is clear,” said Starmer, “and so it is more important than ever that we build a strong cross-party alliance to stop a no-deal Brexit. “That work will intensify over the summer, before parliament resumes in September.” The plans being hatched include amending Brexit-related legislation that has to pass through parliament before the UK can leave the EU in a way that would force the Johnson to ask for a further extension to the UK’s membership if no Brexit agreement has been reached by early October. A “last resort” option is for Hammond and other Tory Remainers to vote for a no-confidence motion in their own government if no deal still appears on the cards.

Written a lot about this. China doesn’t have the foreign reserves to let its people spend freely across the world. That was true even before the trade war. When are the Chinese tourists going to disappear from western streets?

• China Retreats Globally (F.)

China has retreated globally – not from its artificial islands in the South China Sea but economically and financially. It seems just yesterday that the Middle Kingdom, as China calls itself, resembled an unstoppable juggernaut, cutting constructions contracts and buying properties all over the world. That is no longer the case. Trade war with the United States bears much of the blame (or gets the credit, depending on one’s perspective), but even if Washington and Beijing were to sign a deal tomorrow, China would not regain its old momentum. Official Ministry of Finance (MOF) figures, not surprisingly, offer a soothing picture of moderate decline, but private sources tell a much more dramatic story.

According to the American Enterprise Institute’s well-regarded China Global Investment Tracker (CGIT), Chinese overseas investments of all kinds in the first half of this year averaged only $27.5 billion, half the rate averaged during the same time in 2018 and barely a quarter the rate of 2017’s first half. This year’s figures are lower than any time since 2008. Construction contracts, largely in the third world as part of China’s Belt and Road initiative, have fallen off, too, but less dramatically. China clearly has become much less engaged with the world than it was. Two things have caused this retreat. One is a growing hostility among host countries toward Chinese investment. Especially developed countries, the US in particular, have balked over the Chinese practice of extracting technology.

Suspicions along these lines have held up approvals for Chinese purchases and other direct flows of funds. Some familiar with Chinese practice have gone a step further. The European Chamber of Commerce has warned against developing a dependence on China and Chinese funds. This combination of concerns and suspicions have centered primarily on China’s huge state owned enterprises and less on private Chinese investment. But if private investment has fallen off less dramatically, this growing reluctance in the West has had its effect there, too. More significant is China’s relative shortage of hard currency. Despite Beijing’s efforts to make the yuan a global currency, it is little used in currency transactions – no more than 2% of the total in fact – and so is of little use in overseas purchases.

Meanwhile the trade war with the United States has already begun to cut into Beijing’s supplies of foreign exchange. Beijing actually anticipated the problem and in 2017 and began to ration foreign exchange even before the White House added any tariffs. The first major investment declines occurred in late 2018, when the While House first imposed 10% tariffs on a range of Chinese products. The next drop coincided with this past spring’s increased tensions. To be sure, Beijing’s foreign exchange hoard remains huge, but officials are wary of how rapidly it has shrunk, falling some 25% from almost $4 trillion at its peak in 2014 to barely over $3 trillion during the first half of this year. Beijing’s rationing of these financial resources has affected the state-owned sector in particular. Private companies have a greater willingness and ability to borrow hard currencies abroad.

Dangerously close.

• How Close Is China To A Financial Crisis? (F.)

China haters have been waiting for a financial crisis out of China since at least the early 2000s. Each and every time, the People’s Bank of China’s plunge protection team or the central planners in Beijing would throw buckets of ice water on their heads. This time might be different. This time they are dealing with a trade war. Most investment banks have some proprietary model that gives their fund managers a gauge on crises. For Nomura Securities, no country is flashing red more than China. “China has the second-highest number of flashing early warning indicators after Hong Kong,” says Rob Subbaraman, an Asia economist for Nomura in Singapore.

Months of protests against an stalled prisoner extradition bill with China have turned into protests against the Hong Kong government, with the very real possibility of the U.S. doing away with its special trade relationship with Hong Kong. If that ever happened, the Hong Kong dollar would no longer be a de facto source of U.S. dollars for mainland China, assuming Washington included Hong Kong in its mainland China tariff regime. Chinese policymakers need to guard against a renewed build-up of financial stability risks, Subbaraman says. Out of 60 early warning indicators flashing on Nomura’s Cassandra risk assessment program, Hong Kong has 49 covered. China has 25. The U.S. has precisely zero.

Cassandra has reliably signaled around two thirds of the past 50 financial crises in a sample of 30 emerging market and advanced countries, including the U.S., since the early 1990s, Nomura says. Casandra looks at five early warning indicators, including debt-service ratio gap (DSR) with a particular country’s historic average; joint credit and real property price gaps with the average; joint credit and real effective exchange rate (REER) gaps; joint DSR and REER gaps; and finally, a combination of all three credit indicators above. The predefined thresholds of pain-points for a country are set in a way that the early warning indicators flash when one of those thresholds is breached. That means a crisis is likely to hit within three years.

No surprise there. But that model is over.

• FAA Let Boeing Sign Its Own Safety Certifications On 737 MAX (ZH)

Thanks to a ‘broken regulatory process,’ the Federal Aviation Administration has been passing off routine oversight tasks to manufacturers for years. In the case of the beleagured 737 Max, however, the plane was so advanced that the regulator “handed nearly complete control to Boeing,” which was able to sign off on its own safety certificates, according to the New York Times. The lack of regulatory oversight meant that the FAA had no clue how Boeing’s automated anti-stall system, known as MCAS, worked. In fact, “regulators had never independently assessed the risks of the dangerous software” when they issued a 2017 approval for the plane.

“The company performed its own assessments of the system, which were not stress-tested by the regulator. Turnover at the agency left two relatively inexperienced engineers overseeing Boeing’s early work on the system. The F.A.A. eventually handed over responsibility for approval of MCAS to the manufacturer. After that, Boeing didn’t have to share the details of the system with the two agency engineers. They weren’t aware of its intricacies, according to two people with knowledge of the matter.” -New York Times.

During the late stages of the Max’s development, Boeing engineers decided to increase the plane’s reliance on MCAS to fly smoothly. Unfortunately, a new version of the system relied on a single sensor which could malfunction and push the plane into a nosedive. Boeing never submitted a formal assessment of the MCAS system following its upgrade – which wasn’t required by FAA rules. An agency official claims that an engineering test pilot was familiar with the changes, however his job was to evaluate its effect on how the plane flew – not on its safety. The jet was eventually certified as safe to fly, and the FAA required very little pilot training until the second Max crashed less than five months after the first.

There are very clear laws that forbid seizure of tankers. Give them all back.

• Tanker Seizures and Resurgent Imperialism (Craig Murray)

[The] UN Convention which is one of the base blocks of international law [..] does not state that the right to transit through straits can be subject to any sanctions regime which the coastal state chooses to impose; indeed it is clearly worded to preclude such coastal state activity. Nor can it be overridden by any regional grouping of which the coastal state is a member. Jeremy Hunt’s statement to parliament that the Iranian tanker had “freely navigated into UK territorial waters” was irrelevant in law and he must have known that. The whole point of passage through straits is that it is by definition through territorial waters, but the coastal state is not permitted to interfere with navigation.

It is therefore irrelevant whether, as claimed by the government of the UK and their puppets in Gibraltar, the tanker was intending to breach EU sanctions by delivering oil to Syria. There is a very strong argument that the EU sanctions are being wilfully misinterpreted by the UK, but ultimately that makes no difference. Even if the EU does have sanctions seeking to preclude an Iranian ship from delivering Venezuelan oil to Syria, the EU or its member states have absolutely no right to impede the passage of an Iranian ship through the Strait of Gibraltar in enforcement of those sanctions. Anymore than Iran could declare sanctions against Saudi oil being delivered to Europe and close the Straits of Hormuz to such shipping, or Indonesia could declare sanctions on EU goods going to Australia and close the Malacca Strait, or Russia could declare sanctions on goods going to Ukraine and close the Strait of Kerch.

[..] I was for three years the Head of the Maritime Section of the Foreign and Commonwealth Office. I was Alternate Head of the UK Delegation to the UN Preparatory Commission on the UN Convention on the Law of the Sea. I both negotiated, and drafted parts of, the Protocol that enabled the Convention to come into force. I was the Head of the FCO Section of the Embargo Surveillance Centre and responsible for giving real time political and legal clearance, 24 hours a day, for naval boarding operations in the Gulf to enforce a UN mandated embargo. There are very few people alive who combine both my practical experience and theoretical knowledge of precisely the subject here discussed.

“..leaving pools of blood in the same concourse where the suspected triads had attacked the previous weekend.”

• Hong Kong Protesters Defy Police Again On Sunday (AFP)

Thousands of pro-democracy protesters defied a police ban and began marching through Hong Kong on Sunday, a day after riot police fired rubber bullets and tear gas in the latest violent confrontation to plunge the financial hub deeper into crisis. Huge crowds gathered in the heart of the city’s commercial district on Sunday afternoon, after police gave permission for a static protest in a park but banned a proposed march through the city. Yet protesters soon spilled into the streets outside the park and began marching in spite of the ban, ratcheting up the likelihood of renewed clashes. “I feel so conflicted, seeing young people sacrifice their future for Hong Kong,” a 22-year-old student protester called Marcus told AFP, breaking into tears.

The latest march comes a day after a town near the border with mainland China descended into chaos, as police battled protesters holding another banned rally against suspected pro-government triad gangs who beat up democracy demonstrators there last weekend. Riot police used tear gas throughout the afternoon and evening in Yuen Long after tense standoffs with protesters, some of whom were throwing projectiles and had surrounded a police van. Rubber bullets were fired later in the clashes which ended when officers baton-charged the last remaining demonstrators inside the town’s metro station, leaving pools of blood in the same concourse where the suspected triads had attacked the previous weekend.

There’s a pattern.

• Alaskan Glaciers Melting 100 Times Faster Than Previously Thought (NatGeo)

A new way of measuring how some glaciers melt below the surface of the water has uncovered a surprising realization: Some glaciers are melting a hundred times faster than scientists thought they were. In a new study published today in Science, a team of oceanographers and glaciologists unpeeled a new layer of understanding of tidewater glaciers—glaciers that end in the ocean—and their dynamic processes. “They’ve really discovered that the melt that’s happening is fairly dramatically different from some of the assumptions we’ve had,” says Twila Moon, a glaciologist at the National Snow and Ice Data Center at the University of Colorado-Boulder who was uninvolved with the study. Some of this calving and glacial melt is a normal process that glaciers undergo during seasonal transitions from winter to summer, and even through the summer.

But a warming climate accelerates glacier melting across the globe, potentially through melting across the surface of the glacier, but also through underwater melting. Glaciers can extend hundreds of feet below the surface, explained Ellyn Enderlin, a glaciologist at Boise State University who was not involved with the study. Finding higher rates of submarine melting tells us that “glaciers are a lot more sensitive to ocean change than we’ve even thought.” Understanding the melting processes and calculating the amount of melt accurately is essential for planning for sea level rise. “We are just super jazzed that we can even do this,” says lead author David Sutherland, an oceanographer at the University of Oregon. “We weren’t 100 percent sure it was going to work.”

The Saffron Goddess (1600 B.C.) is a detail from a Minoan fresco depicting a saffron harvest, Akrotiri, Santorini island, Greece.

Debt Rattle July 27 2019

Jul 272019

July 27, 2019 Posted by Raúl Ilargi Meijer at 8:41 am Finance Tagged with: Brexit, central banks, China, conspiracies, Grand Jury, Hong Kong, impeachment, Ireland, Mueller, purview, special counsel, Trump 15 Responses »

Pablo Picasso Houses 1937

• For The First Time In 6 Years, No Central Bank Is Hiking

• China Moves To Regulate ‘Blind’ Expansion Of Financial Holding Firms (R.)

• Is This the End of Office of Special Counsel? (Alan Dershowitz)

• A Purview of Dust (Kunstler)

• Highest-Ranking House Democrat To Date Calls For Trump Impeachment (NBC)

• US House Panel Seeks Grand Jury Evidence To Assess Trump Impeachment (R.)

• It’s Time To Forget The Mueller-Fuelled Impeachment Fantasies (Robinson)

• Highly Unlikely Conspiracies (Dmitry Orlov)

• Trouble Feared As Hong Kong Activists Return To Scene Of Triad Attack (R.)

• US and Iran Stuck on Negotiation Ground Zero (Escobar)

• Irish PM Says No-Deal Brexit Could Lead To United Ireland (AFP)

• Dominican Republic Sends McAfee to Britain, Without Guns or Yacht (R.)

They are stuck, the lot of them. They can’t turn back, they can only double down.

• For The First Time In 6 Years, No Central Bank Is Hiking

The global central bank experiment with renormalization is officially over. After roughly half the world’s central banks hiked rates at least once in 2018, the major central banks have returned to easing mode, and as the chart below shows, for the first time since 2013, not a single central bank is hiking rates. Commenting on the violent reversal away from tightening financial conditions which emerged following the Q4 2018 selloff, Goldman’s Jan Hatzius writes that “The FOMC looks set to cut the funds rate next week, the ECB today sent a strong signal that action in September is likely, and China has resumed easing policy after a spring pause. With global growth running at a below-trend rate of 2.75% -down from about 4% a year ago- a synchronized tilt towards easing looks like a natural response to a weaker outlook.”

Yet even Goldman can’t help but ask just why the Fed is rushing to commence the first easing cycle in years, pointing out that “the US economy is in decent shape, with a tight labor market, inflation close to target and— in our forecast— growth running a little above 2% both this year and next. We are modestly above consensus because we expect the negative inventory cycle to end and final demand to continue growing robustly on the back of easier financial conditions.” This, according to the Goldman economist, should limit Fed easing to two 25bp insurance cuts, one next week and another in September, although the bank, which until very recently did not expect any rate cuts at all, fails to justify just why the Fed is doing what it is about to do, unless of course Powell is merely folding to Trump pressure.

They get too big, they becomes threats to Xi’s power.

• China Moves To Regulate ‘Blind’ Expansion Of Financial Holding Firms (R.)

China’s central bank on Friday unveiled the first draft rules to regulate the country’s vast and often complex financial holding companies, which it said have had “blind business expansion” in recent years. The draft rules set minimum asset requirements and ban the holding companies from involvement in non-financial business activities. “There’s a blank in the regulation of the sector, and the risks are accumulating and become exposed,” the People’s Bank of China said in a statement. “Financial holding firms, especially those formed by non-financial companies, witness a blind business expansion over the past few years,” it added.

The opaque cross-holding structures and “blind” expansion of financial holding companies have alarmed policymakers, who say the control of multiple financial institutions by conglomerates and their ability to do business across different sectors could pose wider, systemic risks. China has been working towards specific rules regulating financial holding companies since last year. [..] According to the draft regulations, financial holding conglomerates with at least 500 billion yuan ($72.69 billion) in assets or have non-bank affiliates that manage 100 billion yuan of financial assets or more will be subject to the rules. Financial holding firms cannot engage in any non-financial business in order to prevent cross-sector risks, the PBOC said, and it will be illegal for them to inject capital into financial institutions.

Dershowitz is far too close to Epstein of course, but he’s right on why this is wrong:

“It contained negative information about people, including the president, who will have no opportunity to respond in a legal proceeding.”

• Is This the End of Office of Special Counsel? (Alan Dershowitz)

Robert Mueller’s performance in front of Congressional committees should mark the end of special counsels, special prosecutors, independent counsels and the like. These hearings demonstrated, if any further demonstration was required, how dangerous it was to go outside of the normal processes of criminal justice. Ordinary prosecutors are not allowed to comment about why they decided not to prosecute the subject of an investigation. The Mueller Report, when made public, violated that salutary tradition. It contained negative information about people, including the president, who will have no opportunity to respond in a legal proceeding. The report and the testimony introduced the novel and dangerous concept into our legal vocabulary: “Not exonerated.”

This concept, which finds no basis in the rules of the Justice Department or the Special Counsel, is a variation on the nefarious theme articulated by the disgraced former FBI director, James Comey, when he went beyond announcing that Hillary Clinton would not be prosecuted, and expressed his opinion that she had been extremely careless in her treatment of emails. This statement said, in effect, that Hillary Clinton was not being exonerated. Mueller’s testimony was confused and confusing on many scores. He couldn’t explain why he had reached a formal decision on conspiracy with Russia but had failed to reach a formal conclusion about obstruction of justice. He had to pull back on his answer to whether the decision not to charge the President was based on a Justice Department policy against indicting a sitting president.

There was no explainable pattern as to why he chose to answer some questions while declining to answer others. He seemed not to be familiar with the contents of the Report that bears his name. It was almost as if he had signed his name to the Report without carefully reading or understanding it. [..] Prosecutors, like the Special Counsel, operate behind closed doors and in secret. They hear only one side of the story. They are restricted in what Grand Jury information can be made public. Non-partisan expert commissions, on the other hand, operate primarily in public (except when hearing classified material) and hear all sides of every issue in an effort to hear the whole truth.

Mayor of Munchkin Land.

• A Purview of Dust (Kunstler)

In all this long and excruciating public playing-out of dark schemes, Mr. Trump, first candidate and now president, seems to have acted as little more than a tackling dummy for the Mueller Team and its backstage Clinton confederates. He tweeted childishly about the deeply partisan composition of the Mueller Team when he should have mounted a forceful legal opposition to the effrontery of their selection in the first place. It’s interesting to follow the pronouncements of the bit-players in this spectacle, now that Mr. Mueller has inadvertently destroyed the basis of the sacred narrative. Rep. Jerold Nadler turned up yakking with Anderson Cooper on CNN last night, looking every inch like the Mayor of Munchkin Land, bloviating against the supposed imminent Russian takeover of America (read: by witches) and for the now-receding fool’s errand of impeachment, which would only further expose the criminal culpability of his own Democratic Party in this sordid misadventure.

Mr. Cooper looked deeply pained by the chore, and yet his own professional credibility is on the line after two years of allowing himself to be played like a flugelhorn by the folks who matter in this country, and he contested nothing in Mr. Nadler’s mendacious pratings. And now a fretful silence will descend around this colossal goddamned mess as the momentum of history shifts against the perpetrators of it, and the true machinery of American justice is brought to bear upon them. The playing-out of Act Three will probably coincide with epic global financial disorder in the months ahead, further obscuring what people and nations can do to arrest the collapse of Modernity and its sidekick Human Progress.

You just had a 22 month inquiry.

• Highest-Ranking House Democrat To Date Calls For Trump Impeachment (NBC)

Rep. Katherine Clark, D-Mass., became the highest-ranking House Democrat to call for opening an impeachment inquiry into President Donald Trump. “I deeply respect the committee work of House Democrats to hold the president accountable, including hearings, subpoenas and lawsuits. All of our efforts to put the facts before the American people, however, have been met with unprecedented stonewalling and obstruction,” the sixth-ranking House Democrat said in a statement Thursday evening, adding, “That is why I believe we need to open an impeachment inquiry that will provide us a more formal way to fully uncover the facts.” Clark made her announcement the day after former special counsel Robert Mueller testified before two House committees about his investigation into Russia’s interference in the 2016 election, possible coordination with the Trump campaign and subsequent efforts by the president to obstruct the probe.

“Since the release of the Mueller report in April, it has been clear that the president committed impeachable offenses by welcoming interference from a hostile foreign power in the 2016 election and then attempting to obstruct the investigation into his unpatriotic actions,” Clark said. “Moreover, he said he would do it all again if given the chance.” Four other House Democrats also publicly called for moving ahead with impeachment since Mueller’s testimony — Reps. Andre Carson of Indiana, Lori Trahan of Massachusetts, Peter DeFazio of Oregon and Lisa Blunt Rochester of Delaware — which brings the number to 94 Democrats who are backing an impeachment inquiry, according to an NBC News count.

People are going to turn against this.

• US House Panel Seeks Grand Jury Evidence To Assess Trump Impeachment (R.)

The Democratic-led U.S. House Judiciary Committee asked a federal court on Friday for access to grand jury evidence from the Mueller probe that lawmakers say they need to determine whether to begin impeachment proceedings against President Donald Trump. Democratic lawyers from the House of Representatives filed a 53-page petition in U.S. District Court seeking permission to review evidence involving interactions between Trump campaign officials and Russian agents, and Trump’s alleged efforts to direct former White House Counsel Don McGahn to remove Special Counsel Robert Mueller. The action moved the House one step closer to impeachment, a politically contentious issue that has divided Democrats as Congress prepares to pivot to the 2020 election season.

“We have just given notice that we are actively considering articles of impeachment … that is as serious a step as we should take at this time,” an attorney for the committee told reporters during a background briefing held after the filing. A separate committee lawsuit expected early next week to compel McGahn to testify before the panel will also cite the need to decide on impeachment, though McGahn could avoid court action by agreeing to appear as a result of negotiations, aides said. The grand jury evidence, which is protected from outside scrutiny by federal law, was compiled by Mueller’s 22-month probe of Russian meddling in the 2016 presidential election and Trump’s efforts to impede the investigation.

House Judiciary Committee Chairman Jerrold Nadler told a news conference that since Justice Department policy prohibits prosecution of a sitting president, the House of Representatives is the only institution of government capable of holding Trump accountable for actions outlined in the Mueller report.

” Instead of grappling with the very serious reasons why working-class people of all races are disillusioned with the Democratic party, prominent figures focus on litigating the various ways in which they were robbed of their rightful prize.”

• It’s Time To Forget The Mueller-Fuelled Impeachment Fantasies (Robinson)

What a time-wasting farce this has all been. Robert Mueller’s confused, lethargic testimony before Congress this week confirmed how foolish Democrats have been to hope Mueller would “bring down” Donald Trump. For years, people have hoped that Mueller would swoop in like a “deus ex machina” with blockbuster charges against the president. For years, it has also been obvious that this would not happen, and that defeating Trump would require the traditional hard work of political organizing. Now that Mueller has conclusively showed that the Russia investigation was a pitiful sideshow, perhaps Democrats can finally get back to the issues that Americans actually care about.

It’s embarrassing to recall just how absurdly some people elevated Mueller, and how much faith was placed in him. Memes compared Mueller to Superman, or portrayed him as a top cop who was secretly fitting Trump for an orange jumpsuit. He appeared on votive candles and earrings. SNL sang him a Christmas carol. There was an action figure. But faith in Mueller was born of desperation. He was an ageing Republican bureaucrat, with no track record of seriously challenging people in power. He had been an apologist for the Iraq war and mass surveillance, and a reliable servant of the DC establishment. It took a great deal of wishful thinking to envision Mueller as a caped crusader.

[..] Democrats complaining about Russian interference have always seemed like “sore losers”. Instead of grappling with the very serious reasons why working-class people of all races are disillusioned with the Democratic party, prominent figures focus on litigating the various ways in which they were robbed of their rightful prize. In many ways, the Democratic obsession with the Mueller investigation was symptomatic of a party that has lost touch with the real concerns of working people. People are upset because they’re drowning in debt, their rent is too damn high, they can’t afford their health insurance and they are working crappy jobs.[..]As Thomas Frank has pointed out, the “party of the people” has become a party of Wall Street, unwilling to contemplate policies that threaten the interests of the wealthy.

Why are we still entertaining any thoughts about this? Sorry, but I seem to have forgotten.

Dmitry also persuasively burns down the likelikood of a successful moon landing here. Click the link for that.

• Highly Unlikely Conspiracies (Dmitry Orlov)

A year and a half ago the British PM Theresa May stunned the world by introducing into international relations a new, rather casual standard of proof—“highly likely”—in regard to the very strange case of the Sergei Skripal poisoning. It is part of a technique that is applied as follows. Make an unsubstantiated accusation of some party being “highly likely” to have committed a certain crime. Demand that the accused party confess to the crime, disclose all relevant information and agree to pay reparation. If this demand is not met, impose punishment. It is “highly likely,” the British government claimed, that a couple of Russian tourists secretly employed by a nonexistent Russian government agency called “GRU” smeared some poison gas on the doorknob of the front door of the house occupied by Sergei Skripal, a former Russian officer who had been caught spying, did time in Russia and was released in a spy swap deal.

This heinous act of smearing poison gas on the doorknob occurred after Skripal had left his house, never to return. So badly was the doorknob contaminated with poison gas that the entire roof of the building had to be replaced. [..] Well, clearly, Putin ordered this retired former spy to be murdered by a couple of bumbling tourists on a hookers and weed tour of London who took a side trip to look at a cathedral using an exotic poison gas in order to make sure that the FIFA World Cup championship, which Russia was hosting and which was just about to start, would go off without any international embarrassment. It is rather untraditional to assassinate spies exchanged in a spy swap because it undermines future spy swaps, but Putin, being a former spymaster himself, probably wouldn’t have known that and nobody at the mythical “GRU” knew either.

In any case, it is “highly likely” that this is exactly how and why all of this happened, and if you don’t believe that then you are a conspiracy theorist and your conspiracy theories need to be subjected to a thorough, lavishly funded debunking campaign. Elements of this campaign include accusing you of lack of patriotism and of aiding and abetting the enemy, paying “experts” to browbeat you with their superior acumen and knowledge (including secret knowledge to which you are not privy because of national security concerns) and feeding you false information as bait in order to discredit you once you take the bait and try to run with it.

Rumor has it Chinese troops are gathering.

• Trouble Feared As Hong Kong Activists Return To Scene Of Triad Attack (R.)

Several thousand protesters defied a police ban on Saturday to converge on a rural Hong Kong town where suspected triad gangsters attacked protesters and commuters at a train station last weekend. Police, widely criticized for failing to better protect the public from the triad raid in Yuen Long, refused to allow a planned march in the town on safety grounds.But activists insisted they would push ahead and by 3.30 pm (0730 GMT) several thousand had gathered in sweltering heat, many chanting anti-police slogans such as “black police” and “know the law, break the law.”

Residents described a mounting police presence on Saturday morning, with force chiefs insisting they will still seek to keep order despite the ban. Extra fortifications have been placed around the local police station. Police inside the station were filming the protesters as the march began. Activists told Reuters they feared the protest could turn violent, given feelings of palpable anger among protesters over last Sunday’s events and a determination among some to challenge villagers they believe are close to long-standing triad groups in the area. “The situation is escalating, and (Saturday) could be the start of a more violent period,” one told Reuters.

Stand down.

• US and Iran Stuck on Negotiation Ground Zero (Escobar)

Brazilian President Jair Bolsonaro, a fervent Trump groupie, has turned the country into a tropical U.S. neo-colony in less than seven months. On U.S. sanctions, Bolsonaro said, “We are aligned to their policies. So we do what we have to.” Tehran for its part has threatened to cut its imports of corn, soybeans and meat from Brazil – $2 billion worth of trade a year – unless the refueling is allowed. This is an extremely serious development. Food is not supposed to be — illegally — sanctioned by the Trump administration. Iran now has to use mostly barter to obtain food — as Tehran cannot remit through the CHIPS-SWIFT banking clearinghouse. If food supplies are also blocked that means that sooner rather than later the Strait of Hormuz may be blocked as well.

Beltway sources confirmed that the highest level of the U.S. government gave the order for Brasilia to stop this food shipment. Tehran knows it well – as this is part of the “maximum pressure” campaign, whose goal is ultimately to starve the Iranian population to death in a harrowing game of chicken. How this may end is described by an ominous quote I already used in some of my previous columns, from a Goldman Sachs derivatives specialist: “If the Strait of Hormuz is closed, the price of oil will rise to a thousand dollars a barrel representing over 45 percent of global GDP, crashing the $2.5 quadrillion derivatives market and creating a world depression of unprecedented proportions.” At least the Pentagon seems to understand that a war on Iran will collapse the world economy.

For now wishful thinking, but things could move fast. Scotland will vehemently protest being taken out of the EU.

• Irish PM Says No-Deal Brexit Could Lead To United Ireland (AFP)

A no-deal Brexit could lead to a united Ireland as more people in Northern Ireland would “come to question the union” with Britain, Irish Prime Minister Leo Varadkar has said. His comments came after new British Prime Minister Boris Johnson said the current Brexit deal was unacceptable and set preparations for leaving the EU without an agreement as a “top priority” for his right-wing government. Tension around the withdrawal deal centres on the so-called Irish backstop — a mechanism designed to preserve the bloc’s single market and prevent a hard border between Northern Ireland and EU member Ireland. Varadkar warned a no-deal Brexit could see more people in the North question the union with England, Scotland and Wales.

“People who you might describe as moderate nationalists or moderate Catholics who were more or less happy with the status quo will look more towards a united Ireland,” Varadkar said Friday at a summer school in county Donegal, the Irish Independent newspaper and other media reported. “And increasingly you see liberal Protestants, liberal unionists starting to ask the questions as to where they feel more at home. “Is it in a nationalist Britain that’s talking about potentially bringing back the death penalty and things like that? Or is it part of a common European home and part of Ireland?” said Vardakar, whose heavily trade-dependent nation stands to lose most from a messy EU-UK split.

Colorful?

• Dominican Republic Sends McAfee to Britain, Without Guns or Yacht (R.)

Tech guru John McAfee, creator of the eponymous antivirus computer software, has arrived in Britain from the Dominican Republic, where he was detained with his wife for entering the Caribbean nation with firearms on his yacht, his lawyer said on Friday. The attorney general’s office “asked him where he wanted to go, and he decided on London,” said lawyer Candido Simon, who McAfee hired to represent him in the Dominican Republic. McAfee, born in 1945 at a U.S. military base on British territory, has both nationalities. After Dominican authorities ensured the United States had no active legal cases or extradition requests for McAfee, they allowed him to choose where he would be sent, Simon said.

McAfee, who is seeking the Libertarian Party’s nomination for U.S. president in 2020, recently told Reuters in an interview he could help Cuba defeat the U.S. trade embargo by launching a cryptocurrency. On Friday, he asked his Twitter followers whether he should also campaign to be British prime minister. The Dominican Republic’s Public Ministry said it had seized the weaponry onboard McAfee’s yacht when it docked on the country’s northern coast and McAfee, his wife Janice, and four associates were detained.. The customs authority said it found pistols, a shotgun and bars of suspected silver on the yacht, the Great Mystery.

Older Entries Newer Entries

Challenge and Choices Download