Churchill Archives - The Automatic Earth

The crew in the White House have no idea what the consequences will be of taking 25% of the world’s energy off-line.

It will be a disaster 1 million times worse than Covid.

LNG shipping rates soar 650% from $40,000 to $300,000 per day. https://t.co/21eDvpnoZ7
— Douglas Macgregor (@DougAMacgregor) March 6, 2026

https://twitter.com/EricLDaugh/status/2029740962369405166?s=20 https://twitter.com/AstronomyVibes/status/2029738545125150860?s=20 https://twitter.com/EvanLuthra/status/2029799159025521112?s=20

President Trump is more popular than Barack Obama and George Bush at this point in his Presidency

pic.twitter.com/kTCmrbadKF
— Benny Johnson (@bennyjohnson) March 5, 2026

https://twitter.com/AlexMasonCrypto/status/2029590536722751572?s=20

Nvidia just spent $4 billion on a technology 99% of people have never heard of.

But in 3 years, every AI data center on Earth will need it.

And Nvidia just LOCKED UP the supply.

Here's what happened:

Nvidia invested $2 billion in Coherent and $2 billion in Lumentum. You… pic.twitter.com/xCZiqeNEUq
— Ricardo (@Ric_RTP) March 6, 2026

Cuba.

• Trump to Rubio: Here’s Your Next Project (Sarah Anderson)

Donald Trump told Marco Rubio that he’s got a new project coming on Thursday, and no, I’m not talking about babysitting Kristi Noem, though, apparently, he’s doing that too. Trump welcomed the Inter Miami CF soccer club to the White House today, and there was a lot of talk about Cuba, as the club’s co-owners, brothers Jorge and José Mas, are of Cuban descent. After praising Rubio as the “best Secretary of State in the country’s history” and joking that he didn’t want him to get “too popular,” Trump said, “He’s doing some job, and your next one is going to be… special. He’s waiting, but he says, ‘Let’s get [Iran] finished first.’ We could do them all at the same time, but bad things happen. If you watch countries, over the years, you do them all too fast, bad things happen. We’re not going to let bad things happen.”

I look forward to working with Kristi Noem as Special Envoy for The Shield of the Americas — our new security initiative comprised of 13 countries.

Kristi has achieved incredible results as Secretary of Homeland Security and will be a tremendous asset in our effort to promote…
— Secretary Marco Rubio (@SecRubio) March 5, 2026

The “special” job is, of course, taking over Cuba (last week, Trump called it a “friendly takeover”). The president implied during his speech that it would happen in a couple of weeks, but he said we need to get Iran under control first. But Trump was adamant, as he has been for weeks, that Cuba will fall. Of the regime, he said, “They want to make a deal so badly. You have no idea.” If the Miami Herald is to be believed, the current hand-picked “president” of the nation, Miguel Díaz-Canel, is the holdout and “biggest obstacle,” but it sounds like if he doesn’t start negotiating, he could end up being Cuba’s biggest loser. Rubio is reportedly in talks with Raúl Castro’s grandson, as well as other people in the country’s so-called “government.”
Díaz-Canel actually spent his day at the Iranian Embassy, paying homage to Ayatollah Khamenei. These images are giving me major “defiant Nicolás Maduro before the January 3 raid” vibes. We know how that turned out. Unfortunately, there’s no warrant out for Díaz-Canel’s arrest. Trump also said today that soon, Cubans who live in the United States will be able to go back to their country, but given the current conditions, I can’t imagine a lot of people are super eager. On Wednesday, over two-thirds of the island suffered an extended blackout. While some power has been restored, word is that it could take days to fix it. Then again, sadly, I think the people in Cuba are used to it at this point. Many parts of the country go 20 hours a day without power. The regime blames Trump’s oil squeeze, but we all know what the real problem is. It starts with a “c” and ends with an “ommunism.”
I’ve been banking stories out of Cuba for the last few days for an update, but if I included every single one of them, this article would end up at about 8,000 words, so I’m going to pick the two biggies. So, we know that Mexico’s narco-president, Claudia Sheinbaum, was sending Cuba “humanitarian oil” last year and early this year before Trump put a stop to it by threatening more tariffs. In February, she began sending humanitarian aid instead. Tons of it — items like food and toiletries, while about a third of her own country lives in poverty. Many have condemned her actions, mostly because she sent the aid straight to the regime rather than the Catholic Church as our State Department has been doing.
Well, Azteca Noticias did some investigative work and found that those items are being sold wholesale in state or military-controlled stores that only accept U.S. dollars. For example, for $43, you could get about 30 kilograms or just over 66 pounds of dry beans. And so, people continue to go hungry. The other major news is that many countries in the region are cutting any sort of diplomatic ties with the Cuban regime. The most noteworthy in recent days is Ecuador, which declared Cuban Ambassador Basilio Gutiérrez persona non grata and gave him and his staff 48 hours to get the heck out of the country. Those staff members could be seen on the roof of the embassy burning papers on Wednesday.
Several other countries are also refusing to continue participating in Cuba’s forced labor program. Commies will tell you it’s a great humanitarian gesture in which Cuba sends doctors and other healthcare providers and professionals to underserved countries. But the fact is that these medical professionals are treated like garbage. Some have compared it to modern-day slavery. Meanwhile, the regime gets rich off what these countries pay for the services. Honduras just sent 168 people back home, and on Thursday, Jamaica announced that it was ending its relationship with the program after five decades. Trump said on Thursday that Cuba will definitely fall. It’s just a matter of time as to when. He acted as if it’s merely a scheduling conflict between handling that, Iran, and Venezuela. He makes it all look so simple. We are witnessing history here, folks, and I will continue to document it as much as I can.

“..the media participation was limited to column inches, punditry reports, claims and scripted presentations that worked alongside Zelenskyy, the actor..”

• Strange – CNN Found a War to Cover Again (CTH)

CNN is bragging about the teams they have on the ground in Iran and around the war zone to provide coverage for Operation Epic Fury. [SOURCE] Which again, brings up an interesting contrast that seemingly flew under the radar from past events.

As we noted in the beginning of the Russian war in Ukraine, where was the media for that one? Where was this CNN coverage for the war in Ukraine? The Ukraine war was the only war in modern history with ZERO mainstream media reports complete with helmets, flak jackets and play-by-play reporting of every moment within the conflict. Why? The answer is not necessarily complicated. The Ukraine war was a war of narratives. Yes, there was actual fighting, but the physical conflict itself was not in alignment with the narrative the media intended to create from it. The reality within Ukraine did not fit in the pert chart and the visuals would not ever have supported the claims.
Ukraine was/is the COVID-19 of wars. A western intelligence operation using the geography of Ukraine to push an agenda in alignment with western interests. It would not and does not serve the interests of truth and transparency for media to report from inside a battlespace that might contradict their claims. Hence, we labeled it “World War Reddit,” and it remains that way through today. Volodymyr Zelenskyy was installed by the same interests who triggered the conflict. As an outcome, the media participation was limited to column inches, punditry reports, claims and scripted presentations that worked alongside Zelenskyy, the actor, traveling all around the world promoting the conflict and raising money.
The physical battlespace was far less valuable than the EU/NATO and Intelligence Community narratives needed to maintain it. As soon as everyone started making money from the screenplay, maintaining ticket sales was prioritized over the performance itself. Criticism and critiques can be completely avoided by keeping the curtain down and just narrating what’s going on behind it. That system of deception continues through today. Strange that everyone just accepted it.

Says CNN.

• Trump’s Favorability With His Voting Base Tops All Previous Presidents (JTN)

Multiple new polls show President Donald Trump’s approval rating within his party is higher than any other president in history. “Republicans love Donald Trump more than any president’s own party’s supporters loved him at this particular point,” CNN’s Harry Enten told viewers Wednesday night. The poll, which found that at this point in his second term, Trump’s GOP approval sits at a remarkable 86%, while former presidents Barack Obama and George W. Bush were both at 77%. Strong approval within their own parties is now at 53% for Trump, again higher than Obama and Bush, whose strong approval ratings were 48% and 47% respectively. This approval comes despite other polls showing majority disapproval for Trump’s strike on Iran.

Trump’s approval rating held steady at 44%
A Fox News poll released in late January 2026 shows similar results: strong support persists among Republicans, with 85% approving overall and 97% among those identifying as MAGA (Make America Great Again, Trump’s slogan) supporters. Among all voters, Trump’s job approval rating held steady at 44% among registered voters, with 56% disapproving, unchanged from the previous month. That survey showed that Trump’s rating matches former President George W. Bush’s at a comparable point in his second term and exceeds Barack Obama’s by 2 points.
A president’s own party approval is a direct result of campaign promises coming to fruition. For Trump, there’s a substantial list thanks to his bullishness. President Trump’s campaign promise to secure the southern border has come to fruition through aggressive enforcement measures, resulting in negative net migration for the first time in 50 years and border crossings dropping to historic lows. Trump fulfilled his pledge to deliver major tax relief by signing the One Big Beautiful Bill Act, which extended his 2017 tax cuts, eliminated taxes on tips, overtime, and Social Security benefits, and provided significant reductions for working- and middle-class Americans.
The administration achieved record energy production and dominance by unleashing domestic drilling and deregulation, contributing to lower energy costs and positioning the U.S. as a leading global energy exporter. Trump successfully implemented policies ensuring that net job growth went primarily to native-born Americans through strict immigration enforcement, reversing trends from prior years. His commitment to massive bureaucracy cuts and government efficiency efforts has saved hundreds of billions of dollars, equivalent to substantial per-taxpayer relief, while reshoring trillions in investments to boost American manufacturing and economic growth.

“… the US, Israel and their allies – the “Epstein Coalition” as the Russian military bloggers are calling them…”

• The Sinking Ship Problem of the Epstein Coalition (Helmer)

The problem is that rats can leave a sinking ship but they cannot return if their ship has already sunk. They must surrender instead or drown. This must have been what President Vladimir Putin meant when he instructed his spokesman Dmitry Peskov to announce on Thursday afternoon, March 5: “Moscow has not received any requests for assistance, including weapons provisions, from Iran, Kremlin Spokesman Dmitry Peskov said in a briefing. ‘As for the current situation, there have been no requests from Iran. Our consistent position is well-known to everyone. It remains unchanged,’ he pointed out, when asked if Russia planned to provide any assistance to Iran, particularly by providing weapons, in addition to political support.”

In other words, Russian military intelligence must have told the Kremlin that the war aims of — are failing to decapitate Iran’s civilian and military leadership; failing to destroy their missile stocks and underground launcher capacities; and failing to detect, intercept and prevent the escalating destruction of Iran’s counter-attack targets in the US base system, the Gulf Arab economies, and Israel itself. Accordingly, the Russian assessment is that Iran will not need to request military resupply and other assistance from Russia. Not yet — because the attrition of the Epstein Coalition forces is so rapid, they will be compelled to ask for a stop before Iran will need to ask for Russian assistance.
This is not the interpretation of Russian plans by the Trump Administration. At his Pentagon briefing on March 4, the US Secretary of War, Peter Hegseth, was asked by a reporter: “What is your message to Iran’s allies, namely Russia and China, who have called for an immediate end to hostilities?” Hegseth replied: “I don’t have a message for them and they’re not really a factor here and we’re – our issue is not with them; it’s with the nuclear ambitions of Iran.” Peskov’s announcement followed after Hegseth’s. Since Russian and Iranian officials know exactly what they have been discussing with each other, before the war began and since, Peskov cannot have been addressing Iran. Was he then messaging Washington for reassurance that “our consistent position… remains unchanged”? Was Hegseth correct that this means Russia has not entered the war on Iran’s side and will not do so?
This is the sinking ship question. It remains to be answered whose ship is sinking. It is unclear if Peskov’s message is the same as the Russian Foreign Ministry’s. Reading in retrospect and between the lines of the Ministry communiqués after Foreign Minister Sergei Lavrov’s first telephone call with Abbas Aragchi, Iran’s Foreign Minister, on February 28 and his second call on March 3, there is ambiguity. In the first call Aragchi briefed Lavrov on Iran’s “steps to repel the aggression by the United States and Israel” and “expressed sincere gratitude to the Russian Federation for invariable and solid support.” That last phrase implies Russian intelligence, air defence radar, missile battery, and electronic countermeasures support, plus missile targeting and guidance in the counter-offensive.
In the second call, Lavrov has reported himself as having “reaffirmed Russia’s principled position in support of de-escalation, rejection of force, and a transition to a political and diplomatic settlement of the conflict.” Transition means not yet.Lavrov’s spokesman, Maria Zakharova added on the next day, March 4: “We are convinced that the crisis surrounding Iran has no military solution. We strongly call for the abandonment of forceful methods and a return to political and diplomatic resolution of all issues.” Zakharova also announced that a special operation is under way for five border crossings between Iran and Turkmenistan to open for the northbound evacuation of Russians in Iran. This means that the same routes are now open for Russian military supplies to move southward to Iran, when or if they may be needed. When or if — this is the key to Russian decision-making in the days ahead.

“If you are feeling dumb today, just remember, there are real people who believe Iran is winning.” —Cam Higby on “X”

• The Rockets Red Glare (James Howard Kunstler)

You probably wonder what the end of this war will look like. It won’t look like V-J Day in Times Square, 1945, with sailors kissing girls they met five seconds ago. Our country is way too divided and disturbed with politically-inflected mental illness for love to bloom in the streets like it did then. If you happen to catch the glum crew on CNN you will detect that they really want this operation to fail because, you know, Trump. The war will be over when Iran loses the ability to spray missiles and drones all over the place — and notice how they are pouring it on the Emirate states, Saudi Arabia, Kuwait, Iraq, and even Azerbaijan, for Gawdsake, turning would-be bystanders into pissed-off additional enemies they need like a hole in the head.

At some point they will run out of ordnance, or the will to roll them out of the supposed 10,000 bat caves their weapons are stashed in. Our side apparently has an uncanny knack for seeing the launchers creep into daylight and efficiently blowing them up. Creates a disincentive to even think about launching. Of course, Iran might have some spectacular last-ditch thingie they can unleash to horrify the world — perhaps a “dirty” bomb that uses the 460 kilos of 60-percent enriched uranium they bragged about at one of the last negotiation sessions before the war with Witkoff and Kushner. Standing by on that.
But, at some point a week or so hence, a stillness will fall upon the earth and sky above Iran, and that will be all she wrote for sheer havoc. Victory will not look much like anything. Just that stillness. The body politic in Iran is another matter. Expect awful turmoil. Iran’s command structure is shattered. Officials don’t dare pick a room in some building to meet in. The Internet is down and most communication with it. Nobody knows who is really in charge, and nobody may be in charge, not for quite a long time to come.
Let’s hope we have the patience to let the Iranians sort out their own governing structure, and that it will be made up of people who are not insane, not fanatics of the martyrdom cult that has ruled the place for fifty years. It’s probably not part of the US plan to slaughter the Revolutionary Guard, or Sepah, the chief apparatus of despotic control in the country. Or the Basij, (Sâzmân-e Basij-e Mostaz’afin, which means “Organization for the Mobilization of the Oppressed”), an auxiliary volunteer paramilitary militia that acts as the “morality police” and cracks down on dissent. Hundreds of thousands are employed by these groups.
You might imagine circumstances in which the members of those dastardly outfits decide to peel away from them, sensing a loss of legitimacy and danger in remaining on-board. Surely, a lot of Iranians will have blood in their eyes, looking for scores to settle, just as the people took revenge on members of the Shah’s secret police, the Savak, after the 1979 Islamic Revolution. Even now with the bombs still falling in Tehran (perhaps even because of them), many ordinary Iranians are dancing in the streets. You must suppose there is massive opposition to the regime. But first, chaos.
Why would we feel any necessity to put “boots on the ground” in there? Why expose American troops to the factional fighting that is apt to break out, as it did in Iraq? Did we not learn the lessons of Fallujah? Wouldn’t it be enough that Iran just loses its ability to fire weapons at anyone? Loses its ability to mess with shipping in the Persian Gulf? And loses its ability to foment mischief in other countries, including any ideological influence it might still have, or any financial mojo for sponsoring terrorism? Can we not just stand by and let the Iranians figure out their own future?
Try imagining a peaceful Iran not bent on exporting Jihad (just like you might imagine a peaceful Ukraine, not making itself a problem for the rest of the world). Forgive the cliché, but Iran (a.k.a. Persia), is an old and durable culture, with a highly educated population, one of the world’s largest oil-and-gas reserves, and plenty of other resources. Iran could be somebody. It doesn’t have to be a bum with a one-way ticket to Palookaville.
As for our own country, too many people here are busy wolfing down the black pills with their Adderall and their Starbucks iced lavender cream chai. It’s actually possible that there is a satisfactory outcome to this Iran operation. Would that disappoint you — as it apparently disappoints the glum crew at CNN? As with Iran, it doesn’t pay to be insane, and something close to half of America is insane. That perturbation is mostly lodged in the American Left these days, the Democratic Party, devoted to a long list of ideas and propositions at odds with reality and locked into a strange willful hysteria that regards any kind of good faith as poison. That is exactly why we can’t have clean elections. How about fixing that?

“Keep an eye on Russia. Ignore the western media narratives and look for direct source information on Russian oil activity. Let them work and just keep watching.”

• President Trump: ‘No Deal with Iran Except Unconditional Surrender’ (CTH)

The U.S. and Israel have been targeting deep underground missile sites within Iran, with strong success. Iranian counterstrikes, missile & drone launches are down 80 to 90 percent according to Pentagon officials. Additionally, the Israeli military has reported they dismantled an underground bunker system in Tehran used by regime leadership. Originally the bunker was used by slain Supreme Leader Ayatollah Ali Khamenei underneath the leadership compound in central Tehran. The bunker was targeted by 50 Israeli fighter jets and subsequently destroyed. President Trump announced via Truth Social that he will not seek any terms with Iran other than unconditional surrender.

Meanwhile, in a somewhat predictable move, Treasury Secretary Scott Bessent has announced the U.S. will lift some sanctions on Russian oil exports in order to mitigate shortfalls. India will be permitted to purchase additional Russian oil for use in their refineries. The gasoline end products will then be sold into the market. BESSENT: “President Trump’s energy agenda has resulted in oil and gas production reaching the highest levels ever recorded. To enable oil to keep flowing into the global market, the Treasury Department is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil. This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorizes transactions involving oil already stranded at sea. India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of U.S. oil. This stop-gap measure will alleviate pressure caused by Iran’s attempt to take global energy hostage. (more)”
Strategically, it has always appeared that President Trump wanted to remove the sanctions against Russia as part of a negotiated peace deal with Ukraine. However, the intransigence of Ukraine and the EU had blocked that move. I would anticipate at some date the U.S. will use the opportunity of global need as a justification to permit more Russian oil to be sold into Western markets. This approach will not make Ukraine or the EU happy; however, it could be structured to put petrodollars back in control of Russian oil sales. That approach would further weaken China and the BRICS assembly who have been purchasing energy products in domestic exchange currencies.
The U.S., Venezuela and Russia could increase output and replace the missing oil production from the middle east region. This would stabilize markets. Although, the politics of that approach would face stiff opposition. What seems very likely is that Bessent, Rubio and Trump have a plan. If there’s one person in U.S. politics who understands how to use oil to financially mitigate any geopolitical impacts, it’s President Trump. Keep an eye on Russia. Ignore the western media narratives and look for direct source information on Russian oil activity. Let them work and just keep watching.

“.. the Supreme Court effectively reduced many of the charges to mere trespass in later litigation, rejecting obstruction claims.”

• Virginia Dems Move to Require Teaching Jan. 6th as an Insurrection (Turley)

Virginia Democrats are moving to require teachers to tell students that Jan. 6th was an “insurrection” and effectively bar them from referencing “peaceful protests” or election irregularities. The characterization of the riot as an insurrection is historically and legally false. However, any parents who want to send their children to Virginia public schools would have to accept this form of indoctrination as part of their children’s education.

In the last election, Democrats campaigned as moderates, including Abigail Spanberger. Once in control of the Governor’s mansion and the legislature, however, they have moved quickly to the far left in a flurry of measures. Democratic legislators just voted themselves almost a 300% increase in salaries. They will need it. They are moving to increase taxes on ride shares, concerts, counseling, leaf blowers, Amazon deliveries, DoorDash, Uber Eats, ammunition, and other areas. However, HB 333, drafted by Del. Dan I. Helmer of Fairfax, raises serious concerns over academic freedom and free speech. The summary of the bill mandates “a program of instruction on or relating to the January 6, 2021, insurrection at the United States Capitol” and further:
“prohibits any such program of instruction, any accompanying curriculum or instructional materials, or any instruction provided by a teacher as a part of such program of instruction from (i) describing, portraying, or presenting as credible a description or portrayal of the actions precipitating or involved in the January 6, 2021, insurrection as peaceful protest or (ii) stating, suggesting, or presenting as credible a statement or suggestion that there was extensive election fraud that could have changed or actually changed the results of the 2020 presidential election. The bill requires any such program of instruction, any accompanying curriculum or instructional materials, or any instruction provided by a teacher as a part of such program of instruction to describe the January 6, 2021, insurrection at the United States Capitol as an unprecedented, violent attack on U.S. democratic institutions, infrastructure, and representatives for the purpose of overturning the results of the 2020 presidential election.”
Soon after Jan. 6th, I condemned the riot but rejected the argument that this was an insurrection. However, it soon became part of an orthodoxy in politics and academia despite the fact that the public rejected it. As former House Speaker Pelosi declared, “It is essential that we preserve the narrative of January 6th.” Yet, “insurrection” and “sedition” are legal terms. They have a meaning. The FBI investigated thousands after January 6th and charged hundreds. Not one was charged with insurrection or conspiracy to overthrow the country. The vast majority are charged with relatively minor offenses of trespass or unlawful entry or property damage- the type of charges that are common in protests and riots.
Indeed, the Supreme Court effectively reduced many of the charges to mere trespass in later litigation, rejecting obstruction claims. Faced with a collapsing historical and legal narrative, Democrats are now moving to simply indoctrinate students that this was an “insurrection.” Notably, Helmer is running again for Congress after Democrats, with the support of Gov. Spanberger, moved to reduce Republicans in the state (which is divided down the middle between the parties) to just one of eleven districts through gerrymandering.
Helmer is running in one of the most notorious new districts, called the “lobster” or the “scorpion,” because it runs from the Potomac River in Arlington southwestward, then splits into two “claws” toward the West Virginia line near Rawley Springs and Goochland and Powhatan. In my book, Rage and the Republic: The Unfinished Story of the American Revolution, I discuss the radicalization of the American left. While many on the left advocate censoring “disinformation,” they are far less circumspect in promulgating their own disinformation.Likewise, where Democrats have objected to the pressure put on universities for greater diversity of viewpoints as an attack on academic freedom, these Democrats see no problem in mandating the teaching of positions that are demonstrably false.
Here, Rep. Helmer and other Democrats are mandating the teaching of a false narrative to children rather than simply relying on public debate. The reason is that they are losing the debate over the characterization of this riot as an actual insurrection. This, and other moves on the left, will only accelerate the exodus of families from public education. Notably, Fairfax County (which Helmer represents) has seen a sharp fall in enrollments in recent years.

Walz, Ellison, Omar et al.

• James Comer Suggests Criminal Referrals Are Possible In Minnesota Fraud Probe (JTN)

Chairman James Comer, who leads the House Oversight Committee, told Just the News that further criminal referrals are possible with the evidence his committee has uncovered of the rampant welfare fraud in Minnesota. A new report from Comer’s committee, released on Wednesday, concluded that senior Minnesota government officials, including Gov. Tim Walz and Attorney General Keith Ellison, were for years aware of claims of widespread fraud in the state’s federally funded welfare programs, but failed to act, other than to retaliate against whistleblowers, Just the News reported. Comer told Just the News that he has already shared those findings with the Justice Department.

“We’ve given [the Justice Department] the report today that shows Walz and them knew. I don’t know that it’s a crime. Incompetence isn’t a crime, unfortunately…but at the end of the day, if some of these fraudsters implicate a coordination with Attorney General Ellison or Governor Walz, then I think that you could see some referrals from the committee,” Comer said on the Just the News, No Noise TV show on Wednesday. Governor Walz, who was also the Democratic nominee for vice president in 2024, previously acknowledged there is fraud in his state, but said his administration has made it a priority to root it out for years.
He appeared at an Oversight Committee hearing on Wednesday alongside Ellison where he again defended his handling of the fraud allegations, touting the federal prosecution of more than 75 defendants, but struggled to answer why his own government did not take action against the suspected fraudsters after his office was informed of suspicious activity. “I have watched with dismay as members of this Committee have made unfounded allegations that I am somehow complicit in defrauding Minnesota programs,” Walz said in his opening statement before the committee. “As a former member of Congress, I know that this institution can be better than these evidence-free accusations levied for nakedly partisan reasons,” he said, before reiterating a commitment to work with Congress and federal prosecutors to root out fraud.
However, the Oversight Committee believes the evidence shows the opposite, that Walz and his senior officials knew about the fraud concerns from the very beginning of his tenure and ultimately failed to act to address it before facing public backlash and pressure from the federal government in recent months. That evidence comes from testimony gathered by the committee from nine current and former Minnesota state officials who oversaw the benefits programs within the Minnesota Department of Education (MDE) and the Department of Human Services (DHS), the two government bodies that oversaw the programs at the center of the fraud allegations.

No company can force the hand of a government. If it does. it IS the government. Shouldn’t his model have told him that?

• Anthropic CEO Apologizes For ‘Dictator Trump’ Meltdown Memo (ZH)

As Anthropic attempts to salvage their relationship with the Trump administration, CEO Dario Amodei publicly apologized Thursday for the inflammatory tone of his leaked internal memo that accused the White House of targeting his company because it hadn’t offered “dictator-style praise” to President Trump. The apology came in his first major interview since the Pentagon’s Department of War (DoW) formally designated Anthropic a supply chain risk to national security – effective immediately – marking the first time such a label has been applied to a U.S. company.

The March 5 designation, confirmed in a letter to Anthropic leadership, stems from weeks of failed negotiations over Claude AI’s military applications. Anthropic refused to drop strict red lines prohibiting the model’s use for mass domestic surveillance of Americans or fully autonomous lethal weapons, insisting on meaningful safeguards rather than what Amodei previously called “safety theater” in rival deals like OpenAI’s. Defense Secretary Pete Hegseth had threatened broad restrictions, including barring defense contractors from any commercial activity with Anthropic, but the company clarified the scope appears narrower: it primarily affects direct DoW-related work, with partners like Microsoft confirming continued availability for non-defense uses.
Last Friday, the Trump administration ‘fired’ the company after a bruising dispute with the Pentagon came to a head over ethical concerns surrounding Claude’s military use. The Pentagon demanded to use ClaudeAI for “any lawful purpose” with no guardrails – or having to allegedly ask permission in a life-or-death scenario. In the interview with The Economist Amodei described the crisis as one of the most “disorienting” in Anthropic’s history. He attributed the leaked memo – written hastily on Slack amid rapid-fire events including Trump’s announcements and OpenAI snaking their contract – to confusion and panic from a “difficult day.”
“It does not reflect my careful or considered views,” he said, downplaying it as a casual internal message rather than a formal memo. He said he’d apologized to DoW personnel and signaled openness to further dialogue with administration figures, though he sidestepped a direct personal apology to Trump. Amodei’s Thursday mea culpa was accompanied with a blog post titled: “Where things stand with the Department of War,” where he emphasized shared interests with the military, offered Claude at nominal cost plus engineer support for warfighters, and highlighted ongoing “productive conversations” despite the label.
I also want to apologize directly for a post internal to the company that was leaked to the press yesterday. Anthropic did not leak this post nor direct anyone else to do so—it is not in our interest to escalate this situation. That particular post was written within a few hours of the President’s Truth Social post announcing Anthropic would be removed from all federal systems, the Secretary of War’s X post announcing the supply chain risk designation, and the announcement of a deal between the Pentagon and OpenAI, which even OpenAI later characterized as confusing. It was a difficult day for the company, and I apologize for the tone of the post. It does not reflect my careful or considered views. It was also written six days ago, and is an out-of-date assessment of the current situation.”

“Orban, meanwhile, has taken to social media to issue his own warning. “There will be no deals, no compromise. We will break the Ukrainian oil blockade by force,”

• Zelensky Issues Military Threat to Orban (RT)

Ukraine’s Vladimir Zelensky has issued an apparent military threat to Hungarian Prime Minister Viktor Orban over the ongoing refusal by Budapest to lift a veto on billions in loans underwritten by EU members for Kiev. Orban last month blocked a planned €90 billion ($106 billion) emergency loan raised by EU members for Kiev – following the bloc’s failure to agree on outright stealing billions in Russian assets frozen in Belgium. Orban took the step in response to Ukraine preventing key Russian oil supplies from reaching Hungary via the Druzhba pipeline.

Speaking on new weapons for Kiev’s armed forces on Thursday, Zelensky stated: “We hope that one person in the EU will not block the €90 billion… Otherwise, we will give the address of this person to our armed forces, to our guys, so that they call him and communicate with him in their own language.” The diplomatic dispute between Hungary and Ukraine has escalated in recent weeks, spilling over into personal barbs. Zelensky launched a string of attacks against Orban, including fat-shaming him during the Munich Security Conference last month.
https://twitter.com/BGatesIsaPyscho/status/2022635714953789612?s=20
The Hungarian prime minister has long opposed Ukraine’s push to join the EU, and has repeatedly refused to send it weapons or approve EU military aid, calling for diplomacy instead. Orban, meanwhile, has taken to social media to issue his own warning. “There will be no deals, no compromise. We will break the Ukrainian oil blockade by force,” he wrote on X on Thursday, adding that oil will soon flow to Hungary again through the Druzhba pipeline.
The Soviet-era pipeline, part of which runs through Ukraine, went offline in January after Kiev claimed it had been damaged by Russian strikes – accusations Moscow denies. Hungary and Slovakia, both heavily reliant on Russian energy, have accused Kiev of deliberately cutting them off for political reasons and inventing obstacles for restarting oil flows. Zelensky has issued threats against foreign leaders and officials before. Last year, he suggested that Russia’s top officials should check for bomb shelters, hinting that Ukraine could target the Kremlin. Russian presidential spokesman Dmitry Peskov called the comments “irresponsible.”

“..a loan with no payback clause..”

• Orban Intercepts Zelenskyy’s Money Laundering Operation (CTH)

Ukraine (Zelenskyy) was angry at Hungary (Orban) for blocking the €90 billion EU loan (a loan with no payback clause) which was backed by confiscated Russian sovereign wealth funds. A splendidly European financial scheme. To get back at Viktor Orban, Volodymyr Zelenskyy destroyed an oil/gas pipeline hub in Ukraine that transferred Russian oil to Hungary and Slovakia (Robert Fico). Hungary and Slovakia were furious, and Zelenskyy said repairs were too complicated to be easily fixed. Viktor Orban and Robert Fico then doubled down on blocking Ukraine funds and Ukraine’s assentation to the EU.

When Zelenskyy was questioned about Hungarian or EU inspectors visiting the site to evaluate the repairs, Zelenskyy said they would not be allowed access. Zelenskyy further noted when he was told Patriot Missiles were in short supply, he did not get to visit the inventory; implying his lies were similar to lies told by the United States. Caught in a lie, Zelenskyy followed up by saying he didn’t care, it was Russian oil so get lost. Two days ago, Hungary then intercepted two Ukraine vans carrying $40 million in cash dollars, €35 million in cash Euros, and 9 kg of gold – presumably a money laundering transfer intended to fund Zelenskyy and his intelligence chiefs.
Hungarian Foreign Minister Péter Szijjártó stating that “since January, $900 million and €420 million in cash, as well as 146 kilograms of gold, have been transported across Hungary.” The shipment apprehended by Hungary included 40 million U.S. dollars as well as 35 million euros and 9 kilograms (19.8 pounds) of gold — worth around $1.5 million at current prices — according to a separate statement by Oschadbank. Hungary’s National Tax and Customs Administration confirmed Friday that it had detained the Ukrainian citizens and seized the two armored cash-transport vehicles. It added it was conducting criminal proceedings on suspicion of money laundering. {LINK}
Upon hearing of the intercept yesterday, a highly angered Volodymyr Zelenskyy then threatened to send Ukraine “special military operators” to the home of Viktor Orban to extract revenge. Zelenskyy’s threat caused the European Commission to issue an unusual rebuke of the Ukraine dictator. “Specifically in relation to the comments made by President Zelenskyy, we are very clear as the European Commission that that type of language is not acceptable. There must not be threats against EU member states,” Commission deputy chief spokesperson Olof Gill told reporters Friday, in a rare condemnation of the leader in Kyiv. {link}
Zelenskyy, with pants down and visibly on fire, now missing all the money/gold, retreats from the originating position that started this mess and says he will repair the oil transfer station he destroyed, if Hungary will permit Ukraine to get the €90 billion loan (not a loan) from the Russian sovereign wealth fund.

“Before the Iron Curtain: The centuries-old roots of the Russia–Europe rift ..”

• Churchill Wasn’t The First: Europe’s War On Russia Is Centuries Old (Norin)

In 1946, Winston Churchill’s Fulton Speech symbolically marked the beginning of the Cold War between the Western world and the Soviet Union. Since then, relations between Russia and the West have been fraught with tension. In recent years, this culminated in a strong and almost existential antagonism. Surprisingly, just a while ago, Russia viewed Europe as a natural ally. For two decades following the collapse of the USSR, there was a belief that Russia and Europe have a promising future together. Russian energy resources and European technology seemed like a perfect match, and Europe was commonly considered to be a model, both in terms of lifestyle and organizational efficiency.

That optimism turned out to be fleeting. Unfortunately, the roots of Russian-European opposition run much deeper. Ideas about isolating, colonizing, or even breaking up Russia didn’t emerge recently, and weren’t even invented by Adolf Hitler.
Prisoners of geography
One defining characteristic of Russia is its geographical position, which has historically influenced the decisions of its leaders and its overall policy. Russia is located on the edge of Europe, making connections with the rest of the European continent challenging. Throughout the centuries, this has affected relations between Russia and Europe, giving rise to unrealistic expectations, illusions, and persistent mutual fear. Russian foreign policy has long been shaped by efforts to break through this ‘cordon sanitaire’.
At the turn of the 15th and 16th centuries, several global developments occurred at around the same time. Europe discovered the great wide world, and as a result, soldiers, traders, and missionaries left its borders. Europeans didn’t just discover new lands – they were intent on carrying the word of the true faith there. Those who were willing to listen became part of the Christian world (although they were granted lesser roles within it), and those who resisted became enemies. However, while European missionaries erected crosses on the shores of America and India, movements spread within Europe that were initially considered heresies. Protestantism spread rapidly across the Old World, and intense religious conflicts raged in Europe.
Ignorant of these troubles, Rus’ was preoccupied with its own affairs. The country had cast off the Mongol yoke and was piecing itself together after centuries of foreign domination. It was during this period that emissaries from Western Europe arrived, including representatives from Rome. Their main goals were to persuade Rus’ to join the fight against the Islamic world, particularly the Ottoman Turks, and enter into a union with Rome. Initially, Catholics felt inspired by Russia – here was a vast and already Christian nation, which needed only some guidance along the right path.

“Winston Churchill’s Fulton address was a signal for the Iron Curtain to drop, and for nukes to almost drop as well..”

• This Speech Started The Cold War – Still Haunts The World 80 Years On (Amar)

Eighty years ago, on March 5, 1946, one of the most famous leaders of World War Two delivered a fairly short but stern message which helped lock humanity into a future of open-ended and high-risk Cold War. That was the essence of former British Prime Minister Winston Churchill’s Fulton Speech (if we name it after the small midwestern US college town where he gave it), also known as the Iron Curtain Speech (after its key claim).

A massive political, ideological, and last but not least, military barrier had come to divide post-World War Two Europe, Churchill argued, and it was all the wicked Soviets’ fault: They had broken the Grand Alliance with the West by taking control of “the ancient states of Central and Eastern Europe,” he charged. In the face of this “Soviet sphere” and the aggressive strategies seeking to expand it even farther, Churchill warned, a Western policy of “balance of power” would be ineffective and lead to “catastrophe.” Instead, he urged, the “Western Democracies” needed to “stand together” in order to – Churchill clearly implied – deter the Soviets, who in his view respected only strength, especially of the military variety.
Well lubricated with shameless flattery for American President Harry Truman, who had travelled far to be in the audience and had a hand in setting up the speech, as well as for the US in general – at its “pinnacle of world power” – the Fulton Speech also pitched Churchill’s own, badly declining Britain as a junior but special sidekick to the Americans in their “primacy.” Unfortunately, that too came to pass.
Short and – in its recommendations – really quite generic as it was, Churchill’s intervention, speaking in the middle of nowhere in what is now called fly-over country, has a secure place of honor in naively admiring accounts of the West’s Cold War. There, it is still celebrated as an example of looking unflinchingly at harsh realities, a valiant call to arms, and a wise policy recommendation. Even those less sentimentally inclined still consider the speech necessary and the strategy of containment that it was effectively selling, inevitable.
That however is lazy thinking. For more reasons than one: Most obviously, the old Cold War was extremely costly as well as outrageously perilous. In the end, it lasted for four decades, before it ended with a negotiated settlement, initiated by the Soviet Union, in the late 1980s (no, the Cold War did not end in 1991, whatever ideology-contaminated Wikipedia says). Over almost half a century, this Cold War of the last century could, all serious observers have long understood, easily have ended with World War Three instead, including a world-ending use of nuclear weapons. In that entirely possible scenario, I would not be here to write this, and you would not be here to read it. And everything around us would be missing as well.

Jensen Huang just validated Elon Musk’s entire ecosystem in a single breath.

Not one product. All of it.

Huang: “The work he’s doing in Grok, self-driving cars, and Optimus. These are all world-class. Every single one of them is revolutionary. Every single one of them is going… pic.twitter.com/S9dz3pqpnj
— Dustin (@r0ck3t23) March 6, 2026

Elon Musk laid out the most ambitious compute expansion in human history and it ends with harnessing the Sun

"We'll be launching with SpaceX orbital data centers at the 100 to 200 gigawatt per year level. Not cumulative; I mean per year"

And this is just step one, the next step… pic.twitter.com/HmSCKvuZvi
— X Freeze (@XFreeze) March 6, 2026

Every price tag on every product in Europe is about to be repriced.

Elon Musk just confirmed the timeline. Most people scrolled past it.

Musk: “We’ve got the Tesla Semi coming up, so the Tesla heavy truck. And that’ll be going to Europe, hopefully next year.”

Most people are… pic.twitter.com/puNJmQ5HMg
— Dustin (@r0ck3t23) March 5, 2026

Dark matter https://twitter.com/AstronomyVibes/status/2029551805097808281?s=20

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Debt Rattle June 13 2020

Jun 132020

June 13, 2020 Posted by Raúl Ilargi Meijer at 11:04 am Finance Tagged with: airborne, CDC, Churchill, coronavirus, Covid19, endemic, face masks, Flynn, M4A, Mayans, Oscars, prosecution, subpoena, testing, Yemen 28 Responses »

Gustave Doré Dream of the Eagle (Dante’s Purgatory) 1868

• 32 Yemen Doctors Die Of Coronavirus (MEM)

• Italian Prosecutors Question PM Conte For 3 Hours Over Virus Response (R.)

• June 12 COVID-19 Test Results (McBride)

• CDC Warns Restrictions May Be Needed Again If US COVID-19 Cases Spike (R.)

• Seattle Coronavirus Survivor Gets A $1.1 Million, 181-Page Hospital Bill (ST)

• No Country for Old Men (Ben Hunt)

• Churchill Statue Boarded Up Ahead Of Expected UK Protests On Saturday (R.)

• Films Aiming To Win Oscars Will Need To Meet Diversity Criteria – Academy (R.)

• The American Press Is Destroying Itself (Taibbi)

• The Party of Chaos and Falsehood (Jim Kunstler)

• Lawyer For Flynn Judge Says Court Will Eventually Dismiss The Case (JTN)

• Judges Appear Skeptical Of DOJ Move To Dismiss Flynn Case (Fox)

• Graham Granted Significant Subpoena Power For Russia Probe Investigation (JTN)

• Some Claim Mayan Calendar Was Wrong, ‘World Will End On June 21’ (Mirror)

Worldometer reports new cases for June 9 (midnight to midnight GMT+0) at + 140,917. New record.

My count from about 6 am EDT to 6 am EDT is + 141,854 cases.

New cases past 24 hours in:

• US + 27,221
• Brazil + 25,982
• Russia + 8,706
• India + 11,320
• Pakistan + 6.472
• Chile + 6,754
• Mexico + 5,222

US coronavirus deaths

90 days ago: 58 deaths
80 days ago: 704 deaths
70 days ago: 7,152 deaths
60 days ago: 23,649 deaths
50 days ago: 49,887 deaths
40 days ago: 67,682 deaths
30 days ago: 84,118 deaths
20 days ago: 97,087 deaths
10 days ago: 106,180 deaths
Today: 116,831 deaths

• Cases 7,763,875 (+ 141,854 from yesterday’s 7,622,021)

• Deaths 428,734 (+ 4,409 from yesterday’s 424,325)

⚠️AIRBORNE is the “dominant” route for the coronavirus transmission! New PNAS paper by a Nobel laureate’s group concludes this based on study of several studies and how transmission wasn’t truly slow until mask rules went into place. MASKS FOR ALL, please. https://t.co/nmergxbW20

— Eric Feigl-Ding (@DrEricDing) June 12, 2020

From Worldometer yesterday evening -before their day’s close-:

From Worldometer:

From COVID19Info.live:

The number only becomes significant when you read that only 560 patients have been reported.

• 32 Yemen Doctors Die Of Coronavirus (MEM)

Some 32 doctors in Yemen have died as a result of the coronavirus, the Yemeni Physicians and Pharmacists Syndicate announced yesterday. Doctor Mohammed Ahmed Seif was the latest fatality, he died in the southern province of Taiz. “Seif is the 32nd martyr from coronavirus,” the syndicate said in a statement. By Wednesday, a total of 560 people were reported to have been infected by the virus, 129 of whom have died and 23 have recovered, according to official data. The data does not include the Houthi-controlled areas, which were reported to have registered a total of four infections and one fatality, though many fear the actual number is far higher.

On Monday, the United Nations (UN) said that the mortality rate from the virus in Yemen was “alarmingly increasing”, warning of what it described as a “deteriorating health system”. Since 2014, Yemen has been suffering from an ongoing war between pro-government forces and the Houthis, who have captured most of the north, including the capital, Sanaa.

What’s the use of this? Is it not a case for Parliament instead?

• Italian Prosecutors Question PM Conte For 3 Hours Over Virus Response (R.)

Italian Prime Minister Giuseppe Conte was questioned by prosecutors on Friday about the country’s response to its coronavirus outbreak, which has killed more than 34,000 people. The prosecutors from Bergamo, one of the northern cities hit hardest by the pandemic, are looking into why badly affected small towns around the city were not locked down earlier in the outbreak, when infections were rising fast. Conte, who was questioned as a witness for three hours in his office in Rome and is not under criminal investigation, later told reporters via his spokesman: “I wanted to explain every stage to the smallest detail.” Prosecutors also questioned Interior Minister Luciana Lamorgese and Health Minister Roberto Speranza.

In interviews with several Italian newspapers on Friday, Conte said he would tell prosecutors everything he knew and was not worried by the possibility he could be personally investigated. If that did happen, it would be likely to weaken an already fractious coalition government and add fuel to already frequent speculation that Conte may be pushed out despite his high personal approval ratings in opinion polls. Prosecutor Maria Cristina Rota said the meeting had taken place “in an atmosphere of great calm and institutional collaboration”. The region of Lombardy, which includes Bergamo, was the original epicentre of Italy’s virus outbreak and has remained by far the worst hit of its 20 regions, accounting for about half of its total deaths and most new infections.

The decision not to isolate Bergamo and the surrounding towns has been one of the most contentious episodes, with the central government and Lombardy’s regional authorities each saying the other was responsible. In Lombardy, which is led by the right-wing opposition League party, the Bergamo prosecutors have already interrogated the regional president and health chief. League leader Matteo Salvini was quick to seek political capital from Conte’s interrogation, tweeting that it was Rome’s decision not to set up a so-called “red zone” to seal off Bergamo and enforce it with the army and police. “Now we expect that Conte will at least apologise to the relatives and the friends of too many Bergamo citizens who have died,” he tweeted.

US still not testing nearly enough. Like so many other countries. Without testing there’s no crushing the curve.

• June 12 COVID-19 Test Results (McBride)

Note: I started posting this graph when the US was doing a few thousand tests per day. Clearly the US was way under testing early in the pandemic. I’ll continue posting this graph daily at least until the percent positive is continuously under 3% and the daily positive is significantly lower than today.

The US is now usually conducting over 400,000 tests per day, and that might be enough to allow test-and-trace in some areas. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections, so the US still needs to increase the number of tests per day significantly. According to Dr. Jha of Harvard’s Global Health Institute, the US might need more than 900,000 tests per day . There were 583,961 test results reported over the last 24 hours. This was a new high for the number of test results reported (some states might have had a data dump). The percent positive over the last 24 hours was 4.1% (red line).

Except for protests.

What on earth will happen if a new lockdown is declared? Should have done the first one right.

• CDC Warns Restrictions May Be Needed Again If US COVID-19 Cases Spike (R.)

U.S. health officials on Friday urged Americans to continue adhering to social distancing and other COVID-19 safety measures, and warned that states may need to reimpose strict restrictions if COVID-19 cases spike. In recent weeks, experts have raised concerns that the reopening of the U.S. economy could lead to a fresh wave of infections. About half a dozen states, including Texas and Arizona, are grappling with a rising number of coronavirus patients filling hospital beds. Officials from the U.S. Centers for Disease Control and Prevention (CDC) said the public should continue to maintain 6 feet of social distance, wash hands regularly and wear facial coverings to reduce the risk of infection.

“If cases begin to go up again, particularly if they go up dramatically, it is important to recognize that more mitigation efforts such as what were implemented back in March may be needed again,” said Jay Butler, the deputy director of infectious diseases at the CDC, who spoke to reporters along with CDC Director Robert Redfield. As the United States reopens its economy, a number of U.S. states, including Texas, Arizona and Florida, have relaxed social distancing guidelines in recent weeks. Many U.S. states also do not require residents to wear protective masks. Most Americans support stay-at-home orders and said they always or often wear face coverings in public , according to an online survey conducted early May of over 2,000 adults in New York City and Los Angeles. Most also said they would feel unsafe if restrictions were lifted.

In the history books this will be known as: “How Medicare for All Got Started.”

• Seattle Coronavirus Survivor Gets A $1.1 Million, 181-Page Hospital Bill (ST)

Remember Michael Flor, the longest-hospitalized COVID-19 patient who, when he unexpectedly did not die, was jokingly dubbed “the miracle child?” Now they can also call him the million-dollar baby. Flor, 70, who came so close to death in the spring that a night-shift nurse held a phone to his ear while his wife and kids said their final goodbyes, is recovering nicely these days at his home in West Seattle. But he says his heart almost failed a second time when he got the bill from his health care odyssey the other day. “I opened it and said ‘holy [bleep]!’ “ Flor says. The total tab for his bout with the coronavirus: $1.1 million. $1,122,501.04, to be exact. All in one bill that’s more like a book because it runs to 181 pages.

The bill is technically an explanation of charges, and because Flor has insurance including Medicare, he won’t have to pay the vast majority of it. In fact because he had COVID-19, and not a different disease, he might not have to pay anything — a quirk of this situation I’ll get to in a minute. But for now it’s got him and his family and friends marveling at the extreme expense, and bizarre economics, of American health care. Flor was in Swedish Medical Center in Issaquah with COVID-19 for 62 days, so he knew the bill would be a doozy. He was unconscious for much of his stay, but once near the beginning his wife Elisa Del Rosario remembers him waking up and saying: “You gotta get me out of here, we can’t afford this.”

Just the charge for his room in the intensive care unit was billed at $9,736 per day. Due to the contagious nature of the virus, the room was sealed and could only be entered by medical workers wearing plastic suits and headgear. For 42 days he was in this isolation chamber, for a total charged cost of $408,912. He also was on a mechanical ventilator for 29 days, with the use of the machine billed at $2,835 per day, for a total of $82,215. About a quarter of the bill is drug costs.

For now, I’ll stick to the pandemic having become embedded, but not yet endemic.

Ben’s point is salient: if -when- COVID19 becomes endemic, other health care options must vanish, while premiums rise.

• No Country for Old Men (Ben Hunt)

Connecticut is opening up a bit, so I’ve got an outpatient surgery scheduled at the big local hospital (specialty clinics are still closed) next Friday. I feel lucky to get on the calendar so soon. I also feel nervous. My dad was an ER doc. My brother is a healthcare lawyer. Again, these are things that have certainly made an impression on me. To be clear, my lack of healthcare options today and over the past 3 months isn’t because of the lockdown. That’s how a child would see this. My lack of healthcare options is because of the virus. In its acute phase, Covid-19 shuts down non-emergency healthcare provision entirely. In its endemic phase, Covid-19 forces enormous and costly changes in healthcare provision. There is no “v-shaped recovery” for medicine. Covid-19 is now in its endemic phase. The enormous and costly changes in healthcare provision that Covid-19 requires and the resulting impact on healthcare consumption lead me to three conclusions about the healthcare industry and national politics.

Conclusion #1: Endemic Covid-19 permanently dents healthcare provision (and consumption). The days of “efficient” (i.e., insanely lucrative) specialty medical clinics where docs go through 3 knee replacements or 10 lasik procedures in an afternoon are GONE.

Conclusion #2: Although both acute and endemic Covid-19 sharply reduce my healthcare options and healthcare consumption, my healthcare insurance costs have not gone down. They’ve gone up. Healthcare payers (insurance cos) are a public utility. They should be regulated as such. #BITFD

Conclusion #3: For the past 30 years, US fiscal policy has been largely driven by Boomers’ insatiable demand for more and more healthcare, to the advantage of both the Dems AND the GOP. Covid-19 destroys that cozy political dynamic, but neither party realizes this yet.

I’m sure we can find a few very wrong things that the Queen is, or has been, invested in. Why stop here?

• Churchill Statue Boarded Up Ahead Of Expected UK Protests On Saturday (R.)

Statues of historical figures including Winston Churchill have been boarded up ahead of more expected protests on Saturday as Prime Minister Boris Johnson said it was “shameful” that the monument to Britain’s wartime leader was at risk of attack. Anti-racism protesters, who have taken to the streets following the death of African American George Floyd, have put statues at the forefront of their challenge to Britain’s imperialist past. A statue of Edward Colston, who made a fortune in the 17th century from the slave trade, was torn down in the city of Bristol last Sunday, and authorities have acted to protect monuments they believe could be next.

They have now boarded up a statue opposite parliament of Churchill after demonstrators daubed it with paint last weekend. “It is absurd and shameful that this national monument should today be at risk of attack by violent protesters,” Johnson wrote on Twitter. On Friday, around 500 people gathered in Hyde Park chanting “the UK is not innocent” and “Black Lives Matter”, before marching through central London, with many saying that statues such as Colston’s were legitimate targets. “If we have these big images, and we’re telling people that these people and what they stood for is OK, we’re just allowing everything that they did to pass,” said student Samantha Halsall.

Meanwhile in Britain:

Next up: the music scene. Imagine what they can do to country music.

• Films Aiming To Win Oscars Will Need To Meet Diversity Criteria – Academy (R.)

The organization that hands out the Academy Awards said Friday it would form a group to develop diversity and inclusion guidelines that filmmakers will have to meet in order for their work to be eligible for Oscars. The Academy of Motion Picture Arts and Sciences, which has been criticized for honoring few movies and creators of color, said the move and other steps represented a new phase of a 5-year effort to promote diversity. The group said in a statement it would work with the Producers Guild of America to convene a task force of industry leaders to develop “representation and inclusion standards” for Oscars eligibility by July 31 that will “encourage equitable hiring practices on and off screen.”

The rules will not apply to films vying for Oscars at the next ceremony in 2021. Criticism of the movie academy intensified in 2015 with the hashtag #OscarsSoWhite, a backlash against an all-white field of acting contenders. The academy responded in part by doubling the number of women and people color in its invitation-only ranks. Still, by 2019 just 32% of its roughly 8,000 members were women, and 16% were people of color. New members will be announced next month. “We know there is much more work to be done in order to ensure equitable opportunities across the board,” Academy Chief Executive Dawn Hudson said. “The need to address this issue is urgent.”

Good theme, pretty weak execution. The press has been destroying itself for years. Everything they say has become full-blown partisan.

• The American Press Is Destroying Itself (Taibbi)

Probably the most disturbing story involved Intercept writer Lee Fang, one of a fast-shrinking number of young reporters actually skilled in investigative journalism. Fang’s work in the area of campaign finance especially has led to concrete impact, including a record fine to a conservative Super PAC: few young reporters have done more to combat corruption. Yet Fang found himself denounced online as a racist, then hauled before H.R. His crime? During protests, he tweeted this interview with an African-American man named Maximum Fr, who described having two cousins murdered in the East Oakland neighborhood where he grew up. Saying his aunt is still not over those killings, Max asked:

“I always question, why does a Black life matter only when a white man takes it?… Like, if a white man takes my life tonight, it’s going to be national news, but if a black man takes my life, it might not even be spoken of… It’s stuff just like that that I just want in the mix.”

Shortly after, a co-worker of Fang’s, Akela Lacy, wrote, “Tired of being made to deal continually with my co-worker @lhfang continuing to push black on black crime narratives after being repeatedly asked not to. This isn’t about me and him, it’s about institutional racism and using free speech to couch anti-blackness. I am so fucking tired.” She followed with, “Stop being racist Lee.” [..] If there’s an edge to Fang at all, it seems geared toward people in our business who grew up in affluent circumstances and might intellectualize topics that have personal meaning for him.

In the tweets that got him in trouble with Lacy and other co-workers, he questioned the logic of protesters attacking immigrant-owned businesses “with no connection to police brutality at all.” He also offered his opinion on Martin Luther King’s attitude toward violent protest (Fang’s take was that King did not support it; Lacy responded, “you know they killed him too right”). These are issues around which there is still considerable disagreement among self-described liberals, even among self-described leftists. Fang also commented, presciently as it turns out, that many reporters were “terrified of openly challenging the lefty conventional wisdom around riots.”

[..] Max himself was stunned to find out that his comments on all this had created a Twitter firestorm. “I couldn’t believe they were coming for the man’s job over something I said,” he recounts. “It was not Lee’s opinion. It was my opinion.” By phone, Max spoke of a responsibility he feels Black people have to speak out against all forms of violence, “precisely because we experience it the most.”

Jim reintroduces Hillary as a candidate. But I think she is simply too unpopular.

• The Party of Chaos and Falsehood (Jim Kunstler)

The Democratic Party Resistance apparently believes that all this mayhem, and the false sanctimony excusing it, works to their advantage in the coming national election. They may be disappointed about how that works out, as they’ve been disappointed in three years of previous gambits to overthrow the government and seize power by any means necessary. The picture of them is resolving into the party of bad faith, foul play, coercion, and tyranny. Even the corona virus scare carries a taint of Resistance manipulation. One moment the populace is hustled into an economically devastating lockdown; and then suddenly, on a fine spring day, they’re incited to mix in moiling mobs of street protests with the predictable result of a fresh spike in virus contagion and the possibility of a second lockdown.

Like many activities in our national life lately, it’s another hostage racket, and, guess what, you’re the hostage. Their most transparent artifice is the utterly false elevation of Joe Biden as their candidate for president. Everybody knows he’s incapable of performing the job, and probably even of functioning through a campaign. His inchoate utterances on events and policy make Donald Trump sound like Ralph Waldo Emerson. He’s left behind himself an evidence trail of financial crimes running to at least nine digits of grift. And, of course, if you believe all women, he’s a sexual molester. Everything about his public presentation is false, including his hair, teeth, and soul. This past week, his handlers posed him as Grief Counselor-in-Chief (via video from his basement) at the state funeral for George Floyd, accompanied by an inspirational music soundtrack to shore up the sham sentimentality.

Never have so many hollow platitudes been woven into such garment of alternative reality for public consumption. Most pathetically of all, the audience of mourners, mere props, as black America has long been employed by the cynical party, went along with the charade that George Floyd was a model citizen and father, now soaring on golden wings to the place on high where you don’t need methedrine and fentanyl to feel happy. A couple of days later, Democratic Party bigwig and Clinton henchperson, Terry McAuliffe, told a meeting of the faithful that Joe Biden should remain confined to his basement. In a matter of weeks, you may be sure, we’ll learn that the party is compelled to draft Hillary Clinton as poor Joe’s replacement. It can’t be helped. Her turn will not be denied, even if she has to destroy the country to take it.

Everyone agrees and knows the case will be dismissed. But the “lead” judge says: “There’s nothing wrong with him holding a hearing; there’s no authority I know of that says he can’t hold a hearing,”

No wonder people think thiis all just to get this past the election. But I’m convinced Flynn and Sidney Powell have long seen this coming.

• Lawyer For Flynn Judge Says Court Will Eventually Dismiss The Case (JTN)

A lawyer representing the judge overseeing the Michael Flynn trial suggested Friday that the court will eventually dismiss the case against the former Trump national security adviser, arguing that the judge’s decision to call in outside opinions on the matter was merely an issue of seeking advice before the probable dismissal. The lawyer, Beth Wilkinson, made the acknowledgement during a roughly two-hour federal appeals court hearing on whether the court should order a lower court to immediately dismiss the case, as was requested last month by the Justice Department, or allow the case to proceed through at least July.

“There’s no reason at this point to fear that the District Court is going to deny the government’s motion to dismiss,” she told the three-judge panel Friday morning, stating that the lower court is simply “getting advice” from third parties before likely doing so. It was unclear at the end of hearing, at about noon, when the panel of judges—Neomi Rao, Robert Wilkins and Karen Henderson—would make a decision. A ruling could come before the weekend but is expected to likely happen no sooner than Monday. Principal Deputy Solicitor General of the United States Jeff Wall argued Friday in the virtual hearing that the federal government has gone “beyond what we thought we were obligated to do” in explaining its reasoning behind its dismissal request, and that Sullivan should honor that decision and drop the case rather than draw it out.

“There’s no reason not to take that final step. This has already become, and I think is only becoming more of, a public spectacle,” he said, arguing that the appeals court should force the lower court to end the trial. Sidney Powell, one of Flynn’s attorneys, made similar arguments, saying the Justice Department provided an “extensive and thoroughly documented” argument in favor of dropping the case and that Sullivan should obey the request and bring the prosecution to an immediate end. The trial “cannot go on any longer,” Powell argued, claiming that the judge overseeing the case “has no authority” to continue it after the executive branch requested it be dropped.

Failing to bring the trial to an end immediately, Powell said, would simply be “delaying the inevitable,” arguing that Sullivan will eventually be found to have exceeded his authority in this case. Yet the court at times appeared reluctant to quickly dismiss the case. Henderson pointed out that Sullivan has scheduled a hearing for July on the matter instead of electing to keep the trial “waiting and languishing.” “There’s nothing wrong with him holding a hearing; there’s no authority I know of that says he can’t hold a hearing,” she said.

“Eventually“

after the election

am I right or am I right https://t.co/ypjlm2GadK

— ThunderB, DennisTuttle’sLifeMattered (@ThunderB) June 12, 2020

TEXT

• Judges Appear Skeptical Of DOJ Move To Dismiss Flynn Case (Fox)

Judges on a D.C. appeals court Friday seemed skeptical of arguments that they should force a federal judge to dismiss a case against President Trump’s former National Security Adviser Michael Flynn as sought by the Department of Justice (DOJ) – after Flynn’s lawyer said the case was “concocted” and slammed previous “government misconduct” against him. The unusual move from Judge Emmet Sullivan to keep the case alive despite prosecutors’ wishes was preceded by an unusual move from the DOJ itself to drop the charges against Flynn even after he had pleaded guilty – saying the FBI interview that led to his charge of lying to investigators had no “legitimate investigative basis.”

But the long-running case continues to drag on. The latest twist involved the higher D.C. appeals court panel agreeing to review the handling of the matter. After Sullivan moved to accept input from outside parties, he was called to defend his own decisionmaking before the panel in response to a petition from Flynn to force the judge to let the case die. At issue is the discretion of the judiciary to delay, deny or question the prosecution’s decision to continue pursuing a criminal case. “This record contains enormous evidence now of government misconduct,” Flynn’s lawyer Sidney Powell said. She added that she believes Sullivan doesn’t have the authority to do anything but approve the DOJ motion, and that continuing the case would be an unnecessary burden on Flynn.

“We would simply be delaying the inevitable,” Powell said. “He just got dumped on a 72-page brief that we have to answer by Wednesday … the toll it takes on a defendant to go through this is absolutely enormous.” “The government’s just wasting resources out the wazoo,” she said. Powell also complimented the government’s claim that the case against Flynn was flawed: “This is the most impressive motion to dismiss I have ever seen in decades of practice.” [..] For his part, government lawyer Jeff Wall told the judges that it is the government’s position that it does not need to tell the court all of the reasons why it wants to dismiss a case — just those it chooses to disclose.

“..the president’s attack on the Russia investigation..”?

The 3-year $40 million investigation ended in utter and complete disgrace for Robert Mueller and the people who appointed him, and now you’re saying none of this should be looked into?

• Graham Granted Significant Subpoena Power For Russia Probe Investigation (JTN)

Senate Judiciary Committee Chairman Lindsey Graham on Thursday was granted broad subpoena power in his probe into the federal government’s 2016 Russia-Trump campaign probe, allowing him call more than 50 people for interviews, including high-profile Obama administration officials. Graham received the authorization in a party-line vote in the GOP-controlled committee. “I find myself in a position where I think we need to look long and hard about how the Mueller investigation got off the rails. This committee is not going to sit on the sidelines and move on,” said Graham, a South Carolina Republican.

The committee is currently conducting a broad investigation into the 2016 Russia probe, including “Crossfire Hurricane,” which was the FBI’s name for their investigation into Russian election interference by way of the Trump campaign. The FBI’s actions during that operation gave way to what is broadly referred to as the (now mostly debunked) Russia-collusion narrative. With Thursday’s vote, Graham now has the authority to subpoena former intelligence officials, including former FBI Director James Comey, former national security adviser Susan Rice, and former Director of National Intelligence James Clapper.

The committee chairman has also been granted the authority to subpoena documents and records reference in Justice Department Inspector General Michael Horowitz’s report assessing the use of FISA warrants against former Trump campaign aide Carter Page. Tensions ran high during the committee meeting in which member voted on the subpoenas. To issue a subpoena, the committee chairman needs to either strike a deal with the top Democrat – now California Sen. Dianne Feinstein – or secure a majority vote by the committee. Republicans hold a 12-10 majority, so they were able to grant Graham unilateral subpoena power, rejecting several amendments by the Democrats.

“Unfortunately, it appears that Senate Republicans now plan to spend the next several months bolstering the president’s attack on the Russia investigation and his Democratic nominee, Democrat Joe Biden. Congress should not conduct politically motivated investigations designed to attack or help any presidential candidate,” Feinstein said.

Joe Biden doesn't know what Juneteenth is:

"He’s going down to Texas on Juneteenth, right? The first major massacre … of the Black Wall Street, right?"

1. President Trump is going to Texas today, not June 19
2. Juneteenth is about emancipation
3. The massacre was in Oklahoma pic.twitter.com/vpNDQLwqBj

— Trump War Room – Text TRUMP to 88022 & get the APP (@TrumpWarRoom) June 11, 2020

Compared to actual news these days, even this is light reading.

• Some Claim Mayan Calendar Was Wrong, ‘World Will End On June 21’ (Mirror)

From the coronavirus pandemic to an influx of terrifying murder hornets, 2020 has thrown a number of tricky obstacles in humanity’s way. But the worst is yet to come, according to conspiracy theorists, who claim that the world will end next week. The bizarre theory is based on the fact that when the Gregorian calendar was introduced in 1582, 11 days were lost from the year, to better reflect the time it takes Earth to orbit the sun. While 11 days might not sound a lot, over 286 years it adds up, with some conspiracy theorists claiming we ‘should be in 2012.’ In a now-deleted Twitter post, scientist Paolo Tagaloguin said: “Following the Julian Calendar, we are technically in 2012.

“The number of days lost in a year due to the shift into Gregorian Calendar is 11 days. For 268 years using the Gregorian Calendar (1752-2020) times 11 days = 2,948 days. 2,948 days / 365 days (per year) = 8 years”. According to this theory, June 21 2020 should actually be December 21, 2012. If you cast your mind back to 2012, you may remember various theories, indicating the world would end on December 21. NASA said: “The story started with claims that Nibiru, a supposed planet discovered by the Sumerians, is headed toward Earth. This catastrophe was initially predicted for May 2003, but when nothing happened the doomsday date was moved forward to December 2012 and linked to the end of one of the cycles in the ancient Mayan calendar at the winter solstice in 2012 – hence the predicted doomsday date of December 21, 2012.”

We try to run the Automatic Earth on people’s kind donations. Since their revenue has collapsed, ads no longer pay for all you read, and your support is now an integral part of the interaction.

Thank you.

Hard to tell if I recorded this 30 years or 10 minutes ago… pic.twitter.com/GPDURhYIJL

— John Cleese (@JohnCleese) June 12, 2020

https://twitter.com/i/status/1271121354226642948

Apparently a happy mountain lion sounds exactly like an idling car engine pic.twitter.com/efj0ctxGE1

— Life on Earth (@planetpng) June 11, 2020

Five months into 2020, and there has been a huge, record-breaking warm anomaly over Asia (up to +8°C).

If 2020 goes on to be the warmest recorded year, despite the lack of an El Niño event, then this year's monstrous Asian anomaly will be the reason why.https://t.co/vjpQnxMaHJ pic.twitter.com/raPOz241HP

— Robert Rohde (@RARohde) June 12, 2020

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Debt Rattle March 12 2018

Mar 122018

March 12, 2018 Posted by Raúl Ilargi Meijer at 10:17 am Finance Tagged with: Abe, arms trade, Big Tech, bull market, Churchill, cronyism, Kim, tariffs, troll farm, Trump, Tusk, Xi 5 Responses »

Lewis Wickes Hine Labourer on connector, Empire State Building, New York 1930-31

• On The Bull Market’s Ninth Birthday (CNBC)

• ‘No Response’ Yet From North Korea On Trump Talks (BBC)

• Kim Jong Un Wants a Peace Treaty From Trump (BBG)

• China Banking Crisis Warning Signal Still Flashing – BIS (BBG)

• Don’t Count On Beijing To Resolve Fallout From Any Debt Blowup (CNBC)

• Asia’s Big Developers ‘More Vulnerable’ to Shocks – BIS (BBG)

• Japan PM Shinzo Abe’s Political Future On Cronyism Scandal (G.)

• Trade Wars, Diminished Credibility and Gary Cohn (Nomi Prins)

• London Property Prices Fall 15% (G.)

• European Commissioner Tusk Double-Crossed Poland (GEFIRA)

• Half Of US Arms Exports Go To The Middle East (G.)

• Tim Berners-Lee: Regulate Tech Firms To Prevent ‘Weaponised’ Web (G.)

• America’s Troll Farm Media (CP)

• Winston Churchill, Mass Murderer (WaPo)

John Rubino’s comment: “Emigrate while you still can..”

• On The Bull Market’s Ninth Birthday (CNBC)

The bullish run in the Dow Jones industrial average — which celebrates its ninth birthday Friday — is the longest ever and the greatest percentage gain since World War II, according to Leuthold Group. The corresponding run by the S&P 500, notes LPL Financial, is that benchmark’s second-largest and second-longest bull market ever, with only the 1990s stock market run led by technology stocks in the way. Despite a more than 10% correction in equities last month following a burst of bullish activity, Leuthold’s Doug Ramsey doesn’t think the bull is done yet. “Assuming the Dow Jones industrial average can exceed its late-January high on March 9th or thereafter, this cyclical bull market will become the first one ever to last nine years,” said Ramsey, his firm’s chief investment officer.

“Historically, cycle momentum highs are usually followed by a push to even higher price highs over the next several months.” The Dow hit an all-time high of 26,616.71 on Jan. 26, the same day the S&P 500 clinched its own record of 2,872.87. The major indexes are off their record highs 6.4% and 4.6% respectively. This chart from Leuthold Group shows where the Dow bull market stacks up since 1900. It’s far and away the longest in modern financial times. In terms of percentage gains, it’s third behind two bull markets pre-WWII.

I’d guess Kim didn’t expect the answer he got, as fast as he got it, and now isn’t quite sure what to say.

• ‘No Response’ Yet From North Korea On Trump Talks (BBC)

South Korea says it has not received a response from Pyongyang on a summit between North Korean leader Kim Jong-un and US President Donald Trump. In a surprise development, Mr Trump on Friday accepted North Korea’s invitation to direct talks. South Korean officials said Mr Kim was prepared to give up his nuclear weapons. Details on the planned talks remain vague, with no agreement yet on the location or agenda. Analysts are sceptical about what can be achieved through talks given the complexity of the issues involved. “We have not seen nor received an official response from the North Korean regime regarding the North Korea-US summit,” a spokesman for the South Korean Ministry of Unification said on Monday. “I feel they’re approaching this matter with caution and they need time to organise their stance.” South Korean officials who spoke to Trump are now on the way to China and Japan to brief the leaders of each country on the upcoming talks.

He’s telling his people that’s what his father wanted. They also want to reunite with the south.

• Kim Jong Un Wants a Peace Treaty From Trump (BBG)

Kim Jong Un wants to sign a peace treaty after meeting with U.S. President Donald Trump, South Korean media reported, reviving a long-held goal of the North Korean regime. Kim is likely to raise the possibility of a peace treaty, along with establishing diplomatic relations and nuclear disarmament, during a meeting with the U.S. leader, the Dong-A Ilbo newspaper said Monday, citing an unidentified senior official in South Korea’s presidential office. Trump last week agreed to meet Kim, although key details of the summit have yet to be decided. Koh Yu-hwan, who teaches North Korean studies at Dongguk University in Seoul, said the regime has long sought a peace treaty to end the more than 60-year-old ceasefire between the two sides and help guarantee its safety.

“There were agreements between the U.S. and North Korea to open up discussion on a peace treaty, but they never materialized,” Koh said, saying the conditions were key. “The U.S. wants a peace treaty at the end of the denuclearization process, while for the North, it’s the precondition for its denuclearization.” Signing a peace treaty would require addressing issues regarding the U.S. military’s presence in South Korea and its transfer of wartime operational control to South Korea and United Nations forces in South Korea, Koh said.

China, Canada and Hong Kong are among the economies most at risk of a banking crisis, according to BIS

• China Banking Crisis Warning Signal Still Flashing – BIS (BBG)

China, Canada and Hong Kong are among the economies most at risk of a banking crisis, according to early-warning indicators compiled by the Bank for International Settlements. Canada – whose economy grew last year at the fastest pace since 2011 – was flagged thanks to its households’ maxed-out credit cards and high debt levels in the wider economy. Household borrowing is also seen as a risk factor for China and Hong Kong, according to the study. “The indicators currently point to the build-up of risks in several economies,” analysts Inaki Aldasoro, Claudio Borio and Mathias Drehmann wrote in the BIS’s latest Quarterly Review published on Sunday. The study offered some surprising results: for example, Italy wasn’t shown as being at risk, despite its struggles with a slow-growing economy and banks that are mired in bad debts.

While China was flagged, a key warning indicator known as the credit-to-gross domestic product “gap” showed an improvement, said the BIS, known as the central bank for central banks. This may suggest the government is making progress in its push to reduce financial-sector risk. The gap is the difference between the credit-to-GDP ratio and its long-term trend. A blow-out in the number can signal that credit growth is excessive and a financial bust may be looming. In China, the gap fell to 16.7% in the third quarter of 2017, down from a peak of 28.9% in March 2016 and the lowest since 2012, the study showed.

How does Xi tell his people he doesn’t have their backs? Oh well, he’s president for life.

• Don’t Count On Beijing To Resolve Fallout From Any Debt Blowup (CNBC)

The belief in an “implicit guarantee” from the Chinese government on debt is a big problem, said a finance professor on Monday. “I’m concerned with what a lot of people believe, [that] the government is going to take care of investment losses. Under that impression, they are going to take up lot of leverage because they believe they will be bailed out if something does not work out,” said Zhu Ning, a professor of finance at Tsinghua University in Beijing. China has been battling high debt levels for years, but debt-to-GDP ratio is still about 260%, according to the Bank of International Settlements. While that absolute number is not alarming in itself, it is eyebrow-raising for the speed in rising to such levels, particularly in the last five years, Zhu said.

Since China’s economy is far bigger than two decades ago, the country has the size and resilience to overcome issues in the financial system, but Beijing is concerned about systemic risks that may roil the world’s second-largest economy. The key to solving any potential fallout from the ballooning debt is to remove the perception that Beijing will help solve any problems from a debt blowup, said Zhu. “This is a mentality that has taken decades to form so the government would have to do something aggressive and persistent to gradually remove this sense of implicit guarantee,” Zhu said. The Chinese government has been coming down hard on reining in systemic risks, using strong-arm tactics such as the recent state takeover of Anbang Insurance, which was aggressively expanding internationally.

There’s the shadow banks again.

• Asia’s Big Developers ‘More Vulnerable’ to Shocks – BIS (BBG)

Asia’s big developers are “more vulnerable” to shocks after their profitability waned from the boom years at the start of the decade, the Bank for International Settlements warned. The “sector’s deteriorating fundamentals give reason for concern,” said the Basel, Switzerland-based institution, which watches over global financial stability. Many firms’ returns on assets are below their costs of debt, the BIS said in a quarterly review, citing a study of developers in China, Hong Kong, Indonesia, Malaysia, Singapore and Thailand.

Higher interest rates, sinking property prices or falling currencies are shocks that could worsen developers’ financial health, with the potential for significant economic repercussions, according to the organization known as the central banks’ central bank. Even without external jolts, falling returns on assets and declining interest coverage ratios “could pose problems” for the firms, it said. While easy money drove property booms worldwide after the global financial crisis, the BIS argues a tightening in the years ahead could force developers to sell off inventory – driving down prices – and lay off workers.

“Shinzo Abe has previously said he would resign if he or his wife were shown to be involved in heavily cutting the price of public land sold to a right-wing school operator in Osaka..”

• Japan PM Shinzo Abe’s Political Future On Cronyism Scandal (G.)

A spiralling cronyism scandal linked to the Japanese prime minister and his wife has reached fever pitch after the finance ministry admitted to tampering with records to remove references to the first lady. Shinzo Abe has previously said he would resign if he or his wife were shown to be involved in heavily cutting the price of public land sold to a right-wing school operator in Osaka. The finance ministry admitted on Monday that it had altered official documents surrounding the decision to provide an 85% discount on the appraised value of the land. One document originally quoted the educational group Moritomo Gakuen as saying that Abe’s wife Akie had recommended the primary school project “move forward because it is a good plot of land”. However, this was removed in a version submitted to lawmakers investigating the sale. Kyodo News reported that the submitted papers also omitted an article in which Akie described being “moved to tears by the school’s education policy”.

Moritomo Gakuen’s existing kindergarten attracted attention for requiring its young pupils to bow before portraits of the imperial family, sing the national anthem daily, and learn the 1890 imperial rescript on education, which emphasises sacrifice for country. Akie was set to serve as honorary principal for the new primary school, but stepped down in February last year when questions were raised over the land deal. The government has previously denied claims that the first lady gave the school operator an envelope containing 1m yen (£6,775) on behalf of the prime minister during a visit she made to the existing kindergarten. The controversy fuelled a steep decline in Abe’s popularity last year but heappeared to ride out the scandal and won a snap lower house election in October. However, the forgery revelations have intensified political pressure on Abe and his long-serving finance minister, Taro Aso.

Excellent piece by Nomi, which has two topics: Gary Cohn and steel tariffs. The latter a bit much on short term effects, but good read.

• Trade Wars, Diminished Credibility and Gary Cohn (Nomi Prins)

[..] my former boss from my Goldman Sachs days—Gary Cohn—just resigned from his White House post as chief economic adviser to the Chaos Producer in Chief. This was ostensibly in protest against the president’s announcement about imposing steel and aluminum tariffs. The next day, Trump signed the order sealing that deal, citing his actions as a “matter of necessity for our security.” Along the way, he said there would be no exemptions to the tariffs, then said there would be—for Canada and Mexico. Trump glowed in the light of his new-found power grab over trade agreements, leaving himself room to decide which countries would be “in” and “out” with respect to these and other tariffs in the future. And that was the week that was in Trump World.

The timing of Cohn’s departure certainly put a wrench in his plans to convene executives dependent on steel and present their case against steel tariffs to Trump. Instead, Trump signed the tariffs order flanked by steel and aluminum workers supporting it. Speaking of steel, Cohn’s nerves were seemingly made of that metal. At Goldman, he was the man who regularly waded through deals without losing his cool (unlike Trump). On 9/11, I witnessed him directing traders to keep trading oil as shreds of debris and billows of smoke engulfed the windows of the Goldman trading floor, only a few blocks away from the World Trade Center. He became president (or number two) at Goldman, continually handling the less “cool” behavior of chairman and CEO Lloyd Blankfein, who remained above him in the pecking order for decades.

Cohn commanded daily activities at Goldman that led to the firm’s creation of shady financial instruments that were later at the core of the financial crisis. Under Cohn, Goldman was bailed out by U.S. taxpayers. The firm morphed, for government subsidy purposes, into a bank holding company, though it handled scant deposits from regular people. It did this to retain access to Federal Reserve support, as it has done, over the past decade. Cohn was also at Goldman when it reached a $5 billion settlement with the Department of Justice over its consistent misconduct regarding mortgage-related securities from 2005 to 2007. That type of conflict-meets-crisis readied him for his government service. When Cohn came up against Trump, the president’s flavor-of-the-minute trade policy hawk, Peter Navarro, met “Globalist Gary” head on. Then Cohn’s Trump administration career was over.

Just peeping over the edge for now.

• London Property Prices Fall 15% (G.)

House prices in parts of London that were once at the epicentre of the UK property boom have fallen as much as 15% over the past year in fresh evidence of the impact of the EU referendum. Figures from Your Move, one of the UK’s biggest estate agency chains, reveal that the average home in Wandsworth – which includes much of Clapham, Balham and Putney – fell by more than £100,000 in value over the last 12 months. But property prices have surged in the north-west of England, with Blackburn recording the highest growth rates in the UK. Homes in the London borough of Wandsworth were fetching an average of £805,000 in January 2017 but this has now fallen to £685,000.

Selling out his country and Putin bashing. That’s Tusk. That’s how he got his EU job.

• European Commissioner Tusk Double-Crossed Poland (GEFIRA)

The current President of the EU Council has a good reputation in the EU circles, but not in Poland: he had to flee from his home country to Brussels, completely compromised. After all, his government was a catastrophe: mass emigration of young Poles, tampering with the coffers of future pensioners, corruption and benefit scandals, the Amber Gold affair, the all-pervasive nepotism in his Civic Platform (PO) party, numerous sins of omission crowned by Nord Stream. Young unemployed people can light the torch of a revolution. If you want to secure your position in politics, you leave salaries low and open the borders. The discontented young unemployed emigrate and only those who have less motivation to take to the streets remain. In 2005 Donald Tusk made this trick, this intervention on his nation. He threw Poland into the arms of the EU: since then the population has fallen significantly due to the emigration of many young Poles.

Nigel Farage aptly commented on this when he turned to Tusk in the European Parliament: “Your debate is about emigration, and time and again you’ve promised the Polish voters that young poles would return to Poland, and at the same time Mr Cameron has promised the British people that fewer Poles would come to us. Well, it turns out that you’ve both been wrong and your country has been depopulated by 2 million people since you joined the European Union and the reason is obvious: it’s money, isn’t it? And you yourself prove the point. You are the newest Polish emigre and you’ve gone from a salary of 6,000 euros a year to a salary of 30,000 euros a year. So congratulations! You’ve hit the EU jackpot!”

A picture of the world’s sickest people. Many of them are in your governments.

• Half Of US Arms Exports Go To The Middle East (G.)

Nearly half of US arms exports over the past five years have gone to the war-stricken Middle East, with Saudi Arabia consolidating its place as the world’s second biggest importer, a report has shown. The Stockholm International Peace Research Institute (Sipri) said on Monday that global transfer of major weapons systems between 2013 and 2017 rose by 10% compared with the five-year period before that, in a continuation of an upward trend that began two decades ago. The US, which is the world’s biggest exporter, increased its sales between those two periods by 25%. It supplied arms to as many as 98 states worldwide, accounting for more than a third of global exports. Russia, the world’s second biggest exporter, saw a decrease of 7.1% in its overall volume of arms exports; US exports were 58% higher than those of Russia. France, Germany and China were also among the top five exporters. The UK is the sixth biggest weapons exporter.

“Based on deals signed during the Obama administration, US arms deliveries in 2013–17 reached their highest level since the late 1990s,” said Dr Aude Fleurant, the director of the Sipri’s arms and military expenditure programme. “These deals and further major contracts signed in 2017 will ensure that the USA remains the largest arms exporter in the coming years.” The Middle East, a region where in the past five years most countries have been involved in conflict, accounted for 32% of global imports of weapons. Arms imports to the region doubled between 2013 and 2017 and in the five-year period before that. The US, the UK, and France were the main supplier of arms to the region, while Saudi Arabia, Egypt and the UAE were the main recipient countries.

The UK, which rolled out a red carpet for the Saudi crown prince on his visit to London last week, exported nearly half of its arms to the Saudi Arabia, which has increased its imports by 225%. Sipri’s report noted that Saudi Arabia uses its imported weapons in large-scale combat operations, particularly in Yemen. The Saudi-led military intervention in Yemen, which has cost hundreds of civilian lives, was launched in 2015, aiming to counter the advances of Iran-backed Houthi rebels controlling the capital, Sana’a. Saudi Arabia’s shopping list included 78 combat aircraft, 72 combat helicopters and 328 tanks. “Widespread violent conflict in the Middle East and concerns about human rights have led to political debate in western Europe and North America about restricting arms sales,” said Pieter Wezeman, senior researcher at Sipri. Yet the USA and European states remain the main arms exporters to the region and supplied over 98% of weapons imported by Saudi Arabia.”

How do you regulate global forces? That are part of secret intelligence services?

• Tim Berners-Lee: Regulate Tech Firms To Prevent ‘Weaponised’ Web (G.)

Sir Tim Berners-Lee, inventor of the world wide web, has called for large technology firms to be regulated to prevent the web from being “weaponised at scale”. “In recent years, we’ve seen conspiracy theories trend on social media platforms, fake Twitter and Facebook accounts stoke social tensions, external actors interfere in elections, and criminals steal troves of personal data,” Berners-Lee wrote in an open letter marking the 29th anniversary of his invention. These problems have proliferated because of the concentration of power in the hands of a few platforms – including Facebook, Google, and Twitter – which “control which ideas and opinions are seen and shared”. “What was once a rich selection of blogs and websites has been compressed under the powerful weight of a few dominant platforms,” said the 62-year-old British computer scientist.

These online gatekeepers can lock in their power by acquiring smaller rivals, buying up new innovations and hiring the industry’s top talent, making it harder for others to compete, he said. Google now accounts for about 87% of online searches worldwide. Facebook has more than 2.2 billion monthly active users – more than 20 times more than MySpace at its peak. Together, the two companies (including their subsidiaries Instagram and YouTube) slurp up more than 60% of digital advertising spend worldwide. Although the companies are aware of the problems and have made efforts to fix them – developing systems to tackle fake news, bots and influence operations – they have been built to “maximise profit more than maximise social good”. “A legal or regulatory framework that accounts for social objectives may help ease those tensions,” he said.

Aligning the incentives of the technology sector with those of users and society at large, he argued, will require consulting a diverse group of people from business, government, civil society, academia and the arts. Berners-Lee warned of “two myths” that “limit our collective imagination” when looking for solutions to the problems facing the web: “The myth that advertising is the only possible business model for online companies, and the myth that it’s too late to change the way platforms operate. On both points we need to be a little more creative,” he said. “I want the web to reflect our hopes and fulfil our dreams, rather than magnify our fears and deepen our divisions,” he said.

Too many people still believe far too much of what they read and watch.

• America’s Troll Farm Media (CP)

Despite all the smoke and mirrors, most Americans seem to see where the stenographers of corporate capitalism are taking us. A recent Gallup poll found that while 84% of Americans see media as “critical” or “very important” to democracy, only 28% see the corporatist mainstream news media (MSM) as actually supporting democracy. They’re right on both counts of course. The quality of a democracy is only as good as the information people have to make informed judgements about public policy and politicians. Even as the mainstream news media continue to lose street cred, they persist in a rumor-saturated full court press against the “Trump-Putin presidency,” which only further exposes their lack of professionalism and increasing vulgarity.

MSM management and their boardroom bosses have long understood that as long as they spice up their “nothing burger” news, ratings and advertising rates will keep them in business and please their commercial and government clients. Tabloid journalism, which can describe most American mainstream media these days, even when wrapped up as “all the news that’s fit to print,” is in constant search of sensation, scandal, gossip, and profit – and only occasionally in public-oriented investigative integrity. [..] 65% of Americans consider the so-called “free press” biased, obsessed with scandal, and full of “fake news” and therefore cannot be trusted. [..] trust in American institutions in general, that is, the government, business, NGOs, and the MSM, is going through the worst crisis in recorded history, according to the marketing firm Edelman in 2018.

[..] On January 27, 2018, the Washington Post editorial board issued this statement: “A foreign power interfered in the 2016 presidential election. U.S. law enforcement is trying to get to the bottom of that story. Congress should be doing everything possible to make sure the investigation can take place.” Obviously referring to Russia, the Post’s declaration, as the late investigative journalist Robert Parry and many other independent and respected writers have pointed out, was and remains without a shred of evidence. It’s WMD time all over again, only this time the propaganda is being trumpeted mainly by the Democrats. It would better serve the cause of democracy to investigate the Post for its covert coalition and collusion with the deep state and the Clinton (right) wing of the Democratic Party. The Post and the rest of their pack have constructed a wicked Russia foil in order to undermine Moscow’s presumed ally Trump and boost bigger Pentagon budgets.

Britain is not strong on history. Surprising that this comes from the WaPo.

• Winston Churchill, Mass Murderer (WaPo)

“History,” Winston Churchill said, “will be kind to me, for I intend to write it myself.” He needn’t have bothered. He was one of the great mass murderers of the 20th century, yet is the only one, unlike Hitler and Stalin, to have escaped historical odium in the West. He has been crowned with a Nobel Prize (for literature, no less), and now, an actor portraying him (Gary Oldman) has been awarded an Oscar. As Hollywood confirms, Churchill’s reputation (as what Harold Evans has called “the British Lionheart on the ramparts of civilization”) rests almost entirely on his stirring rhetoric and his talent for a fine phrase during World War II. “We shall not flag nor fail. We shall go on to the end. … We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets. … We shall never surrender.” (The revisionist British historian John Charmley dismissed this as “sublime nonsense.”)

Words, in the end, are all that Churchill admirers can point to. His actions are another matter altogether. During World War II, Churchill declared himself in favor of “terror bombing.” He wrote that he wanted “absolutely devastating, exterminating attacks by very heavy bombers.” Horrors such as the firebombing of Dresden were the result. In the fight for Irish independence, Churchill, in his capacity as secretary of state for war and air, was one of the few British officials in favor of bombing Irish protesters, suggesting in 1920 that airplanes should use “machine-gun fire or bombs” to scatter them. Dealing with unrest in Mesopotamia in 1921, as secretary of state for the colonies, Churchill acted as a war criminal: “I am strongly in favour of using poisoned gas against the uncivilised tribes; it would spread a lively terror.” He ordered large-scale bombing of Mesopotamia, with an entire village wiped out in 45 minutes.

In Afghanistan, Churchill declared that the Pashtuns “needed to recognise the superiority of [the British] race” and that “all who resist will be killed without quarter.” He wrote: “We proceeded systematically, village by village, and we destroyed the houses, filled up the wells, blew down the towers, cut down the great shady trees, burned the crops and broke the reservoirs in punitive devastation. … Every tribesman caught was speared or cut down at once.” In Kenya, Churchill either directed or was complicit in policies involving the forced relocation of local people from the fertile highlands to make way for white colonial settlers and the forcing of more than 150,000 people into concentration camps. Rape, castration, lit cigarettes on tender spots, and electric shocks were all used by the British authorities to torture Kenyans under Churchill’s rule.

But the principal victims of Winston Churchill were the Indians — “a beastly people with a beastly religion,” as he charmingly called them. He wanted to use chemical weapons in India but was shot down by his cabinet colleagues, whom he criticized for their “squeamishness,” declaring that “the objections of the India Office to the use of gas against natives are unreasonable.” [..] Thanks to Churchill, some 4 million Bengalis starved to death in a 1943 famine. Churchill ordered the diversion of food from starving Indian civilians to well-supplied British soldiers and even to top up European stockpiles in Greece and elsewhere. When reminded of the suffering of his Indian victims, his response was that the famine was their own fault, he said, for “breeding like rabbits.”

Debt Rattle December 29 2014

Dec 292014

December 29, 2014 Posted by Raúl Ilargi Meijer at 11:51 am Finance Tagged with: China, Churchill, Civil War, distressed debt, EU, Greece, Russia, Ukraine Comments Off

Unknown Daniels-Wells Pontiac, 3055 Broadway, Oakland 1938

• Greece Faces Snap Election as Samaras Fails to Install President (Bloomberg)

• Greek Stocks Tank After Presidential Vote (CNBC)

• ‘Life Will Go On’ Thesis About Global Economy Might Not Work In 2015 (Guardian)

• Distressed Debt Losses Worst Since ’08 Credit Crisis on Oil Rout (Bloomberg)

• US Bond Sentiment Worst Since Disastrous ’09 as Fed Shifts (Bloomberg)

• The 94% Plunge That Shows Abenomics Losing Global Investors (Bloomberg)

• Japan’s Regional Banks Face Stress Test For Ultra-Low Rates (Reuters)

• Zombie Bankruptcies Top New Year Wish-List for China’s Brokerages (Bloomberg)

• China Slashes Trade Target For 2015 To 6% (MarketWatch)

• China Looking At Deal With US To Recover Dirty Assets (Reuters)

• China First-World Quandary Exposed as $800 Billion Lending Freed (Bloomberg)

• Kiev Targets Oligarchs With Budget Bill (FT)

• Fed and ECB: Kudos And Problems Ahead (CNBC)

• The Liberal Idiocy on Russia/Ukraine (Robert Parry)

• In Reversal, Germany Cools to Russian Investment (NY Times)

• Russia Must Influence Separatists To End Ukraine Crisis, Says Merkel (Reuters)

• In Lieu Of Best Wishes: The Euro’s First Inkling (Varoufakis)

• Winston Churchill’s Family Begged Him Not To Convert To Islam (Ind.)

• The American Civil War: The Bloody Anniversary We All Forgot (Fisk)

Chaos assured in Europe as per Jan 1. Elections January 25. Expect crazy stuff from Samaras and Brussels. We’ll hear Armageddon a lot.

• Greece Faces Snap Election as Samaras Fails to Install President (Bloomberg)

Greece faces snap elections early in the New Year after Prime Minister Antonis Samaras failed in his third and final attempt to persuade parliament to back his candidate for head of state. With voting continuing in Athens today, more than 121 lawmakers in the 300-seat chamber refused to support Samaras’s nominee for president, Stavros Dimas, ensuring that he’ll fall short of the 180 votes required. Under the constitution, the legislature will now be dissolved and a date for elections set within the next 10 days. The prospect of early parliamentary elections as soon as Jan. 25 has roiled financial markets in Greece, evoking memories of the height of the financial crisis in 2012 when the country’s euro membership was in jeopardy.

The benchmark Athens Stock Exchange slumped the most among 18 western-European markets ahead of the vote. The anti-austerity Syriza party led by Alexis Tsipras is ahead of Samaras’s New Democracy movement in opinion polls. Samaras, who failed to gather enough support for Dimas in two previous rounds of voting on Dec. 17 and Dec. 23, called on lawmakers before today’s session to avert a dissolution of parliament, saying that snap elections posed a danger to the country. Heading a coalition of 155 lawmakers, he’d offered to form a broader administration and hold early parliamentary elections at the end of 2015 if lawmakers backed his nominee. His coalition’s term doesn’t expire until June 2016.

Bring in the Plunge Protectors.

• Greek Stocks Tank After Presidential Vote (CNBC)

Greek stocks tumbled over 10% on Monday, after Greek politicians failed to elect a president in a key vote, paving the way for a snap election. Stavros Dimas, the Greek government’s preferred candidate, secured only 168 votes in the third round of voting on Monday, short of the 180 needed to avoid a snap election. Greece’s main stock market fell 11% on the news, while the country’s 10-year bond yields spiked above 9%. Ahead of the vote, the euro slipped to a near-28-month low against the dollar. The result of the vote came as no surprise to analysts, who had not expected Prime Minister Antonis Samaras’ candidate Dimas to get the required votes.

Elena Panaritis, a former MP for Greek social democratic party PASOK, told CNBC on Monday tat the country was heading for snap elections. There are fears that if a snap general election takes place in early 2015, Greece’s popular anti-austerity Syriza party may be elected. This could put the country’s international bailout into jeopardy, as the party has promised to scrap Greece’s tough austerity policies if it gets into power. The unpopular cost-cutting measures are a condition of the country’s bailouts – worth €240 billion ($296 billion) – implemented by the International Monetary Fund, European Central Bank and European Commission.

OK overview.

• ‘Life Will Go On’ Thesis About Global Economy Might Not Work In 2015 (Guardian)

Russia is in crisis. There are concerns about the eurozone. Japan is struggling to emerge from stagnation. Booming stock markets seem divorced from economic reality. The Anglo-Saxon economies are outpacing the other developed economies of the west. This is the world as it exits 2014. But it was also the world as it was 15 years ago during a month in which the first major anti-globalisation protests took place on the streets of Seattle and preparations were made for the nonexistent millennium bug. Oil prices were low. Banks could lend money cheaply. There was talk of how technology would power a new industrial revolution. It would be a mistake, though, to think that nothing has really changed. The story of the past decade and a half is of the increasingly desperate attempts to prevent the Great Stalling of the global economy. Rock-bottom interest rates have failed to prevent growth rates from slipping. Living standards in many countries are back to the levels of the early 2000s.

Securing international cooperation to tackle climate change, to open markets to trade, to manage currencies or to create jobs has become increasingly difficult. The problems of 1999 are still the problems of 2014, but more serious and seemingly more intractable. There is no shortage of explanations for what has gone wrong and what needs to be done to put things right. One view, popular with central bankers and technologists, is that all that is needed is a bit of time. Seen from this perspective, the world is on the brink of the sort of technological shift that happens once in every 50 or 60 years. The transition, however, has been delayed by the structural changes in the global economy caused by the collapse of communism a quarter of a century ago.

Adjustment to these geopolitical shifts, such as the rise of China, is taking longer than expected but will eventually happen. Another view is that the zombie-like state of the global economy is owing to a lack of structural reform. Here there is common cause between the German government, which blames the eurozone crisis not on a lack of demand but on supply-side impediments to growth, and the free market economists who say the financial crisis of 2007-08 was caused by over regulation. The solution, therefore, is to make markets work better through reforms that sharpen incentives to work, dilute labour rights, cut taxes, reduce government spending, balance budgets and push back against growing protectionist tendencies.

Then there is the Keynesian view of the world. Here, the idea is return, as far as possible, to the world as it existed in the golden years of the 1950s and 1960s. That means governments rethinking their austerity programmes; keeping interest rates low; using redistribution to spread the fruits of growth more evenly; and returning to the sort of managed currency regime that existed until the early 1970s. What is common to the explanations is that they believe there is a short-term (sometimes a medium-term) fix that will put matters right. Growth and a steady increase in living standards has been a feature of the modern industrial world, stretching back to the 18th century: it is quite a stretch to believe that 250 years of progress have come to a halt. As a result, the assumption is that eventually the global economy will achieve escape velocity following several years in the post-global recession doldrums.

Emerging markets on their way to the bottom.

• Distressed Debt Losses Worst Since ’08 Credit Crisis on Oil Rout (Bloomberg)

Emerging-market distressed debt losses are the worst this month since the global financial crisis. Bank of America Merrill Lynch’s Distressed Emerging Markets Corporate Plus Index fell 13.4% through Dec. 26, set for its worst performance since October 2008, as a tumble in the price of oil sparked a currency crisis in Russia. That brought this year’s decline to 19.7%, the most in six years. Emerging markets accounted for 14 of the 56 global defaults this year in Standard & Poor’s coverage. Crude reached the lowest in five years earlier this month and is heading for its largest annual decline since 2008 as members of the Organization of Petroleum Exporting Countries resist production cuts to defend market share. A supply glut has also pushed metal and coal prices deeper into a bear market.

“With many moving parts to the equation, could there be a point where investors begin to interpret the circumstances as contagion?” said David Tawil, co-founder of New York-based Maglan Capital LP. “What happens if we need to add Venezuela and Russia to the mix? Contagion is good for no one.” Oil accounts for 95% of Venezuela’s exports and its government bonds have suffered as President Nicolas Maduro said he has no plans to curb fuel subsidies. Economic sanctions are also hurting Russia, pushing the country toward a recession, while corruption probes induced bond losses in Brazil and China. In Indonesia, the Bakrie family group of companies put its coal unit, PT Bumi Resources, under court protection.

So Yellen hikes rates, and then buys up all Treasuries Kuroda-style?

• US Bond Sentiment Worst Since Disastrous ’09 as Fed Shifts (Bloomberg)

Get ready for a disastrous year for U.S. government bonds. That’s the message forecasters on Wall Street are sending. With Federal Reserve Chair Janet Yellen poised to raise interest rates in 2015 for the first time in almost a decade, prognosticators are convinced Treasury yields have nowhere to go except up. Their calls for higher yields next year are the most aggressive since 2009, when U.S. debt securities suffered record losses, according to data compiled by Bloomberg. Getting it right hasn’t been easy. Almost everyone who foresaw a selloff this year as the Fed ended its bond buying was caught off-guard as lackluster U.S. wage growth and turmoil in emerging markets propelled Treasuries to the biggest returns since 2011.

Now, even as the bond market’s inflation outlook tumbles, forecasters are sticking to the view that Treasuries are a losing proposition as the economy strengthens. “Next year should be the break-out year finally,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi, said by phone from New York on Dec. 23. “The market is ignoring the rhetoric that Yellen and the FOMC is getting closer and closer to tightening. The market has it wrong.” Rupkey, who is among the 74 economists and strategists surveyed by Bloomberg this month, has one of the highest projections. He said he expects 10-year yields to rise to 3.4% by the end of 2015 from 2.25% at 12:55 p.m. in Tokyo.

Back in January, Rupkey said yields would be 3.6% by now. The median forecast calls for yields to reach 3.01% during the same span. The roughly 0.75 percentage point increase would be almost twice as much as forecasters anticipated for 2014. Combined with projections for yields on the two-year note to more than double to 1.53% and those on the 30-year bond to rise 0.89 percentage point to 3.70%, the prognosticators are more bearish than any time since heading into 2009. That’s when they predicted yields on every debt maturity would rise more than a percentage point as the U.S., helped by the Fed’s easy-money policies, started to recover from its worst economic crisis since the Great Depression. Treasuries lost 3.7% that year in the biggest slide dating back to 1978.

Investors are still not completely stupid.

• The 94% Plunge That Shows Abenomics Losing Global Investors (Bloomberg)

Foreign investors have had just about enough of Abenomics. After pumping record amounts of cash into Japanese shares last year, they’ve hardly added to holdings in 2014. Inflows are down 94% this year to 898 billion yen ($7.5 billion), on pace for the smallest annual amount since the 2008 global financial crisis. The month of April 2013 alone registered almost three times as much foreign investment in the stock market as all of 2014. These figures provide the clearest look at how global investors have become disillusioned with Prime Minister Shinzo Abe after he pushed through a tax increase in April that sent Japan into recession. Fund managers from Sumitomo Mitsui to MV Financial say to lure investors back, Abe needs to move beyond short-term stimulus and start enacting the structural changes he laid out in his initial plan, dubbed Abenomics, to end Japan’s two-decade economic malaise.

“We need to see a framework where growth isn’t dependent on monetary easing,” Ayako Sera, a market strategist at Sumitomo Mitsui, which oversees $325 billion in assets. “If not growth, then at least a way to increase productivity. For now there’s nothing like that, so I imagine it’ll be hard for stocks to keep going higher and for foreigners to take an interest in them.” Purchases of the nation’s shares through Dec. 19 by investors outside Japan were less than a tenth of the 15.1 trillion yen they bought last year, according to data from the Tokyo Stock Exchange. Trust banks, which typically trade on behalf of pension funds, added 2.7 trillion yen, after offloading about 4 trillion yen of equities in 2013. Individuals were net sellers for a fourth straight year.

Deflation tests.

• Japan’s Regional Banks Face Stress Test For Ultra-Low Rates (Reuters)

Japan’s financial regulator is running stress tests to see if too much cash in the system is stifling smaller banks’ ability to earn, unlike regulatory tests elsewhere that have been designed to see whether lenders had enough capital to cope with financial shocks. Two people with direct knowledge of the process said the Financial Services Agency (FSA) had initiated the tests on concerns that with 10-year Japanese government bond yields near a record low around 0.3%, regional lenders in particular could be at risk as the gap between what they pay for deposits and what they collect on loans and bond holdings shrinks.

The action highlights one of the unintended risks of Prime Minister Shinzo Abe’s programme to end decades of deflation with the support of the Bank of Japan (BOJ), which by injecting monetary stimulus into the economy is helping to keep interest rates at rock bottom. Critics say policymakers in Europe should be considering such risks, too. The European Central Bank completed a review of the resilience of euro zone banks in October and came under fire for not including a deflationary scenario in its stress test hypotheses, even though inflation and bond yields in much of the region are hovering barely above zero. ECB Vice President Vitor Constancio defended the omission by arguing that a “deflation (scenario) is not there because indeed we don’t consider that deflation is going to happen”.

It was not immediately clear what scenario or assumptions the FSA was using in its assessment of the risk to regional and smaller banks, nor how the agency would follow up with lenders that appeared to be at particular risk from a period of persistently low, long-term interest rates. Japan’s more than 100 regional banks account for around 40% of the country’s $4.6 trillion in outstanding loans, but overall loan demand has shrunk 10% over the last 20 years. Such banks, which typically serve smaller businesses, have seen lending fall as Japan’s population ages, and many have cut the interest rates they charge to win business.

But what about the pretense? How many zombies can they blow up before it starts hurting and cascading?

• Zombie Bankruptcies Top New Year Wish-List for China’s Brokerages (Bloomberg)

Bond brokerages have a New Year’s resolution proposal for China’s policy makers: allow more defaults among so-called zombie companies. The extra yield on three-year AA rated debt over top-ranked notes surged 47 basis points this month to Dec. 25, the most for any month since October 2011, even after China’s first onshore bond payment in March failed to trigger a shakeup in the market. Borrowers graded at or below that rating need to repay a record 632.3 billion yuan ($101.6 billion) of notes in 2015, up 71% from 2014, China International Capital data show.

President Xi Jinping, who delivers a year-ahead address on Jan. 1, must balance the need to support an economy set for its slowest growth in more than two decades with reining in the world’s biggest corporate liabilities that Standard & Poor’s estimates stood at $14.2 trillion in 2013. Haitong Securities and Fitch say that will require greater use of bankruptcy laws. “Zombie companies will face higher borrowing costs, which will force more failures,” said Li Ning, a bond analyst in Shanghai at Haitong, the nation’s second-biggest brokerage. “That’s a good thing for the economy because allowing more defaults is a necessary step in building a sound financial asset pricing system.”

Haitong Securities’ Li said the number of bond defaults may increase next year and investors should shun lower-rated corporate debt because their yield premium over top-rated notes may rise. Zombie companies are using up too many lending resources, Liu Shiyu, who was deputy governor at the People’s Bank of China and is now chairman of Agricultural Bank of China, said earlier this year. In the only one onshore default China has had, investors didn’t lose a cent. Shanghai Chaori, which failed to make a full coupon payment in March, repaid all the principal and interest for its 1 billion yuan of bonds on Dec. 22. “It’s necessary to let those zombie companies default,” said Wang Ying, an analyst at Fitch Ratings in Shanghai. “If there is no real default, risks will never be priced in a correct way. Without a correct risk pricing mechanism, zombie companies can still survive by getting loans from banks.”

That quickly withdrawn paper yesterday gave it all away. 3.5% trade growth.

• China Slashes Trade Target For 2015 To 6% (MarketWatch)

China has cut its target for the growth of external trade to 6% for 2015, compared with a 7.5% target this year, the China Daily reported Monday. The paper cited Gao Hucheng, the minister of commerce, without saying where he made the remarks. With imports in particular falling short of expectations, China looks certain to miss this year’s target. In the first 11 months of 2014, total trade was up just 3.5% year-over-year in U.S. dollar terms, according to Dow Jones Newswires’ calculations. That is considerably slower than the official growth rate of the entire economy, which expanded 7.4% from a year earlier in the first three quarters.

Sure the FBI is only too happy to chase some rich Chinese around.

• China Looking At Deal With US To Recover Dirty Assets (Reuters)

China is looking at signing an agreement with the United States to target assets illegally taken out of China by corrupt officials, a newspaper said on Monday, as the government tightens the screws in its anti-graft battle. China has vowed to pursue a search, dubbed Operation “Fox Hunt,” beyond its borders for corrupt officials and business executives, and their assets. But Western countries have balked at signing extradition deals with China, partly out of concern about the integrity of its judicial system and treatment of prisoners. Rights groups say Chinese authorities use torture and that the death penalty is common in corruption cases.

The state-run China Daily said the central People’s Bank of China was talking to the U.S. Treasury Department’s Financial Crimes Enforcement Network about signing an agreement targeting ill-gotten assets held in the U.S. China is set to finalize a similar deal with Canada, Chinese state media reported this month. The central bank was also looking at a deal with Australia, the China Daily said, citing Zhang Xiaoming, deputy head of the Finance Ministry’s legal assistance and foreign affairs department. “After the agreements are made, China will share intelligence with the U.S. and Australia, which will also offer information to their enforcement agencies to conduct further investigations,” Zhang told the English-language paper.

“Once law enforcement officers in the U.S. and Australia identify illegal funds, they will immediately initiate judicial procedures to freeze and confiscate those criminal proceeds in their countries.” The United States, Canada and Australia are popular locations for corrupt officials to transfer their assets, the paper added. But legal problems have prevented China from getting these assets back, Zhang said. “Although the U.S. Federal Bureau of Investigation or Australian police have traced the assets and collected enough evidence to identify them as ill-gotten gains, they are unable to take immediate measures to freeze and confiscate them due to the lack of asset restraining orders from the Chinese courts.”

Creative accounting.

• China First-World Quandary Exposed as $800 Billion Lending Freed (Bloomberg)

China’s central bank is joining the balancing act of developed-world counterparts as it moves to free up at least $800 billion in funds for lenders, seeking to support growth without further inflaming financial risk. The world’s largest emerging market will broaden the definition of a deposit in 2015, boosting the lending capacity of Chinese banks that have to cap loans at 75% of funds held. The relaxation, reported by the official Xinhua News Agency yesterday, could make an additional 5 trillion yuan ($800 billion) to 5.5 trillion yuan available, according to analysts at Credit Agricole CIB and Guotai Junan Securities Co.

“The change in rules allows the extension of additional loans worth half of this year’s new lending,” said Dariusz Kowalczyk, an economist at Credit Agricole CIB in Hong Kong. “Policy makers across the globe are trying to boost demand by increasing bank lending, especially to businesses, so in this sense China’s efforts to boost lending fit well into the picture.” Central bankers worldwide are hunting for new ways to stimulate investment as elevated debt levels in developed nations stifle the scope of governments to respond and record-low borrowing costs limit room for monetary maneuvering. As global policy makers grapple with concern that asset bubbles are a by-product of increased liquidity, the People’s Bank of China’s challenge is supporting growth sufficiently to avoid political discontent while discouraging a renewed borrowing binge in the world’s second-largest economy.

They’re just killing the whole economy on purpose.

• Kiev Targets Oligarchs With Budget Bill (FT)

Recession-battered and war-torn Ukraine overhauled its business-choking tax system early on Monday, promising to lower the burden on small businesses and lower-income citizens while closing loopholes long exploited by oligarchs. The package of legislation adopted after 9 p.m. London time on Sunday also envisions increases in import duties to help stabilize stretched state finances and counter a balance of payments crisis. The laws will form the revenue-boosting backbone of an austerity-packed 2015 budget that officials hope will unlock fresh multibillion-dollar bailouts from the IMF and other western donors. In a 4:15 a.m. vote during the extraordinary Sunday-into-Monday session of parliament, Ukraine’s lawmakers adopted the budget, cutting subsidies and government spending.

Though many lawmakers complained the government did not show them a final version of the draft budget before voting, they were under pressure to adopt it before the end of this year in order to swiftly re-engage with the IMF. With fears of a financial meltdown spreading after central bank reserves halved this year to about one month of import coverage, the IMF concluded this month that Ukraine would need $15 billion of additional support on top of its existing $17 billion loan program. The tax legislation was only adopted after 10 hours of grueling negotiations that tested the unity of a pro-western coalition. It aims to bolster small and medium-sized businesses, reduce a massive shadow economy and squeeze what officials described as a fairer share of revenue out of oligarch-owned businesses.

Kudos? Excuse me?

• Fed and ECB: Kudos And Problems Ahead (CNBC)

It seems to me that the Fed should speed up the removal of a mind-boggling inflationary potential presented by its bloated balance sheet. The latest numbers show that during the two weeks between November 26 and December 10, the Fed shrank its balance sheet by $56.3 billion. That brought the monetary base down to $3.7 trillion, a $315.1 billion decline from its peak of last August. These liquidity withdrawals had no negative impact on U.S. money and capital markets: The federal funds rate remained well below its 0.25% target, and the yield on the Treasury’s benchmark ten-year bond closed at 2.25% last Friday. I expect to see the Fed accelerating asset reductions in the weeks and months ahead.

The European Central Bank (ECB) is in a completely different situation as a result of the weak cyclical position of the euro area economy. With the monetary union’s growth rate of 0.9% in the first nine month of this year, and the bank loans to the private sector falling at an average annual rate of 1.3% in the three months to October, the ECB has to maintain its exceptionally loose monetary policy in the months ahead. But the ECB needs no additional liquidity creation. The euro area markets are already swimming in liquidity. The problem is in an inadequate bank lending to businesses and households. Banks are gun-shy because of bad credit risks in a stagnant economy. Their balance sheets are also closely (maybe too closely) monitored by the regulatory authorities.

That means that the ECB’s most urgent and important task is to fix its dysfunctional transmission mechanism between monetary policy and real economy. The ECB’s other problem is an apparent expectation of some euro area governments that the central bank will do the heavy lifting for them. True to form, Germans are issuing stern warnings to countries (France and Italy) accused of dragging their feet on structural reforms while pushing for even looser monetary policies. German taskmasters may have a point here because it does seem that advocates of greater liquidity are the ones seeking to avoid the political fallout from unpopular reforms.

“Kissinger argued that the West – with its strategy of pulling Ukraine into the orbit of the European Union – was responsible for the crisis by failing to understand Russian sensitivity over Ukraine ..”

• The Liberal Idiocy on Russia/Ukraine (Robert Parry)

Among honest and knowledgeable people, there really isn’t much doubt about what happened in Ukraine last winter. There was a U.S.-backed coup which ousted a constitutionally elected president and replaced him with a regime more in line with U.S. interests. Even some smart people who agree with the policy of going on the offensive against Russia recognize this reality. For instance, George Friedman, the founder of the global intelligence firm Stratfor, was quoted in an interview with the Russian liberal business publication Kommersant as saying what happened on Feb. 22 in Kiev – the overthrow of President Viktor Yanukovych – “really was the most blatant coup in history.”

Brushing aside the righteous indignation and self-serving propaganda, Stratfor’s Friedman recognized that both Russia and the United States were operating in what they perceived to be their own interests. “The bottom line is that the strategic interests of the United States are to prevent Russia from becoming a hegemon,” he said. “And the strategic interests of Russia are not to allow the U.S. close to its borders.” Another relative voice of reason, at least on this topic, has been former Secretary of State Henry Kissinger who – in an interview with Der Spiegel – dismissed Official Washington’s conventional wisdom that Russian President Vladimir Putin provoked the crisis and then annexed Crimea as part of some diabolical scheme to reclaim territory lost when the Soviet Union collapsed in 1991.

“The annexation of Crimea was not a move toward global conquest,” the 91-year-old Kissinger said. “It was not Hitler moving into Czechoslovakia” – as former Secretary of State Hillary Clinton had suggested. Kissinger noted that Putin had no intention of instigating a crisis in Ukraine: “Putin spent tens of billions of dollars on the Winter Olympics in Sochi. The theme of the Olympics was that Russia is a progressive state tied to the West through its culture and, therefore, it presumably wants to be part of it. So it doesn’t make any sense that a week after the close of the Olympics, Putin would take Crimea and start a war over Ukraine.” Instead Kissinger argued that the West – with its strategy of pulling Ukraine into the orbit of the European Union – was responsible for the crisis by failing to understand Russian sensitivity over Ukraine and making the grave mistake of quickly pushing the confrontation beyond dialogue.

A curious NY Times piece mostly made up of innuendo and slander, but which has a few relevent lines. What the Times seeks to insinuate is that German companies ‘cool on Russia’ because they no longer trust the country, whereas in reality it’s sanctions that force them out.

• In Reversal, Germany Cools to Russian Investment (NY Times)

The uncertainty hanging over Germany’s strong business ties with Russia, which are more than double the value of Russian trade with the United States, is in marked contrast to the optimism and relative stability of recent years. And it has been reflected in increasingly acrimonious exchanges in Germany’s political, diplomatic and intellectual elite over how to shape relations with Moscow. Last weekend, the two most prominent Social Democrats in Chancellor Angela Merkel’s grand coalition government of center right and center left — the party leader, Sigmar Gabriel, and the foreign minister, Frank-Walter Steinmeier – voiced concern that sanctions might hobble the stricken Russian economy, and they opposed tightening them.

Ms. Merkel, clearly frustrated with the behavior of President Vladimir V. Putin of Russia, has so far taken a harder line. But the potential for conflict within Ms. Merkel’s government complicates her efforts to use Germany’s close ties with Russia as leverage to fashion a solution to the crisis in Ukraine. Business groups, normally strong backers of Ms. Merkel’s Christian Democrats, have agreed with the Social Democrats on Russia and warned against using economic means to put pressure on Mr. Putin. “Sanctions are not the proper means to resolve this political crisis,” Eckhard Cordes, a former Daimler executive who is chairman of the Committee on Eastern European Economic Relations, which represents companies doing business in the former Soviet bloc, said in an email. “The West cannot have an interest in destabilizing the Russian economy or Russian politics.”

[..] Political tensions are likely to intensify as sanctions against Russia come up for renewal in March, a year after Moscow annexed Crimea. “Anyone who believes that forcing Russia economically to its knees will lead to more security in Europe is wrong,” Mr. Steinmeier, the foreign minister, told the weekly newsmagazine Der Spiegel. Having Russia’s economy in chaos “cannot be in our interest,” he added. Mr. Gabriel, the leader of the Social Democrats, said pointedly that calls for intensifying sanctions were wrong. Gerhard Schröder, Ms. Merkel’s predecessor as chancellor and an avowed friend of Mr. Putin, was among 60 prominent signatories of an appeal entitled, “Again War in Europe?/Not in Our Name.”

Okay, and I say Merkel should influence Kiev.

• Russia Must Influence Separatists To End Ukraine Crisis, Says Merkel (Reuters)

German Chancellor Angela Merkel appealed to the Russian government on Sunday to use its influence on separatists in eastern Ukraine to implement a ceasefire plan agreed in Minsk in September aimed at ending the conflict. Planned talks involving Russia, Ukraine and the Organisation for Security and Cooperation in Europe to further the ceasefire arrangements have not yet taken place. “(Merkel said) A stabilization of the situation can only come if the agreed contact lines are finally implemented,” said a spokeswoman in a statement. “She appealed to the Russian government to use its influence on the separatists to this end,” said the spokeswoman. In a phone call with Ukrainian President Petro Poroshenko late on Saturday, Merkel expressed regret that the contact group talks had not happened.

Last week, Poroshenko had said the talks would take place on Dec. 24 and 26. Merkel, who has been closely involved in diplomatic efforts to resolve the crisis, also welcomed the exchange of prisoners between the Ukrainian government and separatists. The September truce has been flouted by both sides but violence in eastern Ukraine has decreased during December, raising hopes of further talks. The uprising by the separatists, who oppose Kiev rule and want a union with Russia, began after Russia annexed the Black Sea peninsula of Crimea from Ukraine in March. The pro-Western authorities in Kiev accuse Russia of orchestrating the uprising but the Kremlin denies it is behind the revolt.

Long piece from Syriza advisor Varoufakis on the origins of the euro.

• In Lieu Of Best Wishes: The Euro’s First Inkling (Varoufakis)

As 2015 is approaching, seemingly pregnant with crucial challenges for Europe, the euro and all those who have to live with it, I could not think of a better seasonal offering for readers of this blog than a suitable extract from my next book. I chose a piece that narrates, and interprets, the story of the first time the euro was proposed in the highest echelons of European decision making. Hope you enjoy it. With wishes for a 2015 worth remembering fondly.

An Indecent Proposal Kurt Schmücker was a man not given to strong emotions. But on the morning of March 23rd 1964 he could hardly trust his ears and only barely managed to contain his astonishment. As Germany’s Minister of the Economy, Herr Schmücker was used to meeting, regularly, with his French counterpart, Valerie Giscard d’ Estaing, President Charles De Gaulle’s finance minister and a man who would, ten years later, become President of France himself. So, when Giscard dropped by his Bonn office, for a two-hour chat, Minister Schmücker was relaxed, anticipating another anodyne meeting, like all previous get-togethers whose real purpose was to put on a show of European unity between the two erstwhile foes shouldering the burden of constructing a European Union at the early stages of its development.

Schmücker and Giscard normally exchanged polite views on how each saw the economic policies of the other, on how the two countries dealt with movements of money across their borders, on interest rates and trade balances, on their attitudes toward taxing business and, of course, on their joint efforts at cementing a European Union still in its infancy. Occasionally they would also swap tales of woe on their tense relations with their own central bankers, the Bundesbank and the Banque de France. Nothing, in other words, that might have prepared Herr Schmücker for what he was about to hear. But, that morning, once the obligatory niceties had been dispensed with, Giscard came out with a shocking proposal: France and Germany should create a common currency, inviting the other four members of the European Union to join in when and if they were ready.

It took Schmücker a few moments to recover his composure. What on earth was the aristocratic Frenchman saying? Germany and France sharing the same banknotes, the same coins, the same Central Bank? Which one? The Bundesbank? For heavens sake!, he is certain to have cried out inside his own head. Outwards, he put on a face of somber iciness, pretending not to have been taken aback. Indeed, the record shows that he responded as if he had not heard the earth-shattering proposition. Why not be more modest, he countered? Why don’t we just try to stabilize our exchange rates through our central banks and on the basis of (a conservative German’s wet-dream) “strict discipline” and “contractual rules”?

What a shame.

• Winston Churchill’s Family Begged Him Not To Convert To Islam (Ind.)

The family of Sir Winston Churchill urged him to “fight against” the desire to convert to Islam, a newly discovered letter has revealed. The Prime Minister who led Britain to victory in World War Two was apparently so taken with Islam and the culture of the Orient that his family wrote to try and persuade him not to become a Muslim. In a letter dated August 1907 Churchill’s soon to be sister-in-law wrote to him: “Please don’t become converted to Islam; I have noticed in your disposition a tendency to orientalise, Pasha-like tendencies, I really have. “If you come into contact with Islam your conversion might be effected with greater ease than you might have supposed, call of the blood, don’t you know what I mean, do fight against it.”

The letter, discovered by a history research fellow at Cambridge University, Warren Dockter, was written by Lady Gwendoline Bertie who married Churchill’s brother Jack. “Churchill never seriously considered converting,” Dr Dockter told The Independent. “He was more or less an atheist by this time anyway. He did however have a fascination with Islamic culture which was common among Victorians.” Churchill had opportunity to observe Islamic society when he served as an officer of the British Army in Sudan. In a letter written to Lady Lytton in 1907 Churchill wrote that he “wished he were” a Pasha, which was a rank of distinction in the Ottoman Empire. He even took to dressing in Arab clothes in private – an enthusiasm he shared with his good friend the poet Wilfrid S. Blunt. But Dr Dockter thinks Churchill’s family need never have worried about his interest in Islam.

Good read.

• The American Civil War: The Bloody Anniversary We All Forgot (Fisk)

Every month, my London mail package thumps on to my Beirut doorstep with An Cosantóir inside. It’s the magazine of the Irish Defence Forces – surely the glossiest-paged journal of any army, let alone one of the smallest military forces in the world. But among its accounts of Ireland’s UN missions abroad – think Golan, for example, with Syria’s civil war crashing around Irish soldiers – almost inevitably each month, there’s a piece of history we’ve forgotten. For while the start of the Great War of 1914-18 has been commemorated to the point of spiritualism these past 12 months, who remembers that this week we enter the 150th anniversary year of the end of the American Civil War?

In US history, it is a profound event that we should all remember; here, after all, lie the original bones of the Union, its victory consecrated among some of the units whose soldiers were sent to their deaths in Iraq in 2003, its brutality ghosted into the future narrative of American military records, its equalities reflected in the large number of black soldiers who died in present-day Mesopotamia. But for the Irish, too, the civil war of 1861-1865, is a sombre anniversary. They reckon that 210,000 Irish soldiers fought in British uniform in the First World War, and that 49,300 were killed. Yet almost as many Irishmen fought in the American Civil War – 200,000 in all, 180,000 in the Union army, 20,000 for the Confederates.

An estimated 20% of the Union navy were Irish-born – 26,000 men – and the total Irish dead of the American conflict came to at least 30,000. Many of the Irish fatalities were from Famine families who had fled the desperate poverty of their homes in what was then the United Kingdom, only to die at Antietam and Gettysburg. My old alma mater, Trinity College Dublin, is collating the figures and they are likely to rise much higher as Irish academics mine into the American Compiled Military Service Records for the regiments of both sides.