Aug 302020
 


Pablo Picasso Girl Before A Mirror 1932

 

Rapid Home COVID19 Tests Could Help Find People While They Are Contagious (NP)
DNI Ratcliffe: Election Security Briefings Will Now Come In Written Form (JTN)
3/4 of Democratic Voters Still Believe Trump Campaign Colluded With Russia (JTN)
Will Hillary And The Dems Get The Civil War They Are Trying To Provoke? (Saker)
Michael Moore Warns That Donald Trump Is On Course To Repeat 2016 Win (G.)
Steele Associate Offered To ‘Feed’ Michael Flynn Story To WaPo Columnist (DC)
With New Monetary Policy Approach, Fed Lays Phillips Curve To Rest (R.)
Ex-Australia PM Menzies Boasted Of Delivering Large Budget Deficits (ABC.au)
Italy Evacuates Dozens From Overcrowded Banksy-Funded Migrant Rescue Boat (RT)
Airlines Warn Flying Back 100,000 Stranded Australians Will Take 6 Months (G.)

 

 

We passed 25 million global cases.

 

 

 

 

 

 

 

 

 

 

Japan:
– Population: 126 Million
– COVID deaths: 1,255 (10/M)
– % Obese: 4%

USA:
– Population: 328 Million
– COVID deaths: 183,000 (558/M)
– % Obese: 40%

If the US had the same obesity as Japan, we would have only 3,280 COVID deaths. 179,720 lives would have been saved…

 

 

Anti Face Mask Issue Solved

 

 

There is so much wrong with PCR tests, yet the “experts” refuse to even discuss rapid tests. Time to change that, test people every day in 15 minutes, not let them wait for days or weeks.

Rapid Home COVID19 Tests Could Help Find People While They Are Contagious (NP)

Cheap, rapid COVID-19 tests simple enough to use anywhere — home, school, the office — could help us climb out of the pandemic disaster, says infectious diseases specialist Dr. Andrew Morris. Just spit into a tube or swab your nose, wait a few minutes for the stripes to change colour — results available within minutes. With no vaccines or “fantastic therapies” for COVID, the best we can do is keep infected people out of buildings to prevent them from unknowingly spreading the virus, says Morris. Which is why he finds it “absurd” that Heath Canada says the risks of home or self-testing kits outweigh the benefits and that it will reject applications for such devices “without compelling new evidence to the contrary.”

The federal health agency worries that, “without the guidance of a health-care professional,” people would use the home test kit improperly or “misinterpret the results” and that it could be impossible to collect test results — information that’s key to “important health decisions involving disease control during an outbreak,” the department said in an emailed statement. “If it’s done in a haphazard way … you might actually create more problems, confusion than the actual benefits because you might get maybe a higher risk of false negative results,” Dr. Howard Njoo, Canada’s deputy chief public health officer, said Tuesday during a COVID-19 briefing. Morris wants the government to seriously rethink its position on home testing. They’re not the solution to COVID, but they are part of it, he believes.

Cheap, rapid testing is the backbone of infectious disease management, says Morris, of the Sinai Health System and University Health Network in Toronto. “But if Health Canada says ‘we aren’t even interested in these tests,’ they are neither being open-minded nor strategic in understanding the potential of these tests.” It has echoes of earlier federal dismissals of face masks, when officials worried masks would lead to a “false sense of security” and more face-touching. “The current strategy is not to trust the public… and we need to change that,” Morris says. The gold standard of testing today is a workhorse called reverse transcriptase polymerase chain reaction, or RT-PCR, which amplifies SARS-CoV-2 from nasal swabs, so that minute amounts of RNA can be detected.

Anyone who is sick or showing symptoms of COVID-19, or who thinks he or she may have been exposed, can get PCR testing. But PCR testing isn’t designed around getting our lives back to normal, Morris says. It’s expensive, testing capacity is seriously limited and it can take days to get results. Vancouver has seen traffic gridlock at testing sites as B.C. battles with a surge in cases. Ottawa has had four-hour-long waits at its COVID testing sites. “The only way we can get our society back up and running is by having some better situational awareness than what we have,” Morris says.

[..] Rapid tests aren’t perfect. They aren’t as sensitive as PCR tests. But they don’t need to be perfect, argues Harvard Medical School epidemiologist Michael Mina. Mina says the tests can detect the virus when a person is most infectious, with high viral loads. “The vast majority of PCR positive tests we currently collect in this country are actually finding people long after they have ceased to be infectious,” Mina told Harvard Magazine. Paper-strip test could cost less than one or two U.S. dollars to produce, he says. Millions could take them daily or every other day. Frequent testing, with fast results, would help break chains of transmission, Mina tweeted this week. Morris has heard talk the FDA is expected to authorize several lateral flow assay tests for COVID-19 in the coming weeks. “And nothing by Health Canada. To me, this is a massive, massive blind spot.”

Read more …

I’m inclined to give him the benefit of the doubt, because he provokes this gem from Adam Schiff (is this the 1950s?): “..the Trump administration “clearly does not want Congress or the country informed of what Russia is doing.”

DNI Ratcliffe: Election Security Briefings Will Now Come In Written Form (JTN)

Director of National Intelligence John Ratcliffe informed senators and representatives on Friday that election security briefings, previously given to Congress in person, will between now and the November elections be delivered in written form. The letter, which was sent on Friday and declassified on Saturday afternoon, notes that the intelligence community has given Congress dozens of briefings on election security over the past two years. “While many of these engagements and products have been successful and productive, others have been less so,” Ratcliffe wrote in the document.

“In order to ensure clarity and consistency across the Office of the Director of National Intelligence’s … engagements with Congress on elections,” Ratcliffe continued, “the ODNI will primary meet its obligation to keep Congress fully and currently informed leading into the Presidential election through written finished intelligence products.”

Ratcliffe said the move will help ensure that intelligence information is neither “misunderstood nor politicized,” and that the new protocol will “protect our sources and methods and most sensitive intelligence from additional unauthorized disclosures or misuse.” Democrats on Saturday evening slammed the decision. Speaker of the House Nancy Pelosi wrote on Twitter that the move represented “a shocking abdication of [ODNI’s] responsibility to keep Congress informed.” House Intelligence Committee Chairman Adam Schiff, meanwhile, claimed that the Trump administration “clearly does not want Congress or the country informed of what Russia is doing.”

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Schiff can also claim a large role in this. Where’s that evidence, Adam? We’re still waiting.

3/4 of Democratic Voters Still Believe Trump Campaign Colluded With Russia (JTN)

Three-quarters of Democratic voters believe that the Trump campaign conspired with Russia to steal the 2016 election, according to a new Just the News Daily Poll with Scott Rasmussen. Asked whether it was more likely that Trump colluded with Russia in 2016 or that the Obama administration spied on the Trump campaign that year, 73% of Democrats said the Russia collusion theory was more likely to have occurred. In contrast, 67% of Republicans expressed more belief in the claim that the Obama administration spied on Trump during that election. Overall, 43% of voters put more stock in the Russia story.


The Russia collusion theory dominated headlines and politics for roughly the first three years of the Trump administration. A 22-month, special counsel probe led by former FBI Director Robert Mueller concluded without finding evidence that the Trump campaign colluded with the Russian government to steal the 2016 election. The survey of 1,200 Registered Voters was conducted by Rasmussen using a mixed-mode approach from August 20-22.

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“The Dems won’t get their civil war – but they will suffer the blowback for their attempts to destroy the United States.”

Will Hillary And The Dems Get The Civil War They Are Trying To Provoke? (Saker)

I don’t see a civil war happening in the US. But I do think that this country can, and probably will, break-up into different zones so to speak. In some regions, law and order will be maintained, by force is needed, while in others something new will appear: what the French call “des zones de non-droit“, meaning “areas of lawlessness” in which law enforcement will be absent (either because the political leaders will refuse to engage them, or because they will simply have to withdraw under fire). Typically, such zones have a parallel “black” economy which can make the gangs which control such zones very wealthy (think of Russia in the 1990s). Eventually, a lot of people will flee from such zones and seek refuge in the safer areas of the country (this process has already begun in New York).


Right now, there are a little over two months before the election, and I think that it is safe to say that the situation will deteriorate even faster and much worse. By November 2nd the country will be “ready” (so to speak) for a massive explosion of violence followed by months of chaos. Many will probably vote Trump just because they will (mistakenly) believe that he is the only politician who will stand against what the Dems promise to unleash against the majority of “deplorables” who want to keep their country and traditions. At the core, the conflict we are now witnessing is a conflict about identity, something which most people deeply care about. Sooner or later, there will be push-back against the Dems attempt to turn the USA into some kind of obese transgender liberal Wakanda run by crooks, freaks and thugs. The Dems won’t get their civil war – but they will suffer the blowback for their attempts to destroy the United States.

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Michael Moore’s winning slogan and strategy: the Democrats are terrible, but you DO have to vote for them.

Michael Moore Warns That Donald Trump Is On Course To Repeat 2016 Win (G.)

The documentary film-maker Michael Moore has warned that Donald Trump appears to have such momentum in some battleground states that liberals risk a repeat of 2016 when so many wrote off Trump only to see him grab the White House. “Sorry to have to provide the reality check again,” he said. Moore, who was one of few political observers to predict Trump’s victory over Hillary Clinton in 2016, said that “enthusiasm for Trump is off the charts” in key areas compared with the Democratic party nominee, Joe Biden. “Are you ready for a Trump victory? Are you mentally prepared to be outsmarted by Trump again? Do you find comfort in your certainty that there is no way Trump can win? Are you content with the trust you’ve placed in the DNC [Democratic National Committee] to pull this off?” Moore posted on Facebook late on Friday.

Moore identified opinion polling in battleground states such as Minnesota and Michigan to make a case that the sitting president is running alongside or ahead of his rival. “The Biden campaign just announced he’ll be visiting a number of states – but not Michigan. Sound familiar?” Moore wrote, presumably indicating Hillary Clinton’s 2016 race when she made the error of avoiding some states that then swung to Trump. “I’m warning you almost 10 weeks in advance. The enthusiasm level for the 60 million in Trump’s base is OFF THE CHARTS! For Joe, not so much,” he later added. He continued to voters: “Don’t leave it to the Democrats to get rid of Trump. YOU have to get rid of Trump. WE have to wake up every day for the next 67 days and make sure each of us are going to get a hundred people out to vote. ACT NOW!”

Moore, a vocal supporter of Bernie Sanders’s leftwing candidacy, warned in October 2016 that “Trump’s election is going to be the biggest ‘f*** you’ ever recorded in human history – and it will feel good,” even as Clinton appeared to be sailing to victory. “Whether Trump means it or not is kind of irrelevant because he’s saying the things to people who are hurting, and that’s why every beaten-down, nameless, forgotten working stiff who used to be part of what was called the middle class loves Trump,” Moore warned at that time.

Read more …

A lot of people in that camp were actively working on this. There are new names just about every day.

Steele Associate Offered To ‘Feed’ Michael Flynn Story To WaPo Columnist (DC)

A former associate of Sen. John McCain served as a key conduit between journalists and dossier author Christopher Steele in early 2017, going so far as offering to “feed” stories about Trump associates to a Washington Post columnist, according to documents from a British court proceeding. David Kramer, a former State Department official who worked at the McCain Institute, kept Steele apprised of his contacts in January 2017 with journalists from BuzzFeed News, CNN, ABC News, The Wall Street Journal and The Washington Post regarding aspects of the dossier. Kramer relayed information he learned from reporters at ABC News and the Journal regarding the dossier’s allegation that Trump lawyer Michael Cohen visited Prague, according to text messages read at a defamation trial against Steele in London last month.

The Daily Caller News Foundation obtained a transcript of the closed-door court proceedings, which were held in London from July 20-24. Steele, a former MI6 officer, is being sued by Aleksej Gubarev, a Russian businessman who Steele’s dossier accuses of hacking Democrats’ computer systems in 2016. Kramer was already known to have met with reporters to discuss the dossier. He has acknowledged providing the dossier to a reporter for BuzzFeed News, which published the salacious document on Jan. 10, 2017. But the Steele messages suggest Kramer played a more proactive role in trying to put negative stories in the media about Trump associates. Kramer’s most eye-catching references are to David Ignatius, a Washington Post columnist who writes about national security issues.

“The Flynn calls story is picking up legs,” Kramer wrote to Steele, seemingly referring to a Jan. 12, 2017, column by Ignatius that revealed that Flynn spoke by phone weeks earlier with Sergey Kislyak. According to text messages read at the trial, Kramer suggested to Steele that he would provide dirt on Trump associates to Ignatius. “I think it’s time to get that other [Manafort] story out there,” Kramer wrote in a message to Steele, referring to former Trump campaign chairman Paul Manafort. “And Ignatius is the one I’ll feed it to,” he also wrote. Steele insisted during his testimony that Kramer was suggesting feeding a story to Ignatius about Flynn rather than Manafort. “It’s a Michael Flynn story, isn’t it?” Steele asked during the cross-examination.

He went on to say that the information regarding Flynn he discussed with Kramer was not found in the dossier. “Any story here about Michael Flynn is completely independent of anything in the dossier,” said Steele. The former spy did not describe the Flynn story, but Kramer told the House Intelligence Committee in 2017 that Steele told him that he believed that Flynn had an affair with a Russian-British researcher in the United Kingdom. The unverified allegation matches closely with stories that appeared in the media in March 2017 that alleged that Flynn had improper contacts with former Cambridge researcher Svetlana Lokhova in 2014, when Flynn visited the historic university as director of the Defense Intelligence Agency.

Read more …

“Decades of thought at the Fed are now being pushed aside.”

In most other jobs, if you’ve been wrong for decades, you get fired or resign. But when you’re handling trillions of dollars, there are different standards.

With New Monetary Policy Approach, Fed Lays Phillips Curve To Rest (R.)

One of the fundamental theories of modern economics may have finally been put to rest. In the several years before the coronavirus pandemic took hold of the global economy, Federal Reserve policymakers watched as the U.S. unemployment rate fell lower and lower and waited for the jump in inflation typically associated with such a tight labor market. The expectations were based on a rule that has shaped decades of monetary policy decisions: the Phillips curve, or the concept that inflation tends to rise when the unemployment rate falls, and vice versa. But the inflation that Fed officials anticipated never arrived, and in a monumental speech delivered on Thursday, Fed Chair Jerome Powell announced that the U.S. central bank’s policymakers are done waiting.

The Fed chief, speaking during the Kansas City Fed’s annual conference, unveiled the central bank’s new approach to monetary policy, which puts more emphasis on shortfalls in employment, and less weight on the fear that low unemployment could spark higher inflation. “The conditions in the economy have changed to such an extent that this upwardly sloped relationship between inflation and employment has now changed,” said Joseph Brusuelas, chief economist for RSM. “Decades of thought at the Fed are now being pushed aside.” With its landmark policy shift, the Fed is putting new weight on bolstering the labor market and less on inflation, promising to aim for 2% inflation on average over a period of time rather than using that figure as a hard annual target, as it had done since 2012.

With their new approach, Fed officials are essentially saying they are no longer worried about the unemployment rate falling too low. Now that inflation expectations are anchored at low levels, the economy has room to keep adding jobs. Policymakers can also wait a little longer for the gains to reach the workers on the margins – including Black, Hispanic and low-income workers – who are often the last to reap the benefits of a tight labor market, Powell said. “It is hard to overstate the benefits of sustaining a strong labor market, a key national goal that will require a range of policies in addition to supportive monetary policy,” Powell said on Thursday, reflecting on the strong U.S. labor market that existed before the pandemic.

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h/t Steve Keen.

Ex-Australia PM Menzies Boasted Of Delivering Large Budget Deficits (ABC.au)

There’s a lot we’ve forgotten about Robert Menzies. Take his name, for example. Younger Australians may not know it, but our country’s longest-serving prime minister, one of the founders of the Liberal Party, was nicknamed “Ming”. He was our first prime minister to have two Australian-born parents, but his paternal grandfather was Scottish and he was proud of that heritage. He preferred his surname to be pronounced the way the Scots pronounce it — Ming-iss — but his attempts to convince his countrymen to do so were in vain. He received the nickname “Ming” instead. Then there was his time as prime minister, when he boasted about delivering a bigger budget deficit than Labor would have, for the good of the country. That’s right.

The father of Australia’s Liberal Party was proud of spending whatever was necessary to ensure full employment, even when the economy wasn’t in recession. A speech Mr Menzies gave in August 1962 about his budget that year is worth reading. He’d won the federal election eight months earlier, defeating the Labor opposition led by Arthur Calwell. During the campaign, Mr Calwell promised to deliver a deficit large enough to eradicate unemployment, and he figured that meant a deficit of 100 million pounds. Here’s Mr Menzies explaining why he was spending more than Labor pledged. “Too few people realise that a cash deficit of 120 million [pounds] … will of itself have a most expansionary effect,” he said.

“We shall pay out to the citizens 120 million [pounds] more than will be collected from them. “So, far from being timorous — I think that was another of the words used by the deputy leader of the opposition — this is adventurous finance. “Add to the deficit the tax refunds now being made, and it is clear that purchasing power in Australia this financial year will be uncommonly high. “The real task of any government today, as well as of the business community and all sensible citizens, is to get that purchasing power exercised.” It was uncomplicated Keynesian logic. As John Maynard Keynes wrote in 1933: “Look after the unemployment, and the budget will look after itself.”

[..] Mr Menzies’ second stint as prime minister lasted from 1949 to 1966. For his last nine budgets he delivered deficits, and the size of his last deficit, at 3.3 per cent of gross domestic product (GDP), was 0.3 per cent larger than the deficit in Wayne Swan’s last budget in 2013. So why wasn’t the public angry? Because Australia’s economy, like economies in other western nations, grew strongly in the post-war period. In the 1940s, its average growth rate was 3.8 per cent. In the 1950s, it was 4.2 per cent. In the 1960s, it was 5.3 per cent. And that constant growth meant the size of Australia’s government debt relative to the size of the economy (the ratio of debt-to-GDP) shrank dramatically, too. All while the government was handing down budget deficits.

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How much extra attention because of Banksy’s involvement?

Italy Evacuates Dozens From Overcrowded Banksy-Funded Migrant Rescue Boat (RT)

Some 50 people were evacuated from the migrant rescue boat Louise Michel that got stranded off Malta’s coast after taking more than 200 people aboard. After one person died, the crew accused Europe of ignoring its pleas for help. The vessel, which reported rescuing a total of 219 people from the sea over the past few days, including “many women and children,” had become so “overcrowded” that a life raft was attached to its side, and it lost its ability to maneuver. The crew’s Twitter feed suggests they have been desperately sending distress signals and making calls to various European maritime authorities to no avail. To make the matters worse, one of the migrants died on the ship as conditions deteriorated.

“Louise Michel is unable to move … above all due to Europe ignoring our emergency calls for immediate assistance,” a tweet from the crew read. Following about a day of pleas for help, Italy’s coast guard arrived at the scene and took 49 of “the most vulnerable” migrants in. While describing the development as “great,” the Louise Michel crew said it leaves the majority “still waiting.” It added that another NGO migrant rescue ship, Sea Watch 4, arrived to “do what Europe falters to do.” Photos and videos apparently taken on board the vessel – a 31-meter motor yacht once owned by French customs authorities, now named after a French anarchist – show it is extremely crowded with people who are cooped up literally everywhere, from the foredeck to the aft and even on top of the captain’s bridge.

[..] Painted in white and bright pink and featuring a Banksy artwork of a girl in a life vest holding a heart-shaped flotation device, Louise Michel is said to have set sail in secrecy from a Spanish port of Burriana, near Valencia. The first post in its Twitter account appeared about a week after what was called its first successful mission. The ship, flying a German flag, is captained by Pia Klemp, a controversial German boat captain credited with rescuing more than 1,000 North African migrants between 2011 and 2017. The woman was charged with colluding with human smugglers by the Italian authorities in 2019 and defiantly snubbed Paris’ highest civilian award months later.

[..] Reports claim that Klemp was personally contacted by the artist as early as in September 2019 and was offered assistance with buying a new boat. She told the Guardian that she sees the effort as “part of anti-fascist fight,” while adding that Banksy’s involvement in the project is limited to financial support. “Banksy won’t pretend that he knows better than us how to run a ship, and we won’t pretend to be artists,” she said.

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And you thought your “leaders” were incompetent.

Airlines Warn Flying Back 100,000 Stranded Australians Will Take 6 Months (G.)

Frustrated airlines continuing to fly into Australia are warning it will take six months to repatriate more than 100,000 Australians stuck overseas if the country’s strict arrival caps are not eased. Pressure is also mounting within government ranks to address the growing number of Australians stranded by the caps, with Coalition MPs complaining the limits are “probably the biggest area of concern” raised with them by constituents currently, who claim airlines are repeatedly bumping them off flights to prioritise more expensive tickets and remain profitable under the caps. Opposition foreign affairs spokeswoman, Penny Wong, on Friday criticised the government’s position of recommending those affected by the caps rely on early super withdrawals to fund what could be an indefinite period away from their jobs, families and secure accommodation.

“The government should be offering financial support to stranded Australians who need it. People shouldn’t be forced to raid their super or launch a GoFundMe fundraiser in order to return home,” she said, noting earlier reports that consular staff had told Australians to start crowdfunding sites to sustain living costs and business class flights. Wong said she had been contacted by a pensioner forced to sleep in a car in France because his flight had been cancelled and he couldn’t get a refund. Wong also criticised the government for recent travel exit exemptions – including allowing Tony Abbott to fly to the UK, and an entrepreneur to collect a yacht in Italy – calling it “special treatment for the privileged few” with “everyone else being left behind”.

Qatar Airways on Friday announced it had suspended sales of tickets into Australia until the caps are lifted, and said it will have to cancel the tickets of “thousands” more Australian citizens who are currently scheduled to fly home with the carrier in the coming months. The airline has acknowledged it has been forced to prioritise customers who pay more for tickets after reports its aircraft were landing in Sydney with as few as four economy passengers. The Guardian has been inundated by stories of Australians who have been forced to live in caravans for months, exhaust all their paid leave, and forgo seeing dying parents in Australia while they wait for airlines to honour their economy flights home.

Read more …

 

 

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If Greece and Turkey go to war, it’s over this:

 

 

Long time favorite. Possibly the ultimate Calvin and Hobbes:

 

 

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Oct 012019
 


Paul Gauguin Sunken lane 1884

 

Dear America, Civil War Is Not A Joke – Or A Picnic (RT)
Civil War On (Kunstler)
Impeachment…or CIA Coup? (Ron Paul)
Hillary Clinton’s Big Comeback Begins Tuesday (WT)
US Dollar Status as Global Reserve Currency Slides (WS)
No End In Sight For ECB’s Inflation Problem (MW)
Twitter Executive For Middle East Is British Army ‘Psyops’ Soldier (MEE)
Johnson Planning To Bypass Brussels In Bid For New Brexit Deal (Ind.)
UK Proposes Customs Posts On Both Sides Of Irish Border (RTE)
France’s Overtures Toward Russia (Moisi)
Assange’s Lawyers Were Under Surveillance. That’s Not The Whole Story (Canary)

 

 

Nebojsa Malic, senior writer at RT, lived through the Yugoslavia civil war.

Dear America, Civil War Is Not A Joke – Or A Picnic (RT)

Critics have reacted to President Donald Trump’s Twitter warning about his impeachment causing a civil war with both shrieks of outrage and jokes. Notably absent: any self-awareness of what such a war would be like or how to avoid it. “If the Democrats are successful in removing the president from office, I’m afraid it will cause a Civil War-like fracture in this nation from which this country will never heal,” Texas televangelist Robert Jeffress said Sunday night on Fox News. Trump quoted him in a tweet the next morning, and Twitter lost its collective mind. The typical response was to accuse Trump of calling for a new civil war, mind-reading what he must have really meant by the quote. He was “priming his base” to think of war, according to unnamed “experts of fascism,”a liberal comedian argued in just one example.

Others dismissed the very notion of a civil war as crazy, joking about bringing the potato salad and biodegradable forks – or hamberders and covfefe – to the fight, as soon as they get out of yoga class, using the hashtag #CivilWarSignup. There were also scornful takes about Americans being too fat to fight, or rural Americans being too scared to “take the subway in New York or drive in Los Angeles,” much less take a rifle and “take their country back from elite urbanites.” It’s unclear whether the people joking about bringing food to the fight were deliberately channeling the spirit of Washingtonians who turned out to the first Battle of Manassas/Bull Run, in June 1861, as if it were a picnic, bringing baskets and blankets to enjoy the show.

As anyone who’s studied that era of US history knows, their glee quickly turned to horror and panic, when the Union army lost – and they found themselves shoved aside on crowded roads leading back to Washington by the routed troops in blue. Wars never go as planned. No plan survives first contact with the enemy, who also gets a vote. If there is one ironclad rule of war through the ages, no matter the level of technology, that is it. Yet the corollary is that civilians always forget about it, and it comes back to bite them.

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“Does this sound a little like part of the origin story of RussiaGate? Is that not exactly the potential criminal matter that the current attorney general, Mr. Barr, is officially investigating?”

Civil War On (Kunstler)

Someone in Impeachmentville is not paying attention. Of course, diverting the rubes is exactly the point of the latest CIA operation to negate the 2016 election. Has nobody noticed that there is treaty between Ukraine and the USA, signed at Kiev in 1998 and ratified by the US Senate in 2000. It’s an agreement on “Mutual Legal Assistance in Criminal Matters.” Here, read the cover letter for yourself:

What part of the following do Nancy Pelosi and the news media not understand? “The Treaty is self-executing. It provides for a broad range of cooperation in criminal matters. Mutual assistance available under the Treaty includes: taking of testimony or statements of persons; providing documents, records, and articles of evidence; serving documents; locating or identifying persons; transferring persons in custody for testimony or other purposes; executing requests for searches and seizures; assisting in proceedings related to restraint, confiscation, forfeiture of assets, restitution, and collection of fines; and any other form of assistance not prohibited by the laws of the requested state… ([etc].”


How does this not permit Mr. Trump asking the president of Ukraine for “assistance” in criminal matters arising out of “collusion with Russia,” as specified within the scope of Robert Mueller’s special prosecutor activities? For instance, the matter of CrowdStrike. The cybersecurity firm was co-founded by Russian ex-pat Dmitri Alperovitch, who also happens to be a senior fellow at the Atlantic Council, an anti-Russian think tank funded by Ukrainian billionaire, Viktor Pinchuk, who donated at least $25 million to the Clinton Foundation before the 2016 election. Crowdstrike was the company that “examined” the supposedly hacked DNC servers, while somebody in the Obama administration prevented the FBI from ever seeing them. Does this sound a little like part of the origin story of RussiaGate? Is that not exactly the potential criminal matter that the current attorney general, Mr. Barr, is officially investigating?

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Obvious nonsense though it may be, people will continue to accuse me of supporting Trump. But you can’t accuse Ron Paul of that.

Impeachment…or CIA Coup? (Ron Paul)

You don’t need to be a supporter of President Trump to be concerned about the efforts to remove him from office. Last week House Speaker Nancy Pelosi announced impeachment proceedings against the President over a phone call made to the President of Ukraine. According to the White House record of the call, the President asked his Ukrainian counterpart to look into whether there is any evidence of Ukrainian meddling in the 2016 election and then mentioned that a lot of people were talking about how former US Vice President Joe Biden stopped the prosecution of his son who was under investigation for corruption in Ukraine.

Democrats, who spent more than two years convinced that “Russiagate” would enable them to remove Trump from office only to have their hopes dashed by the Mueller Report, now believe they have their smoking gun in this phone call. It this about politics? Yes. But there may be more to it than that. It may appear that the Democratic Party, furious over Hillary Clinton’s 2016 loss, is the driving force behind this ongoing attempt to remove Donald Trump from office, but at every turn we see the fingerprints of the CIA and its allies in the US deep state. In August 2016, a former acting director of the CIA, Mike Morell, wrote an extraordinary article in the New York Times accusing Donald Trump of being an “agent of the Russian Federation.”

Morell was clearly using his intelligence career as a way of bolstering his claim that Trump was a Russian spy – after all, the CIA should know such a thing! But the claim was a lie. Former CIA director John Brennan accused President Trump of “treason” and of “being in the pocket of Putin” for meeting with the Russian president in Helsinki and accepting his word that Russia did not meddle in the US election. To this day there has yet to be any evidence presented that the Russian government did interfere. Brennan openly called on “patriotic” Republicans to act against this “traitor.” Brennan and his deep state counterparts James Comey at the FBI and former Director of National Intelligence James Clapper launched an operation, using what we now know is the fake Steele dossier, to spy on the Trump presidential campaign and even attempt to entrap Trump campaign employees. Notice a pattern here?

Read more …

Too predictable to be newsworthy.

Hillary Clinton’s Big Comeback Begins Tuesday (WT)

Media attention will intensify on Hillary Clinton on Tuesday. The former first lady, senator, secretary of state and Democratic presidential candidate is ready for another round in the public arena. She has a new book arriving, written with the help of a very close relative. Behold. Here comes “The Book of Gutsy Women: Favorite Stories of Courage and Resilience” — all 464 pages of it. Indeed, the new book of essays now landing on the shelves is written by Mrs. Clinton and her daughter Chelsea Clinton, is published by Simon & Schuster. Some informed observers speculate the book could be yet another indicator — along with increased public appearances and commentary — that Mrs. Clinton pines for a political comeback.


What kind of comeback? Oh, maybe the bumper stickers will read BIDEN/CLINTON 2020, WARREN/CLINTON 2020 — or even CLINTON/CLINTON 2020. Who the heck knows? “Word on the political street now is the rumbling that the impeachment probe launched by House Speaker Nancy Pelosi may be the crack that opens the door for another presidential run by Hillary Clinton. This time, the thinking goes, Hillary would be running with vindication that the 2016 election was ‘stolen’ from her and she can ascend in 2020 to reclaim the mantle for her party and the majority of the country that voted for her,” writes Nate Ashworth, editor in chief of Election Central.

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Wolf Richter mostly manages to deny his own headline.

US Dollar Status as Global Reserve Currency Slides (WS)

If the US dollar loses its hegemony as a global reserve currency, it would be a sea change globally, and specifically for the US economy. Today, we got the next installment in that saga, via the IMF’s quarterly COFER data on foreign exchange reserves. Total global foreign exchange reserves in all currencies ticked up 1.1% from the first quarter, to $11.7 trillion. US-dollar-denominated exchange reserves rose only 0.7% to $6.79 trillion, and their share of total global foreign exchange reserves fell to 61.63%, down from 61.86% in the prior quarter. And this has been going on for years in baby steps:

The US dollar’s share of global reserve currency declines when central banks other than the Fed proportionately reduce their dollar-denominated assets and add assets denominated in other currencies. Compared to the mega-moves in the 1970s, the recent moves have been muted. Nevertheless, the current share of USD-denominated foreign exchange reserves of 61.63% is the lowest since the year-end in 2013. The bump in 2014, 2015, and 2016 has now been unwound:

These US-dollar-denominated exchange reserves are US Treasury securities, US corporate bonds, and other financial assets that central banks other than the Fed are holding in their foreign exchange reserves. The Fed’s own holdings of Treasury securities and Mortgage-Backed Securities are not included in “foreign exchange reserves.” However, the Fed’s holdings of foreign-currency denominated assets are included in the other currencies. Unlike some other central banks, the Fed holds just a smidgen in foreign currency assets – currently $20.6 billion worth, compared to, for example, China’s $3.1 trillion in foreign exchange reserves.


[..] The chart below shows the dollar’s slowly declining but still hegemonic share of foreign exchange reserves, the euro’s essentially flat share, and the other reserve currencies’ comparatively tiny share. The renminbi (RMB) is the short red line near the very bottom:

To shed some light on the tangle of currencies at the bottom of the chart above, it’s useful to look at them without the US dollar and the euro overshadowing the neighborhood:

Read more …

Inflation is not Europe’s problem. The ECB is.

No End In Sight For ECB’s Inflation Problem (MW)

Unemployment in the eurozone declined to 7.4% in September, its lowest level since August, 2008, the EU’s statistics institute Eurostat said Monday. But this good news about the European economy helps underline the predicament the European Central Bank has long struggled with: the persistent low level of inflation. The ECB has undershot its official price stability target, set at “below but close to 2%”, every year since 2013. Keeping the eurozone on that steady inflation path is the only official remit of the ECB. It hasn’t been tasked with other economic policy objectives, like the U.S. Federal Reserve on employment, or the Bank of England on supporting the government’s economic objectives.


Inflation in the eurozone stood at an annual 1% in August, according to Eurostat. The closest the ECB was to its target was last year, when inflation reached 1.8%. That was up from 1.5% in 2017, and 0.2% in both preceding years. The risk of debilitating deflation – falling prices – was the rationale behind the ECB’s first massive quantitative easing program, launched in 2015. The central bank is now citing the financial markets’ declining inflation expectations for 2021 as the main reason for its latest monetary easing package, announced on September 12: They have fallen from 1.8% to 1.5% since the beginning of this year, according to ECB chief economist Philip Lane.

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“..the 77th Brigade is giving the British military “the capability to compete in the war of narratives at the tactical level..”

Twitter Executive For Middle East Is British Army ‘Psyops’ Soldier (MEE)

The senior Twitter executive with editorial responsibility for the Middle East is also a part-time officer in the British Army’s psychological warfare unit, Middle East Eye has established. Gordon MacMillan, who joined the social media company’s UK office six years ago, has for several years also served with the 77th Brigade, a unit formed in 2015 in order to develop “non-lethal” ways of waging war. The 77th Brigade uses social media platforms such as Twitter, Instagram and Facebook, as well as podcasts, data analysis and audience research to wage what the head of the UK military, General Nick Carter, describes as “information warfare”.

Carter says the 77th Brigade is giving the British military “the capability to compete in the war of narratives at the tactical level”; to shape perceptions of conflict. Some soldiers who have served with the unit say they have been engaged in operations intended to change the behaviour of target audiences. What exactly MacMillan is doing with the unit is difficult to determine, however: he has declined to answer any questions about his role, as has Twitter and the UK’s Ministry of Defence (MoD). Twitter would say only that “we actively encourage all our employees to pursue external interests”, while the MoD said that the 77th Brigade had no relationship with Twitter, other than using it for communication.

The 77th Brigade’s headquarters is located west of London. It brought together a number of existing military units such as the Media Operations Group and the 15 Psychological Operations Group. At its launch, the UK media was told that the new unit of “Facebook warriors” would be around 1,500 strong, and made up of both regular soldiers and reservists. In recent months, the army has been approaching British journalists and asking them to join the unit as reservists.

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In reality, he’s preparing to blame everyone else for his own failures. And Dominic Cummings will blame Boris.

Johnson Planning To Bypass Brussels In Bid For New Brexit Deal (Ind.)

Boris Johnson is to attempt a last-ditch charm offensive on EU leaders to get a Brexit deal over the line, after delivering his proposals for a new withdrawal agreement to Brussels as early as the end of this week. With EU chief negotiator Michel Barnier viewed in Downing Street as a stickler for rules who will be hard to shift from the deal struck with Theresa May, Mr Johnson is keen to speak with key European leaders who may be ready to show flexibility ahead of the crunch Brussels summit on 17 October. Plans were made to fly the prime minister to the funeral of ex-president Jacques Chirac for talks in the margins with sympathetic leaders, but it was decided the opportunity did not justify breaking off his attendance at the Conservative conference in Manchester.


London believes a key to any deal will be securing the acceptance of Irish premier Leo Varadkar and German chancellor Angela Merkel. News that negotiator David Frost has finalised a legal text of the UK proposals – said by a senior government source to be “game changing” – emerged as ministers attending cabinet admitted that they were not absolutely sure what the PM plans to do if his hopes of a deal fall flat. With speculation that the plan is known only to a tiny circle around Mr Johnson and his chief adviser Dominic Cummings, housing minister Esther McVey said she did not “know what is necessarily going on in Boris’s head”, while even chancellor Sajid Javid when asked if he knew what the PM would do could say only that “I think I do”.

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And you thought they’d steer clear of hammering Good Friday…

UK Proposes Customs Posts On Both Sides Of Irish Border (RTE)

The UK has proposed the creation of a string of customs posts along both sides of the Irish border as part of its effort to replace the backstop, RTÉ News understands. The ideas, which would be highly controversial, are contained in proposals sent from London to the European Union – extracts of which have been seen by RTÉ News. The proposals would effectively mean customs posts being erected on both sides of the border, but located perhaps five to ten miles ‘back’ from the actual land frontier. This is because under British Prime Minister Boris Johnson, the UK is insisting that Northern Ireland remain completely outside the EU’s customs union for industrial goods and agri-food products.

Even more controversial is a proposal that the goods moving from a so-called “customs clearance site” on the northern side of the border to a similar site on the southern side would be monitored in real time using GPS via mobile phone data, or tracking devices placed on trucks or vans. The ideas are contained in one of four so-called ‘non-papers’ submitted by UK officials during recent technical discussions in Brussels. Under the British proposals, both the UK and EU would create what are believed to be called “customs clearance sites”, but to all intents and purposes a customs post. Traders would have a choice of either a straightforward customs declaration which would have to be lodged and cleared on either side of the border, or the so-called ‘transit’ system.

Under a transit scheme, the exporter becomes a registered ‘consigner’ at base, and the importer becomes a registered ‘consignee’. The method requires a bond from a financial institution to guarantee that the relevant customs duty, excise and VAT have been paid and that the goods do not go illegally off the beaten track en route. The UK proposals have been discussed in technical talks with the European Commission’s Brexit Task Force under Michel Barnier. However, the details of the four non-papers have not been disclosed to EU member states.

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Macron playing Napoleon again. He can’t stop himself.

France’s Overtures Toward Russia (Moisi)

French President Emmanuel Macron is convinced that now is the right time to reset relations with Russia. He has therefore made it a diplomatic priority to restore a climate of trust between Paris and Moscow. Three compelling reasons underlie this move… First and foremost, the international strategic context has changed dramatically. China is rising, while the United States, although still the world’s dominant power, is distancing itself from its global responsibilities. And Russia, with an aging, shrinking population and a huge, largely uninhabited landmass, is a natural prey for China’s long-term ambitions. European leaders should not resign themselves passively to seeing Russia, lacking any other alternative, align with China.

Instead, they should try to convince Russians that their future is with Europe, and not as China’s junior partner in a deeply unbalanced relationship. Russia’s destiny lies in the West, not the East. Moreover, although Russia is no match for China, it has returned as a serious global actor. Many current conflicts, from Eastern Europe to the Middle East, simply cannot be addressed without involving Russia. This represents a triumph of sorts for Russian President Vladimir Putin, who first came to power nearly 20 years ago pledging to restore his country’s geopolitical clout. In particular, Putin wanted the US to treat Russia not as a mere object of history, as it had done under his predecessor Boris Yeltsin, but as a real interlocutor.

And while it might be impossible to restore the bipolar world of the Cold War years, at least the US would be forced to recognize the importance of a modernized and operational Russian army that could intervene in the former Soviet sphere and beyond. This represents a triumph of sorts for Russian President Vladimir Putin, who first came to power nearly 20 years ago pledging to restore his country’s geopolitical clout. In particular, Putin wanted the US to treat Russia not as a mere object of history, as it had done under his predecessor Boris Yeltsin, but as a real interlocutor.

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If these revelations don’t stop Assange’s extradition, nothing will. And Britain will be nothing but a deep black hole.

Assange’s Lawyers Were Under Surveillance. That’s Not The Whole Story (Canary)

A private security company organised 24/7 surveillance of WikiLeaks founder Julian Assange during his stay at the Ecuadorian embassy in London. This included confidential meetings between Assange and members of his legal team. The surveillance was provided directly to the CIA. These revelations could possibly jeopardise the viability of the US extradition case. But within this story there lies another that raises serious questions about the establishment media and allegiances. According to El Pais, Spanish security firm UC Global was responsible for the surveillance of Assange when he was a guest of the Ecuadorian government at their London embassy. UC Global, a firm with an address in Jerez de la Frontera (Cádiz), was hired by Senain, the former Ecuadorian intelligence service, ostensibly to provide protection for Assange.


However, it’s now been revealed that the company’s owner David Morales passed on the results of the operations to the CIA. He even installed a video streaming service direct to the US. Also monitored were meetings between Assange and his lawyers, including Melynda Taylor, Jennifer Robinson, and Baltasar Garzón. After Rafael Correa was replaced by the right-wing Lenín Moreno as president of Ecuador in May 2017, the latter cancelled the UC Global contract. Moreno then issued a new contract to Ecuadorian company Promsecurity. Video recordings and photos taken by that firm were subsequently used in an extortion attempt.

Read more …

 

 

 

 

 

Aug 082019
 


Edward Hopper Ground swell 1939

 

The US government has to come up with very very strong legislation for social media, and it has to do that very soon. Because if it doesn’t, it risks those same social media inciting a civil war (that’s no hyperbole, that is real) on American soil.

And beyond as well, but as Donald Trump said about European efforts to curtail Twitter, Facebook et al’s activities, they’re American companies and hence America’s responsibility. Well, cool, but that means you have to do your job, and you ain’t doing it. Those EU efforts by the way were all about financial issues, tax paying etc., not inciting civil wars or being undemocratic. In short, Brussels doesn’t get it yet either.

Now, the Automatic Earth was kicked off Facebook years ago and never received an explanation for why an account with 1000s of followers was just choked in the bud, so I can’t be expected to celebrate its great achievements for mankind. We still have a Twitter account, but how much longer after I post this essay? There’s no telling, and that is the heart of the entire issue. If I, or you, say anything that anyone at these companies don’t like, they can ban us.

Facebook and Twitter continue to operate on the notion that they are private companies who are entitled to ban anyone they don’t like. In the case of Facebook, that covers half the world population. It’s like running the UN as a private enterprise. And it’s not even the owners or the board, they don’t have time to check who they like or not. Instead, they have hired 10s of 1000s of young -because cheap- kids to do the (shadow-) banning for them.

The companies are all based in Silicon Valley, i.e. California, i.e. NOT Trump territory, and the cheap young kids hired to decide what people can and cannot say on their so-called private platforms reflect that territory and its ideas. But Washington can no longer tolerate that. It must act now. The question is: will it?

 

Why wouldn’t it? Because Facebook, Twitter, Instagram et al have become the US Intelligence’s dream tools to spy on their own people as well as those abroad. The CIA couldn’t even ever have dreamt of a platform that encompasses 3.5 billion people. But Mark Zuckerberg handed it to them on a platter. My idea is Trump would love to go against them, because they go against him and his voters, but US Intelligence, CIA, FBI, may be holding him back from it. Bad, bad idea.

Picked up Charles Nenner on his war cycles at Greg Hunter’s USA Watchdog site, and I wasn’t terribly convinced at first sight, but that was before I read about Mitch McConnell being threatened at his own house.

 

Civil War Cycle Heating up in America

“Years ago when we talked about my war cycles, I said I am more worried about internal social war in the United States than outside wars. I think there is a bigger chance in the United States than in Europe. They say it’s Trump’s fault . . . . I say it’s the other way around. If the Democrats would just get things organized and people would not get that angry. . . . The media will always take the other side, so they will never solve it. I think it is the Democrats whose fault it is that all these killings are there and not the Republicans. . . .


So, there is a cycle of social unrest in the United States, which is 60 years old. So, you go back to what happened in the 1960’s. It could explode, and I think it is going to explode, and there is going to be a major problem. . . . I don’t know how bad it is going to be, but based on cycles, it has to be worse than the 1960’s. Each cycle always is worse. . . . WWII was worse than WWI, so every cycle becomes worse than the first cycle. . . . I don’t feel comfortable living in the United States anymore because people are so aggressive on everything.

Nenner also talks in that piece about how he visited Putin, who is interested in the war cycles idea, so maybe I should read up on those war cycles.

But that Mitch McConnell story interferes and disperses into the whole tale. There apparently were groups of people outside his home, caught on video, who were calling for him to be violently attacked. And when his campaign posted a video of these people on Twitter, the campaign’s account was shut down.

 

“Just Stab The Motherfu*ker”: Twitter Suspends McConnell Campaign For Posting Video Of Violent Threats

“I just want him to have a stroke, that is all,” the woman added. “One of those heart attacks where they can’t breathe, and they’re holding their chest and they fall backwards” “He’s in there nursing his broken arm. He should have broken his raggedy, wrinkled-ass neck,” she said at one point in the video. “Everybody needs to show up wherever this ho is at and make him just regret his fucking life, period,” she added. At one point in the protest, a male protester commenting on McConnell’s recent injury said that he may have been the victim of a “voodoo doll” curse. -Daily Caller


Kevin Golden, McConnell’s 2020 campaign manager noted that “Twitter will allow the words of ‘Massacre Mitch’ to trend nationally on their platform, but locks our account for posting actual threats against us.” Golden says that they appealed to Twitter, which stood by their decision, saying that the account will remain locked until they delete the video. Daily Wire reporter Ryan Saavedra was similarly locked out of his Twitter account for posting the video. “Twitter asked me yesterday to delete this tweet,” Saavedra recounted in a massive tweetstorm. “It showed a person allegedly calling for violence against Mitch McConnell. The person appears to be a BLM activist who has met with Elizabeth Warren.”

And I know, people are going to react to this saying: Oh, it’s Daily Caller, Mitch McConnell, Ryan Saveedra, it’s right wing, but that is so far beyond the point it disqualifies you from any conversation at all. Mitch McConnell, aka MoscowMitch or MassacreMitch, is very far removed from being my favorite person on the planet, but he’s the Senate Majority Leader, and as such an important part of the American political system.

If you don’t like that, there’s a mechanism to express that: the ballot box. Calling for him to be physically attacked right outside the place where he and his family live is not done. Unless perhaps you want the same to happen to you at your residence. But you don’t, do you?

This has nothing to do with left vs right anymore. This is about people who have convinced themselves they are so right in their ideas that anything at all is justified to get their views and their points across, including violence. Well, there’s the seeds of your civil war then.

Now, note that this started well over 3 years ago with the invention out of thin air of Russiagate. Now that that ‘theory’ has been debunked, where are the inventors, i.e. losers, going to hide? Apparently in front of Senate Majority Leader Mitch McConnell’s home.

And what’s next? Right-wing protesters setting up camp outside Mark Zuckerberg’s home, or Adam Schiff’s, Jerry Nadler’s, Elijah Cummings’? We may not be that far removed from that happening. And if it does, Facebook and Twitter will be crucial in organizing it.

Which is why Trump and AG Bill Barr must come up with very strong rules, very soon, defining what social media are allowed to do and what not. And barring Mitch McConnell’s campaign from posting direct threats to the man uttered mere feet away from where he lives doesn’t seem to be the way forward.

The Age of -corporate- Innocence that Zuck and @jack keep trying to hide behind while counting their billions has long gone. They have become bigger political players than the New York Times, CNN and Jeff Bezos. Stop them now or you risk the 2020 elections leading to outright warfare. Mr. Trump, sir, this is your responsibility more than anyone else’s. You have no choice. But you do have the power.

Not many Americans, far as I can see, take the threat of a civil war seriously, including you, Mr. Trump. But you really should. Take on the social media, and you’re halfway there to preventing it.

 

 

 

 

May 022019
 


Bugatti Atlantic Coupé 1935

 

Julian Assange Legal Team Begin ‘Big Fight’ Over Extradition (G.)
US May Have To Stop Borrowing Later This Year – Treasury (R.)
From 2024, All US Debt Issuance Will Be Used To Pay For Interest On Debt (ZH)
Fed Sees No Strong Case For Hiking Or Cutting Rates (R.)
Venezuela and Binary Choice (Murray)
Nellie Ohr’s ‘Hi Honey’ Emails On Russia Collusion Should Alarm Us All (Hill)
Barr Cancels Second Day Of Testimony, Escalating Battle With US Congress (R.)
WSJ: Dems Vilifying Barr For ‘Acting Like A Real Attorney General’ (Hill)
737 Max Sensor Had Been Flagged Over 200 Times To FAA (CNN)
US Environment Agency Says Glyphosate Is Not A Carcinogen (R.)

 

 

Straight from the horse’s foul-smelling mouth, the Guardian. First judge called Assange a narcissist. This one says he cost taxpayers £16m. Judges in Britain are apparently not required to be objective. Here’s praying he’ll receive better treatment today.

Julian Assange Legal Team Begin ‘Big Fight’ Over Extradition (G.)

A struggle over the US request for Julian Assange’s extradition will open in court on Thursday morning, a day after the WikiLeaks founder was jailed for just under a year for breaching bail conditions to avoid being extradited to Sweden. Wednesday’s sentence was decried as an “outrage” by Kristinn Hrafnsson, the editor-in-chief of the whistleblowing website, who said the hearing at Westminster magistrates court to oppose Assange’s extradition would be the start of the “big fight” – a process he said would be “a question of life and death for Mr Assange”. A judge largely rejected the mitigating factors put forward by lawyers for Assange – who took refuge in Ecuador’s embassy to London in 2012 to avoid extradition to Sweden over sexual assault allegations, which he has denied – and told the 47-year-old it was difficult to envisage a more serious example of the offence.

“You remained there for nearly seven years, exploiting your privileged position to flout the law and advertise internationally your disdain for the law of this country,” said Judge Deborah Taylor, as she sentenced him at Southwark crown court. “Your actions undoubtedly affected the progress of the Swedish proceedings. Even though you did cooperate initially, it was not for you to decide the nature or extent of your cooperation with the investigations. They could not be effectively progressed, and were discontinued, not least because you remained in the embassy.” Assange, who was arrested last month when Ecuador revoked his political asylum and invited Metropolitan police officers inside the country’s Knightsbridge diplomatic premises, had written a letter in which he expressed regret for his actions but claimed he had been left with no choice.

“I apologise unreservedly to those who consider that I have disrespected them by the way I have pursued my case. This is not what I wanted or intended,” he said in the letter read out by his lawyer, Mark Summers QC. “I found myself struggling with terrifying circumstances for which neither I nor those from whom I sought advice could work out any remedy. I did what I thought at the time was the best and perhaps the only thing that could be done – which I hoped might lead to a legal resolution being reached between Ecuador and Sweden that would protect me from the worst of my fears.”

Assange, wearing a black blazer and shorn of the beard worn when police carried him out of the embassy last month, was told by the judge that his continued residence there had cost £16m of taxpayers’ money “in ensuring that when you did leave, you were brought to justice”. “It is essential to the rule of law that nobody is above or beyond the reach of the law,” said the judge, who said Assange’s written apology was the first recognition that he regretted his actions.

Read more …

Don’t they say that all the time about twice a year?

US May Have To Stop Borrowing Later This Year – Treasury (R.)

The U.S. government will have to stop borrowing money between July and December if Washington doesn’t agree to raise a legal restriction on public debt, the Treasury Department said on Wednesday. Hitting that so-called “debt ceiling” could trigger a U.S. default on its debt and an immediate recession, a risk that has become a regular facet of U.S. politics over the last decade. The current debt limit was set in March. Treasury has been able to continue borrowing from investors by using accounting measures such as limiting government payments to public sector retirement funds.


“Treasury expects that the extraordinary measures will be exhausted sometime in the second half of 2019,” Treasury Deputy Assistant Secretary Brian Smith said in a statement announcing the department’s quarterly debt issuance plans. Wall Street also sees Treasury exhausting its borrowing authority in the third or fourth quarter, according to the minutes of a meeting of a Treasury advisory committee of financiers. The debt ceiling is already affecting how the government funds itself. Issuance of Treasury bills – short-term debt – is expected to gradually decline over the second quarter due to debt ceiling constraints, Smith said.

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“..while we don’t know yet what the next reserve currency – either fiat, hard or digital – after the US dollar will be, we urge readers to own a whole lot of it.”

From 2024, All US Debt Issuance Will Be Used To Pay For Interest On Debt (ZH)

As part of today’s Treasury Presentation to the Treasury Borrowing Advisory Committee, there is a chart showing the Office Of Debt Management’s forecast for annual US debt issuance, broken down between its three component uses of funds: Primary Deficit, Net Interest Expense, and “Other.” That chart is troubling because while in 2019 and 2020 surging US interest expense is roughly matched by the other deficit components in the US budget, these gradually taper off by 2024, and in fact in 2025 become a source of budget surplus (we won’t be holding our breath). But what is the real red flag is that starting in 2024, when the primary deficit drops to zero according to the latest projections, all US debt issuance will be used to fund the US net interest expense, which depending on the prevailing interest rate between now and then will be anywhere between $700 billion and $1.2 trillion or more.

In short: in the stylized cycle of the US “Minsky Moment”, the US will enter the penultimate, Ponzi Finance, phase – the one in which all the new debt issuance is used to fund only interest on the debt – some time around in 2024. From that point on, every incremental increase in interest rates, which will eventually happen simply due to rising inflation expectations, will merely accelerate the ponzi process, whereby even more debt is sold just to fund the rising interest on the debt, requiring even more debt issuance, and so on, until finally the “Minsky Moment” arrives. At that point, while we don’t know yet what the next reserve currency – either fiat, hard or digital – after the US dollar will be, we urge readers to own a whole lot of it.

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Get rid of the Fed or you will have no economy left. You already don’t have markets anymore, because the Fed became the market, and with the markets the economy will vanish too.

Fed Sees No Strong Case For Hiking Or Cutting Rates (R.)

The U.S. Federal Reserve on Wednesday held interest rates steady and signaled little appetite to adjust them any time soon, taking heart in continued job gains and economic growth and the likelihood that weak inflation will edge higher. “We think our policy stance is appropriate at the moment; we don’t see a strong case for moving it in either direction,” Fed Chairman Jerome Powell said in a press conference following the end of the central bank’s latest two-day policy meeting. Overall, he said, “I see us on a good path for this year.” Fed policymakers said ongoing economic growth, a strong labor market and an eventual rise in inflation were still “the most likely outcomes” as the U.S. expansion nears its 10-year mark.


“The labor market remains strong … economic activity rose at a solid rate” in recent weeks, the Fed said in a policy statement a day after President Donald Trump called on it to cut rates by a full percentage point and take other steps to stimulate the economy. The policy statement, and particularly Powell’s insistence the Fed saw no compelling reason to consider a rate cut in response to weak inflation, prompted a modest selloff in stock markets and pushed bond yields higher. The S&P 500 index fell 0.75 percent, its largest daily decline since mid-March. Interest rate futures also reversed direction, signaling a lower degree of confidence the next Fed move would be a rate cut, exactly the point Powell was driving at in a “stay-the-course” message, said analysts at Cornerstone Macro.

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“Juan Guaido has been groomed for 15 years as a long-term CIA project.”

Venezuela and Binary Choice (Murray)

When a CIA-backed military coup is attempted by a long term CIA puppet, roared on by John Bolton and backed with the offer of Blackwater mercenaries, in the country with the world’s largest oil reserves, I have no difficulty whatsoever in knowing which side I am on. Juan Guaido has been groomed for 15 years as a long-term CIA project. His coup attempt yesterday, which so far appears to have stalled, was the culmination of these efforts to return Venezuela’s oil reserves to US hegemony.

It is strange how the urgent installation of liberal democracy by force correlates so often with oil reserves not aligned to the USA, as in Libya, Iraq or Venezuela, while countries with massive oil reserves which permit US military domination and align with the West and Israel can be as undemocratic as they wish, eg Saudi Arabia. Venezuela is an imperfect democracy but it is far, far more of a democracy than Saudi Arabia and with a much better human rights record. The hypocrisy of Western media and politicians is breathtaking.

Hypocrisy and irony are soulmates, and there are multiple levels of irony in seeing the “liberal” commentators who were cheering on an undisguised military coup, then complaining loudly that people are being injured or killed now their side is losing. Yesterday the MSM had no difficulty in calling the attempted coup what anybody with eyes and ears could see it plainly was, an attempted military coup. Today, miraculously, the MSM line is no coup attempt happened at all, it was just a spontaneous unarmed protest, and it is the evil government of Venezuela which attempts to portray it as a coup. BBC Breakfast this morning had the headline “President Maduro has accused the opposition of mounting a coup attempt”… Yet there is no doubt at all that, as a matter of plain fact, that is what happened.

Read more …

We’re going to have a civil war. But it won’t be civil.

Nellie Ohr’s ‘Hi Honey’ Emails On Russia Collusion Should Alarm Us All (Hill)

First came the text messages between FBI lovebirds Peter Strzok and Lisa Page, which gave us a painful glimpse at potential political bias inside America’s most famous crime-fighting bureau. Now, a series of “Hi Honey” emails from Nellie Ohr to her high-ranking federal prosecutor husband and his colleagues raise the prospect that Hillary Clinton-funded opposition research was being funneled into the Justice Department during the 2016 election through a back-door marital channel. It’s a tale that raises questions of both conflict of interest and possible false testimony.

Ohr has admitted to Congress that, during the 2016 presidential election, she worked for Fusion GPS — the firm hired by Democratic nominee Clinton and the Democratic National Committee to perform political opposition research — on a project specifically trying to connect Donald Trump and his campaign chairman, Paul Manafort, to Russian organized crime. Now, 339 pages of emails from her private account to Department of Justice (DOJ) email accounts, have been released under a Freedom of Information Act request by the conservative legal group Judicial Watch. And they are raising concerns among Republicans in Congress, who filed a criminal referral with the Justice Department on Wednesday night.

They clearly show that Ohr sent reams of open-source intelligence to her husband, Associate Deputy Attorney General Bruce Ohr, and on some occasions to at least three DOJ prosecutors: Lisa Holtyn, Ivana Nizich and Joseph Wheatley. The contents tracked corruption developments in Russia and Ukraine, including intelligence affecting Russian figures she told Congress she had tried to connect to Trump or Manafort. “Hi Honey, if you ever get a moment you might find the penultimate article interesting — especially the summary in the final paragraph,” Nellie Ohr emailed her husband on July 6, 2016, in one typical communication. The article and paragraph she flagged suggested that Trump was a Putin stooge: “If Putin wanted to concoct the ideal candidate to service his purposes, his laboratory creation would look like Donald Trump.” Nellie Ohr bolded that key sentence for apparent emphasis.

Read more …

Still don’t get why they insist on lawyers asking their questions for them.

Barr Cancels Second Day Of Testimony, Escalating Battle With US Congress (R.)

Attorney General William Barr on Wednesday canceled plans to testify before the House of Representatives about his handling of Special Counsel Robert Mueller’s Russia investigation, further inflaming tensions between U.S. President Donald Trump and Democrats in Congress. Barr was due to face the Democratic-controlled House Judiciary Committee on Thursday, but pulled out after the two sides were unable to agree on the format for the hearing. “It’s simply part of the administration’s complete stonewalling of Congress,” Judiciary Committee Chairman Jerrold Nadler told reporters. Justice Department spokeswoman Kerri Kupec said Nadler’s proposal to have committee lawyers question Barr was “unprecedented and unnecessary,” saying questions should come from lawmakers.


The Justice Department also said on Wednesday it would not comply with a Nadler-issued subpoena seeking an unredacted version of Mueller’s report and underlying investigative files from the probe. Earlier on Wednesday, Barr spent more than four hours before the Republican-controlled Senate Judiciary Committee where he fended off Democratic criticism of his decision to clear Trump of criminal obstruction of justice and faulted Special Counsel Robert Mueller for not reaching a conclusion of his own on the issue.

Read more …

The Wall Street Journal takes a very strong stand.

WSJ: Dems Vilifying Barr For ‘Acting Like A Real Attorney General’ (Hill)

The Wall Street Journal editorial board on Wednesday excoriated Democrats for making Attorney General William Barr out to be a “villain,” defending Barr as merely “acting like a real Attorney General.” “Washington pile-ons are never pretty, but this week’s political setup of Attorney General William Barr is disreputable even by Beltway standards,” the board wrote in an op-ed published just hours after Barr testified before the Senate Judiciary Committee. The editorial, which was shared by President Trump on Twitter, slammed Democrats’ criticism of Barr’s handling of special counsel Robert Mueller’s report on Russian election interference and possible obstruction of justice by Trump.


The board also took issue with Mueller, saying that the letter he wrote to Barr expressing concerns with how the attorney general summarized his investigation amounted to “posterior covering.” “Democrats leapt on the letter as proof that Mr. Barr was somehow covering for Donald Trump when he has covered up nothing,” the board wrote, arguing that Barr’s four-page memo adequately summarized the chief findings of Mueller’s investigation. The board wrote that the “trashing of Barr shows how frustrated and angry Democrats continue to be that the special counsel came up empty in his Russia collusion probe.”

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“Single sources of data are considered acceptable in such cases by our industry..” As I explained when this came out, you need three sources. One is crazy, two is too dangerous.

737 Max Sensor Had Been Flagged Over 200 Times To FAA (CNN)

The device linked to the Boeing 737 Max software that has been scrutinized after two deadly crashes was previously flagged in more than 200 incident reports submitted to the Federal Aviation Administration, but Boeing did not flight test a scenario in which it malfunctioned, CNN has learned. The angle-of-attack (AOA) sensor, as it’s known, sends data to a 737 Max software system that pushes the nose of the aircraft down if it senses an imminent stall. That software, triggered by erroneous data from AOA sensors, is believed to have played a role in crashes of Lion Air and Ethiopian Airlines jets. Former Boeing engineers and aviation analysts interviewed by CNN have criticized Boeing’s original software design for relying on data from a single AOA sensor, claiming that those devices are vulnerable to defects.

FAA data analyzed by CNN supports that assessment. The FAA has received at least 216 reports of AOA sensors failing or having to be repaired, replaced or adjusted since 2004, according to data from the FAA’s Service Difficulty Reporting website. [..] In one 2011 case, the flight crew on a Boeing 737-800 reported that the “angle of attack and airspeed failed” and declared an emergency. An AOA sensor was then replaced. The FAA also issued two directives for various Boeing aircraft models before the 737 MAX was released, indicating that Boeing was aware of the potential for the sensors to cause problems in its planes. A 2013 directive mandated inspections of certain AOA sensors to prevent possible problems that included “obstacles after takeoff, or reduced controllability of the airplane.”

Another FAA directive published in 2016 warned that AOA sensors on Boeing MD-90-30 airplanes needed to be modified and tested to address “the unsafe condition on these products.” While those directives did not involve the 737 Max, Peter Goelz, a former managing director of the National Transportation Safety Board (NTSB) and a CNN aviation analyst, said AOA sensors fundamentally work the same on different aircraft models. “This is a fairly simple external device that can get damaged on a regular basis,” Goelz said. “That’s important because Boeing made the decision to rely on them as single sources for streams of data.”

In a statement to CNN, a Boeing spokesperson said the 737 Max and its stall-prevention system, called MCAS, were certified in accordance with all FAA requirements, and that Boeing’s analysis for the plane determined that in the event of erroneous inputs from an AOA sensor, pilots would be able to maintain control of the plane by following established procedures. “Single sources of data are considered acceptable in such cases by our industry,” the Boeing spokesperson said.

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Unbelievable. Might as well end the EPA too. There is only one way to deal with GMO and the poisons that keep them alive: precautionary principle.

US Environment Agency Says Glyphosate Is Not A Carcinogen (R.)

The U.S. Environmental Protection Agency (EPA) said on Tuesday that glyphosate, a chemical in many popular weed killers, is not a carcinogen, contradicting decisions by U.S. juries that found it caused cancer in people. The EPA’s announcement reaffirms its earlier findings about the safety of glyphosate, the key ingredient in Bayer’s Roundup. The company faces thousands of lawsuits from Roundup users who allege it caused their cancer. “EPA continues to find that there are no risks to public health when glyphosate is used in accordance with its current label and that glyphosate is not a carcinogen,” the agency said in a statement.


Farmers spray glyphosate, the most widely used herbicide in U.S. agriculture, on fields of soybeans and other crops. Roundup is also used on lawns, golf courses and elsewhere. The EPA did previously find ecological risks from the chemical and has proposed new measures to protect the environment from glyphosate use by farmers and to reduce the problem of weeds becoming resistant to it. Bayer said it was pleased the EPA and other regulators who have assessed the science on glyphosate for more than 40 years continue to conclude it is not carcinogenic. “Bayer firmly believes that the science supports the safety of glyphosate-based herbicides,” it said in a statement. The company has repeatedly denied allegations that glyphosate and Roundup cause cancer.

Read more …

 

 

Mar 292019
 


Leonardo da Vinci Vitruvian man c1510

Leonardo wrote: “Vitruvius, architect, writes in his work on architecture that the measurements of man are distributed in this manner”:

The length of the outspread arms is equal to the height of a man.
From the hairline to the bottom of the chin is one-tenth of the height of a man.
From below the chin to the top of the head is one-eighth of the height of a man.
From above the chest to the top of the head is one-sixth of the height of a man.
From above the chest to the hairline is one-seventh of the height of a man.
The maximum width of the shoulders is a quarter of the height of a man.
From the breasts to the top of the head is a quarter of the height of a man.
From the elbow to the tip of the hand is a quarter of the height of a man.
From the elbow to the armpit is one-eighth of the height of a man.
The length of the hand is one-tenth of the height of a man.
The root of the penis [Il membro virile] is at half the height of a man.
The foot is one-seventh of the height of a man.

 

 

It’s almost silly to write anything on Brexit right now, because at right now+1 everything may have changed again. But almost silly is not the same as completely silly. At this point, whatever the outcome will be, it will serve to ridicule the idea and image of the UK as a functioning democracy. Something that ironically all participants in the Kabuki theater claim to be intent on preventing.

Both major parties -and supposedly other politicians too- say that “not respecting” the result of the Brexit referendum would imperil democracy. But “respecting” it at all cost will imperil it just as much, if not more.

On June 23, 2016, people voted on the question: “Should the United Kingdom remain a member of the European Union or leave the European Union?” But nobody knew what they were voting for, and that’s reflected in today’s lack of agreement on what Brexit means, almost 3 years after the vote.

People had been inundated with promises about what Brexit would mean, especially from the Leave side, anxious to paint a vision of a wealthy country ‘finally’ able to sign it own trade deals with the world, free from compulsory contributions to Brussels. But none of these things were facts, they were promises, most of whom have so far turned out to be empty.

The notion that it is the summit of democracy to make people vote on things they don’t understand (because no-one can tell them) is a curious one. And it’s perhaps even more curious to maintain that voting when people have a better idea of what their vote will entail is undemocratic. That would open a “chasm of distrust”, is the claim. In reality that chasm has long been opened, just by the behavior of politicians.

What is happening as we speak is that politicians are free to turn on a dime – and do just that- when it comes to who or what they elect to support, but people are not. And that is being presented, by both left and right, as -more- democratic. They would like you to believe this is how a democracy should function, but none of that is cast in stone. It’s just another idea.

Underlying this idea about democracy is undoubtedly to some extent the fear of violent reactions from the Leave side if there were to be a second referendum, or if Brexit gets postponed “too long”. But do they really expect the country to accept all this cattle trading lying down, where MPs scramble to find something, anything that is accepted by a narrow margin, and that narrow margin will be used to push through Brexit, which itself was voted through by a narrow margin?!

That’s a serious question that no-one seems to ask: do they believe the 6 million people who have signed an anti-Brexit petition, and the over 1 million who marched in London on March 23, and who may come out in even larger numbers on the 30th, to remain peaceful after having witnessed how their interests are being squandered by politicians jockeying for position?

 

In the June 23, 2016 referendum, the Leave side got 17,410,742 votes (51.89%) while Remain got 16,141,241 votes (48.11%). That’s awfully close. In most jurisdictions it would be impossible to hold a vote with so much potential impact on a country, on its legal system, its trade etc., with such margins. Often if not mostly, a 2/3 majority would be needed to make such drastic changes.

There are solid reasons for such legal requirements. Many people would summarize them as guaranteeing the quality of a democracy. To name an example, one would expect a potential petition to get rid of Britain’s royal family to not be decided by just one vote either.

But that’s what is very much possible in the case of Brexit. If one of the 8 indicative votes held in Parliament had gotten a one vote majority, it could have dictated the way forward. The same is true for Theresa May’s deal, even after suffering two historically large losses in the house. Boris Johnson left government because of it, then said he’s sign up anyway, and the day after did a 180º again. Is it that strange that a democracy would want to build in a few safeguards against such shenanigans?

 

But perhaps most of all, what other countries would turn to much sooner when mired in a mess such as Brexit under May has become, is a national government. Because that is the ultimate instrument to make sure your democracy functions. Provided it’s executed in good faith. Such a government need not consist of -only- politicians either. Which fits in nicely with the anonymous comment from the Guardian that I posted under the title The Failure of Party Politics earlier this week:

We are no longer able to govern, we cannot lead and we cannot decide. We must return the question of our place in the world back to the people and once that’s done we must dissolve this house and our parties and a new slate be mined because right now not one of us is fit to stand in this place and claim leadership of this disunited kingdom.

Drag the UK out of the EU on 1 or 2 votes now, after almost 3 years of chaos and incompetence, and you’re pretty much guaranteed to end up with more chaos, at least some of which will not have a peaceful character. In order to prevent that from happening, take a step back and start talking to each other. In a venue other than that Parliament, because it has failed the people.

You can renege on May’s article 50 decision and continue in the EU, just with a lot of broken trust. But push through May’s contorted plans today and you’re stuck outside pretty much forever. There’s a lot wrong with the EU, and there’s little wrong with the idea in itself of leaving it, but people didn’t vote to Leave only to get stuck with even more incompetence than they had with Brussels. And chances are they simply won’t accept it.

So forget about your party politics, that system is dead regardless of any outcomes, you’ve just shown that day after exasperating day. Get a group of judges and lawyers and business people and people from all walks of life together and start a national conversation based on trust. You’re not going to like any of the alternatives.

By sticking to the Brexit process as it’s been developing up to this point you’re not guaranteeing democracy, you’re guaranteeing its demise.

NB: I fully expect you to continue as you have. I have good friends who live in the UK, and many readers, but it’s not where I reside, so it’s not really any skin off my back. But you guys hurt my eyes. As I wrote earlier today: Sometimes I wonder what John Lennon would have said.

 

 

Apr 182018
 


Francesco Hayez The Death of the Doge Marin Faliero 1867

 

 

Dr. D’s swift response to my essay yesterday, Every Kingdom Divided Against Itself. On the mechanisms by which empires fall. They’re always similar and familiar.

 

 

Dr. D: Wonderfully said. Since no one will report, here’s what happened to that airstrike. The one where we declare a victory and go home (or try to).

They targeted 10 sites, yet after the Pentagon said it was a perfect mission, they only reported on 4. Who were the other 6?


Duwali airbase – 4 missiles fired, 4 shot down
Dumayr airbase – 12 missiles fired, 12 shot down
Baley airbase – 18 missiles fired, 18 shot down
Shayrat airbase – 12 missiles fired, 12 shot down
Marj Ruhayyil airbase – 18 missiles fired, 18 shot down
Damascus international airport – 4 missiles fired, 4 shot down

Sounds like an amazing ad for Russian military hardware and Russian alliances, and an amazing warning to warhawks in the Pentagon to check themselves.

And hold on: wouldn’t bombing a major chemical weapons manufacturing facility lead to a cloud of nerve and/or other gas killing every civilian within 20 miles? I.e. the entire capital city? Or did they know that there was nothing there already which is why they were confident it could not lead to an incident that would be recorded as the worst chemical attack of all time? You know, chemically attacking 1.7 million Syrians to save 10 Syrians from chemical attacks?

Yet this illegal, reckless, and (intentionally?) futile attack is NOT ENOUGH for CNN, MSNBC and their ilk. Denouncing Trump for bombing Syria, they also denounced him for NOT bombing Syria. Adequately. Or fully mobilizing the entire U.S. military for a ground invasion.

Or whatever, as weasel-faced chicken hawks, they wouldn’t openly say what they wanted, only that Trump openly bombing a nation outside the U.N. without a declaration of war as they themselves demanded, was pointless and weak. Which is why they also wanted it, in side-by-side front page articles? Or like Veruca Salt they want a pony AND an oompa loompa?

 

This IS weak, and like the late Soviet Union, it IS divided, no one IS in charge, clearly, as we see: the FBI, Justice, Pentagon, CIA, all make it a point of honor to openly, proudly disobey direct orders from their boss, and with him their real employer, the American people who elected him. And which they worked tirelessly to election tamper and deny and/or remove him.

And that’s perfectly okay with everybody. Is that normal for everyone in a business, a platoon, to directly countermand all direct orders? It is these days, and not just with Trump. Once you throw off the Logos, every man does what is right in his own eyes, they are not restrained by petty law and custom, by order and precedent, for they will be as the most high.

This is as true down at Taco Bell as in Federal Court, in the Justice Department, true in police departments, schools, hospitals, and even public lavatories. Order, rules, are whatever some official wants them to be during the 5 minutes they meet you. An hour later, the rules, your punishment, even their description of reality itself is all different. Railroad one guy: it’s legal, commendable! Railroad the next guy? It’s draconian, the death penalty.

Look at someone wrong? Have an opinion? Lose your life, liberty, property, reputation and career. A Celebrity? Poor dear: no matter how many felonies, how many killed, or how often wrong, it never matters. Not just saying that, the number of police acquitted for killing unarmed citizens exceeds Parkland by leagues. And this licence is given not just to judges and investigators but by the people themselves.

 

We have an Emperor Nero or early Robespierre government. There is no logic in them. No Logos. When you expel Logos actively, joyfully, you get the anti-Logos: pure random chaos, disorder, violence, and death. No one can work with anyone, trust anyone, restrain anyone, work together, or plan. You get the Reign of Terror and the purges of the Lion’s Mouths under the Council of Ten.

This was well engineered to bring down the U.S. in a repeat of the Russian Revolution of 1918, and it’s going relatively well. When the people themselves have no order, it’s hard enough to hold the people. But when the government doesn’t either, and fights itself while lying, there’s less hope than ever.

Because while government can be reformed, it takes generations of work to re-instill the Logos, rules, law, customs, order, consequences, back into the people. Sometimes it seems nothing can purge them of these delusions of theft and power but fire.

But one way or the other, we’re in it now. The Civil War is at home. Syria is just an example of our domestic war. Remember the L.A. Times reporting the CIA-imbedded resistance openly shooting the Pentagon-imbedded Kurds? Two agencies killing each other with bullets? That went on every day before and since, politically, socially, economically, and now militarily.

The airstrike in Syria — real or fake — is that war. A war of order and law vs unrestrained will-to-power. And that battle of Logos and anti-Logos is worldwide.

 

 

Aug 222017
 
 August 22, 2017  Posted by at 8:35 am Finance Tagged with: , , , , , , , , ,  6 Responses »


Pierre Bonnard Nude in an Interior c1935

 

Periods Of Re-Pricing Are Usually Quick And Brutal (Roberts)
US House Price Bubbles 2.0 (Hanson)
QE Is Like Heroin, Says Former UK Treasury Official (G.)
UK Credit Card Lending Booms As Real Wages Fall (Ind.)
Cash is Not The Curse (Mark GB)
US Gross National Debt to Spike by $800 Billion in October? (WS)
Why Peter Costello Is Not Even Half Right On Housing (ND)
Diminishing Returns (Jim Kunstler)
What Would A US Civil War Look Like? (Copley)
Hate is the New Sex (Greer)
Greece Concerns Peak Amid Sudden Spike In Refugee Arrivals (K.)
US Farmers Confused By Monsanto Weed Killer’s Complex Instructions (R.)
UK Blasted Over ‘Shocking’ Export Of Deadly Weedkiller To Poorer Countries (G.)
The Blue Dogs of Mumbai (G.)

 

 

And the longer re-pricing is postponed, through QE etc., the steeper the fall will be.

Periods Of Re-Pricing Are Usually Quick And Brutal (Roberts)

1. Stock prices run in cycles. Periods of re-pricing are usually quick and powerful.

7. Your first loss will often be your best loss. No one is right all the time and you don’t have to be. There are market participants that are immensely profitable by being right only 30% of the time. It is good to have conviction in your investment thesis, but discipline should always trump conviction.

8. Optimism and pessimism in the stock market are contagious. Investor psychology often loses its logic and become emotional. The news media and the most recent price action play a particularly important role in developing moods of mass optimism or pessimism.

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Debt slaves.

US House Price Bubbles 2.0 (Hanson)

A big problem with house prices experiencing even a “moderate” correction of 10% to 20% — already underway in many of the most over-priced regions — is with between 40% and 50% of all house purchases for years being of the “less than 10% down” variety — and because it takes 8% to 10% equity to sell plus the 3% to 10% down payment on the new house — it doesn’t take much downside to swamp the nation in “NEGATIVE EQUITY” once again. And we know for certain that many homeowners rather pay their credit cards and car payments before their mortgage when they are underwater.

ITEM 1) Household income INCREASE needed to Buy the Median Priced House in Key Cities. Bottom Line: On a “national” basis the divergence isn’t too bad…6%. But, in the key cities that drive the US economy, Bubble 2.0 has blown large. This represents significant downside, especially in the sand states, just like in Bubble 1.0.

ITEM 2) DIVERGENCE between Actual Household Income & Income Needed to Buy the Median Priced House. Bottom Line: Here too, on a “national” basis the divergence isn’t too bad…-6%. But, in the key cities that drive the US economy, Bubble 2.0 has blown large.

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It’s worse, actually. Heroin cold turkey is doable though hard. QE cold turkey is definitely not.

QE Is Like Heroin, Says Former UK Treasury Official (G.)

A former senior Treasury mandarin has compared quantitative easing to heroin and called for an end to almost a decade of electronic money printing by central banks. Nick Macpherson was permanent secretary to the Treasury when Bank of England officials started buying UK government bonds to stimulate the economy following the financial crisis. On Monday, he said it was “time to move on” from QE, which is credited with helping Britain into recovery but remains in use nine years later amid concerns over Brexit. Threadneedle Street initially began pumping £200bn into the gilt market in 2009 to boost the economy, before expanding the programme to £435bn, including an extra £60bn following the EU referendum. The bond buying scheme is similar to massive stimulus packages used by other countries, such as the Fed’s $4.5tn of asset purchases (£3.5tn) and the ECB ’s €2.3tn (£2.1tn) plan.

Lord Macpherson’s call comes as pressure mounts on the world’s central bankers to give more clues about how they intend to exit QE in a process known as “normalisation” almost a decade on from the crash. Some indications could be given at a meeting of senior officials at Jackson Hole in the US later this week. Mario Draghi, the ECB governor, is expected to be the star turn at the event watched by global investors, although he is not thought to be preparing to announce the end of QE just yet. While QE is credited with lowering borrowing costs and helping banks to lend more to consumers and businesses, critics say such schemes inflate assets owned by the richest in society, while punishing savers without large amounts of wealth. Macpherson did not single out the specific bond-buying programme of a particular central bank. “QE like heroin: need ever increasing fixes to create a high. Meanwhile, negative side effects increase. Time to move on,” he wrote on Twitter.

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And after all the QE, people are poorer than before.

UK Credit Card Lending Booms As Real Wages Fall (Ind.)

UK consumers are increasingly purchasing goods on plastic with the number of transactions on credit and debit cards jumping 12% in the last year. The increase was the fastest annual rise in the number of card transactions since 2008 and comes after warnings from the Bank of England about the growth of personal debt. Shoppers spent 7.2% more on all types of cards in the year to the end of June, despite real wages falling over the period, data from industry body UK Finance showed. The total value of credit and charge card purchases increased 6.9% over the 12 months with credit card lending accelerating in April, May and June to an annual growth rate of 9%. During those three months, the number of people defaulting on their credit card bills and personal loans “increased significantly”, the Bank of England said in a recent report.

The rise comes as official figures show real earnings have declined. Average pay rose at an annual rate of 2.1% in the three months to June – well below the inflation rate of 2.6% in the year to the end of June. Overall consumer spending was up 1.3% in the year to July, the Office for National Statistics said in a separate release this month. Peter Tutton, head of policy at StepChange debt charity, expressed concern at the findings. “With our research estimating 3.2 million people are using credit cards to pay for everyday household expenses, the growing stock of credit card debt should focus attention on households in financial difficulties,” he said. Mr Tutton said the growth in credit card cash advances was particularly worrying. This type of borrowing is expensive and can be a warning sign that borrowers are facing financial difficulty.

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More on Ken Rogoff and Larry Summers’ crazy ideas of power over people’s money.

Cash is Not The Curse (Mark GB)

There’s a pub in the Welsh hills, not far from where I live, called ‘The Tylers Arms’ – pronounced ‘tillers’. The name originated, I believe, in the 18th century. The local villagers, who all worked on the land, would go there to pick up their wages in the form of ‘tyles’ – some of which would be immediately exchanged for beer, and thus returned to the landowner…who also owned the pub…and the local store. Thus, the ‘tyles’ circulated regularly, providing employment & cheap produce for the villagers, a steady and almost ‘captive’ profit for the landowner, and stability for the community. As the industrial revolution progressed some of the larger UK manufacturers adopted a similar system, but using fiat currency – e.g. there is a ‘village’ in Birmingham known as Bourneville, which was built by the Cadbury family.

Now before anyone thinks I’ve got unresolved baggage on feudalism, a ‘downer’ on capitalism, or a yearning for socialism…hold your horses please…this is about something far more serious than the ‘isms’. This is about who controls the money. The folks who do that…can, and do, call the tune for the rest of us. And that’s what I want to talk about here.

These days our monetary masters are much more sophisticated – our ‘tyles’ are pieces of paper backed by government fiat. You can work for pretty much whomever you like, and you can buy from whomever you like, but one way or another the government will take a cut of everything you earn and everything you spend. You can do the odd ‘swapsie’ with your pals but you can’t pay taxes with home grown tomatoes – the IRS don’t do vegetables – they can’t digitise them or create them with a keystroke so veggies would confuse the poor dears.

What happens next is technical and varies between territories, so let’s just deal with the ‘myth’: The taxman’s ‘cut’ is used to boost the economy on your behalf by spending it on useful things like building roads and bridges. It also includes an ever-growing list of things that you didn’t even realise you need, like cruise missiles & other stuff that goes ‘BANG’, along with other seemingly ‘essential’ services like bribing foreign governments and funding ‘moderate rebels’ to remove the foreign governments that can’t be bribed. Clearly we’ve come a long way from tyles, especially in the case of the dollar, which can used to bribe governments on seven continents. The chap who owned the Tillers never dreamt of such power – this is considered to be progress…

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Now that Goldman rules the White House, default risk is definitely down.

US Gross National Debt to Spike by $800 Billion in October? (WS)

“There is zero chance, no chance we won’t raise the debt ceiling,” swore Senate Majority Leader Mitch McConnell (R., Ky.) at an event in Louisville, Kentucky, on Monday. He who couldn’t get his Republican ducks all lined up in a row to get any major legislation passed this year was confident that the Senate would pass a bill that would raise the debt ceiling so that the government could continue to pay for things that Congress told the Government to pay for, and so that the government could service its debts, rather than default on them. Treasury Secretary Steven Mnuchin was there with him, pleading once again for a “clean” debt-ceiling increase, according to the Wall Street Journal. His “magic super Treasury powers” that allow the government to conserve cash to avoid having to issue more debt will expire at the end of September, he said.

“This is not about spending money,” he said. “This is about paying for what we’ve spent, and we cannot put the credit of the United States on the line.” The debt ceiling is just under $20 trillion. While the government can issue bonds to redeem maturing bonds – and it does this all the time – it cannot allow the gross national debt to go beyond the debt ceiling. But because it has to continue to pay for things that Congress mandated in its various spending bills over the years, the Treasury scrounges up the money from other government accounts, robbing Peter to pay Paul, so to speak. For example it temporarily short-changes the Civil Service Retirement and Disability Fund. These “extraordinary measures,” as they’re called, or the “magic super Treasury powers,” as Mnuchin called it, run out after a while.

Mnuchin said in his last letter to Congress that the out-of-money-date is September 29. But as in the past, the real out-of-money date can probably be stretched into October. These shenanigans make the entire world shake its collective head and pray that Congress, after going through its charade, will for the umpteenth time raise the debt limit. The other option is a US default. Its global consequences are too ugly to even imagine. But this charade has some peculiar effects, beyond its entertainment value: for months on end, it covers up the true extent of US government debt, and the current surge of this debt. This chart shows the gross national debt going back to 2011, including the last two debt-ceiling fights. Note the long flat lines leading into October or November, followed each time by an enormous spike:

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A good example of exatly how stuck governments and central banks are after blowing housing bubbles. There was an Australian tycoon this week who said the Oz bubble won’t pop because people are too heavily invested in property…

Why Peter Costello Is Not Even Half Right On Housing (ND)

When former treasurer Peter Costello called on Monday for interest rates to be ‘normalised’ upwards to stop Australia’s credit bubble getting any larger, he was very nearly half right. As long as the Reserve Bank keeps the official cash rate at the record low of 1.5%, the economy will become increasingly “unbalanced”, as he put it. And although struggling families will protest that they can’t afford higher mortgage repayments, the other side of that coin is that each successive wave of first home owners is taking on even higher debts. The longer that super-low rates persist, the more debt the banks will be able to balance on the shoulders of new home buyers. That has already created huge property-based inequality. But Mr Costello’s comments weren’t focused on that imbalance – he’s worried about the impact that unstable house prices or teetering banks could have on economic growth more generally.

He told The Australian that “once [the price of] money returns to more normal levels” Australia could face a “big problem” with asset prices and the housing market. Quite right, but what could prevent that? A gradual increase in rates will not, in itself, ‘fix’ the housing market. To do that, two other abnormalities need to be addressed. The one mentioned most by Mr Costello’s side of politics is the availability of suitable dwellings – the ‘supply problem’. That is a wildly misunderstood problem, so I will look at it separately in coming days. But bigger than either low rates or the supposed ‘supply problem’ is the abnormality that Mr Costello himself created – tax laws that reward investors for making annual losses in the housing market, so as to reap lightly-taxed capital gains years down the track.

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“..an impenetrable smokescreen of legal blather in the service of racketeering.”

Diminishing Returns (Jim Kunstler)

These two words are the hinge that is swinging American life — and the advanced techno-industrial world, for that matter — toward darkness. They represent an infection in the critical operations of daily life, like a metabolic disease, driving us into disorder and failure. And they are so omnipresent that we’ve failed to even notice the growing failure all around us. Mostly, these diminishing returns are the results of our over-investments in making complex systems more complex, for instance the replacement of the 37-page Glass-Steagall Act that regulated American banking, with the 848 page Dodd-Frank Act, which was only an outline for over 22,000 pages of subsequent regulatory content — all of it cooked up by banking lobbyists, and none of which replaced the single most important rule in Glass-Steagall, which required the separation of commercial banking from trafficking in securities.

Dodd-Frank was a colossal act of misdirection of the public’s attention, an impenetrable smokescreen of legal blather in the service of racketeering. For Wall Street, Dodd-Frank aggravated the conditions that allow stock indexes to only move in one direction, up, for nine years. During the same period, the American economy of real people and real stuff only went steadily down, including the number of people out of the work force, the incomes of those who still had jobs, the number of people with full-time jobs, the number of people who were able to buy food without government help, or pay for a place to live, or send a kid to college. When that morbid tension finally snaps, as it must, it won’t only be the Hedge Funders of the Hamptons who get hurt. It will be the entire global financial system, especially currencies (dollars, Euros, Yen, Pounds, Renminbi) that undergo a swift and dire re-pricing, and all the other things of this world priced in them.

And when that happens, the world will awake to a new reality of steeply reduced possibilities for supporting 7-plus billion people. The same over-investments in complexity have produced the racketeering colossus of so-called health care (formerly “medicine”), in case you’re wondering why the waiting room of your doctor’s office now looks exactly like the motor vehicle bureau. Meanwhile, it’s safe to say that the citizens of this land have never been so uniformly unhealthy, even as they’re being swindled and blackmailed by their “providers.” The eventual result will be a chaotic process of simplification, as giant hospital corporations, insurance companies, and overgrown doctors’ practices collapse, and the braver practitioners coalesce into something resembling Third World clinics.

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“..such a conflict – physical or political – could, equally, lead to a victory for nationalism over globalism, and to the protection of currencies and values.”

What Would A US Civil War Look Like? (Copley)

There is little doubt that the US, despite the evidence that economic recovery is at hand, could spiral into a self-destructive descent of dysfunction, dystopia, and anomie. The path toward a “second civil war” has significant parallels with the causes of the first US Civil War (1861-65). Both events — the 19th Century event and a possible 21st Century one — saw the polarization of a fundamentally urban, abstract society against a fundamentally regional, traditional society. In some respects, it is a conflict between people with long memories (even if those memories are flawed and selective) and people to whom memories and history are irrelevant. Equally, it is a conflict between identity and materialism, with the abstract social groups (the urban populations) the most preoccupied with short-term material gain.

I have covered the US for 50 years, and my earliest view of it was, a half century ago, that its populations would inevitably polarize into protective islands of self-interest, surrounded by seas of unthinking locusts. What is ironic is that the present islands of wealth and power — the cities — have come to represent short-term materialism, as cities have throughout history. But what is interesting is that, despite the global attention on the political/geographic polarizations occurring in the US and other parts of the Western world, there has been a reversion in other parts of the world to a sense of Westphalian or pre-Westphalian nationalism. The fact that “the West” may have ring-fenced Iran, Russia, and so on, with sanctions and other forms of isolation may well be what ensures their enduring status.

They have avoided the contagion of globalism. Russia, indeed, recovered from the Soviet form of globalism in 1991. An urban globalist “victory” over Trump and Brexit would trigger that meltdown toward a form of civil societal collapse – civil war in some form or other – as the regions disavow the diktats of the cities. That would, in turn, bring about the global economic uncertainty which could impact the PRC and then the en-tire world. But such a conflict – physical or political – could, equally, lead to a victory for nationalism over globalism, and to the protection of currencies and values. We have seen this cycle repeated for millennia. It is the eternal battle.

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The Archdruid from a few weeks ago.

Hate is the New Sex (Greer)

It occurred to me the other day that there’s a curious disconnect between one of the most common assumptions most of us make about how to make the world better, on the one hand, and the results that this assumption has had when put into practice, on the other. It’s reminiscent of the realization that led James Hillman and Michael Ventura to title a once-notorious book of theirs We’ve Had A Hundred Years Of Psychotherapy And The World’s Getting Worse. In this case as in that one, something that’s supposed to make things better doesn’t seem to be doing the trick—in fact, quite the opposite—and it’s time that we talked about that. You know the assumption I have in mind, dear reader. It’s the conviction that certain common human emotions are evil and harmful and wrong, and the way to make a better world is to get rid of them in one way or another.

That belief is taken for granted throughout the industrial societies of the modern West, and it’s been welded in place for a very long time, though—as we’ll see in a moment—the particular emotions so labeled have varied from time to time. Just now, of course, the emotion at the center of this particular rogue’s gallery is hate. These days hate has roughly the same role in popular culture that original sin has in traditional Christian theology. If you want to slap the worst imaginable label on an organization, you call it a hate group. If you want to push a category of discourse straight into the realm of the utterly unacceptable, you call it hate speech. If you’re speaking in public and you want to be sure that everyone in the crowd will beam approval at you, all you have to do is denounce hate.

At the far end of this sort of rhetoric, you get the meretricious slogan used by Hillary Clinton’s unsuccessful presidential campaign last year: LOVE TRUMPS HATE. I hope that none of my readers are under the illusion that Clinton’s partisans were primarily motivated by love, except in the sense of Clinton’s love for power and the Democrats’ love for the privileges and payouts they could expect from four more years of control of the White House; and of course Trump and the Republicans were head over heels in love with the same things. The fact that Clinton’s marketing flacks and focus groups thought that the slogan just quoted would have an impact on the election, though, shows just how pervasive the assumption I’m discussing has become in our culture.

Now of course most people these days, when confronted with the sort of things I’ve just written, are likely to respond, “Wait, are you saying that hate is good?”—as though the only alternatives available are condemning something as absolutely bad or praising it as absolutely good. Let’s set that simplistic reaction to one side for the moment, and ask a different question: what happens when people decide that some common human emotion is evil and harmful and wrong, and decide that the way to make a better world is to get rid of it?

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Watch Erdogan. German elections coming up.

Greece Concerns Peak Amid Sudden Spike In Refugee Arrivals (K.)

A sudden spike in the number of undocumented migrants arriving from neighboring Turkey has led to concern on the part of Greek authorities, who expect the next few days to reveal whether the rapid increase is a random occurence or the beginning of a new trend. A total of 643 migrants who had set out from the Turkish coast landed on the islands of the eastern Aegean between Friday and Monday morning, according to government figures. Another 114 people arrived in two separate smuggling boats later on Monday, putting authorities on alert.

Early on Monday, a vessel belonging to the European Union’s border monitoring agency Frontex spotted a smuggling boat off the coast of Chios and intercepted the 53 migrants who had been aboard. Later in the day another 61 migrants were found in a boat that had reached Samos and were also detained. Tensions are already high in reception centers on several Aegean islands. Most of the facilities are at around twice their capacity as hundreds of migrants and refugees await the outcome of asylum applications or deportation orders. Tolerance has been tested in several island communities as dozens of migrants continue to arrive daily from nearby Turkish shores. There are currently more than 14,400 migrants living on camps on Lesvos, Chios, Samos, Kos and Leros.

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Confused? The instructions are impossible to follow, not confusing.

US Farmers Confused By Monsanto Weed Killer’s Complex Instructions (R.)

With Monsanto’s latest flagship weed killer, dicamba, banned in Arkansas and under review by U.S. regulators over concerns it can drift in the wind, farmers and weed scientists are also complaining that confusing directions on the label make the product hard to use safely. Dicamba, sold under different brand names by BASF and DuPont, can vaporize under certain conditions and the wind can blow it into nearby crops and other plants. The herbicide can damage or even kill crops that have not been genetically engineered to resist it. To prevent that from happening, Monsanto created a 4,550-word label with detailed instructions. Its complexity is now being cited by farmers and critics of the product. It was even singled out in a lawsuit as evidence that Monsanto’s product may be virtually impossible to use properly.

At stake for Monsanto is the fate of Xtend soybeans, it largest ever biotech seed launch. Monsanto’s label, which the U.S. Environmental Protection Agency (EPA) reviewed and approved, instructs farmers to apply the company’s XtendiMax with VaporGrip on its latest genetically engineered soybeans only when winds are blowing at least 3 miles per hour, but not more than 15 mph. Growers must also spray it from no higher than 24 inches above the crops. They must adjust spraying equipment to produce larger droplets of the herbicide when temperatures creep above 91 degrees Fahrenheit. After using the product, they must rinse out spraying equipment. Three times. “The restriction on these labels is unlike anything that’s ever been seen before,” said Bob Hartzler, an agronomy professor and weed specialist at Iowa State University. The label instructions are also of interest to lawyers for farmers suing Monsanto, BASF and DuPont over damage they attribute to the potent weed killer moving off-target to nearby plants.

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It’s not ‘shocking’, it’s criminal.

UK Blasted Over ‘Shocking’ Export Of Deadly Weedkiller To Poorer Countries (G.)

Paraquat, a pesticide so lethal that a single sip can be fatal, has caused thousands of accidental deaths and suicides globally, and was outlawed by EU states in 2007. But Swiss pesticide manufacturer Syngenta is exporting thousands of tonnes of the substance to other parts of the world from an industrial plant in Huddersfield. Campaigners have condemned the practice as an “astonishing double standard”, while a UN expert said it was deeply disquieting that the human rights implications of producing a substance for export that is not authorised in the EU were being ignored. “The fact that the EU has decided to ban the pesticide for health and environmental reasons, but they still export it to countries with far weaker regulation and far weaker controls, is shocking to me,” said Baskut Tuncak, the UN special rapporteur on toxic wastes.

Syngenta is responsible for 95% of Europe’s exports of paraquat, which it sells under the brand name Gramoxone. The substance can be absorbed through the skin and has been linked with Parkinson’s disease. Syngenta has exported 122,831 tonnes of paraquat from the UK since 2015, an average of 41,000 tonnes a year, according to export licensing data analysed by the Swiss NGO Public Eye and shared with the Guardian. Since 2015, when a facility in Belgium stopped exporting paraquat, all EU exports of the pesticide have come from Syngenta’s UK base, according to Public Eye. Almost two-thirds of these exports by volume – 62% – go to poor countries, including Brazil, Mexico, Indonesia, Guatemala, Venezuela and India. A further 35% is exported to the US, where paraquat can only be applied by licensed users.

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We are a brilliant species.

The Blue Dogs of Mumbai (G.)

Authorities in Mumbai have shut down a manufacturing company after it was accused of dumping untreated industrial waste and dyes into a local river that resulted in 11 dogs turning blue. The group of strangely coloured canines was first spotted on 11 August, according to the Hindustan Times, prompting locals to complain to the Maharashtra Pollution Control Board about dyes being dumped in the Kasadi river, where the animals often swim. Footage shows the animals roaming the streets with bright blue fur. “It was shocking to see how the dog’s white fur had turned completely blue,” said Arati Chauhan, head of the Navi Mumbai Animal Protection Cell, told the Times. “We have spotted almost five such dogs here and have asked the pollution control board to act against such industries.”

Chauhan had posted images of the blue dogs on the group’s Facebook page, saying the “pollutants from Taloja Industrial area not only ruining the water bodies affecting humans there but also affecting animals, birds, reptiles”. The board investigated, shutting down the company on Wednesday after confirming that canines were turning blue due to air and water pollution linked to the plant. An animal welfare agency managed to capture one of the dogs and wash some of the blue dye off. The group concluded that animal seemed unharmed in all other ways. The Kasadi River flows through an area with hundreds of factories.

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Aug 152017
 
 August 15, 2017  Posted by at 8:42 am Finance Tagged with: , , , , , , , , , ,  3 Responses »


Stanley Kubrick Walking the streets of New York 1946

 

Prepare For Negative Interest Rates In The Next Recession – Rogoff (Tel.)
We’re Still Not Ready for the Next Banking Crisis (BBG)
World’s Biggest Banks Face £264 Billion Bill For Poor Conduct (G.)
US Stock Buybacks Are Plunging (BBG)
Consumer Spending Expectations Down Again (Mish)
Dow 30,000, Not If Demographics Have Anything To Say (SA)
Ten Years After The Crash, There’s Barely Suppressed Civil War In Britain (G.)
Broadening Internal Dispersion (Hussman)
Trump Orders Probe Of China’s Intellectual Property Practices (R.)
China Imposes Ban on Imports From North Korea, Yields to Trump’s Calls (Sp.)
North Korea Leader Holds Off On Guam Plan (R.)
Australia’s Central Bank Renews Alert on Mounting Household Debt (G.)
Australia Says New Zealand Opposition Trying To Bring Down Government (G.)
Greek Population Set To Shrink Up To 18% By 2050 (K.)
Sharp Fall In Number Of Refugees, Migrants Arriving In Italy (AFP)

 

 

Feels like we’re being prepared, or maybe set up is a better way to put it. They’re going to take over everything, criminalize anything they can’t control. All for your own good. Rogoff is one scary dude.

Prepare For Negative Interest Rates In The Next Recession – Rogoff (Tel.)

Negative interest rates will be needed in the next major recession or financial crisis, and central banks should do more to prepare the ground for such policies, according to leading economist Kenneth Rogoff. Quantitative easing is not as effective a tonic as cutting rates to below zero, he believes. Central banks around the world turned to money creation in the credit crunch to stimulate the economy when interest rates were already at rock bottom. In a new paper published in the Journal of Economic Perspectives the professor of economics at Harvard University argues that central banks should start preparing now to find ways to cut rates to below zero so they are not caught out when the next recession strikes. Traditionally economists have assumed that cutting rates into negative territory would risk pushing savers to take their money out of banks and stuff the cash – metaphorically or possibly literally – under their mattress.

As electronic transfers become the standard way of paying for purchases, Mr Rogoff believes this is a diminishing risk. “It makes sense not to wait until the next financial crisis to develop plans and, in any event, it is time for economists to stop pretending that implementing effective negative rates is as difficult today as it seemed in Keynes time”, he said. The growth of electronic payment systems and the increasing marginalisation of cash in legal transactions creates a much smoother path to negative rate policy today than even two decades ago. Countries can scrap larger denomination notes to reduce the likelihood of cash being held in substantial quantities, he suggests. This is also a potentially practical idea because cash tends now to be used largely for only small transactions. Law enforcement officials may also back the idea to cut down on money laundering and tax evasion.

The key consequence from an economic point of view is that forcing savers to keep cash in an electronic format would make it easier to levy a negative interest rate. “With today’s ultra-low policy interest rates – inching up in the United States and still slightly negative in the eurozone and Japan – it is sobering to ask what major central banks will do should another major prolonged global recession come any time soon,” he said, noting that the Fed cut rates by an average of 5.5 percentage points in the nine recessions since the mid-1950s, something which is impossible at the current low rate of interest, unless negative rates become an option. That would be substantially better than trying to use QE or forward guidance as central bankers have attempted in recent years.

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If we don’t take away political power from banks and central banks, we’re doomed.

We’re Still Not Ready for the Next Banking Crisis (BBG)

The 10th anniversary of the financial crisis has prompted a lot of analysis about what we’ve learned and whether we’re ready for the next one. Pretty much everything you need to know, though, can be found in one chart: the capital ratios of the largest U.S. banks. Capital, also known as equity, is the money that banks get from shareholders and retained earnings. Unlike debt, it has the advantage of absorbing losses, a feature that makes individual banks and the whole system more resilient. Bank executives typically prefer to use less equity and more debt – that is, more leverage – because this magnifies returns in good times. Hence, capital levels can serve as an indicator of the balance of power between bankers and regulators concerned about financial stability. Here’s a chart showing tangible common equity, as a percentage of tangible assets, at the six largest U.S. banks from December 2001 to June 2017:

The downward slope in the first several years demonstrates the extent to which leverage got out of hand before the crisis. As late as 2008, when the financial sector was already in distress, the Federal Reserve was still allowing banks to pay out capital in the form of dividends, even though some had equity of less than 3% of assets. That proved to be a fatal miscalculation: By 2009, forecasts of total losses on loans and securities reached 10% of assets. A crippled banking system tanked the economy and had to be rescued at taxpayer expense. After the crisis, regulators pushed banks to get stronger. The biggest U.S. institutions more than doubled their tangible common equity ratios – to an average of about 8% of assets (or, by international accounting standards, closer to 6% of assets). That’s an achievement, and better than in Europe, but the starting point was so low that they still fall short of what’s needed. Researchers at the Minneapolis Fed, for example, estimate that capital would have to more than double again to bring the risk of bailouts down to an acceptable level.

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How crime got re-defined. Poor conduct. Orwell.

World’s Biggest Banks Face £264 Billion Bill For Poor Conduct (G.)

Fines, legal bills and the cost of compensating mistreated customers reached £264bn for 20 of the world’s biggest banks over the five years to 2016, according to new research that raises doubts about efforts by the major financial services players to restore trust in the sector. This figure is higher than in the previous five-year period – when the costs amounted to £252bn – and is up 32% on the period 2008-12, the first time the data was collated by the CCP Research Foundation, one of the few bodies that analyses the “conduct costs” of banks. The report said the data showed that 10 years on from the onset of the financial crisis, the consequences of misconduct continue to hang over the banking sector. The latest analysis shows that in 2016 the total amount put aside by the banks surveyed rose to more than £28.6bn – higher than in the previous year when there had been a fall from a peak of £63bn in 2014.

Chris Stears, research director of the foundation, writes in the latest report: “Trust in, and the trustworthiness of, the banks must surely correlate to, and be conditional on, banks’ conduct costs. And persistent level of conduct cost provisioning is worrying. “It remains to be seen whether or not the provisions will crystallise in 2017 [or later] and what effect this will have on the aggregated level of conduct costs.” Two UK high street banks – Royal Bank of Scotland and Lloyds Banking Group – are in the top five of banks with the biggest conduct costs. RBS set aside extra provisions for fines and legal costs largely related to a forthcoming penalty from the US Department of Justice for mis-selling toxic bonds in the run-up to the financial crisis. That residential mortgage bond securitisation mis-selling scandal is responsible for £66bn of the costs incurred during the five-year period and the single largest factor, according to the foundation.

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The only thing that propped up stocks is vaporizing.

US Stock Buybacks Are Plunging (BBG)

U.S. stocks have been able to hit fresh highs this year despite a dearth of demand from a key source of buying. Share repurchases by American companies this year are down 20% from this time a year ago, according to Societe Generale global head of quantitative strategy Andrew Lapthorne. Ultra-low borrowing costs had encouraged large firms to issue debt to buy back their own stock, thereby providing a tailwind to earnings-per-share growth. “Perhaps over-leveraged U.S. companies have finally reached a limit on being able to borrow simply to support their own shares,” writes Lapthorne. Repurchase programs account for the lion’s share of net inflows into U.S. equities during this bull market. Heading into 2017, equity strategists anticipated that the buyback bonanza would continue in earnest, fueled in part by an expected tax reform plan that would provide companies with repatriated cash to invest.

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Deflation.

Consumer Spending Expectations Down Again (Mish)

Fed Chair Janet Yellen keeps citing consumer confidence and jobs as reasons consumer spending and inflation will pick up. Curiously, the New York Fed Survey on Consumer Spending Expectations keeps trending lower and lower, despite survey-high expectations for wage growth. The report for July 2017 was released today. I downloaded the survey results and produced the following charts.

Household Spending Projections

 

Household Income Projections

 

Income projections are volatile but at least they are trending higher across the board. Spending projections are less volatile and trending lower at every level. At the 25th%ile level, a group that no doubt spends every cent they make, spending expectations are zero. Those projections were in negative territory in April. Fed Chair Janet Yellen does not believe the Fed’s own reports. Instead, she relies on consumer confidence numbers that tend to track the stock market or gasoline prices more than anything else. Perhaps New York Fed President William Dudley does believe in the report.

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If you weren’t scared yet…

Dow 30,000, Not If Demographics Have Anything To Say (SA)

Nowadays, it is easy to get caught up in the day to day of markets with main stream media pumping the hot stock or warning of market crashes that rarely come. Focusing on the longer term cycles is how you stay with the trend, reduce portfolio churn and costs. I am not advocating for a purely passive strategy as I think the current state of passive investing is contributing to over-valuation and a lack of pricing discovery, which is another topic I won’t get into in this piece. Longer term cycles are largely influenced by demographics. Boomers were entering the workforce in the 1970s and started having children (Millennials) in the early 1980s. The surge in home purchases, appliances, and the multitude of things you buy for kids helped drive the economy for 30 years. The giant buildup in credit that I have covered in a previous article is another reason for a 35-year bull market.

The potential problem now is Boomers are hitting retirement, and roughly 10,000 Boomers retire each day. The above chart is the age distribution of the U.S. population by age. You can see the cliff of Boomers that are turning 70 this year. There are a couple ramifications of Boomers retiring. First is the moment they quit their job or sell their business, they are on a finite budget from there on out. Second, fewer people will be available for work down the road leaving less tax payers contributing to already stressed government budgets. Lastly, Boomers are incentivized to retire at 70.5 due to social security rules and will also start drawing on pensions. What makes matters worse is the majority of Boomers have less than $200k saved for retirement and a large portion have less than $50k saved per PWC’s Annual survey. This means that Boomers are heavily relying on Social Security or they have to work longer, which is currently evidenced by the following chart from the BLS.

Boomers have essentially garnered the majority of wage gains and now are working longer either out of necessity or preference. You might be thinking the surge in Millennials entering the work force will save the day, but due to the above facts, younger generations have to wait longer to move up the corporate ladder or have to attain levels of higher education to receive an adequate salary. As a result, student debt has risen exponentially in the U.S. jeopardizing the future of many starting their professional lives.

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“Debt racked up through the greed of financiers being dumped on the poor, the young and people with disabilities in what must rank as the biggest bait and switch in postwar Britain.”

Ten Years After The Crash, There’s Barely Suppressed Civil War In Britain (G.)

All history now, isn’t it? The credit crisis that began in August 2007, the ensuing banking crash and global recession. One bumper episode from the long-ago past, when the iPhone was a newborn and Amy Winehouse still made records. Now done, dusted, reformed and resolved. Or so one assumes, from the official self-congratulation. The European commission marks the 10th anniversary of the credit crisis by trumpeting: “Back to recovery thanks to decisive EU action.” Yes, the same clapped-out European establishment that has spent the last decade kicking a can down the road. The head of the derivatives industry body, ISDA, admits: “We sometimes forget to articulate the social value of what we do.” Indeed so: before the crash, bankers emailed each other about how the derivatives that they were paid so much to flog were “crap” and “vomit”.

Everyone knows history is written by the victors, but this is something else: bullshit recounted by the bullshitters. Even the banks are back to bragging how many billions they generously chip in to Her Majesty’s Exchequer, presumably hoping no one will point out that they took £1.3tn from taxpayers in just a few months in 2008. Let’s get three things straight. First, it was working- and middle-class Britons who paid for the mess, who are still paying for it now and who will keep paying for it decades from now. Second, the crash has prompted almost no fundamental reckoning or reform. And, most importantly, the combination of those first two factors means the crash that began in 2007 cannot be consigned to the past. Today’s politics – from Brexit to Trump and the collapse of centrism – is just one of its products.

For politicians and financiers to treat the crash as history brings to mind Stephen Dedalus in Ulysses: “History is a nightmare from which I am trying to awake.” Here’s the stuff of historical bad dreams: at the height of the banking crisis in 2008, every man, woman and child in Britain handed over £19,721 each to bankers. The economy tanked, Gordon Brown got booted out – and David Cameron pretended a private banking catastrophe was a crisis of a supposedly profligate public sector. You know what happened next: first the kids’ Sure Start centre closed, then the library; your mum waited ages to get her hip replacement; the working poor had their social security stolen, and the local comp began sending begging letters. Debt racked up through the greed of financiers being dumped on the poor, the young and people with disabilities in what must rank as the biggest bait and switch in postwar Britain.

I say that, but we have only had seven years of austerity. If Philip Hammond stays in No 11 and sticks to plan (one must hope he does neither), the cuts will continue until the middle of the next decade. After 2025, who knows what will remain of our councils, our welfare state and our public realm. One truism of this era is that the average British worker earns less after inflation than they did when RBS nearly died. Most of us have seen not a recovery, but a ripping up of our social contract – so that over 7 million Britons are now in precarious employment. But the highest earners are way ahead of where they were in 2008. Finance-sector bonuses are as generous as they were during the boom, while a bad year for the average FTSE boss is one in which he or she pulls in a mere £4.53m.

And so we remain reliant on debt – aptly termed “the raw material for bubbles and crashes” by Daniel Mügge at the University of Amsterdam. According to the Bank for International Settlements, the UK is far deeper in the red now than it was when Northern Rock collapsed. Government debt has shot up under the Conservatives, but so too has household borrowing. Were the UK to crash again, its government no longer has the political capital nor the fiscal headroom to save the financial system.

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“The deterioration and widening dispersion in market internals is no longer subtle.”

Broadening Internal Dispersion (Hussman)

It’s important to observe that if short-term interest rates were still at zero and market internals were favorable, even the most extreme overvalued, overbought, overbullish syndromes we identify would not be enough to push us to a hard-negative market outlook. That, in a nutshell, is the central lesson from quantitative easing, and is one that could alone have dramatically altered our own challenging experience in the recent speculative half-cycle. At present, however, we observe not only the most obscene level of valuation in history aside from the single week of the March 24, 2000 market peak; not only the most extreme median valuations across individual S&P 500 component stocks in history; not only the most extreme overvalued, overbought, overbullish syndromes we define; but also interest rates that are off the zero-bound, and a key feature that has historically been the hinge between overvalued markets that continue higher and overvalued markets that collapse: widening divergences in internal market action across a broad range of stocks and security types, signaling growing risk-aversion among investors, at valuation levels that provide no cushion against severe losses.

[..] Again, the principal lesson of the recent half-cycle was that in the face of zero interest rates, even the most extreme “overvalued, overbought, overbullish” syndromes were not enough to anticipate steep market losses (as they typically were in prior market cycles). Instead, investors were driven to believe that they had no other alternative but to continue their yield-seeking speculation. In the face of zero interest rates, one had to wait for market internals to deteriorate before adopting a hard negative market outlook. At present, we observe neither zero interest rates, nor uniformly favorable market internals. In the current environment, we expect that obscene valuations and severe “overvalued, overbought, overbullish” syndromes are likely to be followed by the same outcomes that have attended similar conditions across history. The chart below shows the percentage of U.S. stocks above their respective 200-day moving averages, along with the S&P 500 Index. The deterioration and widening dispersion in market internals is no longer subtle.

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It’s about Apple and Google.

Trump Orders Probe Of China’s Intellectual Property Practices (R.)

President Donald Trump on Monday authorized an inquiry into China’s alleged theft of intellectual property in the first direct trade measure by his administration against Beijing, but one that is unlikely to prompt near-term change. Trump broke from his 17-day vacation in New Jersey to sign the memo in the White House at a time of heightened tensions between Washington and Beijing over North Korea’s nuclear ambitions. The investigation is likely to cast a shadow over relations with China, the largest U.S. trading partner, just as Trump is asking Beijing to step up pressure against Pyongyang. U.S. Trade Representative Robert Lighthizer will have a year to look into whether to launch a formal investigation of China’s trade policies on intellectual property, which the White House and U.S. industry lobby groups say are harming U.S. businesses and jobs.

Trump called the inquiry “a very big move.” Trump administration officials have estimated that theft of intellectual property by China could be as high as $600 billion. Experts on China trade policy said the long lead time could allow Beijing to discuss some of the issues raised by Washington without being seen to cave to pressure under the threat of reprisals. Although Trump repeatedly criticized China’s trade practices on the campaign trail, his administration has not taken any significant action. Despite threats to do so, it has declined to name China a currency manipulator and delayed broader national security probes into imports of foreign steel and aluminum that could indirectly affect China.

[..] The Information Technology Industry Council, the main trade group for U.S. technology giants, such as Microsoft, Apple and Google, said it hoped China would take the administration’s announcement seriously. “Both the United States and China should use the coming months to address the issues causing friction in the bilateral trade relationship before Presidents Trump and Xi have their anticipated meeting ahead of the November APEC leaders meeting,” ITI President Dean Garfield said in a statement.

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“On August 15, a full ban on imports of coal, iron, iron ore, lead, lead ore, seafood from North Korea is introduced..”

China Imposes Ban on Imports From North Korea, Yields to Trump’s Calls (Sp.)

China is introducing a ban on imports of some goods from North Korea in line with a UN Security Council resolution, the Chinese Commerce Ministry said Monday. US President Donald Trump has repeatedly called on Beijing to increase economic pressure on North Korea as China is Pyongyang’s biggest trade partner. “On August 15, a full ban on imports of coal, iron, iron ore, lead, lead ore, seafood from North Korea is introduced,” the ministry said in a statement. According to the statement, North Korean products arrived at Chinese ports before the ban would be allowed to enter the country. Import applications of products from North Korea will be halted from September 5. Meanwhile, Chinese companies are still allowed to import coal from third countries via the North Korean port of Rason. However, Chinese importers need to apply for approval from a UN committee set up under the UN Security Council resolution 1718.

Interestingly, Beijing’s move came amid media speculations that Trump is mulling a trade crackdown on China. China is by far the largest trading partner of North Korea. In April, the Chinese General Administration of Customs said trade between the two countries in the first quarter increased 37.4% year-over-year, even despite the UN sanctions on North Korean supplies of coal, the country’s top export earner. The tensions around North Korea have been high over the recent months and they have escalated further after the tightening of economic sanctions against North Korea by the United Nations Security Council (UNSC) last week in response to July’s launches of ballistic missiles by Pyongyang. On August 5, new UNSC sanctions against North Korea could cut the nation’s annual export revenue by $1 billion.

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Saving face.

Kim Jong-un Holds Off On Guam Plan (R.)

North Korea’s leader received a report from his army on its plans to fire missiles toward Guam and said he will watch the actions of the United States for a while longer before making a decision, the North’s official news agency said on Tuesday. North Korea said last week it was finalizing plans to launch four missiles into the waters near the U.S. Pacific territory of Guam, and its army would report the strike plan to leader Kim Jong Un and wait for his order. Kim, who inspected the command of the North’s army on Monday, examined the plan for a long time and discussed it with army officers, the official KCNA said in a report. “He said that if the Yankees persist in their extremely dangerous reckless actions on the Korean peninsula and in its vicinity, testing the self-restraint of the DPRK, the latter will make an important decision as it already declared,” the report said.

The DPRK stands for North Korea’s official name, the Democratic People’s Republic of Korea. Pyongyang’s detailed plans for the strike near Guam prompted a surge in tensions in the region last week, with U.S. President Donald Trump warning he would unleash “fire and fury” on North Korea if it threatened the Unite States. South Korean and U.S. officials have since sought to play down the risks of an imminent conflict, helping soothe global concerns somewhat on Monday. Kim said the United States should make the right choice “in order to defuse the tensions and prevent the dangerous military conflict on the Korean peninsula,” the KCNA report said.

Read more …

Oh, get real: “..poised to benefit from the tailwind of a much improved global backdrop.”

Australia’s Central Bank Renews Alert on Mounting Household Debt (G.)

Australia’s central bank renewed its focus on mounting household debt, even as the outlook for the nation’s economy improved, according to the minutes of this month’s policy decision where interest rates were left unchanged. RBA noted “need to balance the risks associated with high household debt in a low-inflation environment” in its decision to stand pat on policy. Better hiring this year meant “forecasts for the labor market were starting from a stronger position”. The bank reiterated GDP growth was expected to rise to around 3% in 2018 and 2019, supported by low rates; faster growth in non-mining business investment is expected. The main change is one of emphasis after the Reserve Bank of Australia removed the labor market and added household balance sheets – where debt is currently at a record 190% of income – to its key areas of concern alongside the residential property market.

But the minutes convey rising confidence that Australia’s economy will strengthen and is poised to benefit from the tailwind of a much improved global backdrop. Yet areas of substantial uncertainty remain: how China manages the trade-off between growth and the build-up of leverage; the fact the forecasts for the domestic economy are based on no change in the exchange rate in the period through 2019; and whether better employment would lead to higher household income and increased consumption, or whether ongoing weak wage growth and high household debt would cut into consumption.

Read more …

Neither country seems to know how one gets a passport down under. Curious.

Australia Says New Zealand Opposition Trying To Bring Down Government (G.)

Australia and New Zealand have become embroiled in an extraordinary diplomatic spat over claims the New Zealand opposition colluded with the Australian Labor party (ALP) in an attempt “to try and bring down the government”. During a febrile day of politics in both countries, Australia’s foreign affairs minister, Julie Bishop, said New Zealand’s opposition party was threatening the stability of a usually robust partnership between the two nations. She said she would find it “very hard to build trust” if New Zealand’s opposition Labour party were to win the general election in September. Her comments came only 24 hours after it was revealed that Australia’s deputy prime minister, Barnaby Joyce, held New Zealand citizenship and may be ineligible to sit in parliament under the Australian constitution, which disqualifies dual nationals.

Malcolm Turnbull’s government currently commands a majority of one seat in the House of Representatives. But Australia’s ruling coalition has now accused the opposition Labor party of planting a question in the New Zealand parliament in order to extract the information about Joyce’s nationality. Australian government minister Christopher Pyne accused the ALP of being part of a conspiracy to bring down the government. “Clearly the Labor party are involved in a conspiracy using a foreign government, in this case New Zealand, to try and bring down the Australian government,” he said. “How many other foreign governments, or foreign political parties in other countries, has the Labor party been colluding with to try to undermine the Australian government? “Has he been talking to the people in Indonesia, or China, or the Labour party in the UK?”

Joyce made the admission after media inquiries on the subject, but it subsequently also emerged that on 9 August the New Zealand Labour MP Chris Hipkins submitted two written questions to the internal affairs minister, Peter Dunne, in parliament, both of an unusual nature. “Are children born in Australia to parents who are New Zealand citizens automatically citizens of New Zealand; if not, what process do they need to follow in order to become New Zealand citizens?” Hipkins asked. He also asked: “Would a child born in Australia to a New Zealand father automatically have New Zealand citizenship?”

Read more …

What austerity also does.

Greek Population Set To Shrink Up To 18% By 2050 (K.)

A new study released by the Berlin Institute for Population and Development suggests that Greece is set to lose up to 18% of its population by the middle of the century. The deep economic crisis – which has hit young people especially hard and is identified as a key reason behind the country now having one of the lowest birth rates in the world – is cited as the primary cause of this decline, which has accelerated in recent years. According to the study, Greece had already lost nearly 3% of its population between 2011 and 2016. In 2016, Greece’s population stood at 10.8 million. That is expected to drop to 9.9 million by 2030 and 8.9 million by 2050. That is a nearly 18% decline in the country’s population over the next 33 years. Greece also has a rapidly aging population, with 21% already over the age of 65 and fewer than 100,000 babies being born each year. This percentage is currently the second highest in Europe, after Italy. Greece will have the highest ratio of pensioners to workers in Europe by 2050.

Read more …

They’re stuck in hell.

Sharp Fall In Number Of Refugees, Migrants Arriving In Italy (AFP)

Italy has seen a sharp fall in the number of migrants arriving on its shores, a decline that has left experts scrambling for an explanation. Summer is traditionally the peak season for migrants attempting the hazardous crossing of the Mediterranean from North Africa to Europe. But, to much surprise, only 13,500 have arrived in Italy since July 1, compared to 30,500 over the same period in 2016 – a year-on-year fall of more than 55%. Many migrants are from poor sub-Saharan Africa, fleeing violence in their home country or desperate for a better life in prosperous Europe. “It’s still too early to talk of a real trend,” cautions Barbara Molinario, a spokeswoman for the UN High Commissioner for Refugees (UNHCR).

One mooted reason for the fall is tougher action by the Libyan coastguard. The force which has been strengthened by help from the European Union (EU), which trained about 100 personnel over the winter, while Italy has provided patrol vessels, recently supported by Italian warships in Libyan waters. But according to figures from UN’s International Office of Migration (IOM), the Libyan coastguard have intercepted fewer than 2,000 migrants since early July, compared to more than 4,000 in May. Another reason put forward to explain the decline is tougher action by NGOs who have been accused by critics of colluding with smugglers to pick up migrants at sea to prevent them from drowning. But these organisations have been involved in only a fraction of migrant rescues – and three NGO vessels are still operating in the hope of picking up those in need.

[..] Since 2014, 600,000 migrants have landed in Italy, but more than 14,000 have died. Italian newspapers which, just a few weeks ago, were accusing NGOs of abetting an influx that seemed uncontrollable have now switched to reports on the terrifying conditions faced by migrants in Libya. “Sending them back to Libya right now means sending than back to Hell,” the deputy foreign minister, Mario Giro, said earlier this month.

Read more …

Jun 182017
 


Thomas Cole Destruction of Empire 1836

 

The Conflicts Forum, directed by former British diplomat and MI6 ‘ranking figure’ Alastair Crooke, sent me another unpublished article by Alastair and asked if the Automatic Earth would publish it. But of course. Previous articles by Alastair published here are: ‘End of Growth’ Sparks Wide Discontent in October 2016, Obstacles to Trump’s ‘Growth’ Plans in November 2016 and What is this ‘Crisis’ of Modernity? in January 2017.

Here’s Alastair again:

 

 

Alastair Crooke: David Stockman routinely refers to President Trump as the ‘Great Disrupter’. But this is not a bad quality, he insists. Rather, it is a necessary one: Stockman argues (my paraphrasing) that Trump represents the outside force, the externality, that tips a ‘world system’ over the brink: It has to tip over the brink, because systems become too ossified, too far out on their ‘branch’ to be able to reform themselves. It does not really matter so much, whether the agency of this tipping process (President Trump in this instance), fully comprehends his pivotal role, or plays it out in an intelligent and subtle way, or in a heavy-handed, and unsubtle manner. Either serve the purpose. And that purpose is to disrupt.

Why should disruption be somehow a ‘quality’? It is because, during a period when ‘a system’ is coming apart, (history tells us), one can reach a point at which there is no possibility of revival within the old, but still prevailing, system. An externality of some sort – maybe war, or some other calamity or a Trump – is necessary to tip the congealed system ‘over’: thus, the external intrusion can be the catalyst for (often traumatic) transformational change.

Stockman puts it starkly: “the single most important thing to know about the present risk environment [he is pointing here to both the political risk as well as financial risk environment], is that it is extreme, and unprecedented. In essence, the ruling elites and their mainstream media megaphones have arrogantly decided that the 2016 [US Presidential] election was a correctible error”.

But complacency simply is endemic: “The utter fragility of the latest and greatest Fed bubble could not be better proxied than in this astounding fact. To wit, during the last 5,000 trading days (20 years), the VIX (a measure of market volatility) has closed below 10 on just 11 occasions. And 7 of those have been during the last month! … That’s complacency begging to be monkey-hammered”, Stockman says.

Former Presidential candidate, Pat Buchanan concurs: “President Trump may be chief of state, head of government and commander in chief, but his administration is shot through with disloyalists plotting to bring him down.

We are approaching something of a civil war where the capital city seeks the overthrow of the sovereign, and [to achieve] its own restoration. Thus far, it is a nonviolent struggle, though street clashes between pro- and anti-Trump forces are increasingly marked by fistfights and brawls. Police are having difficulty keeping people apart. A few have been arrested carrying concealed weapons.

That the objective of this city is to bring Trump down, via a deep state-media coup, is no secret. Few deny it.”

The extraordinary successful ‘manufacture’ and ‘parachuting-in’ of Macron into the French Presidential election by the French élite, precisely has given to the globalised Deep State (including their US counterparts), renewed confidence that Europe and America’s slide towards ‘populism’, is indeed a ‘correctable error’. European élites now can barely contain their revived schadenfreude at the Brexiters’ and at the Populists’ presumed discomfort (see here).

 


Thomas Cole Consummation of Empire 1836

 

But despite the palpable danger to the integrity of the political system itself, Stockman notes, “it is no inconsiderable understatement to suggest that the S&P 500 at 2440 is about as fragile as the ‘market’ has ever been.

Any untoward pinprick could send it into a tailspin … Doug Kass said it best in his recent commentary: “Over history, as we have learned, a Minksy Moment develops when investor sentiment becomes complacent after long periods of prosperity and the data is ignored, and doesn’t seem to matter anymore, as I wrote in “It’s a ‘Bohemian Rhapsody’ Market: Nothing Really Matters … to investors.” In short, the market has become ‘zombie’ (in the sense of residing within a psychological defence mechanism – as, when to contemplate the alternative – simply is too threatening to the psyche) [emphasis added].

Daniel Henninger, in a Wall Street Journal op-ed, writes: “Donald Trump’s election has caused psychological unhingement in much of the population. But the Trump phenomenon only accelerated forces that were plummeting in this direction before the 2016 election…

“Impossible to miss, though, is how jacked up emotional intensity has become in American politics. The campaign rallies of both Mr. Trump and Bernie Sanders often sat on the edge of violence. Reporters describe political town hall meetings as full of “angry” voters. Shouting down the opposition in these forums or on campus has been virtually internalized as standard behavior. Refusal to reason is the new normal. And then, the unreason is euphemized as free speech.

Explaining away these impulses as a routine turn of the populist political cycle is insufficient. Something more permanent is happening.”

It is not, of course just the markets which are threatened by unperceived risk. Trump shall not be forgiven for challenging the sacrosant meme of a world divided between (good) ‘liberal’ democracies (led by the US and its European allies) and (bad) illiberal autocracies (led today, by President Putin’s Russia): by snubbing Nato and withdrawing from the Paris climate agreement, Professor Michael Klare writes, “we’ve been told, President Trump is dismantling the liberal world order created by Franklin D Roosevelt at the end of World War II”.

 


Thomas Cole Destruction of Empire 1836
 

An offence, it seems, against something somehow sacral: recently, US comedienne Kathy Griffin posted a video of herself holding the bloody, severed head of Donald Trump. “But that wasn’t the end of it” Henninger notes. “We may assume that as Ms. Griffin was creating her video, the artists at New York’s Public Theatre, were rehearsing their production of Julius Caesar, the one in which Central Park audiences watch ‘Caesar’ as a blond-haired Donald Trump, who is pulled down from a podium by men in suits, and assassinated with plunging knives … Whatever once fastened the doors of people’s minds to something secure and stable has become unhinged.”

Mike Vlahos (Professor at the US Naval War college and John Hopkins) tells us that, as a military historian and global strategist, he became curious to know just why it is that ‘world systems’ do ‘come apart’. His first, intuitive sense was that their collapse generally was brought about by some massive external force such as war, pestilence or famine, and by the concomitant mass migrations of peoples.

But when he and his students completed their research, he concluded that though these factors had often played an important part, they were not the prime cause of the system coming apart. Rather, he identified a number of key triggers:

· The élites became stratified, and politics frozen
· The peoples’ allegiance became taken for granted, at the same time that the élites chose to ignore threats to the peoples’ way of life
· Social mobility declined, and change is fiercely resisted
· Rather, élites work to maximize their wealth and status.
· Elite authority becomes excessively militarized – and justified as ‘saving civilization’.

He concludes from this study, “the situation that we inhabit today […] here in the imperial city in Washington DC, is that it is absolutely hollowed out … it is incapable of offering anything to its own people, the American people … I think we have reached a point where there is no possibility of revival within the current system that exists. The current system is set upon … is determined to eat itself out in a kind of civil war that is coming, and at the end of that, it will be done, will be finished”.

“The Methoni, one of the great nations of the late Bronze Age, had this same problem with the élites and the 1% that we have today, and they were overthrown. That’s 3300 years ago, and it keeps happening again and again. And the very structure of the decadent relationships in late periods where élites refuse to accommodate, refuse to adapt, refuse to be sensitive to needs of the larger whole of society, means this has to happen. There has to be an overthrow … for things eventually to get better, to be renewed. In other words, you can’t renew from within”.

Is this the situation today? The pre-conditions that Professor Vlahos relates, in terms of élite hubris, self-regard, and disdain for the real concerns of people are there (the polarization of US society at the US election provides the empirical evidence for this). And Stockman, in calling Trump the ‘Great Disrupter’ plainly implies that he might be precisely the ‘externality’ (coming from outside the élite) – that might tip things ‘over’. This surely is what Stockman means when he warns about ‘the present risk environment’ being extreme.

Of course, the usual retort is that Trump offers no coherent alternative conceptual vision for the future, but only seized successfully upon a number of key insights: the power of cultural nationalism, the pain felt by the casualties of globalism, the impact of a hollowed-out US economy, and the need to put America first. This is true. These insights do not constitute a vision for the future, but why should one expect that, from the ‘Disrupter’? His ‘agency’ is that of catalyst, not that of final ‘constructor’. That comes later.

 


Thomas Cole Desolation of Empire 1836

 

So, from whence does ultimate societal renewal come? The classic answer is that after ‘disruption’ nothing much is left standing amidst the (metaphoric) ruins of whatever stood as the reigning ‘modernity’. Historically, renewal was effected through a communal ‘reaching back’- beyond the roots of whatever represented the contemporary crisis – to delve back, deep into the archetypal cultural history of a people. The rummaging in collective memory, allows a narrative to shape, about why the present ‘hurt’ befell its people, and to bring forward, transformed into contemporary meaning, some ‘solution’: a new meta-historical understanding.

Plainly, this (a type of spiritual renewal) is not President Trump’s ‘bag’. (Steve Bannon’s the more so, perhaps?)

What does all this mean in practical terms? First, it suggests that most of us still prefer not to address the stark reality that “the objective of this city (DC), is to bring Trump down, via a deep state-media coup” and the bitter political trench warfare, which this portends. We prefer to rest in complacency, (as zombies for now), until a crisis squarely hits us – in a personal way.

Secondly, thoughts of an easy return to the status quo ante (such as via Vice-President Pence standing-in), is problematic (Macron’s election in France notwithstanding). Since the élites (all of them), have, in their ‘war’ against ‘populists’ and deplorables, totally lost legitimacy and authority for a substantive part of their populations. And they will not – cannot – adapt. For, that is their nature. This is the moment, Professor Vlahos notes, when a system – i.e. US operational governance – begins to ‘come apart’. Individuals, cabals within government, whole departments of state, look to their own self-awarded ‘authority’, rather than to that of the government as mandated by the electorate.

Thus we have this past week, the Senate voting 97-2 to impose further sanctions on Russia. Another wrench jammed into Trump’s foreign policy wheels – and explicitly conceived to paralyse and impede the President.

Thirdly, the intent is – like some Amazonian reptile venom – to ‘bite’ him with so much innuendo and assorted investigations and further allegations, that Trump, like the reptile’s victim, remains awake – but incapable of moving a muscle: A true zombie, in fact, as the reptile feeds on its living corpse.

Fourth, this zombified US President, will shortly face the requirement to negotiate with Congress an exit from a bubbling financial sphere soaring upwards, whilst a moribund real economy trails downwards – under pressure from the fast-approaching debt-ceiling deadline. The Senate’s slap at the President’s face with the Russia sanctions vote suggests it is more likely that he will be tossed another spanner: this time aimed at the wheels of the ‘Trump reflation’ programme.

What other insights might history offer? Two, perhaps: Professor Vlahos, during his discussion with John Batchelor, the latter points out that, even at the very moment that the hub of the Roman Empire already had fallen apart, the collapsing Empire was celebrated the most, when it was imitated at the furthest edges of Empire: by the peoples of Gaul and Germany, for example. Are we not seeing the same today, in Europe, as Merkel and Macron vow to keep the liberal, globalist values of the American Empire alive — at the edges of the American Empire — in Europe?

And lastly, the constituency that historically led renewal? Professor Vlahos: “The Roman legions, the Czarist armies, the German Imperial armies and the Ottoman armies”.

The Pentagon élites should note well.

 

 

Mar 232017
 
 March 23, 2017  Posted by at 9:18 am Finance Tagged with: , , , , , , , , , ,  6 Responses »


Unknown GMC truck Associated Oil fuel tanker, San Francisco 1935

 

I Don’t Think The US Should Remain As One Political Entity – Casey (IM)
Trump Tantrum Looms On Wall Street If Healthcare Effort Stalls (R.)
The US Student Debt Bubble Is Even Bigger Than The Subprime Fiasco (Black)
US Auto-Loan Quality To Deteriorate Further, Forcing Tighter Underwriting (MW)
Oil Price Drops Below $50 For First Time Since OPEC Deal (Tel.)
China Shadow Banks Hit by Record Premium for One-Week Cash (ZH)
Zombie Companies are China’s Real Problem (BBG)
China Debt Risks Go Global Amid Record Junk Sales Abroad (BBG)
A Fake $3.6 Trillion Deal Is Easy to Sneak Past the SEC
Elite Economists: Often Wrong, Never In Doubt (720G)
Trump the Destroyer (Matt Taibbi)
Erdogan Warns Europeans ‘Will Not Walk Safely’ If Attitude Persists (R.)
Lavish EU Rome Treaty Summit Will Skirt Issues in Stumbling Italy (BBG)
Greek Consumption Slumps Further In 2017 (K.)
Nine Years Later, Greece Is Still In A Debt Crisis.. (Black)
In Greece, Europe’s New Rules Strip Refugees Of Right To Seek Protection (K.)

 

 

So there.

I Don’t Think The US Should Remain As One Political Entity – Casey (IM)

What’s going on in the US now is a culture clash. The people that live in the so-called “red counties” that voted for Trump—which is the vast majority of the geographical area of the US, flyover country—are aligned against the people that live in the blue counties, the coasts and big cities. They don’t just dislike each other and disagree on politics; they can no longer even have a conversation. They hate each other on a visceral gut level. They have totally different world views. It’s a culture clash. I’ve never seen anything like this in my lifetime.

There hasn’t been anything like this since the War Between the States, which shouldn’t be called “The Civil War,” because it wasn’t a civil war. A civil war is where two groups try to take over the same government. It was a war of secession, where one group simply tries to leave. We might have something like that again, hopefully nonviolent this time. I don’t think the US should any longer remain as one political entity. It should break up so that people with one cultural view can join that group and the others join other groups. National unity is an anachronism.

Read more …

Credibility.

Trump Tantrum Looms On Wall Street If Healthcare Effort Stalls (R.)

The Trump Trade could start looking more like a Trump Tantrum if the new U.S. administration’s healthcare bill stalls in Congress, prompting worries on Wall Street about tax cuts and other measures aimed at promoting economic growth. Investors are dialing back hopes that U.S. President Donald Trump will swiftly enact his agenda, with a Thursday vote on a healthcare bill a litmus test which could give stock investors another reason to sell. “If the vote doesn’t pass, or is postponed, it will cast a lot of doubt on the Trump trades,” said the influential bond investor Jeffrey Gundlach, chief executive at DoubleLine Capital. U.S. stocks rallied after the November presidential election, with the S&P 500 posting a string of record highs up to earlier this month, on bets that the pro-growth Trump agenda would be quickly pushed by a Republican Party with majorities in both chambers of Congress.

The S&P 500 ended slightly higher on Wednesday, the day before a floor vote on Trump’s healthcare proposal scheduled in the House of Representatives. On Tuesday, stocks had the biggest one-day drop since before Trump won the election, on concerns about opposition to the bill. Investors extrapolated that a stalling bill could mean uphill battles for other Trump proposals. Trump and Republican congressional leaders appeared to be losing the battle to get enough support to pass it. Any hint of further trouble for Trump’s agenda, especially his proposed tax cut, could precipitate a stock market correction, said Byron Wien, veteran investor and vice chairman of Blackstone Advisory Partners. “The fact that they are having trouble with (healthcare repeal) casts a shadow over the tax cut and the tax cut was supposed to be the principal fiscal stimulus for the improvement in real GDP,” Wien said. “Without that improvement in GDP, earnings aren’t going to be there and the market is vulnerable.”

Read more …

“This is particularly interesting because student loans essentially have no collateral.”

The US Student Debt Bubble Is Even Bigger Than The Subprime Fiasco (Black)

In 1988, a bank called Guardian Savings and Loan made financial history by issuing the first ever “subprime” mortgage bond. The idea was revolutionary. The bank essentially took all the mortgages they had loaned to borrowers with bad credit, and pooled everything together into a giant bond that they could then sell to other banks and investors. The idea caught on, and pretty soon, everyone was doing it. As Bethany McLean and Joe Nocera describe in their excellent history of the financial crisis (All the Devils are Here), the first subprime bubble hit in the 1990s. Early subprime lenders like First Alliance Mortgage Company (FAMCO) had spent years making aggressive loans to people with bad credit, and eventually the consequences caught up with them. FAMCO declared bankruptcy in 2000, and many of its competitors went bust as well.

Wall Street claimed that it had learned its lesson, and the government gave them all a slap on the wrist. But it didn’t take very long for the madness to start again. By 2002, banks were already loaning money to high-risk borrowers. And by 2005, all conservative lending standards had been abandoned. Borrowers with pitiful credit and no job could borrow vast sums of money to buy a house without putting down a single penny. It was madness. By 2007, the total value of these subprime loans hit a whopping $1.3 trillion. Remember that number. And of course, we know what happened the next year: the entire financial system came crashing down. Duh. It turned out that making $1.3 trillion worth of idiotic loans wasn’t such a good idea. By 2009, 50% of those subprime mortgages were “underwater”, meaning that borrowers owed more money on the mortgage than the home was worth.

In fact, delinquency rates for ALL mortgages across the country peaked at 11.5% in 2010, which only extended the crisis. But hey, at least that’s never going to happen again. Except… I was looking at some data the other day in a slightly different market: student loans. Over the last decade or so, there’s been an absolute explosion in student loans, growing from $260 billion in 2004 to $1.31 trillion last year. So, the total value of student loans in America today is LARGER than the total value of subprime loans at the peak of the financial bubble. And just like the subprime mortgages, many student loans are in default. According to the Fed’s most recent Household Debt and Credit Report, the student loan default rate is 11.2%, almost the same as the peak mortgage default rate in 2010. This is particularly interesting because student loans essentially have no collateral. Lenders make loans to students… but it’s not like the students have to pony up their iPhones as security.

Read more …

You have to wonder what exactly is keeping the US economy afloat.

US Auto-Loan Quality To Deteriorate Further, Forcing Tighter Underwriting (MW)

Auto loan and lease credit performance will continue to deteriorate in 2017, led by the vulnerable subprime sector, Fitch Ratings said in a report released Wednesday. “Subprime credit losses are accelerating faster than the prime segment, and this trend is likely to continue as a result of looser underwriting standards by lenders in recent years,” said Michael Taiano, a director at the credit-ratings agency. Banks are starting to lose market share to captive auto finance companies and credit unions as they begin to tighten underwriting standards in response to deteriorating asset quality, Fitch said. According to the Federal Reserve’s January 2017 senior loan officer survey, 11.6% of respondents (net of those who eased) reported tightening standards, compared with the five-year average of 6.1%.

“This trend is consistent with comments made by several banks on earnings conference calls over the past couple of quarters,” Fitch said in the report. Fitch considers continued tightening by auto lenders as a credit-positive but it’s also paying attention to market nuances. The tightening, to date, primarily relates to pricing and loan-to-value (how much is still owed on the car compared to its resale value), but average loan terms continue to extend into the 72- to 84-month category. “The tightening of underwriting standards is likely a response to expected deterioration in used vehicle prices and the weaker credit performance experienced in the subprime segment,” added Taiano. Used-car price declines have accelerated more recently, which will likely pressure recovery values on defaulted loans and lease residuals, the analysts said.

Read more …

Might as well call off the theater.

Oil Price Drops Below $50 For First Time Since OPEC Deal (Tel.)

The oil price has fallen back below the key $50 a barrel mark for the first time since November after surging US oil supplies dealt a blow to OPEC’s plan to erode the global oversupply of crude. The flagging oil price bounded above $50 a barrel late last year after a historic co-operation deal between OPEC and the world’s largest oil producers outside of the cartel to limit output for the first half of this year. The November deal was the first action taken by the group to limit supply for over eight years but since then the quicker than expected return of fracking rigs across the US has punctured the buoyant market sentiment of recent months. Brent crude prices peaked at $56 a barrel earlier this year and were still above $52 this week.

But by Wednesday the price fell to just above $50 a barrel and briefly broke below the important psychological level to $49.86 on Wednesday afternoon. Market analysts fear that a more sustained period below $50 could trigger a sell-off from hedge funds which would drive even greater losses in the market. The price plunge was sparked by the latest weekly US stockpile data which revealed a bigger than expected increase of 5 million barrels a day compared to a forecast rise of 1.8 million barrels. The flood of US shale emerged a day after Libya announced that would increase its output to take advantage of higher revenues from its oil exports. “The market is increasingly worried that the continued overhang of supply is not being brought down fast enough,” said Ole Hansen, a commodities analyst with SaxoBank.

Read more …

Beijing forced to save the shadows.

China Shadow Banks Hit by Record Premium for One-Week Cash (ZH)

During the so-called Chinese Banking Liquidity Crisis of 2013, the relative cost of funds for non-bank institutions spiked to 100bps. So, the fact that the ‘shadow banking’ liquidity premium has exploded to almost 250 points – by far a record – in the last few days should indicate just how stressed Chinese money markets are. While interbank borrowing rates have climbed across the board, the surge has been unusually steep for non-bank institutions, including securities companies and investment firms. They’re now paying what amounts to a record premium for short-term funds relative to large Chinese banks, according to data compiled by Bloomberg.

The premium is reflected in the gap between China’s seven-day repurchase rate fixing and the weighted average rate, which, by Bloomberg notes, widened to as much as 2.47 percentage points on Wednesday after some small lenders were said to miss payments in the interbank market. Non-bank borrowers tend to have a greater influence on the fixing, while large banks have more sway over the weighted average. “It’s more expensive and difficult for non-bank financial institutions to get funding in the market,” said Becky Liu at Standard Chartered. “Bigger lenders who have access to regulatory funding are not lending much of the money out.” Without access to deposits or central bank liquidity facilities, many of China’s non-bank institutions must rely on volatile money markets. As Bloomberg points out, The People’s Bank of China has been guiding those rates higher in recent months to encourage a reduction of leverage, while also stepping in at times to prevent a liquidity crunch.

Read more …

State owned zombies.

Zombie Companies are China’s Real Problem (BBG)

China needs to take on its state-owned “zombie companies,” which keep borrowing even though they aren’t earning enough to repay loans or interest, says Nicholas Lardy of the Peterson Institute for International Economics. “That’s where the real problem is,” Lardy said Thursday in a Bloomberg Television interview from the Boao Forum for Asia, an annual conference on the southern Chinese island of Hainan. “It’s a component of the run-up in debt that they really have to focus on.” While flagging this concern, Lardy, a senior fellow at Peterson in Washington and author of “Markets Over Mao: The Rise of Private Business in China,” said anxiety over China’s debt growth is overstated. Household deposits will continue to underpin the banking and financial system, which means the situation with zombie firms is unlikely to reach a critical point.

Household savings are “very sticky, they’re not going anywhere, and the central bank can come in to the rescue if there are problems,” he said. Chinese corporate profits will probably continue to recover this year and after-tax earnings needed to service the debt load is improving, Lardy said. Another positive sign is a slowdown in the buildup of debt outstanding to non-financial companies. The combination of that slackening and companies’ increasing earning power “is improving the overall situation,” he said. When it comes to U.S. President Donald Trump’s negative rhetoric on China, the country’s leaders deserve “very high marks so far” for their cool reaction. “They’ve been waiting to see what Mr. Trump is actually going to do as opposed to what he’s talked about, so they haven’t overreacted,” he said. “They’ve made very careful preparations for the worst case if Trump does move in a very strong protectionist direction.”

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Zombies and junk.

China Debt Risks Go Global Amid Record Junk Sales Abroad (BBG)

China’s riskiest corporate borrowers are raising an unprecedented amount of debt overseas, leaving global investors to shoulder more credit risks after onshore defaults quadrupled in 2016. Junk-rated firms, most of which are property developers, have sold $6.1 billion of dollar bonds since Dec. 31, a record quarter, data compiled by Bloomberg show. In contrast, such borrowers have slashed fundraising at home as the central bank pushes up borrowing costs and regulators curb real estate financing. Onshore yuan note offerings by companies with local ratings of AA, considered junk in China, fell this quarter to the least since 2011 at 31.3 billion yuan ($4.54 billion). Global investors desperate for yield have lapped up offerings from China. Rates on dollar junk notes from the nation have dropped 81 basis points this year to 6.11%, near a record low, according to a Bank of America Merrill Lynch index.

Some investors have warned of froth. Goldman Sachs Group Inc. said last month that it sees little value in the country’s high-yield property bonds. Hedge fund Double Haven Capital (Hong Kong) has said it is betting against Chinese junk securities. “Today’s market valuations are tight and investors are focusing on yields without taking into account credit risks,” said Raja Mukherji at PIMCO. “That’s where I see a lot of risk, where investors are not differentiating on credit quality on a risk-adjusted basis.” Lower-rated issuers turning to dollar debt after scrapping financing at home include Shandong Yuhuang Chemical on China’s east coast. The chemical firm canceled a 500 million yuan local bond sale in January citing “insufficient demand.” It then issued $300 million of three-year bonds at 6.625% this week. Some developers have grown desperate for cash as regulators tighten housing curbs and restrict their domestic fundraising. That’s raising concern among international investors in China’s real estate sector who have been burned before.

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Priceless humor: “Congress has already raised the alarm.” After three decades, that is.

A Fake $3.6 Trillion Deal Is Easy to Sneak Past the SEC

A few hours after the New York market close on Feb. 1, an obscure Chicago artist by the name of Antonio Lee told the world he had become the world’s richest man. The 32-year-old painter said Google’s parent, Alphabet Inc., had bought his art company in exchange for a chunk of stock that made him wealthier than Bill Gates, Warren Buffett and Jeff Bezos – combined. Of course, none of it was true. Yet, on that day, Lee managed to issue his fabricated report in the most authoritative of places: The U.S. Securities and Exchange Commission’s Edgar database – the foundation of hundreds of billions of dollars in financial transactions each day. For more than three decades, the SEC has accepted online submissions of regulatory filings – basically, no questions asked.

As many as 800,000 forms are filed each year, or about 3,000 per weekday. But, in a little known vulnerability at the heart of American capitalism, the government doesn’t vet them, and rarely even takes down those known to be shams. “The SEC can’t stop them,” said Lawrence West, a former SEC associate enforcement director. “They can only punish the filer afterward and remove the filing from the system. So, caveat lector – let the reader beware.” Congress has already raised the alarm. For its part, the SEC, which declined to comment, has said those who make filings are responsible for their truthfulness and that only a handful have been reported as bogus. Submitting false information exposes the culprit to SEC civil-fraud charges, or even federal criminal prosecution.

On May 14, 2015, Nedko Nedev, a dual citizen of the United States and Bulgaria, filed an SEC form indicating he was making a tender offer – an outright purchase – for Avon, the cosmetics company. Avon’s shares jumped 20% before trading was halted, and the company denied the news. (A federal grand jury later indicted Nedev on market manipulation and other charges.) After the fraudulent Avon filing, U.S. Senator Chuck Grassley, the Iowa Republican and former chairman of the Finance Committee, told the SEC it must review its posting standards. “This pattern of fraudulent conduct is troubling, especially in light of the relative ease in which a fake posting can be made,” Grassley wrote in a letter to the agency. In response, Mary Jo White, who then chaired the SEC, said it wouldn’t be feasible to check information. She noted that there were on average 125 first-time filers daily in 2014, and the agency was studying whether its authentication process could be strengthened without delaying disclosure of key information to investors.

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Only a major reset will do.

Elite Economists: Often Wrong, Never In Doubt (720G)

Since the U.S. economic recovery from the 2008 financial crisis, institutional economists began each subsequent year outlining their well-paid view of how things will transpire over the course of the coming 12-months. Like a broken record, they have continually over-estimated expectations for growth, inflation, consumer spending and capital expenditures. Their optimistic biases were based on the eventual success of the Federal Reserve’s (Fed) plan to restart the economy by encouraging the assumption of more debt by consumers and corporations alike. But in 2017, something important changed. For the first time since the financial crisis, there will be a new administration in power directing public policy, and the new regime could not be more different from the one that just departed. This is important because of the ubiquitous influence of politics.

The anxiety and uncertainties of those first few years following the worst recession since the Great Depression gradually gave way to an uncomfortable stability. The anxieties of losing jobs and homes subsided but yielded to the frustration of always remaining a step or two behind prosperity. While job prospects slowly improved, wages did not. Business did not boom as is normally the case within a few quarters of a recovery, and the cost of education and health care stole what little ground most Americans thought they were making. Politics was at work in ways with which many were pleased, but many more were not. If that were not the case, then Donald Trump probably would not be the 45th President of the United States. Within hours of Donald Trump’s victory, U.S. markets began to anticipate, for the first time since the financial crisis, an escape hatch out of financial repression and regulatory oppression.

As shown below, an element of economic and financial optimism that had been missing since at least 2008 began to re-emerge. What the Fed struggled to manufacture in eight years of extraordinary monetary policy actions, the election of Donald Trump accomplished quite literally overnight. Expectations for a dramatic change in public policy under a new administration radically improved sentiment. Whether or not these changes are durable will depend upon the economy’s ability to match expectations.

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I find the Trump bashing parade very tiresome, but Matt’s funny.

Trump the Destroyer (Matt Taibbi)

There is no other story in the world, no other show to watch. The first and most notable consequence of Trump’s administration is that his ability to generate celebrity has massively increased, his persona now turbocharged by the vast powers of the presidency. Trump has always been a reality star without peer, but now the most powerful man on Earth is prisoner to his talents as an attention-generation machine. Worse, he is leader of a society incapable of discouraging him. The numbers bear out that we are living through a severely amplified déjà vu of last year’s media-Trump codependent lunacies. TV-news viewership traditionally plummets after a presidential election, but under Trump, it’s soaring. Ratings since November for the major cable news networks are up an astonishing 50% in some cases, with CNN expecting to improve on its record 2016 to make a billion dollars – that’s billion with a “b” – in profits this year.

Even the long-suffering newspaper business is crawling off its deathbed, with The New York Times adding 132,000 subscribers in the first 18 days after the election. If Trump really hates the press, being the first person in decades to reverse the industry’s seemingly inexorable financial decline sure is a funny way of showing it. On the campaign trail, ballooning celebrity equaled victory. But as the country is finding out, fame and governance have nothing to do with one another. Trump! is bigger than ever. But the Trump presidency is fast withering on the vine in a bizarre, Dorian Gray-style inverse correlation. Which would be a problem for Trump, if he cared. But does he? During the election, Trump exploded every idea we ever had about how politics is supposed to work. The easiest marks in his con-artist conquest of the system were the people who kept trying to measure him according to conventional standards of candidate behavior.

You remember the Beltway priests who said no one could ever win the White House by insulting women, the disabled, veterans, Hispanics, “the blacks,” by using a Charlie Chan voice to talk about Asians, etc. Now he’s in office and we’re again facing the trap of conventional assumptions. Surely Trump wants to rule? It couldn’t be that the presidency is just a puppy Trump never intended to care for, could it? Toward the end of his CPAC speech, following a fusillade of anti-media tirades that will dominate the headlines for days, Trump, in an offhand voice, casually mentions what a chore the presidency can be. “I still don’t have my Cabinet approved,” he sighs. In truth, Trump does have much of his team approved. In the early days of his administration, while his Democratic opposition was still reeling from November’s defeat, Trump managed to stuff the top of his Cabinet with a jaw-dropping collection of perverts, tyrants and imbeciles, the likes of which Washington has never seen.

En route to taking this crucial first beachhead in his invasion of the capital, Trump did what he always does: stoked chaos, created hurricanes of misdirection, ignored rules and dared the system of checks and balances to stop him. By conventional standards, the system held up fairly well. But this is not a conventional president. He was a new kind of candidate and now is a new kind of leader: one who stumbles like a drunk up Capitol Hill, but manages even in defeat to continually pull the country in his direction, transforming not our laws but our consciousness, one shriveling brain cell at a time.

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Tourism is a very big source of income for Turkey. Erdogan’s killing it off with a vengeance.

Erdogan Warns Europeans ‘Will Not Walk Safely’ If Attitude Persists (R.)

President Tayyip Erdogan said on Wednesday that Europeans would not be able to walk safely on the streets if they kept up their current attitude toward Turkey, his latest salvo in a row over campaigning by Turkish politicians in Europe. Turkey has been embroiled in a dispute with Germany and the Netherlands over campaign appearances by Turkish officials seeking to drum up support for an April 16 referendum that could boost Erdogan’s powers. Ankara has accused its European allies of using “Nazi methods” by banning Turkish ministers from addressing rallies in Europe over security concerns. The comments have led to a sharp deterioration in ties with the European Union, which Turkey still aspires to join.

“Turkey is not a country you can pull and push around, not a country whose citizens you can drag on the ground,” Erdogan said at an event for Turkish journalists in Ankara, in comments broadcast live on national television. “If Europe continues this way, no European in any part of the world can walk safely on the streets. Europe will be damaged by this. We, as Turkey, call on Europe to respect human rights and democracy,” he said. Germany’s Frank-Walter Steinmeier used his first speech as president on Wednesday to warn Erdogan that he risked destroying everything his country had achieved in recent years, and that he risked damaging diplomatic ties. “The way we look (at Turkey) is characterized by worry, that everything that has been built up over years and decades is collapsing,” Steinmeier said in his inaugural speech in the largely ceremonial role. He called for an end to the “unspeakable Nazi comparisons.”

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Can’t let a little crisis get in the way of your champagne and caviar.

Lavish EU Rome Treaty Summit Will Skirt Issues in Stumbling Italy (BBG)

As leaders celebrate the European Union’s 60th birthday in Rome this weekend, the host nation may be hoping that a pomp-filled ceremony distracts from any probing questions. Overshadowed by the sting of Brexit and elections in the Netherlands, France and Germany, Italy’s lingering problems have left it as the weak link among Europe’s powerhouse economies. It’s stumbling through a stop-start slow recovery from a record-long recession, unemployment is twice that of Germany’s, and voters, weary of EU institutions, are flirting with the same kind of populism grabbing attention elsewhere. The gathering on Saturday on the city’s Capitol hill is to celebrate the Treaty of Rome, the bedrock agreement signed on March 25, 1957 for what is now the EU.

From its beginnings as the European Economic Community – with Italy among the six founding members – it has since grown to a union of 28 nations stretching 4,000 kilometers from Ireland in the northwest to Cyprus in the southeast. The U.K. is heading toward a lengthy exit from the EU known as Brexit, raising questions among the remaining 27 about the bloc’s long-term future. “Italy was until very recently at the forefront of the European integration process,” Luigi Zingales, professor of finance at University of Chicago Booth School of Business, said in an interview. “Today it’s undoubtedly Europe’s weakest link.” The economy grew just 0.9% last year, below the euro area’s 1.7%, and unemployment is at 11.9%. A recent EU poll put Italy as the monetary union’s second-most euro-skeptic state after Cyprus with only 41% saying the single currency is “a good thing.” The average in the 19-member euro area is 56%.

That widespread disenchantment may be felt at elections due in about one year. A poll published on Tuesday by Corriere della Sera put support for the Five Star Movement, which calls for a referendum to ditch the euro, at a record 32.3%, well ahead of the ruling Democratic Party. Summit host Prime Minister Paolo Gentiloni has only been in power since December, when Matteo Renzi resigned after losing a constitutional reform referendum. For Zingales, Italy has problems that European policy makers “would rather not talk about now as they don’t want to scare people.” That’s because across the bloc, politicians are still fighting voter resentment over the loss of wealth since the financial crisis, bitterness about bailouts and anger over a perceived increase in inequality. “Sixty years after the signing of the Treaties of Rome, the risk of political paralysis in Europe has never been greater,” Bank of Italy Governor Ignazio Visco told a conference in Rome this month.

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The EU can celebrate only because it’s murdering one of its members. Greece needs stimulus but gets the opposite.

Greek Consumption Slumps Further In 2017 (K.)

The year has started with some alarm bells regarding the course of consumer spending, generating concern not only about the impact on the supermarket sector and industry, but also on the economy in general. In the first week of March the year-on-year drop in supermarket turnover amounted to 15%, while in January the decline had come to 10%. Shrinking consumption is a sure sign that the economic contraction will be extended into another year, given its important role in the economy. The new indirect taxes on a number of commodities, the increased social security contributions, the persistently high unemployment and the ongoing uncertainty over the bailout review talks have hurt consumer confidence and eroded disposable incomes.

In this context, it will be exceptionally difficult to achieve the fiscal targets, especially if the uncertainty goes on or is ended with the imposition of additional austerity measures that would only see incomes shrink further. According to projections by IRI market researchers, supermarket sales in 2017 are expected to decline 3.6% from last year, with the worst-case scenario pointing to a 4.4% drop. Supermarket sales turnover dropped at the steepest rate seen in the crisis years in 2016, down 6.5%, after falling 2.1% in 2015, 1.4% in 2014, 3.5% in 2013 and 3.4% in 2012.

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“For a continent that has been at war with itself for 10 centuries and only managed to play nice for the last 30 or so years, it’s foolish to expect these bailouts to last forever.”

Nine Years Later, Greece Is Still In A Debt Crisis.. (Black)

Greece has had nine different governments since 2009. At least thirteen austerity measures. Multiple bailouts. Severe capital controls. And a full-out debt restructuring in which creditors accepted a 50% loss. Yet despite all these measures GREECE IS STILL IN A DEBT CRISIS. Right now, in fact, Greece is careening towards another major chapter in its never-ending debt drama. Just like the United States, the Greek government is set to run out of money (yet again) in a few months and is in need of a fresh bailout from the IMF and EU. (The EU is code for “Germany”…) Without another bailout, Greece will go bust in July– this is basic arithmetic, not some wild theory. And this matters. If Greece defaults, everyone dumb enough to have loaned them money will take a BIG hit. This includes a multitude of banks across Germany, Austria, France, and the rest of Europe.

Many of those banks already have extremely low levels of capital and simply cannot afford a major loss. (Last year, for example, the IMF specifically singled out Germany’s Deutsche Bank as being the top contributor to systemic risk in the global financial system.) So a Greek default poses as major risk to a number of those banks. More importantly, due to the interconnectedness of the financial system, a Greek default poses a major risk to anyone with exposure to those banks. Think about it like this: if Greece defaults and Bank A goes down, then Bank A will no longer be able to meet its obligations to Bank B. Bank B will suffer a loss as well. A single event can set off a chain reaction, what’s called ‘contagion’ in finance. And it’s possible that Greece could be that event. This is what European officials have been so desperate to prevent for the last nine years, and why they’ve always come to the rescue with a bailout.

It has nothing to do with community or generosity. They’re hopelessly trying to prevent another 2008-style meltdown of the financial system. But their measures have limits. How much longer do Greek citizens accept being vassals of Germany, suffering through debilitating capital controls and austerity measures? How much longer do German taxpayers continue forking over their hard-earned wages to bail out Greek retirees? After all, they’ve spent nine years trying to ‘fix’ Greece, and the situation has only become worse. For a continent that has been at war with itself for 10 centuries and only managed to play nice for the last 30 or so years, it’s foolish to expect these bailouts to last forever. And whether it’s this July or some date in the future, Greece could end up being the catalyst which sets off a chain reaction on both sides of the Atlantic.

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It’s time for lawyers to step in.

In Greece, Europe’s New Rules Strip Refugees Of Right To Seek Protection (K.)

EU leaders are celebrating a year since they carved out the agreement with Turkey that stemmed the flood of refugees seeking to escape war and strife on Europe’s doorstep. But the importance of the agreement goes far beyond the fact that it has contributed to deterring refugees from coming to Greece. At the Norwegian Refugee Council, we fear that the system Europe is putting in place in Greece is slowly stripping people of their right to seek international protection. Greece took the positive step to enshrine in law some key checks and balances to protect the vulnerable – a victim of torture, a disabled person, an unaccompanied child – so they could have their asylum case heard on the Greek mainland rather than remaining on the islands.

But a European Commission action plan is putting Greece under pressure to change safeguards enshrined in Greek law. NRC, along with other human rights and humanitarian organizations, wrote an open letter to the Greek Parliament this month urging lawmakers to keep that protection for those most in need. Importantly, this is just another quiet example of how what is happening in Greece is setting precedents that may irrevocably change the 1951 Refugee Convention. Europe is testing things out in Greece. [..] It was Europe and its postwar crisis that led to the 1951 convention that protects those displaced by war. Now that convention risks expiring on the doorstep of the same continent that gave birth to it – Europe is in danger of becoming, as NRC’s Secretary-General Jan Egeland has said, the convention’s “burial agent.”

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