Jul 102017
 
 July 10, 2017  Posted by at 9:15 am Finance Tagged with: , , , , , , , ,  4 Responses »
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Fred Lyon Anne Lyon getting into her Riley on Nob Hill, San Francisco 1950s

 

Propaganda-ville (Robert Parry)
Trump Cannot Improve Relations With Russia (PCR)
Comey’s Leaked Trump Memos Contained Classified Information (ZH)
Tales from the FOMC Underground (PT)
Stock Market Tsunami Siren Goes Off (WS)
America Is Struggling With Economic Rot (BBG)
May Appeals To Corbyn For Help In Coming Up With New Ideas (Ind.)
US-Russian Ceasefire Deal Holding In Southwest Syria (R.)
The Lynx Could Return To UK Within Months After 1,300-Year Absence (Ind.)

 

 

When slow news becomes no news. I must have seen 100 different versions of the non-story of one of Trump’s not-so-bright sons meeting with a Russian lady, a story that’s supposed to prove what nothing else has yet proven, not even Bob Mueller, Russian meddling. Yeah, Russia spies, and it hacks, and so does everyone else. But that’s clearly not news, and you can’t make it so be endlessly repeating it. That Comey leaked classified information is apparently much less newsworthy. Only, it is not. It just serves the machine to a lesser degree. Be careful, America, or you’ll have no news sources left soon. Not a great prospect.

Propaganda-ville (Robert Parry)

As much as the U.S. mainstream media wants people to believe that it is the Guardian of Truth, it is actually lost in a wilderness of propaganda and falsehoods, a dangerous land of delusion that is putting the future of humankind at risk as tension escalate with nuclear-armed Russia. This media problem has grown over recent decades as lucrative careerism has replaced responsible professionalism. Pack journalism has always been a threat to quality reporting but now it has evolved into a self-sustaining media lifestyle in which the old motto, “there’s safety in numbers,” is borne out by the fact that being horrendously wrong, such as on Iraq’s WMD, leads to almost no accountability because so many important colleagues were wrong as well.

Similarly, there has been no accountability after many mainstream journalists and commentators falsely stated as flat-fact that “all 17 U.S. intelligence agencies” concurred that Russia did “meddle” in last November’s U.S. election. For months, this claim has been the go-to put-down whenever anyone questions the groupthink of Russian venality perverting American democracy. Even the esteemed “Politifact” deemed the assertion “true.” But it was never true. It was at best a needled distortion of a claim by President Obama’s Director of National Intelligence James Clapper when he issued a statement last Oct. 7 alleging Russian meddling. Because Clapper was the chief of the U.S. Intelligence Community, his opinion morphed into a claim that it represented the consensus of all 17 intelligence agencies, a dishonest twist that Democratic presidential candidate Hillary Clinton began touting.

However, for people who understand how the U.S. Intelligence Community works, the claim of a 17-agencies consensus has a specific meaning, some form of a National Intelligence Estimate (or NIE) that seeks out judgments and dissents from the various agencies. But there was no NIE regarding alleged Russian meddling and there apparently wasn’t even a formal assessment from a subset of the agencies at the time of Clapper’s statement. President Obama did not order a publishable assessment until December – after the election – and it was not completed until Jan. 6, when a report from Clapper’s office presented the opinions of analysts from the Central Intelligence Agency, Federal Bureau of Investigation and the National Security Agency – three agencies (or four if you count the DNI’s office), not 17.

The report also contained no hard evidence of a Russian “hack” and amounted to a one-sided circumstantial case at best. However, by then, the U.S. mainstream media had embraced the “all-17-intelligence-agencies” refrain and anyone who disagreed, including President Trump, was treated as delusional. The argument went: “How can anyone question what all 17 intelligence agencies have confirmed as true?” It wasn’t until May 8 when then-former DNI Clapper belatedly set the record straight in sworn congressional testimony in which he explained that there were only three “contributing agencies” from which analysts were “hand-picked.”

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Paul Craig Roberts lays it on. A bit much if you ask me, but then so is everything else.

Trump Cannot Improve Relations With Russia (PCR)

On the same day that President Donald Trump said “it is time to move forward in working constructively with Russia,” and the day after he said “I had a tremendous meeting yesterday with President Putin,” the ignorant, stupid, Nikki Haley, who Trump appointed as US UN Ambassador, publicly contracted her president, forcefully stating: “we can’t trust Russia and we won’t ever trust Russia.” The ignorant stupid Haley is still in office, a perfect demonstration of Trump’s powerlessness. The ignorant stupid Haley has gone far beyond Obama’s crazed UN Ambassador, neocon Smantha Power in doing everything in her power to ruin the prospect of normal relations between the two major nuclear powers. Why does Nikki Haley work in favor of a confrontation between nuclear powers that would destroy all life on earth?

What is wrong with Nikki Haley? Is she demented? Has she lost her mind, assuming she ever had one? How can President Trump normalize relations with Russia when every one of his appointees wants to worsen the relations to the point of nuclear war? How is President Trump going to improve relations with Russia when President Trump stands powerless in face of his dressing down by his UN Ambassador? Clearly, Trump is powerless, a mere cipher. Joining Nikki Haley was Trump’s Secretary of State, Rex Tillerson. Tillerson, allegedly a friend of Russia, is also working overtime to worsen relations between the two nuclear powers by publicly contradicting the President of the United States, thereby making it clear that Trump is barely even a cipher.

Tillerson, a disgrace, said that Putin’s refusal to admit that Putin elected Trump by interferring in the US election “stands as an obstacle to our ability to improve the relationship between the US and Russia and it needs to be addressed in terms of how we assure the American people that interference into our eletions will not occur by Russia or anyone else.” Trump’s incompetence is illustrated by his appointments. There is no one in “his” government that supports him. Everyone of them works to undermine him. And he sits there and Twitters. So, what is President Putin’s belief that an understanding can now be worked out with Washington worth? Not a plugged nickel. Trump has zero authority over “his” government. He can be contradicted at will by his own appointees. The President of the United States is a joke.

You can find him on Twitter, but nowhere else, not in the Oval Office making foreign or military policy. The president Twitters and thinks that that is policy. The Trump administration was destroyed when the weak Donald Trump allowed the neoconservatives to remove his National Security Advisor, General Flynn. Trump has never recovered. “His” administration is staffed with violent Russophobes. Wars can be the only outcome. We know two things about the alleged Russian inteferrance in the Trump/Hillary presidential election. One is that John Brennan, Obama’s CIA director, and Comey, Obama’s FBI director, implied repeatedly that Trump was elected by Russian interference in the election, but neither the CIA nor the FBI have provided any evidence whatsoever that any such interference occurred. Indeed, months into the case, the special prosecutor, the former FBI director, can produce no evidence.

The whole thing is a sham, but it is ongoing. There will be no end to it as it is designed to undermind President Trump with the people who elected him. The message is: “Trump is not for America. Trump is for Russia.”

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Is Muelller going to investigate Comey soon?

Comey’s Leaked Trump Memos Contained Classified Information (ZH)

Comey’s troubles started when he testified under oath last month that he considered the memos he prepared to be personal documents and that he shared at least one of them with a Columbia University lawyer friend. As Comey later disclosed, he asked that lawyer to leak information from one memo to the news media in hopes of increasing pressure to get a special prosecutor named in the Russia case after Comey was fired as FBI director. The Hill recounts that particular exchange with Senator Roy Blunt: “So you didn’t consider your memo or your sense of that conversation to be a government document?,” Sen. Roy Blunt (R-Mo.) asked Comey on June 8. “You considered it to be, somehow, your own personal document that you could share to the media as you wanted through a friend?”

“Correct,” Comey answered. “I understood this to be my recollection recorded of my conversation with the president. As a private citizen, I thought it important to get it out.” Comey insisted in his testimony he believed his personal memos were unclassified, though he hinted one or two documents he created might have been contained classified information. “I immediately prepared an unclassified memo of the conversation about Flynn and discussed the matter with FBI senior leadership,” he testified about the one memo he later leaked about former national security adviser Lt. Gen. Michael Flynn. Additionally, he added, “My view was that the content of those unclassified, memorialization of those conversations was my recollection recorded.”

That’s when the problems escalated, because according to The Hill – which for the first time disclosed that the total number of memos linked to Comey’s nine conversations with Trump – when the seven memos Comey wrote regarding his nine conversations with Trump about Russia earlier this year were shown to Congress in recent days, the FBI claimed all were, in fact, deemed to be government documents. Oops. As The Hill reveals, four, or more than half, of the seven memos had markings making clear they contained information classified at the “secret” or “confidential” level, according to officials directly familiar with the matter. This is a major problem for Comey because FBI policy forbids any agent from releasing classified information or any information from ongoing investigations or sensitive operations without prior written permission, and mandates that all records created during official duties are considered to be government property.

“Unauthorized disclosure, misuse, or negligent handling of information contained in the files, electronic or paper, of the FBI or which I may acquire as an employee of the FBI could impair national security, place human life in jeopardy, result in the denial of due process, prevent the FBI from effectively discharging its responsibilities, or violate federal law,” states the agreement all FBI agents sign. FBI policy further adds that “all information acquired by me in connection with my official duties with the FBI and all official material to which I have access remain the property of the United States of America” and that an agent “will not reveal, by any means, any information or material from or related to FBI files or any other information acquired by virtue of my official employment to any unauthorized recipient without prior official written authorization by the FBI.”

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“..Not since Herbert C. Hoover has there been a more perfect scapegoat for an economic depression of the Fed’s making.”

Tales from the FOMC Underground (PT)

“What should we do?” began Yellen. “A decade of easy monetary policies has turned financial markets into a Las Vegas casino while the economy’s lazed around like my smelly house cats. What the heck was Bernanke thinking?” “Hell, Janet,” remarked New York Fed President William Dudley. “He wasn’t thinking. He soiled his pantaloons and then he soiled them again.” “So now we must clean up his stinky pile while he promotes his revisionist courage to act shtick. The reality is we must orchestrate a take-down of financial markets, and we must do it by year’s end.” “Well, gawd damn Bill!” barked St. Louis Fed President James Bullard. “With the exception of Neel, the $700 billion dollar bailout boy, don’t you think we all know that?”

“Hey, now!” interjected Minneapolis Fed President Neel Kashkari. “Don’t blame me. I was just carrying out Hank Paulson’s will, right Bill? Saving our boys’ bacon back at Goldman so they could continue doing god’s work.” “Besides Fish, it was you all who lined up behind Bernanke and tickled the poodle with his crazy QE experiment while I was busy chopping wood at Donner Pass and getting my fanny spanked in the California Governor’s race by retread Jerry Moonbeam Brown, of all people.” “Fair enough,” continued Bullard. “The point is, taking down the stock market will cause an extreme upset to the economy’s applecart. The mobs will come after us with torches and pitchforks.” “You see, the real trick is to do the dirty deed then disappear behind a fog of confusion. That’s what Greenspan would do. How can we pull that off?”

After a moment of silent contemplation, and a licked finger held up to the cool political winds drafting across the country… “Eureka! We can pin it on President Donald J. Trump!” exclaimed Chicago Fed President Charles Evans. “Could our good fortune be any better? Not since Herbert C. Hoover has there been a more perfect scapegoat for an economic depression of the Fed’s making.” “Hear, hear!” approved Yellen. “Damn the economy,” they bellowed in harmony… minus Kashkari. “This one’s on Trump!” “Bill, one last thing,” closed Yellen. “After the meeting, remember to give the public that shake n’ bake you dreamed up about crashing unemployment. We have to give off an air of being data dependent.” “That misdirection should twist them up until NFL football starts. Shortly after that, our work will be done…” “…and by the New Year, Congress and Joe public will be begging us to rescue the economy from the Fed’s… I mean… Trump’s disastrous economic program.”

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Earnings vs S&P. Something will give.

Stock Market Tsunami Siren Goes Off (WS)

Everyone who’s watching the stock market has their own reasons for their endless optimism, their doom-and-gloom visions, their bouts of anxiety that come with trying to sit on the fence until the very last moment, or their blasé attitude that nothing can go wrong because the Fed has their back. But there are some factors that are like a tsunami siren that should send inhabitants scrambling to higher ground. Since July 2012 – so over the past five years – the trailing 12-month earnings per share of all the companies in the S&P 500 index rose just 12% in total. Or just over 2% per year on average. Or barely at the rate of inflation – nothing more. These are not earnings under the Generally Accepted Accounting Principles (GAAP) but “adjusted earnings” as reported by companies to make their earnings look better.

Not all companies report “adjusted earnings.” Some just stick to GAAP earnings and live with the consequences. But many others also report “adjusted earnings,” and that’s what Wall Street propagates. “Adjusted earnings” are earnings with the bad stuff adjusted out of them, at the will of management. They generally display earnings in the most favorable light – hence significantly higher earnings than under GAAP. This is the most optimistic earnings number. It’s the number that data provider FactSet uses for its analyses, and these adjusted earnings seen in the most favorable light grew only a little over 2% per year on average for the S&P 500 companies over the past five years, or 12% in total. Yet, over the same period, the S&P 500 Index itself soared 80%.

And these adjusted earnings are now back where they’d been on March 2014, with no growth whatsoever. Total stagnation, even for adjusted earnings. And yet, over the same three-plus years, the S&P 500 index has soared 33%. This chart shows those adjusted earnings per share for all S&P 500 companies (black line) and the S&P 500 index (blue line). I marked July 2012 and March 2014:

Given that there has been zero earnings growth over the past three years, even under the most optimistic “adjusted earnings” scenario, and only about 2% per year on average over the past five years, the S&P 500 companies are not high-growth companies. On average, they’re stagnating companies with stagnating earnings. And the price-earnings ratio for stagnating companies should be low. In 2012 it was around 15.5. Now, as of July 7, it is nearly 26. In other words, earnings didn’t expand. The only thing that expanded was the multiple of those earnings to the share prices – the P/E ratio. Such periods of multiple expansion are common. They’re part of the stock market’s boom and bust cycle. And they’re invariably followed by periods of multiple contraction. How long can this period of multiple expansion go on? That’s what everyone wants to know. Projections include “forever.” But “forever” doesn’t exist in the stock market. The next segment of the cycle is a multiple contraction.

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The incessant call far a return to normal. There’s no such thing. The economy never recovered.

America Is Struggling With Economic Rot (BBG)

The Great Recession, and the financial crisis that preceded it, were such enormous and terrible events that they occupied most of our economic thinking for a decade. But now that the smoke has cleared and the economy has returned to a semblance of normality, we’re starting to think more about long-term trends. And evidence is mounting that the Great Recession may have drawn attention away from a slow rot that has been eating the U.S. economy since the turn of the century. Some of the top macroeconomists in the business have a new paper that reaches this conclusion. In “The Disappointing Recovery of Output after 2009,” John G. Fernald, Robert E. Hall, James H. Stock and Mark W. Watson break down the declines in growth and employment into a structural, long-term component and a short-term part related to the crash.

That’s an inherently hard thing to do, since there’s no universally accepted theory of how recessions work. But Fernald et al. use two accounting methods, and find basically the same thing – although the recession hurt the economy a lot, it happened to coincide with two trends that were slowly eroding the U.S.’s fundamentals. Those two trends are slowing productivity and reduced labor-force participation. Slow productivity growth is hardly news – Bloomberg View recently ran a whole series of articles about the phenomenon. This unhappy trend appears to have begun three years before the financial crisis:

As for labor-force participation, this has been falling since the turn of the century, though the last two years have seen a small uptick:

Both of these trends might have been exacerbated by the Great Recession. That economic disaster caused businesses to stop investing, which may have deprived them of the technology needed to increase productivity. Workers thrown out of employment by the recession might have seen their skills, connections and work ethic degrade, preventing them from going back to work even after the economy recovered.

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His advise: call a snap election.

May Appeals To Corbyn For Help In Coming Up With New Ideas (Ind.)

Theresa May is to insist she has the right vision for Britain and an “unshakeable sense of purpose” to build a fairer nation as she launches a fightback after her General Election gamble backfired. The Prime Minister will acknowledge that the loss of her Commons majority means she will have to adopt a different approach to government, signalling she is prepared to “debate and discuss” ideas with her opponents. But amid rumours of unrest within Tory ranks about her position, Ms May will insist her commitment is “undimmed” almost 12 months after entering Number 10 as Prime Minister. Her comments in a speech on Tuesday will be viewed as an attempt to relaunch her premiership after the humiliation of the election result and the need to strike a deal with the Democratic Unionist Party to prop up her administration in the Commons.

Ms May will return to her core message from when she succeeded David Cameron: a “commitment to greater fairness” and tackling “injustice and vested interests” in recognition that the EU referendum result was a “profound call for change across our country”. She will say: “Though the result of last month’s General Election was not what I wanted, those defining beliefs remain, my commitment to change in Britain is undimmed; my belief in the potential of the British people and what we can achieve together as a nation remains steadfast; and the determination I have to get to grips with the challenges posed by a changing world never more sure. “I am convinced that the path that I set out in that first speech outside Number 10 and upon which we have set ourselves as a Government remains the right one.

“It will lead to the stronger, fairer Britain that we need.” The fragile nature of Ms May’s position in the Commons will not stop her being “bold”, she will insist. “I think this country needs a Government that is prepared to take the bold action necessary to secure a better future for Britain and we are determined to be that Government. “In everything we do, we will act with an unshakeable sense of purpose to build the better, fairer Britain which we all want to see.”

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Hard to believe.

US-Russian Ceasefire Deal Holding In Southwest Syria (R.)

A U.S.-Russian brokered ceasefire for southwest Syria held through the day, a monitor and rebels said on Sunday, in the first peacemaking effort of the war by the U.S. government under President Donald Trump. The United States, Russia and Jordan reached the “de-escalation agreement,” which appeared to give Trump a diplomatic achievement at his first meeting with Russian President Vladimir Putin at the G20 summit in Germany this week. The Syrian Observatory for Human Rights, a Britain-based war monitor, said “calm prevailed” in the southwest since the truce began at noon (0900 GMT) on Sunday despite minor violations. Combatants briefly exchanged fire in Deraa province and in Quneitra around midnight, but this “did not threaten the ceasefire,” said Observatory Director Rami Abdulrahman.

Major Issam al Rayes, spokesman of the Southern Front coalition of Western-backed rebel groups, said “a cautious calm” continued into the evening. “The situation is relatively calm,” Suhaib al-Ruhail, a spokesman for the Alwiyat al-Furqan faction in Quneitra, said earlier. Another rebel official, in Deraa city, said there had been no significant fighting. It was quiet on the main Manshiya front near the border with Jordan, which he said had been the site of some of the heaviest army bombing in recent weeks. “Syrian ceasefire seems to be holding … Good!” Trump tweeted on Sunday. A Syrian official indicated that Damascus approved of the ceasefire deal, describing the government’s silence over it as a “sign of satisfaction.” “We welcome any step that would cease the fire and pave the way for peaceful solutions,” the government official told Reuters.

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Majestic animal. But 1,300 years is a big gap.

The Lynx Could Return To UK Within Months After 1,300-Year Absence (Ind.)

The Eurasian lynx could be stalking through British woodlands within months after plans were submitted to reintroduce the species, absent from Britain for about 1,300 years. Campaigners have applied for a licence to import six of the wildcats, which were hunted to extinction in the UK, and release them in Northumberland’s Kielder Forest. The Lynx Trust said the animals, which can grow to 1.3m in length, “belong” in Britain and there was a “moral obligation” to bring them back. The cats’ return would also generate millions of pounds for rural communities by attracting tourists, according to the group. But the proposal has met with opposition from sheep farmers, who claim their livestock would be put at risk.

The scheme would initially involve six lynx, four females and two males, being imported from Sweden and fitted with GPS tracking collars for a five-year trial. The trust applied to Natural England for permission to release the cats after it carried out an 11-month consultation. No date has been set for the proposed reintroduction but they cats could return to the UK by the end of 2017 if the plans are approved. The trust said in a statement: “In many other countries Eurasian lynx reintroduction has proven exceptionally low-conflict and wonderfully beneficial for the local communities that live alongside them, and we do sincerely hope that these cats, which thrived here for millions of years, do have the opportunity to prove they can still fit into both our ecology, and alongside local communities like those across the Kielder region.”

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Jun 302017
 
 June 30, 2017  Posted by at 9:35 am Finance Tagged with: , , , , , , , , , ,  7 Responses »
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Claude Monet Impression Sunrise 1872

 

Trump Travel Ban Goes Into Effect Amid New Court Challenge (BBG)
Yes, Ms. Yellen…There Will Be Another Financial Crisis (Roberts)
Car Deals: Must Be Subprime, Must Finance Through Chrysler Capital (Mish)
Signs Of An Auto Bubble: Dealer Offers “Low Credit Score Discount” (ZH)
Japan May Industrial Output Slumps At Steepest Pace In Over 6 Years (R.)
Bob Woodward Chides NYT, Mainstream Media: ‘Fair Mindedness is Essential’ (DC)
Russia-gate Is A Scandal In Search Of A Specific Crime (Robert Parry)
New York Times Forced To Retract Longstanding Lie About Russian Hacking (M.)
Maria Bartiromo Slams John Podesta Over His Ties To Russia (PFW)
Comey Friend Unveils “Smoking Gun” Nothingburger (ZH)
Peace is Popular (Ron Paul)
Greece Garbage Cleanup Begins As Workers Halt Strike Action (K.)
Italy Threatens To Turn Away Foreign NGO Ships With Rescued Migrants (dpa)
Closing Italian Ports ‘A Cry For Help’, Say Weary Crew Of Rescue Boat (G.)

 

 

Let’s have it, so the courts can hold all points of view against the light of the law.

Trump Travel Ban Goes Into Effect Amid New Court Challenge (BBG)

The Trump administration’s revised travel ban faced a new court challenge as soon as it took effect Thursday after the president’s signature immigration policy already weathered months of protests, legal wrangling and delays. A new set of restrictions on refugees and immigrants from six predominantly Muslim countries took effect at 8 p.m. EDT. The administration said the rules should help prevent the chaotic airport scenes witnessed when President Donald Trump’s initial order was abruptly imposed in January. But a half-hour before the ban took effect, Hawaii asked a judge to clarify whether the government violated instructions from the U.S. Supreme Court in defining who’s covered by the ban and who’s excluded.

If implemented as intended, the travel restrictions would allow Trump to declare partial victory on his campaign promise to stem the flow of refugees and travelers from nations he deems a security risk. Lower court decisions to uphold two of his proposed travel bans were early, public defeats for the administration in its initial weeks. To minimize disruptions this time, the State Department, Homeland Security Department and Justice Department coordinated in advance to establish clearer guidelines for thousands of consular officers, airlines and travelers. And unlike in January, when hundreds of travelers arriving in the U.S. were turned back or detained at airports, those already holding a valid visa will be let in. “The American public could have legitimate concerns about their safety when we open our doors,” State Department spokeswoman Heather Nauert said at a briefing Thursday.

“We want to open our doors to people who are willing to go through proper screening measures and who want to be here and want to be productive members of our society.” The latest effort followed a U.S. Supreme Court ruling this week that travelers from the six nations – Iran, Libya, Somalia, Sudan, Syria and Yemen – with “bona fide” connections in the U.S. be exempted from the travel ban. That definition was interpreted to mean that travelers with specific, close family members in the U.S., including spouses, children, and siblings, could be let in. But people whose closest connections are grandparents, aunts and uncles could be barred. Students or travelers with business or professional ties from the affected countries also are exempt if they can show a relationship that’s formal and documented, and not based on an intent to evade the ban.

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She’s gotta go. That was just too crazy. A few points and graphs from Lance’s longer article.

Yes, Ms. Yellen…There Will Be Another Financial Crisis (Roberts)

That is a pretty bold statement to make considering that every one of her predecessors failed to predict the negative consequences of their actions. Will there will be another “Financial Crisis” in our lifetimes? Yes, it is virtually guaranteed. The previous “crisis” wasn’t about just “an asset gone bad,” but rather the systemic shock caused by a “freeze” in the credit markets when Lehman Brothers filed for bankruptcy. Counterparties evaporated, banks froze lending and the credit market ceased to function. Credit, not the stock market, is the “lifeblood” of the economy. Of course, it is all good now because the Fed says so with Ms. Yellen placing a great amount of faith in the Fed’s own carefully constructed, and recently released results, of “bank stress tests.” Interestingly, EVERY bank passed with flying colors. In other words, the Millennial generation has now passed the baton of “Everybody Gets A Trophy” to the banking sector. [..] Here is why Janet Yellen is wrong in believing another “Financial Crisis” can’t occur:

Catalyst 1: Delinquency & Defaults We are already seeing the early warning signs with delinquency rates rising and commercial lending on the decline in both consumer and commercial and industrial loans. [..] Of course, this also includes the credit problems of the collapse in Commercial Real Estate which is grossly leveraged at a time when prices have begun to stagnate with an oversupply of inventory sitting on the ground.

Catalyst 2: Leverage & Robots It isn’t just bank loans which will catalyze the coming financial crisis. It is also, be the massive surge in debt and leverage over the last eight years including student loans, credit cards, corporate debt and margin loans. As I discussed recently in the “Illusion Of Liquidity:” “The illusion of liquidity has a dangerous side effect. The process of the previous two debt-deleveraging cycles led to rather sharp market reversions as margin calls, and the subsequent unwinding of margin debt fueled a liquidation cycle in financial assets. The resultant loss of the ‘wealth effect’ weighed on consumption pushing the economy into recession which then impacted corporate and household debt leading to defaults, write-offs, and bankruptcies.”

Catalyst 3: Pensions Lastly, and a point clearly missed by Ms. Yellen in her quest to dismiss financial crisis risks, is the $3 Trillion “Pension Crisis” that is just one sharp downturn away from imploding. The cresting of the “baby boom” generation now puts these massively underfunded pensions at risk of a “run on assets” during the next downturn which could send the entire system into chaos. Of course, this problem can be directly traced to the malfeasance of pension fund managers, and pension boards, which used excessively high return rates to lower costs of contributions.

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Lenders need new loans something desperate.

Car Deals: Must Be Subprime, Must Finance Through Chrysler Capital (Mish)

Reader Brian emailed an ad for huge discounts on cars. The fine print is rather amusing: Must be subprime and must finance through Chrysler Capital. Frequently, when you see an ad “only x available at this price”, there are really none available at that price. They all went to friends of the dealer. I called about the 2017 Patriot and there were still some left but they were “going fast”. The ad reads “Primary customer must have a FICO score below 620 and must finance through Chrysler Capital” I asked what happens if my credit score was above 620. As expected, I could not get that price. For someone with a credit score of 800 the price jumps to $13,485.

I asked what happens if I pay all cash. That price is $13,995. I asked about prepayment penalties and California does not allow them. Still, the MSRP is $21,760 and you can get one for $13,995. That is a discount of 35.7% off the MSRP. I do not know what this model typically sells for, but that seems like a hefty discount. A subprime buyer can pay $11,995. That is a discount of 44.9% off MSRP. Since there are no prepayment penalties, one could immediately pay it off in theory. In practice, someone with a credit score below 620 is extremely unlikely to be in a position to pay the loan off immediately.

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Don’t forget: when loans are paid back, money disappears from the system.

Signs Of An Auto Bubble: Dealer Offers “Low Credit Score Discount” (ZH)

If you’re still on the fence about whether the auto market in this country is anything but a massive bubble being propped up by extremely loose credit underwriting standards, then we think we’ve just found some definitive evidence for you. As Jalopnik noted earlier today, at first glance the following advertisement for a $55,000 truck from a dealership in Texas looks fairly ‘normal’…an extremely high starting MSRP at the top followed by a series of incentive offers that make the vehicle look “affordable.” But, take a closer look and we think you just might find something rather disturbing…that’s right, a $1,500 discount offered only to people with “Low Credit Scores.”

Ordinarily, of course, lender/dealer financing incentives like these would be offered to folks with good credit, because…well, that’s at least somewhat logical, but it seems as though this particular dealer has already sold a $55,000 truck to everyone with good credit and is looking to ‘creatively’ broaden it’s addressable market. Meanwhile, looking at the fine print, it seems as though this incentive is particularly targeted at subprime borrowers with credit scores below 620. “April 2017 Pricing on all new vehicles may include up to $1500 in finance rebates that have certain credit requirements to be able to claim this rebate. The finance office is Credit Score based and you must be below 620 to qualify. If you are over a 620 you must add up to $1500 to the price. Varies by make and model. Not all units are eligible for this rebate. Call Dealer for Details.”

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Rollercoaster territory. Wonder why. +4.0% in April, -3.2% in May, expected + 2.8% in June and -0.1% in July.

Japan May Industrial Output Slumps At Steepest Pace In Over 6 Years (R.)

Japan’s industrial output fell 3.3% in May from the previous month due to lower production of cars and construction equipment, preliminary government data showed on Friday, in a sign of a temporary lull in manufacturing activity. The result compared with the median estimate of a 3.2% decline in a Reuters poll of economists. It followed a 4.0% increase in April, which was the fastest increase in almost six years, the data from the Ministry of Economy, Trade and Industry showed. Manufacturers surveyed by the ministry expect output to rise 2.8% in June and fall 0.1% in July.

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I’m sort of sorry I feel inclined to delve into US politics, but enough is enough. “..maybe more essential is a game plan for reporting this and going to Moscow and finding the bookkeeper.”

Bob Woodward Chides NYT, Mainstream Media: ‘Fair Mindedness is Essential’ (DC)

Famed investigative journalist Bob Woodward criticized the media’s open bias toward President Trump on Tuesday in remarks following a screening of “All The President’s Men” in Washington, D.C. Woodward, the reporter who broke the Nixon Watergate scandal the media now loves to compare to the Trump administration, said it’s crucial the press retain the trust of the public, and execute a deep “fair-mindedness” when reporting. He pointed to a list of Trump’s “lies” compiled by The New York Times in which some of the president’s are misjudged as an example of overt bias, after he was asked about the media’s treatment of Trump in a Q&A session at Landmark E Street Cinema. “[Number three on the list] was that Trump said he was on the cover of Time magazine 14 or 15 times when it was in fact 11 times,” Woodward said. “… That’s not a lie.”

He likened Trump’s statement instead to someone getting pulled over for speeding and telling the police officer that they were driving the speed limit. “Tone matters, and headlines matter, and you want people to [trust you],” he said. “[It] really betrays the anti-Trump media bias,” Woodward added, regarding the media’s coverage of the investigation into Russian meddling in the election. “I think a kind of brief, deeply fair-mindedness is essential, but as essential or maybe more essential is a game plan for reporting this and going to Moscow and finding the bookkeeper.” The bookkeeper was a reference to a key source for Woodward and Carl Bernstein in their Watergate coverage. Woodward has been a consistent voice for journalism in recent months, calling the Buzzfeed dossier “a garbage document” and saying that the Comey investigation was “not yet Watergate,” contradicting frequent mainstream claims.

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Great history lesson on previous US scandals.

Russia-gate Is A Scandal In Search Of A Specific Crime (Robert Parry)

So how do Watergate and Iran-Contra compare and contrast with Russia-gate? One key difference is that in Watergate in 1972-73 and Iran-Contra in 1985-86, you had clear-cut crimes (even if you don’t want to believe the two “prequels” from 1968 and 1980, respectively). In Watergate, five burglars were caught inside the DNC offices on June 17, 1972, as they sought to plant more bugs on Democratic phones. (An earlier break-in in May had installed two bugs, but one didn’t work.) Nixon then proceeded to mount a cover-up of his 1972 campaign’s role in funding the break-in and other abuses of power. In Iran-Contra, Reagan secretly authorized weapons sales to Iran, which was then designated a terrorist state, without informing Congress, a violation of the Arms Export Control Act. He also kept Congress in the dark about his belated signing of a related intelligence “finding.”

And the creation of slush funds to finance the Nicaraguan Contras represented an evasion of the U.S. Constitution. There was also the attendant Iran-Contra cover-up mounted both by the Reagan White House and later the George H.W. Bush White House, which culminated in Bush’s Christmas Eve 1992 pardons of six Iran-Contra defendants as special prosecutor Lawrence Walsh was zeroing in on possible indictment of Bush for withholding evidence. By contrast, Russia-gate has been a “scandal” in search of a specific crime. President Barack Obama’s intelligence chieftains have alleged – without presenting any clear evidence – that the Russian government hacked into the emails of the Democratic National Committee and of Hillary Clinton’s campaign chairman John Podesta and released those emails via WikiLeaks and other Internet sites. (The Russians and WikiLeaks have both denied the accusations.)

The DNC emails revealed that senior Democrats did not maintain their required independence regarding the primaries by seeking to hurt Sen. Bernie Sanders and help Clinton. The Podesta emails pulled back the curtain on Clinton’s paid speeches to Wall Street banks and on pay-to-play features of the Clinton Foundation. Hacking into personal computers is a crime, but the U.S. government has yet to bring any formal charges against specific individuals supposedly responsible for the hacking of the Democratic emails. There also has been no evidence that Donald Trump’s campaign colluded with Russians in the hacking. Lacking any precise evidence of this cyber-crime or of a conspiracy between Russia and the Trump campaign, Obama’s Justice Department holdovers and now special prosecutor Robert Mueller have sought to build “process crimes,” around false statements to investigators and possible obstruction of justice.

In the case of retired Lt. Gen. Michael Flynn, Trump’s first national security adviser, acting Attorney General Sally Yates used the archaic Logan Act of 1799 to create a predicate for the FBI to interrogate Flynn about a Dec. 29, 2016 conversation with Russian Ambassador Sergey Kislyak, i.e., after Trump’s election but before the Inauguration. The Logan Act, which has never resulted in a prosecution in 218 years, was enacted during the period of the Alien and Sedition Acts to bar private citizens from negotiating on their own with foreign governments. It was never intended to apply to a national security adviser of an elected President, albeit before he was sworn in. But it became the predicate for the FBI interrogation — and the FBI agents were armed with a transcript of the intercepted Kislyak-Flynn phone call so they could catch Flynn on any gaps in his recollection, which might have been made even hazier because he was on vacation in the Dominican Republic when Kislyak called.

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“The “17 intelligence agencies” lie had been completely, thoroughly debunked for weeks..”

New York Times Forced To Retract Longstanding Lie About Russian Hacking (M.)

Seventeen intelligence agencies: if you’ve been following the maniacal #TrumpRussia coverage to any extent, you’ve heard this phrase used uncritically, time and again, regardless of your ideological loyalties. Pundits, papers and rank-and-file establishment loyalists have been unquestioningly regurgitating the nonsensical line that 17 intelligence agencies confirmed Russian interference in the US elections ever since Hillary Clinton made that baseless assertion in a debate back in October. The innate absurdity of the claim was immediately attacked by WikiLeaks and anti-establishment outlets who pointed out that this would necessarily need to involve full investigations from agencies like the Coast Guard, the DEA and the Energy Department in order to be true.

Nevertheless, many high-profile pro-establishment outlets like Politifact and USA Today found Clinton’s claims to be 100% true on the grounds that James Clapper, then-Director of National Intelligence and notorious Russophobic racist, “speaks on behalf of” all 17 intelligence agencies. To this day Politifact stands by its false claim on the basis of that same spurious assertion. It turns out, however, that in addition to Clapper’s office there were only three intelligence agencies involved in that assessment, not 17, and that the conclusions were drawn not by the actual agencies in full, but by a mere two dozen loyalists from those agencies hand-selected by Russophobic eugenicist Clapper himself. The great Robert Parry notes in his Consortium News article about this point, “as any intelligence expert will tell you, if you ‘hand-pick’ the analysts, you are really hand-picking the conclusion. For instance, if the analysts were known to be hard-liners on Russia or supporters of Hillary Clinton, they could be expected to deliver the one-sided report that they did.”

As reported by Parry, we have known about these facts since they emerged from Clapper’s racist face hole on May 8, and they were confirmed by former CIA Director John Brennan on May 23. And yet at a California technology conference on May 31, Hillary Clinton repeated the same lie she’s been spouting since October: “Seventeen agencies, all in agreement, which I know from my experience as a Senator and Secretary of State, is hard to get. They concluded with high confidence that the Russians ran an extensive information war campaign against my campaign, to influence voters in the election. They did it through paid advertising we think; they did it through false news sites; they did it through these thousand agents; they did it through machine learning, which you know, kept spewing out this stuff over and over again. The algorithms that they developed. So that was the conclusion.”

The “17 intelligence agencies” lie had been completely, thoroughly debunked for weeks, and yet not a soul called Clinton out on her brazen lie within the establishment press. Indeed, establishment pundits like Megyn Kelly continued to repeat the lie, and have continued to do so throughout the month of June. All this changed when CNN was sent reeling by a 1–2–3-punch combination ensuing from its horrendously propagandistic Russia coverage, which has seen three of its journalists lose their jobs and sent the network into international disgrace. All of a sudden we are seeing establishment outlets getting a lot more conscientious about what they choose to publish about the Russian Federation, and today we saw none other than the New York Times posting the very first retraction of this long-debunked lie that we have seen in establishment media.

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Even the New York TImes has issued a correction repudiating the “17 intelligence agencies” meme. There’s a James Clapper testimony video in which he says it was only CIA, NSA and FBI, “not all 17”. But Podesta just keeps using it. One creepy individual, if you ask me.

Maria Bartiromo Slams John Podesta Over His Ties To Russia (PFW)

Even after James O’Keefe and Project Veritas essentially blew the lid right off the fake ‘Russia hacked the election’ narrative, Hillary Clinton’s former campaign chairman, John Podesta, doubled down on the debunked narrative when challenged by Fox News’ Maria Bartiromo on his ties to a Kremlin-backed company. Podesta met behind closed doors on Tuesday with the members of the House Intelligence Committee as part of the panel’s investigation into supposed Russian efforts to meddle in the presidential election. When asked what he could tell the Thursday Fox audience about the House Intel meeting, Podesta explained that the panel wanted to know “what had happened to me and the effect on the campaign … the effect of the Russian interference in our democratic process.”

“They’re probing what actually happened, whether if there was collusion and what we’re going to do about,” Podesta told Bartiromo. “They asked me not to get into specific questions that they asked me and my specific answers but in general terms, they’re taking a bipartisan look at this stage.” Fox Host Maria Bartiromo then chimes in with a question that digs sharply into the skin of Podesta. “Don’t you find it odd that there’s been so much attention on the Trump Campaign and the Trump associates and potential collusion with the Russians when in fact it’s really the Democrats who have deeper and stronger ties to Russia,” Bartiromo said. “I mean John I have to ask your own situation..”

Bartiromo then goes on to break down how Podesta joined the board of the board of a small energy company in 2011 which later received $35 million from a Kremlin-funded entity. According to Bartiromo, Podesta also owns 75,000 shares in a Russian company and failed to disclose this to the Obama administration. And this is where things got heated…

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Accusing the dead. Low.

Comey Friend Unveils “Smoking Gun” Nothingburger (ZH)

For about a week now, Benjamin Wittes, the Brookings Institution senior fellow and noted ally of former FBI Director James Comey, has been taunting the Trump administration with tweets suggesting that another ‘bombshell’ story, presumably related to the Russia investigation, was in the works and set to drop any minute. Of course, people took notice of the warnings because Wittes posted similar tweets just before the New York Times published their now infamous story on Comey’s memos So what was the “bombshell” story? It seems to have come in the form of a rather bizarre, and thoroughly difficult to follow, Wall Street Journal article entitled “GOP Operative Sought Clinton Emails From Hackers, Implied a Connection to Flynn.”

To summarize the ‘bombshell’, the story is about a long-time Republican opposition researcher, 81-year-old Peter W. Smith, who apparently set out on a mission to find Hillary’s 30,000 emails which the FBI confirmed had gone missing. In his efforts to find those emails, he scoured hacking chat rooms looking for clues and/or hackers that might be able to help him. The WSJ alleges that Smith may or may not have been working with Michael Flynn but, in the end, they found absolutely nothing. To summarize even further, a guy tried to find Hillary’s missing emails and failed…HALT THE PRESSES! Of course, the goal of the story is to paint some sinister plot that involved Smith and Michael Flynn enlisting the help of some Russians to hack the 2016 election…thus ‘proving’ the collusion angle.

Unfortunately, the story seems to prove the exact opposite which is, if Flynn was really running around on some wild goose chase looking for Hillary’s missing 30,000 emails by chatting up hackers on a message board then we have to assume that means he wasn’t in any way connected to the original hack which ended up on WikiLeaks. [..] Of course, it’s only deeper in the story that the WSJ admits they have no idea if Flynn was even involved with Smith…but no one reads an entire article so it’s fairly irrelevant. “What role, if any, Mr. Flynn may have played in Mr. Smith’s project is unclear. In an interview with The Wall Street Journal, Mr. Smith said he knew Mr. Flynn, but he never stated that Mr. Flynn was involved.” [..] Meanwhile, the WSJ confirms that Smith died last month at the age of 81. So there you have it…all the makings of another salacious, ‘bombshell’ story with multiple references to Russians, hackers, collusion, shady dealings with Michael Flynn, etc, yet still no evidence of pretty much anything.

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“95% of employees at the State Department, Pentagon, CIA, NSA, and the rest of the alphabet soup agencies do not come and go with elections.”

Peace is Popular (Ron Paul)

Peace is popular. That was Ron Paul’s message to our audience in Texas earlier this spring, and it has been his consistent message since first running for Congress in the 1970s. So why do seemingly endless wars remain such a stubborn feature of the American presidency, with the shameful complicity of Congress? Americans who supported Trump did so overwhelmingly because he promised a populist “America First” approach to both domestic and foreign policy. Every poll shows that the domestic economy, culture wars, and immigration were the animating issues of the election – not our ongoing military misadventures in the Middle East. Nobody voted for an escalation of US involvement in Syria, nobody voted to ramp up the never-ending war in Afghanistan by dispatching the Mother of All Bombs, and nobody voted to resurrect an absurd decades-old conflict with North Korea.

Yet President Trump has done all of these things, largely abandoning the noninterventionist promises of Candidate Trump. Perversely, ordering a missile attack on a Syrian air base was the first and only act that earned him praise from his enemies at organs like the New York Times and Washington Post. “He’s finally acting presidential” they gushed. To understand Trump’s departures from his campaign rhetoric is to understand the very nature of politics and the bureaucratic state. Nobody goes to Washington to “run” the government. Washington runs them. Trump, ostensibly the biggest outsider to win the presidency in modern American history, cannot overcome the entrenched foreign policy establishment any more than he can overcome gravity. 95% of employees at the State Department, Pentagon, CIA, NSA, and the rest of the alphabet soup agencies do not come and go with elections.

They, along with the vast apparatus of defense contractors, are not going anywhere. Permanent war and interventionism requires permanent funding. And like all tax-funded enterprises, war is inherently anti-capitalist. It diverts resources, swells state bureaucracies, and hides the horrific human and economic costs in a cloak of patriotism and platitudes about America’s role in the world. When we hear Vice President Pence talk about “rebuilding the arsenal of democracy,” he really means it. Ludwig von Mises saw German war socialism up close as a lieutenant in the Austro-Hungarian army during the Great War. Under Wehrwirtschaftslehre, the German doctrine of war economics, the normal calculations of capitalist businessmen go out the window. Costs, quality, demand, and profit become wholly secondary to the overriding goal of preparing the nation for war.

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After 2 weeks. Forecast for Athens today: 43ºC (110ºF). Ditto for the weekend.

Greece Garbage Cleanup Begins As Workers Halt Strike Action (K.)

Municipal garbage collectors Thursday started the long and unpleasant task of picking up thousands of tons of trash that has been rotting under the sun for the past two weeks after unionists decided to call off strike action demanding job security. As fears of a threat to public health spiked Thursday amid an intensifying heat wave, the union representing protesting workers, POE-OTA, announced that they would be ending their action. The decision came on the day of a 24-hour strike by POE-OTA workers who pressed on with the walkout despite having wrested concessions from the government earlier in the week. Local authorities in Athens, Thessaloniki and other cities are now expected to rehire thousands of sanitation workers whose short-term contracts have expired.

According to sources, the Interior Ministry is on Friday to issue a circular to local authorities across the country, calling for the implementation of an amendment approved in Parliament on Wednesday which foresees the extension of workers’ short-term contracts. It remains unclear how POE-OTA will react, however, if municipalities end up hiring fewer than the 6,150 people currently employed on short-term contracts in sanitation. Meanwhile contract workers have to clean up the mess in the streets. According to Giorgos Broulias, deputy mayor of Athens, it will take at least four days to pick up all the trash. “It will then take even more days for parts of the capital to be washed down with cleansing agents and disinfectants,” he told Kathimerini.

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I even saw a number of 20,000 arrivals so far this week.

Italy Threatens To Turn Away Foreign NGO Ships With Rescued Migrants (dpa)

Italy is poised to instruct its ports to turn away foreign ships carrying rescued migrants unless other EU countries agree to greater burden-sharing on refugee arrivals, a senior government source said Wednesday. The threat would apply to ships run by NGOs but not to foreign state units operating under EU border agency Frontex and EU naval mission Eunavfor Med Sophia, the source told dpa. The same source said Italy’s ambassador to the EU, Maurizio Massari, was sent to meet EU Migration Commissioner Dimitris Avramopoulos to deliver the message that “Italy is dealing with a serious situation and Europe cannot turn the other way.” “The ambassador highlighted that Italy’s efforts have been enormous and well beyond international obligations [and] under the current circumstances it is difficult for our authorities to allow further disembarkations of migrants,” an Italian diplomat added.

It was not immediately clear whether the ban against foreign NGO ships could be enacted legally. It could affect several German vessels operated by German sea rescue charities, such as Jugend Rettet and Sea Watch. “We are a bit worried by this idea,” said Michele Trainiti, sea rescue coordinator for the Doctors Without Borders (MSF). The medical charity operates two boats in the Mediterranean, including one with a non-Italian flag. He said diverting vessels to France, for example, “would require many more days of navigation with people in very precarious situations,” which current MSF rescue vessels “are not equipped for.”

Rome’s hard-line message filtered out following the record rescue of nearly 10,000 migrants since the weekend, and in the wake of Prime Minister Paolo Gentiloni’s failure at last week’s EU summit to convince partners to take in more asylum seekers. It also came in the wake of a Sunday local election rout for the ruling centre-left Democratic Party, which several commentators blamed on public discontent with rising immigration and government proposals to grant citizenship to children of foreign residents.

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Europe is morally and politically gapingly empty.

Closing Italian Ports ‘A Cry For Help’, Say Weary Crew Of Rescue Boat (G.)

As 1,032 people plucked from the Mediterranean prepared to disembark the MS Aquarius onto southern Italian soil on Thursday, bringing refugee and migrant arrivals to more than 12,000 this week, those who had rescued them said they understood why Rome was threatening to close its ports to such vessels. “Officially, we haven’t heard anything from the Italian government … but if this is indeed the case, if anything it sounds more like a cry for help from the Italian government towards the EU,” said Marcella Kraay, a Dutch coordinator with Médecins Sans Frontières, as the ship arrived at Porto di Corigliano in Calabria. “And that goes along with what we’ve always asked for, which is for the EU to organise dedicated search and rescue in the Mediterranean. Until that happens we are forced to be out there because people are in danger, they’re going to drown if we’re not there.”

The last week has seen a surge of refugees arriving on humanitarian rescue ships. The Aquarius, which has been been undertaking risky year-round search and rescue missions in waters north of Libya since 2015, set a new record on Tuesday as it recovered more than 1,000 people in just one day. More than 5,000 people arrived in Italy on Monday alone, according to the International Office for Migration. The Italian government, which came under pressure from a strong challenge from the centre-right in local elections this week, has responded by giving its EU ambassador a mandate to raise the issue with the European commission – including the possibility it could close its ports to the ships. A commission spokeswoman said it supported Italy’s “call for a change in the situation” and the bloc’s migration ministers would tackle the matter next week.

“Over the last few months we’ve heard so many things said that were going to happen, or that should happen, or politicians basically gearing up for elections, that it doesn’t make me feel all that much right now,” said Kraay on board the Aquarius, which is chartered by the German-French charity SOS Méditerranée. “Let’s cross that bridge when we get there … until now we just need to stay focussed on doing our job.”

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Jun 162017
 
 June 16, 2017  Posted by at 10:02 am Finance Tagged with: , , , , , , , , , , ,  17 Responses »
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Pablo Picasso Dora Maar au chat 1941

 

‘It’s A ‘Scary’ Time With A Global Crisis On The Way’ (CNBC)
Angry Trump Decries Being Target Of Russia Probe (AFP)
Putin Comey Comment ‘Remark On Circus-like Russia Nonsense Gripping US’ (RT)
Theresa May Is Now Almost As Unpopular As Pre-Campaign Corbyn (YouGov)
UK Student Loan Debt Soars To More Than £100 Billion (G.)
UK Gov Still Hasn’t Submitted Brexit Papers For Talks Starting Monday (Ind.)
Germany, Austria Slam US Sanctions Against Russia (AP)
Debt Deal Gives Clarity To Markets – Greek FinMin Tsakalotos (AP)
Eurogroup Approves Greek Loans, Details Debt Relief, IMF To Join (K.)
IMF Won’t Fund Greek Bailout Until It Gets More Clarity On Debt Restructuring (CNBC)
Have The Greek Bailouts Worked? (BBC)
Greek Government Sabotages Its People With Water Privatization Scheme (Occupy)
Half of Athens’ Ambulances Are Out Of Action (AP)
Uptick In Migrant Arrivals Eyed With Concern By Greece’s Islanders (K.)

 

 

Louis Vuitton CEO knows it; where’s the rest?

‘It’s A ‘Scary’ Time With A Global Crisis On The Way’ (CNBC)

A financial crisis could be just around the corner, according to the chief executive of LVMH, who has described the global economic outlook as “scary”. “For the economic climate, the present situation is…mid-term scary,” Bernard Arnault told CNBC Thursday. “I don’t think we will be able to globally avoid a crisis when I see the interest rates so low, when I see the amounts of money flowing into the world, when I see the stock prices which are much too high, I think a bubble is building and this bubble, one day, will explode.”

Arnault, who is responsible for the world’s largest luxury goods company, couldn’t say whether the crash would be imminent or within the next few years, but he insisted that almost a decade on from the global financial crisis of 2008, one was due. “There has not been a big crisis for almost ten years now and since I’ve had a business I have seen crises more than every ten years, so be careful.” Longer term, however, Arnault said he was “optimistic”, pointing to advances in technology and innovation, which he said would stimulate the economy.

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The echo chamber expands.

Angry Trump Decries Being Target Of Russia Probe (AFP)

President Donald Trump responded angrily to reports he is under criminal investigation Thursday, deriding a “witch hunt” against him led by some “very bad” people. Trump responded to reports he is personally being investigated for obstruction of justice with a characteristic scorched earth defense: claiming mistreatment of historic proportions and calling into question the probity of his accusers. “You are witnessing the single greatest WITCH HUNT in American political history – led by some very bad and conflicted people!” Trump said in an early morning tweet. Trump did not directly address the allegations that he is being probed for possibly obstructing justice – a potentially impeachable offense. Nor did he deny he has entered the miniscule ranks of sitting presidents who have become the subject of a criminal investigation.

“They made up a phony collusion with the Russians story, found zero proof, so now they go for obstruction of justice on the phony story. Nice,” he wrote. Trump’s young presidency has been battered by allegations — under investigation both by Congress and the FBI — that Russia interfered to sway the 2016 election in his favor, in possible collusion with Trump’s campaign team. The FBI probe, now in the hands of special prosecutor Robert Mueller, shifted its focus to allegations of obstruction in the days after Trump fired the agency’s then director James Comey on May 9. The new allegations against Trump center on his own admission that he fired Comey because of the Russia investigation, and suggestions he asked several top intelligence officials for their help altering the direction of the inquiry.

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“..that sounds very strange when a special service chief records a conversation with the commander-in-chief and then gives it to the media via his friend.”

Putin Comey Comment ‘Remark On Circus-like Russia Nonsense Gripping US’ (RT)

Russia wants ties with the US improved, but the American domestic political situation is close to hopeless and while the Russian door is open, no one is going to lose their breath waiting to hold it open, political analyst Adam Garrie said, commenting on Putin’s statement. On Thursday, President Vladimir Putin held his annual live marathon Q&A session with the public, titled: “Direct Line with the president.” During the session, he said Russia was ready to grant former FBI director James Comey asylum. “[Comey] suddenly said that he had recorded a conversation with the president, and then gave the recording of this conversation to the media via his friend. Well, that sounds very strange when a special service chief records a conversation with the commander-in-chief and then gives it to the media via his friend. Then what’s the difference between the FBI director and Mr. [Edward] Snowden? Then he is not the head of the special services, but a human rights advocate who defends a certain position,” Putin said.

Political analyst Adam Garrie described the parallel between Comey and Snowden as “brilliant.” “It was a masterful moment for Vladimir Putin,” he told RT. “With all the lies and disinformation about the Russian president in Western mainstream media, people forget that, like most intelligent men, he’s got a wonderful sense of humor, he can be very cheeky, he can be sarcastic.” “Like Snowden, who thought he was doing a public good, Comey said that he thought he was doing the same. Should things get hairy for Comey, the doors to Russia are equally open to him.

I thought that was a very important remark by Putin on the whole sort of circus-like element of the whole Russia nonsense that’s gripping and probably will grip for some time the pundits in Washington. It just makes it clear that the entire tone of Putin’s statements about America is that we [Russia] want to get on with having good relations. It’s crucial not just bilaterally, but to the wider world, if the two of the three major superpowers do have improved relations, but that the situation domestically in America is close to hopeless – so that while the Russian door is open, no one in Russia is going to lose their breath or their cool waiting to hold it open,” Garrie said.

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She has no authority to negotiate anything anymore. That is a much bigger problem than people seem to think.

Theresa May Is Now Almost As Unpopular As Pre-Campaign Corbyn (YouGov)

New YouGov research highlights just how badly the election campaign and result damaged the public’s view of both the Prime Minister and the Conservative party and how much it boosted Labour and its leader. In April, Theresa May had a healthy net favourability rating of +10. At the end of May, following the campaign and negative reception of the Conservative manifesto, it fell to -5. Following the election result it has plummeted to -34. The Prime Minister is currently about as unpopular as Jeremy Corbyn was in November last year, when he scored -35. Meanwhile, the Labour leader has experienced a remarkable turnaround in public perception. Having experienced increasingly worse favourability ratings since Theresa May took office last summer, Jeremy Corbyn sank to a low of -42 in late April, just after the election was called.

However, the public’s view of the Labour leader improved markedly over the campaign, reaching -14 in the last YouGov favourability survey before election day. Now, following the result, his net favourability score is +0 – meaning that as many people now have a favourable view of him as have an unfavourable view. [..] It is remarkable that there has been such a sharp turnaround for the leaders of the two main political parties. When the election was called, Theresa May was secure in her position and many were speculating over the future of the Labour leader. Now, the roles are reversed, with Jeremy Corbyn having silenced his critics and won over large sections of the public while the Prime Minister faces criticism from across the board.

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Burden the young. An idea with future.

UK Student Loan Debt Soars To More Than £100 Billion (G.)

Student loan debt in the UK has risen to more than £100bn for the first time, underlining the rising costs young people face in order to get a university education. Outstanding debt on loans jumped by 16.6% to £100.5bn at the end of March, up from £86.2bn a year earlier, according to the Student Loans Company. England accounted for £89.3bn of the total. “Lots of prospective and current university students will see these figures and worry about being part of an increasing pool of graduate debt,” said Jake Butler of at money advice website Save the Student. “As fees increase this number will only go up, as more and more money is lent out each year. There is some cause for concern here, mainly for the government, as it is now widely accepted that the majority of graduates will never pay off their whole student loan debt before it is wiped off 30 years after their graduation.”

Sorana Vieru, the vice-president for higher education at the National Union of Students, said student debt had risen to “eye-watering levels”. The rise in student debt has been driven partly by rules introduced in 2012, allowing universities in England to charge up to £9,000 a year in tuition fees. In the year ending 31 March 2012, student debt was less than half the current level, at £45.9bn. Jeremy Corbyn made younger voters a key focus of Labour’s election campaign, promising to scrap tuition fees for new university students. A strong turnout among 18- to 24-year-olds at last week’s election helped the party to win 262 seats, an increase of 30. Sebastian Burnside, a senior economist at NatWest, said student debt was rising at a faster pace than any other form of debt, and eclipsed credit card debt of £68bn. “These latest figures show student debt is becoming of greater priority with every passing year. Student debt is the fastest growing type of borrowing and is rapidly becoming economically significant.”

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Maybe May intends to blame the EU and gather Brits together against them?

UK Gov Still Hasn’t Submitted Brexit Papers For Talks Starting Monday (Ind.)

The British Government has still not sent papers outlining its opening position for Brexit talks to the European Union, despite negotiations beginning on Monday. EU sources told The Independent Brussels had sent its “positioning papers” to London four days ago and while similar documents were expected in return, nothing has arrived as Theresa May’s administration struggles to get on its feet. Brexit Secretary David Davis confirmed on Thursday that talks to pull Britain out of the EU will begin on Monday regardless, despite cabinet splits over how to approach them and Ms May’s withdrawal plans not even being cemented in a Queen’s Speech.

Chancellor Philip Hammond cancelled a speaking event in which he was expected to signal new softer Brexit proposals focusing on jobs, amid fears it might spark an internal row with other Tories demanding Ms May stick to her immigration-centred approach. It came as the Prime Minister confirmed that a Queen’s Speech would go ahead, but only on 21 June – two days later than originally planned. It is still unclear if she has locked in the support of the Northern Irish DUP to prop her up in the House of Commons and give her the majority she needs to pass a vote approving the agenda set out in the Queen’s Speech. Conservatives signalled that talks with the unionists could even continue beyond the start of Brexit talks and the Queen’s Speech, as Sinn Fein’s Gerry Adams warned that any deal struck could breach the Good Friday Agreement that brought peace to Northern Ireland.

On Monday this week, the EU sent to London its positioning papers, officially outlining its negotiating stance ahead of talks, and had expected similar documents to come back in good time before discussions begin. But with the EU’s papers arriving as Ms May staved off a cabinet coup, convinced backbenchers to support her and held talks about realigning Brexit plans, nothing had been sent back to Brussels by Thursday night. One source across the Channel said it was “unbelievable” that the UK had still not sent the “basic” papers for the start of negotiations, with just over three days left before they begin. They added: “The talks are beginning on Monday. There are no positioning papers yet. It’s a basic thing that should happen beforehand. It doesn’t bode well.”

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Haha, Gazprom.

Germany, Austria Slam US Sanctions Against Russia (AP)

Germany and Austria voiced sharp criticism Thursday of the latest U.S. sanctions against Moscow, saying they could affect European businesses involved in piping in Russian natural gas. The United States Senate voted Wednesday to slap new sanctions on key sectors of Russia’s economy and individuals over its interference in the 2016 U.S. election campaign and its aggression in Syria and Ukraine. The measures were attached to a bill targeting Iran. In a joint statement, Austria’s Chancellor Christian Kern and Germany’s Foreign Minister Sigmar Gabriel said it was important for Europe and the United States to form a united front on the issue of Ukraine, where Russian-based separatists have been fighting government forces since 2014.

“However, we can’t accept the threat of illegal and extraterritorial sanctions against European companies,” the two officials said, citing a section of the bill that calls for the United States to continue to oppose the Nord Stream 2 pipeline that would pump Russian gas to Germany beneath the Baltic Sea. Half of the cost of the new pipeline is being paid for by Russian gas giant Gazprom, while the other half is being shouldered by a group including Anglo-Dutch group Royal Dutch Shell, French provider Engie, OMV of Austria and Germany’s Uniper and Wintershall. Some Eastern European countries, including Poland and Ukraine, fear the loss of transit revenue if Russian gas supplies don’t pass through their territory anymore once the new pipeline is built.

Gabriel and Kern accuse the U.S. of trying to help American natural gas suppliers at the expense of their Russian rivals. They said the possibility of fining European companies participating in the Nord Stream 2 project “introduces a completely new, very negative dimension into European-American relations,” they said. In their forceful appeal, the two officials urged the United States to back off from linking the situation in Ukraine to the question of who can sell gas to Europe. “Europe’s energy supply is a matter for Europe, and not for the United States of America,” Kern and Gabriel said.

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It’s getting close to outright lying.

Debt Deal Gives Clarity To Markets – Greek FinMin Tsakalotos (AP)

Greece’s finance minister says financial markets now have “much greater clarity” about the future of Greece’s debts, which will help the country regain market access when its current bailout program ends next year. Speaking after a meeting of the eurozone’s 19 finance ministers, Euclid Tsakalots said the country can “look forward with much greater confidence.” As well as securing €8.5 billion in bailout funds, which will help Greece meet a big summer repayment, Tsakalotos won a promise on future measures to ease the country’s debt burden and possible IMF financial involvement in the coming year. Greece has relied on bailout money for seven years and hopes that it will be able to stand on its own feet when the bailout ends. Tsakalotos said one big benefit from the deal Thursday was that future debt repayments could be linked to Greece’s growth. In essence, that could mean payments could be postponed in the event of an adverse shock.

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No , there are no details on debt relief, that’s the whole story.

Eurogroup Approves Greek Loans, Details Debt Relief, IMF To Join (K.)

Greece’s international creditors agreed on Thursday to approve the disbursement of €8.5 billion in bailout loans and to detail medium-term debt relief measures following talks in Luxembourg. Describing the agreement as “a major step forward,” Eurogroup President Jeroen Dijsselbloem said the deal aimed to get Greece standing “on its own feet again,” noting that debt relief would be linked to the country’s growth rates, in line with a proposal that had been promoted by French officials. The deal also outlined the participation of the IMF in Greece’s third bailout with the Fund’s chief Christine Lagarde saying she would formally recommend the IMF’s participation with $2 billion on a standby basis.

As regards the debt relief aspect of the agreement, Lagarde remarked that it was not the best solution for Greece as it was only an agreement in principle but the “second best” solution. European Commissioner for Economic and Monetary Affairs Pierre Moscovici sought to focus on the positive aspects of the deal. “Tonight, Greece can see the light at the end of its long tunnel of austerity,” he said. “From tonight, the watchwords are jobs, growth and investment.” His comments were echoed by Greek Finance Minister Euclid Tsakalotos who, in a separate press conference, said the deal provided greater clarity, for both citizens and investors, “more light at the end of the tunnel.” A spokesperson for the European Central Bank, whose bond buying program Greece wants to join, described the Eurogroup agreement as “a first step towards securing debt sustainability.”

However it remained unclear whether the deal was adequate to pave the way for the ECB to buy Greek bonds or not. The breakthrough last night came after Athens appeared to have shifted its stance slightly from earlier in the week when tensions between Greece and Germany had peaked and two top government ministers had said publicly that Athens mistrusts German Finance Minister Wolfgang Schaeuble. Speaking from Thessaloniki, where he met Israeli and Cypriot leaders for talks on energy cooperation, Prime Minister Alexis Tsipras remarked to reporters, “The good guys win in the end.” Greek officials have insisted over the past week that Greece has won the right to debt relief.

“Greece has fulfilled its commitments and adopted the required reforms. Now it is time for the Europeans to comply with their commitments on debt relief,” President Prokopis Pavlopoulos said in comments published in Germany’s Handelsblatt. He appealed to Schaeuble to abandon his persistent opposition to Greek debt relief. “Anything else would not be worthy of a great European politician,” he said. “It is important for us that our creditors secure the viability of the debt. Otherwise the ECB cannot buy Greek state bonds,” he said, referring to the European Central Bank.

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But the article above said “IMF to join”!

IMF Won’t Fund Greek Bailout Until It Gets More Clarity On Debt Restructuring (CNBC)

The IMF wants Greek debt to become more sustainable before it channels funds into the country’s bailout program, the organization’s managing director Christine Lagarde told CNBC. “For us to engage and for us to participate financially, more needs to be clarified, defined and approved in terms of restructuring,” she said late on Thursday. “What we believe will be needed is a deferral of interests, an extension of maturity, and a mechanism by which there is an adjustment based on growth … this is where further discussion and negotiation is needed.” Lagarde was speaking in Luxembourg after European finance ministers approved a €8.5 billion loan for Athens that will enable the cash-strapped nation to meet a major July repayment deadline.

European countries have been shouldering the burden of Greece’s current €86 billion rescue fund — its third bailout package since 2010. The IMF financially contributed to Athens’ previous bailouts but refused to join the current pact because it believes Greece needed debt relief — something that European creditors aren’t comfortable with. The organization’s absence has been a thorn in the sides of heavyweight European countries, particularly Germany, who view IMF participation as a key credibility factor. For Berlin to continue backing euro zone loans to Athens, Germany’s parliament is now insisting on IMF contribution. On Thursday, the IMF agreed to offer Athens a standby arrangement of less than $2 billion but won’t be disbursing any of the funds until euro zone countries offer more detail on potential debt relief measures in 2018.

“I’ve always said that the (bailout) program walks on two legs: the leg of policies and the leg of debt sustainability,” Lagarde told CNBC on Thursday. Athens has proved its commitment to key structural reforms, which cover pensions, tax, serial procedures, and labor markets, but the second leg of the bailout program — debt restructuring — needs to be further clarified, she continued. “Progress has been made today, no question about it but more is needed.” Lagarde praised Thursday’s loan agreement, stating that Athens would now be protected from future crisis moments because its financial needs in terms of debt service will be low.

“It (Athens) will actually produce a primary surplus and it should be, in terms of liquidity and stability, in a fairly solid situation to develop its economy to cultivate growth, generate investment , and proceed with the privatization that they have agreed to complete.” On the matter of Brexit negotiations, the IMF chief advised European and U.K. officials to adopt a risk-averse approach. “What is more predictable, more certain, can be calibrated, can be anticipated, can be transitioned into, is going to be more reliable and safer for the people and the economy.” Circumstances were still too premature for the IMF to forecast future economic developments, she added.

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They have for Germnay, yes.

Have The Greek Bailouts Worked? (BBC)

As eurozone finance ministers meet in Brussels for crucial talks on Greece, Reality Check looks at whether the bailouts the country has received have secured Greece’s economic survival or just created unsustainable debt. Neither Greece nor its creditors would say they are happy with how it has worked out. In 2010, when the Greek debt crisis started, Greece received €110bn in bailout money. And in 2012, the country received a second bailout of €130bn. These loans, from the eurozone and the International Monetary Fund (IMF), were deemed necessary to stop Greece going bankrupt. In exchange, Greece was required to make deep public spending cuts, raise taxes and introduce fundamental changes to the public sector and labour legislation. In August 2015, the eurozone countries agreed to give Greece a third bailout, of up to €86bn, on the condition of further changes.

The next tranche of that bailout, which Greece needs in order to honour repayments due in July, is being discussed at the eurozone finance ministers’ meeting on Thursday. In 2010, they managed to keep Greece in the euro and prevented the collapse of the common currency. So, from the perspective of the eurozone as a whole, a chaotic “Grexit” did not happen. But seven years on, and many more billions of euros later, was this price worth paying, both from the point of view of Greece’s creditors and of the Greek people? It is impossible to know what the situation would be like now had Greece not received the bailouts, but the consequences of receiving them have been painful. For the Greek people, the bailouts and the austerity measures implemented with them have come at a huge cost.

• Unemployment remains staggeringly high: 22.5% of Greeks were unemployed in March 2017. And almost half of people under the age of 25 were out of work
• Those who do work, earn less. The minimum monthly wage at the beginning of the crisis was €863. It has now fallen to €684
• Pensioners have been hit particularly hard. Pension changes since 2010 mean 43% of pensioners now live on less than €660 a month, according to the Greek government
• Government spending on health was almost halved between 2010 and 2015, while the education budget was cut by 20%

Greece’s creditors, strongly influenced by Germany, demanded that Greece start spending less than it earned. In 2016, for the first time, Greece achieved this. The surplus is small, at €1.3bn or 0.7% of GDP. But this can hardly be seen as a success – the economy has shrunk and the overall debt pile is still going up, not down.

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Tsipras is not going to grow a pair anymore. Rule 1 for every country and society should be: Never give up your water.

Greek Government Sabotages Its People With Water Privatization Scheme (Occupy)

The “fire sale” privatization of Greece started in 2015, following the infamous Syriza referendum in which more than three-fifths of the Greek people voted to reject Troika-imposed bailout conditions – and yet their government, led by Alexis Tsipras, chose to accept the deal anyway. The privatization process reached its peak the next year, when the Greek government sold the public transport giant TrainOSE to the Italian company Ferrovie dello Stato Italiane S.p.A for 45 million euros. This happened after a very brief bidding period and despite considerable employee pushback, including a 24-hour strike that paralyzed the country. Now, a second round of fire sales is taking place ahead of the upcoming third bailout negotiations for Greece, whose current bailout package will expire in August 2018.

Since last year, the sale of the country’s roads, rights to the use of its ports, and other public sector resources have only yielded around €4 billion – a far cry from the projected €50 billion that were promised when the privatization plan was put in motion. At best, it will result in a 6 billion euro profit, nowhere near enough to cover the ailing Greek economy’s massive overhead spending. In 2016, under the EYATH initiative (representing Thessaloniki’s public sector water workers) and activists, Save Greek Water was launched in an attempt to curb the Syriza administration’s efforts to privatize public water reserves. The initiative enjoyed enormous support from the public and media, and seemed to curbing further efforts to move the privatization talks forward. That was until last December, when an article published by Stavroula Symeonidou, president of the Workers Union of DEYA of Drama, revealed that Greece’s public water sector was being purposefully sabotaged by its own government.

“…DEYAs are not financially dependent on the State/Central Government, therefore they do not, in any way whatsoever, contribute to the public debt… however they are equally restricted in (actually barred from) recruiting any new personnel, which means that over time their already limited resources will reach zero,” Symeonidou wrote. The article also warned about the danger of further levies being imposed on Greek farmers using public water sources like ground- and rainwater wells. This dire prediction came to pass last month, when an “irregular water source charge” was imposed on the major rural regions of the country, directly targeting farmers and households in the affected areas. According to a statement released by the Syriza administration, 2.5% of the proceeds from this levy will be invested in the interest of supporting the Greek public sector – but not the DEYA initiative. This is being seen as an obvious attempt to further hobble any resistance to privatization.

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Let me guess, this is part of making the country competitive again? This is criminal.

Half of Athens’ Ambulances Are Out Of Action (AP)

Greece’s financial woes have clobbered spending on state-provided health services, even as demand has spiked because fewer Greeks can pay for private treatment. Some of Athens’ ambulances have up to 1 million kilometers (620,000 miles) — nearly three times the distance to the moon — on the clock, and about half are idle because of a lack of spare parts. At night, fewer than 40 vehicles cover a population of more than 4 million. Paramedic Dimitris Dimitriadis says the service is obliged to respond to every call it receives, even if the callers are just taking advantage of a rule that patients brought to hospitals by ambulance jump the line for treatment. “But then you also get elderly people who can’t afford a taxi fare to the hospital, so they call an ambulance,” he said, driving toward a reported suicide in central Athens. Upon arrival, the crew was told that the injured person had been taken to a hospital by relatives.

Unions say rescuers do their best against the odds, focusing on getting urgent cases to emergency treatment within minutes of receiving a call. But other patients, who may still require hospital treatment, can end up waiting well over an hour. Athens ambulance workers’ union leader Giorgos Mathiopoulos says about 70 of the capital’s 140 ambulances are out of action, and the fleet needs to be doubled in size. “Up to 30% of the immobilized ambulances can’t be repaired” and many are stripped for parts to keep others going, Mathiopoulos said. “When we’re trying to get to an incident as fast as possible … and the ambulance has that many kilometers on the clock, it’s a worry.”

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Something’s going to break.

Uptick In Migrant Arrivals Eyed With Concern By Greece’s Islanders (K.)

Official data on Thursday showed an uptick in refugee and migrant arrivals from Turkey to Greece’s shores, increasing concerns among residents on the Aegean islands that have borne the brunt of the refugee crisis. A total of 151 people were reported as entering Greece in 24 hours on Thursday, 74 of whom landed on Chios, 54 on Lesvos and 23 on other islands, slightly above the 146 arrivals in the previous 24-hour period. According to official figures, the number of migrants and refugees that reached Greece between June 8 and Thursday morning came to 538, a significant rise from May when daily arrivals were in the double digits.

The upsurge is stoking fears on islands such as Chios that are already struggling to cope with thousands of refugees and migrants stranded by slow processing and deportation procedures. Residents of Chios held a rally on Thursday night to protest plans for a pre-departure facility on the island, where authorities said they will temporarily detain dozens of migrants who are not eligible for asylum before they are deported. Protesters say that the official line in favor of the facility, pointing to a decrease in arrivals on Lesvos since a similar center was opened there, are disproved by the uptick observed in recent days. A similar rally was also held on the island of Samos on Thursday.

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Jun 102017
 
 June 10, 2017  Posted by at 9:22 am Finance Tagged with: , , , , , , , , ,  3 Responses »
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Marshall Hirsh Rue de Steinkerque, Paris 1950

 

Central Banks Have Bought A Record $1.5 Trillion In Assets In 2017 (ZH)
Central Banks Are Poised to Start Rowing in One Direction Again (BBG)
US Household Net Worth Climbs to Record $94.8 Trillion (WSJ)
Trump Lawyer Doubles Down On Comey Perjury Accusation (ZH)
Britain’s Credit Rating At Risk After General Election Outcome (RT)
Jeremy Corbyn: 1, British Mainstream Media: 0 (McDonald)
Tories turn on Theresa (G.)
Who is the DUP? A Brief History of UK Parliament’s New Kingmaker (RT)
5 Things To Know About DUP Politicians And Science (New Scientist)
Without Glass-Steagall America Will Fail (PCR)
Breaking Up the Banks Is Easier Than You Might Think (Nomi Prins)
Australian Households’ Share Of National Economic Pie Nears 50-Year Low (G.)
How Germany’s Three-Tiered Banking System Works (HandelsBlatt)
Greek Pensions Not Enough To Cover Costs Of Medicines, Bills And Food (K.)

 

 

The crime of our times. There’s nobody to stop it.

Central Banks Have Bought A Record $1.5 Trillion In Assets In 2017 (ZH)

One month ago, when observing the record low vol coupled with record high stock prices, we reported a stunning statistic: central banks have bought $1 trillion of financial assets just in the first four months of 2017, which amounts to $3.6 trillion annualized, “the largest CB buying on record” according to Bank of America. Today BofA’s Michael Hartnett provides an update on this number: he writes that central bank balance sheets have now grown to a record $15.1 trillion, up from $14.6 trillion in late April, and says that “central banks have bought a record $1.5 trillion in assets YTD.”

The latest data means that contrary to previous calculations, central banks are now injecting a record $300 billion in liquidity per month, above the $200 billion which Deutsche Bank recently warned is a “red-line” indicator for risk assets.

This, as we said last month, is why “nothing else matters” in a market addicted to what is now record central bank generosity. What is ironic is that this unprecedented central bank buying spree comes as a time when the global economy is supposedly in a “coordinated recovery” and when the Fed, and more recently, the ECB and BOJ have been warning about tighter monetary conditions, raising rates and tapering QE. To this, Hartnett responds that “Fed hikes next week & “rhetorical tightening” by ECB & BoJ beginning, but we fear too late to prevent Icarus” by which he means that no matter what central banks do, a final blow-off top in the stock market is imminent. He is probably correct, especially when looking at the “big 5” tech stocks, whose performance has an uncanny correlation with the size of the consolidated central bank balance sheet.

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There are actually still people who claim central banks have solved problems. They only made them worse, but with a time-lag.

Central Banks Are Poised to Start Rowing in One Direction Again (BBG)

[..] The shift has been gradual and often subtle, yet it marks a sea change. Largely in unison, central banks employed unprecedented, unconventional easing to force their economies back into gear after the global financial crisis spurred widespread unemployment and a decade of sub-par growth. In many, that involved large-scale asset purchase programs. In the euro area and Japan, it included negative rates. The Fed has been reducing accommodation on its own since December 2015. Now, others are beginning to discuss unwinding their policies, restoring a sense of togetherness. “We’re talking about a change from a situation where the central banks were basically pedal to the metal, full throttle, as much monetary stimulus as you could conceivably do,” said Jacob Funk Kirkegaard at the Peterson Institute for International Economics.

“Now, central banks in advanced economies are reacting to a recovering economy.” As hiring hums along and central banks tip-toe toward the exit, the Fed stands to benefit. The dollar has seen upward pressure as the U.S. central bank hikes and other monetary authorities ease, and a strong greenback means cheaper imports and lower inflation. The Fed’s preferred price index continues to undershoot its 2 percent goal. “You don’t want it falling out of bed, but dollar depreciation would lead to higher inflation in the U.S.,” Bryson said. “Frankly, I think the Fed wouldn’t be that unhappy to see higher inflation.” The change is also good news for the nations turning toward the exit, as it signals that business confidence is picking up, more people are working, and the specter of another economic dip is fading from view. “None of the big global central banks is looking to loosen policy,” said Andrew Kenningham at Capital Economics in London. “What has changed is that the fear of outright deflation, or entrenched low inflation, has now faded.”

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That’s not worth or wealth. That’s a bubble.

US Household Net Worth Climbs to Record $94.8 Trillion (WSJ)

The total net worth of U.S. households climbed by $2.3 trillion in the first quarter of 2017, reaching a record $94.8 trillion as the stock market soared and home prices climbed in many parts of the country. Household wealth in the stock market climbed by $1.3 trillion in the quarter, showing just how much the market’s climb to Dow 20000 and beyond has created a swell of wealth on American’s investment statements that is helping underpin consumer confidence. The figures are from a quarterly Federal Reserve report, known as the Flow of Funds, that tracks the aggregate wealth of all U.S. households and nonprofit organizations.

The report showed that the value of household real estate rose by about $500 billion in the quarter, reflecting a continuing increase in national home prices. The sum Americans held in savings accounts rose by about $100 billion in the quarter. Household debts increased by about $46 billion in the quarter. The $2.3 trillion increase, though large, isn’t without precedent. Such large increases were seen in the late 1990s when the stock market was also climbing rapidly, and in 2004 when both markets and home prices were climbing. The last time wealth increased so rapidly was late 2013.

During the 2007-09 recession, when the housing market and stock market both fell, households lost nearly $12 trillion in wealth. But in recent years, households in aggregate have regained that wealth and more as first the stock market, and then the housing market, began to rebound. The U.S. has about 126 million households, meaning the average net worth of U.S. households is about $750,000. The report provides no details of how that wealth is distributed between households. The figures aren’t adjusted for inflation.

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Always risky to tangle with top lawyers.

Trump Lawyer Doubles Down On Comey Perjury Accusation (ZH)

Yesterday, the Twittersphere lit up when Julie Davis of the New York Times sent out a tweet suggesting that Trump’s personal attorney, Marc Kasowitz, had potentially made a serious blunder in mixing up his timeline of when Comey first leaked details of his meetings with Trump to the Times. Here is what Kasowitz said yesterday: Although Mr. Comey testified he only leaked the memos in response to a tweet, the public record reveals that the New York Times was quoting from these memos the day before the referenced tweet, which belies Mr. Comey’s excuse for this unauthorized disclosure of privileged information and appears to entirely retaliatory. Davis, and most of the media, assumed that Kasowitz was referring to an article published on May 16th by the New York Times entitled “Comey Memo Says Trump Asked Him to End Flynn Investigation.”

Of course, given that Trump’s tweet about the Comey tapes was sent 4 days prior, it couldn’t have possibly been triggered by the the NYT’s May 16th story, as Kasowitz suggested, which led Ms. Davis of the Times to publish her ‘gotcha’ tweet. Unfortunately for Davis and the New York Times, Kasowitz has just released a clarifying statement which points out that he was never referring to the May 16th article in his statement yesterday, but rather an article published on May 11, the day before Trump’s tweet, entitled “In a Private Dinner, Trump Demanded Loyalty. Comey Demurred,” which seems to discuss, in detail, the same facts presented in Comey’s now infamous memos. Here is the full statement from Kasowitz:

Statement of Marc Kasowitz, Attorney to President Donald J. Trump:

“Numerous press stories have misreported that our statement yesterday incorrectly claimed that the New York Times was reporting details from Mr Comey’s memos the day before President Trump’s May 12, 2017 Tweet because, according to these reports, the first New York Times story to mention the memos specifically was May 16, 2017, which was after the Tweet. Our statement was accurate and was not referring to the May 16, 2017 story. Rather, Mr. Comey’s written statement, which he testified he prepared from his written memo, describes the details of the January dinner in virtually verbatim language as the New York Times May 11, 2017 story describing the same dinner. That story was the day before President Trump’s Tweet. It is obvious that whomever was the source for the May 11, 2017 New York Times story got that information from the memos or from someone reading or who had read the memos. This makes clear, as our statement said, that Mr Comey incorrectly testified that he never leaked the contents of the memo or details of the dinner before President Trump’s May ’12. 2017 Tweet.”

Meanwhile, a quick review of the New York Times’ May 11 story does seem to suggest that Kasowitz has a point as the language describing Trump’s January dinner with Comey is almost identical to the testimony he presented to Congress yesterday. Therefore, whoever supplied this ‘leak’ to the NYT’s was either in possession of Comey’s memos or had been read them verbatim shortly before they were relayed to the Times.

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A world of pain.

Britain’s Credit Rating At Risk After General Election Outcome (RT)

International rating agencies, closely monitoring the situation in the UK, have warned the country’s creditworthiness faces a downgrade after the Conservative Party’s failure to win a majority in Thursday’s general election. According to the agencies, the UK’s election result could delay negotiations with the European Union over its exit from the bloc and throws the future path of its economic policy into doubt. “In our view, the lack of a majority for any party is likely to delay Brexit negotiations, scheduled to start very soon,” said S&P in a statement, adding it doesn’t “exclude the possibility of another snap election.” “These considerations are reflected in our current negative outlook on the long-term ratings,” added the agency. S&P currently rates the UK at AA, with a negative outlook. The country was stripped of its triple-A rating immediately after the Brexit referendum last year. The negative outlook means Britain is at risk of future downgrades.

S&P’s sovereign chief ratings officer Moritz Kraemer told CNBC the assessment will depend “pretty much on the further outcome of the Brexit negotiations and the reality that the UK will face outside the EU, which is still uncertain.” Brexit negotiations are supposed to begin in less than two weeks. The UK holds the second highest rating Aa1 from another agency, Moody’s. It had held the rating since 2013 when it was downgraded from AAA due to sluggish growth prospects and fiscal challenges. The agency’s lead UK sovereign analyst Kathrin Muehlbronner said on Friday, “Moody’s is monitoring the UK’s process of forming a new government and will assess the credit implications in due course.” “As previously stated, the future path of the UK sovereign rating will be largely driven by two factors: first, the outcome of the UK’s negotiations on leaving the EU and the implications this has for the country’s growth outlook. Second, fiscal developments, given the country’s fiscal deficit and rising public debt,” she said.

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Very much the Guardian too.

Jeremy Corbyn: 1, British Mainstream Media: 0 (McDonald)

From it’s “The Sun Wot Won It” to a vacuum. The Labour Party’s surge this Thursday spells the end of the popular press’ ability to manipulate the outcome of elections. It also proves the relevance of alternative media in the internet age. It was June, 2015. And RT UK’s Afshin Rattansi was interviewing a man in a beige blazer about his unlikely bid to lead British Labour. His name was Jeremy Corbyn, and he spoke a lot of sense. Too much of it to win the leadership contest, it immediately appeared. Over the following weeks, Corbyn’s support increased, and the Labour-leaning mainstream media became more-and-more opposed to his candidacy. Particularly the Guardian, a newspaper which professes to be a leftist organ, but, in reality, will always favor liberal causes over those affecting the poor. [..] Here’s a selection of Guardian comment headlines from the past 24 months or so.

30 July 2015 – Michael White – “If Labour elects Jeremy Corbyn as leader, it will be the most reckless move since choosing the admirable but unworldly pacifist, George Lansbury, in 1932.”

25 June 2016 – Polly Toynbee – “Dismal, spineless, Jeremy Corbyn let us down again.”

28 June 2016 – Editorial – “The question is no longer whether his (Corbyn’s) leadership should end because at Westminster it already has. The challenge for the Labour left is to rescue something from it.”

14 December 2016 – Rafael Behr – “Jeremy Corbyn may be unassailable, but he is not leading Labour.”

11 January 2017 – Suzanne Moore – “Labour’s Corbyn reboot shows exactly why he has to go.”

1 March 2017 – Owen Jones – “Jeremy Corbyn says he is staying. That’s not good enough.”

5 May 2017 – Jonathan Freedland – “No more excuses: Jeremy Corbyn is to blame for this meltdown.” (almost a month before polling day).

Also, 5 May 2017 – Nick Cohen – “Corbyn & (John) McDonnell could limit a Tory landslide by resigning now. That they would rather die, shows the far left is an anti-Labour movement.” (ditto)

And let’s not forget The New Statesman, where Jason Cowley suggested, only on Tuesday, that Corbyn could be leading his party to “its worst defeat since 1935.” Two days before he delivered Labour’s biggest vote share increase since 1945.

And that was the election where Labour’s greatest ever chief, Clement Attlee, stunned a victorious Winston Churchill in the aftermath of World War Two. Or Cowley’s colleague, George Eaton, who told us in March: “Jeremy knows he can’t do the job…. senior figures from all parties discuss the way forward: a new Labour leader, a new party or something else?” Also, worth a mention in this social media era, are Twitter “freelancers” like the author JK Rowling. In September of last year, she described Corbyn as “Utterly deluded,” saying “I want a Labour govt (sic), to help people trapped where I was once trapped. Corbyn helps only Tories.”

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Turning on a dime. Lust for power does that.

Tories turn on Theresa (G.)

Theresa May is fighting for her future as prime minister, according to Britain’s newspapers, which have issued damning verdicts on the Conservatives’ failure to win a majority in the general election. The Sun and the Daily Mail, which heavily supported May and criticised Jeremy Corbyn in the runup to the election, said senior Conservatives had turned on the prime minister and that she could be forced to step down within six months. The Sun’s front page headline, over a photo of May eating chips, was “She’s had her chips”, while the Daily Mail said, “Tories turn on Theresa”. The Mail described the prime minister’s election campaign as “disastrous” and said the Conservatives had been “plunged into civil war”.

The Daily Telegraph and the Times, which, like the Sun and Mail, supported the Conservatives before the election, also warned that May’s future was at risk. The Times’ front page said: “May stares into the abyss.” The Guardian, which backed Labour, said May and the Conservatives had gone from “hubris to humiliation” during the election campaign. May was also criticised for looking to strike a deal with the DUP of Northern Ireland in order to form a government. The Daily Mirror accused May of forming a “Coalition of crackpots” and pointed out that the Northern Irish party opposes gay marriage and abortion. May’s setback will raise questions about the influence of newspapers on the electorate, given that the majority strongly backed her and the Conservatives.

The Guardian reported last week that some of the most shared articles on social media about the general election were from partisan blogs such as Another Angry Voice, The Canary and Evolve Politics, which backed Labour. The Sun had urged its readers not to “chuck Britain in the Cor-bin” in its last edition before the election, provoking a backlash on social media, while on Wednesday the Daily Mail devoted 13 pages to attacking Labour, Corbyn, Diane Abbott and John McDonnell under the headline “Apologists for terror”. The Sun is owned by Rupert Murdoch’s News Corp. John Prescott, the former deputy leader of Labour, tweeted on Thursday night that he had heard from a “very good source” that Murdoch had “stormed out” of the Times’s election party after seeing the exit poll, which predicted that the Conservatives would fail to win a majority.

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Theresa May’s desperate hunger for power endangers the peace process.

Who is the DUP? A Brief History of UK Parliament’s New Kingmaker (RT)

The Democratic Unionist Party (DUP) holds the key to Theresa May remaining in Downing Street but what do we know about this Protestant party drawn from the pro-union side of Northern Ireland’s deeply sectarian political spectrum? As Britons scramble to learn about the party that will prop up May’s mandate to execute Brexit, a swathe of the online conversation has focused on the party’s past comments on homophobia, Islam and creationism. The DUP was at the center of a bloody sectarian divide during Northern Ireland’s Troubles – a conflict involving rival paramilitary groups and the British Army which claimed more than 3,000 lives over 30 years. The Conservatives and the DUP won’t form a formal coalition government but the latter will support the government regardless.

“We want there to be a government. We have worked well with May. The alternative is intolerable. For as long as Corbyn leads Labour, we will ensure there’s a Tory PM,” a DUP source was cited as saying in by the Guardian. The party is the creation of firebrand Protestant Evangelical Minister Ian Paisley. Reverend Paisley also founded the Free Presbyterian Church of Ulster and was characterized by his entrenched Unionist views and his hostile opposition to the Catholic Church. In its early years, the party was heavily involved in a campaign against homosexuality and fiercely opposed gay rights. Paisley, who was famed for his extraordinarily fiery speeches, routinely preached against homosexuality and the party picketed gay rights events as part of their ‘Save Ulster from Sodomy’ campaign.

The campaign was ultimately unsuccessful as homosexuality was decriminalized in 1982. Paisley became infamous in 1988 when, as a member of the European Parliament for Northern Ireland, he caused uproar by interrupting an address by Pope John Paul II. During his protest he shouted: “I refuse you as Christ’s enemy and Antichrist with all your false doctrine,” while brandishing posters reading: “Pope John Paul II ANTICHRIST.”

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Backwaters.

5 Things To Know About DUP Politicians And Science (New Scientist)

Having failed to win an overall majority in the UK’s general election, Theresa May’s Conservative party is hoping to foster an informal coalition with Northern Ireland’s Democratic Unionist Party (DUP). Members of the party have taken controversial stances on everything from climate change to evolution, with one assembly member being unaware that heterosexual people can contract HIV. Here are five things you need to know when it comes to science and the DUP

Climate change The party has a history of speaking out against climate change. Senior member Sammy Wilson has called climate change a “con”, and described the Paris Agreement as “window dressing for climate chancers”. During his time as Northern Ireland’s environment minister, he said that people would eventually “look back at this whole climate change debate and ask ourselves how on Earth we were ever conned into spending billions of pounds” on the issue. It isn’t just Wilson though – in 2014, DUP ministers tried to oppose proposals to introduce local measures against climate change in Northern Ireland.

Abortion Northern Ireland remains the only part of the UK where women cannot access abortion unless their life is endangered by pregnancy – a legal situation that is incompatible with the European Convention on Human Rights, according to a Belfast High Court ruling in 2015. But on taking leadership of the party in 2016, Arlene Foster promised to block any attempt to change these laws, telling reporters “I would not want abortion to be as freely available here as it is in England.” Foster did, however, say she might consider an amendment in cases of rape. But the DUP’s Jim Wells – formerly the health minister for Northern Ireland – opposes abortion even in these circumstances.

Evolution DUP assembly member Thomas Buchanan has previously called for creationism to be taught in schools. In 2016, he voiced support for an evangelical Christian programme that offers “helpful practical advice on how to counter evolutionary teaching”. He has expressed a desire to see every school in Northern Ireland teaching creationism, describing evolution as a “peddled lie”. Buchanan told the Irish News “I’m someone who believes in creationism and that the world was spoken into existence in six days by His power,” adding that children had been “corrupted by the teaching of evolution”.

Green energy The DUP’s leader narrowly survived a no-confidence motion following a disastrous attempt to bolster green energy in Northern Ireland by providing subsidies for wood burners. Arlene Foster introduced the scheme in 2012 when she was head of the Department of Enterprise, Trade and Investment. The original budget was £25 million, but a lack of price controls meant that, over five years, almost £500 million went up in smoke.

HIV Last year, DUP assembly member Trevor Clarke admitted that he had thought only gay people could be infected with HIV, until a charity explained otherwise. He made the comments during a parliamentary debate around a campaign to “promote awareness and prevention” of HIV in Northern Ireland and to increase support for those living with HIV.

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“That any corporation is too big to fail is a contradiction of the justification of capitalism.”

Without Glass-Steagall America Will Fail (PCR)

Not only must Glass-Steagall be restored, but also the large banks must be reduced in size. That any corporation is too big to fail is a contradiction of the justification of capitalism. Capitalism’s justification is that those corporations that misuse resources and make losses go out of business, thus releasing the misused resources to those who can use them profitably. Capitalism is supposed to benefit society, not be dependent on society to bail it out. I was present when George Champion, former CEO and Chairman of Chase Manhattan Bank testified before the Senate Banking Committee against national branch banking. Champion said that it would result in the banks becoming too large and that the branches would suck savings out of local communities for investment in traded financial assets. Consequently, local communities would be faced with a dearth of loanable funds, and local businesses would die or not be born from lack of loanable funds.

I covered the story for Business Week. But despite the facts as laid out by the pre-eminent banker of our time, the palms had been greased, and the folly proceeded. As Assistant Secretary of the US Treasury in the Reagan Administration, I opposed all financial deregulation. Financial deregulation does nothing but open the gates to fraud and sharp dealing. It allows one institution, even one individual, to make a fortune by wrecking the lives of millions. The American public is not sufficiently sophisticated to understand these matters, but they know when they are hurting. Few in the House and Senate are sufficiently sophisticated to understand these matters, but they do know that to understand them is not conducive to having their palms greased. So how do the elected representatives manage to represent those who vote them into office? The answer is that they seldom do.

The question before Congress today is whether they will take the country down for the sake of campaign contributions and cushy jobs if they lose their seat, or will they take personal risks in order to save the country. America cannot survive if excessive risks and financial fraud can be bailed out by taxpayers. US Representatives Walter Jones and Marcy Kaptur and members of the House and staff on both sides of the aisle, along with former Goldman Sachs executive Nomi Prins and leaders of citizens’ groups, have arranged a briefing in the House of Representatives on June 14 about the importance of Glass-Steagall to the economic, political, and social stability of the United States. Let your representative know that you do not want the financial responsibility for the reckless financial practices of the big banks. Let your representative know also that you do not want big banks that dominate the financial arena. Let them know that you want the return of Glass-Steagall.

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“..a fresh bubble is inflating. This time, it’s not US subprime mortgages at the heart of a budding banking crisis, but $51 trillion in corporate debt in the form of bonds, loans, and related derivatives.”

Breaking Up the Banks Is Easier Than You Might Think (Nomi Prins)

Today, a fresh bubble is inflating. This time, it’s not US subprime mortgages at the heart of a budding banking crisis, but $51 trillion in corporate debt in the form of bonds, loans, and related derivatives. The credit ratings agency S&P Global Ratings has predicted that such debt could rise to $75 trillion by 2020 and the defaults on it are starting to increase in pace. Banks have profited by the short-term creation and trading of this corporate debt, propagating even greater risk. Should that bubble burst, it could make the subprime mortgage bubble of 2007 look like a relatively small-scale event. On the positive side, there’s a growing bipartisan alliance in Congress and outside it on restoring Glass-Steagall.

This increasingly wide-ranging consensus reaches from the AFL-CIO to the libertarian Mises Institute, in the Senate from John McCain to Elizabeth Warren, Bernie Sanders, and Maria Cantwell, and in the House of Representatives from Republicans Walter Jones and Mike Coffman to Democrats Marcy Kaptur and Tulsi Gabbard. In fact, just this week, Kaptur and Jones announced an amendment to the pending Financial Choice Act in the House of Representives, that would represent the first genuine attempt to bring to a vote the possibility of resurrecting the Glass-Steagall Act since its repeal. So, Donald, here’s the question: Where do you—the man who, in the course of a few weeks, embraced Middle Eastern autocrats, turned relations with key NATO allies upside down, and to the astonishment of much of the world, withdrew the United States from the Paris climate agreement—stand?

In just a few months in office, you’ve turned the White House into an outpost for your family business, but when it comes to the financial wellbeing of the rest of us, what will you do? Will you, in fact, protect us from another future meltdown of the financial system? It wouldn’t be that hard and you were clear enough on this issue in your election campaign, but does that even matter to you today? I noticed that recently, in an Oval Office interview with Bloomberg News, when asked about breaking up the banks, you said, “I’m looking at that right now. There’s some people that want to go back to the old system, right? So we’re going to look at that.”

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“..the downward trend in labour’s share of GDP over the past 40 years has been more marked in Australia than in those other economies, apart from New Zealand.”

Australian Households’ Share Of National Economic Pie Nears 50-Year Low (G.)

The share of national income going to Australian households is close to a 50-year low, and now “lies towards the bottom of the international ladder”, an economist has warned. Bureau of Statistics data show labour’s share of gross domestic product has fallen to 51.5%, down from 54.2% in the third quarter of last year. At the same time, the profit share of GDP has risen from 24.5% to a five-year high of 27.5%. Paul Dales from Capital Economics said Australian households had not seen “one cent” of the extra income generated by recent soaring commodity prices because “it’s all gone into the pocket of business”. He said the share of national income going to households was now “within a whisker” of a 50-year low and a meaningful cyclical or structural upturn in that share of income was “very unlikely” if jobs growth and wages growth remained so low.

“The share of the economic pie that households currently enjoy isn’t just small by Australia’s own standards, it’s also small by international standards,” Dales wrote in a note to clients. “As a share of GDP, the compensation of Australian employees lies towards the bottom of the international ladder. That’s not always been the case. “Back in 1975, Australia households received a bigger share of the economic pie than households in the US, France and New Zealand. Only in the UK did the compensation of employees account for a larger share of GDP. “But the downward trend in labour’s share of GDP over the past 40 years has been more marked in Australia than in those other economies, apart from New Zealand.” This trend in most economies was mainly because of structural changes that had reduced the bargaining power of employees, including globalisation, the increased flexibility of the labour market and technical innovation, which had flattened firms’ cost curves, Dales said.

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Source of stability?!

How Germany’s Three-Tiered Banking System Works (HandelsBlatt)

[..] In Germany today some 18 million people, or one in four adults, belong to a credit union. And the idea has spread. Some 800 million people around the world belong to cooperatives, and there are even about 6,000 scattered around the United States. Reinhard Siebel of Frankfurt’s Goethe University says that German credit unions have also inspired today’s micro-financing projects in developing countries. The savings banks in the second tier have been copied less and remain more uniquely German, although Cuba and Ireland are interested in importing the concept. They’re sometimes compared to savings-and-loans in the United States. But the difference is that Germany’s savings banks are publicly-owned – either by municipal governments in the case of local Sparkassen or by federal states in the case of the regional Landesbanken.

Credit unions and savings banks have a few things in common. Both are part of networks of cross-guarantees to protect savers in the event that one of them goes bust. And both have mandates that emphasize maximizing the welfare of their members or stakeholders rather than making profit. In the case of savings banks, this means giving back to the municipality that owns the bank. Savings banks typically sponsor local festivals, finance local hospitals and universities and so forth. All this might sound like a leftist dream – putting communities or democratically elected governments in charge of money-lending rather than greedy private bankers. Creating an altruistic financial system was indeed part of the founders’ motivation. But it hasn’t always played out in practice.

Take the 2008 financial crisis. Some of the culprits were private banks like Commerzbank and Deutsche Bank. But the state-backed Landesbanken had also strayed beyond their allegedly conservative remits, investing in shady American mortgage-backed securities and pouring money into Greece, Spain and Portugal during their boom years. Those exposures were considered risks to the whole banking system and therefore required billions in taxpayer bailouts. So being public instead of private didn’t make them better banks. In fact, it may have made them worse, argues Wilhelm Schmundt, a German financial analyst for the consultancy Bain & Company. He thinks the Landesbanken got in trouble precisely because they were being watched over by public officials who had no real expertise in banking.

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“There are pensioners whose original supplementary pensions came to €585.20 per month and today amount to just €138.80. This signifies a reduction of 78%.”

Greek Pensions Not Enough To Cover Costs Of Medicines, Bills And Food (K.)

Three in every four pensioners already find themselves financially crippled, while upcoming cuts to pensions combined with bailout interventions in their allowances are expected to lead to a total reduction of pensioners’ incomes by up to 70%. This is the conclusion of a survey conducted by the United Pensioners network, which paints a picture of pensioners today as poor, demoralized and disappointed. It adds that the pension most retirees receives doesn’t even cover the costs of spending on medications, bills and food. The head of the network, Nikos Hatzopoulos, notes that “the reductions that pensioners’ incomes have suffered are huge. It’s not just the cuts, it’s also the [social security] contribution hikes, tax hikes and all the levies that have impoverished the veterans of the work force.

Pensions corresponding to revenues withheld from a lifetime’s work have been turned into a mere gratuity through the bailout agreement regulations.” The network’s data are quite staggering: Some 1.5 million pensioners with annual incomes up to €4,500 have sunk into poverty while new cuts to current pension will in 2019 have led to a total loss of income of 70% since Greece entered the bailout mechanism in 2010. New main pensions will not exceed €655 per month for average-paid workers. At the same time supplementary pensions have been savaged, as the seven rounds of cuts inflicted on them average at 50% in total. There are pensioners whose original supplementary pensions came to €585.20 per month and today amount to just €138.80. This signifies a reduction of 78%. Of the total figure of 2.89 million pensioners, 2.15 million (or 74%) have to make ends meet on monthly pensions that do not exceed €1,000.

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Jun 092017
 
 June 9, 2017  Posted by at 9:27 am Finance Tagged with: , , , , , , , , , , ,  5 Responses »
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Labour Campaign Poster 1922

 

Trump Accuses Comey Of Lying About Leaked Memo (ZH)
Chris Matthews: “There’s No ‘There’ There” On Trump-Russia ‘Collusion’ (ZH)
Theresa May Has ‘No Intention Of Resigning’ After Losses (BBC)
This Is Where Theresa May’s Arrogance Will Lead Us Next (Ind.)
UK’s Shock Election Result May Hamper Brexit Talks, EU Leaders Warn (G.)
The Myth of “Cash on The Sidelines” (Roberts)
US Household Net Worth Hits Record $95 Trillion… There Is a Catch (ZH)
Opioid Overdoses The Leading Killer Of American Adults Under 50 (ZH)
Trump’s $110 Billion Arms Deal With Saudis Mostly Speculative (RT)
Defense Minister Kammenos Says US Is Greece’s Best International Ally (K.)
European Court Of Justice: Refugee Crisis Trumps Dublin Regulation (K.)
The Shield of Law and Humanism (K.)

 

 

I know the echo chamber won’t agree, but after watching quite a bit of it, four things stood out for me in the Comey testimony, other than the somewhat too loud remarks about how the entire White House lied about him and the FBI:

1) He admitted to leaking information of his private talk with Trump in the Oval Office. Comey said he didn’t understand why Trump asked everyone to leave the room, but, well, perhaps it’s this: that if anything leaked, it would be clear whodunnit. And leaking info about a private talk with your president is not an obvious thing to do. Illegal? Borderline? Comey stated that he did it because he thought it would lead to a special counsel being appointed. But who is he to ‘promote’ such a thing?

2) He finally said in public that Trump himself had not been under investigation, something the president had asked him to do on three occasions. There was some excuse about not doing it because he might have to walk that back later, but the fact remains: no Trump investigation, and despite all other leaks, no public acknowledgement of that.

3) Comey insisted in no uncertain terms that the entire US intelligence community is convinced that Russia interfered in the 2016 elections, and Russia here means the Kremlin, re: Putin. Well, let’s finally see the proof.

4) He recounted how then-AG Loretta Lynch pushed him to relabel the criminal investigation into the Clinton server as a “matter”, a term the Clinton campaign used. But why would an AG do it too, and push the FBI to do the same? Very odd. And then Comey added that this was a reason to call the press conference in which he advised the Department of Justice not to indict Clinton.

Trump Accuses Comey Of Lying About Leaked Memo (ZH)

As we detailed earlier, during his testimony today, former FBI Director Comey testified that he only leaked the memo about his contact with the President AFTER he saw President Trump’s tweet…
COMEY: I asked — the president tweeted on Friday after I got fired that I better hope there’s not tapes. I woke up in the middle of the night on Monday night because it didn’t dawn on me originally, that there might be corroboration for our conversation. There might a tape. My judgement was, I need to get that out into the public square. I asked a friend of mine to share the content of the memo with a reporter. Didn’t do it myself for a variety of reasons. I asked him to because I thought that might prompt the appointment of a special counsel. I asked a close friend to do it. [..] A close friend who is a professor at Columbia law school.

Pretty clear – it was a response to a tweet. But, as President Trump’s personal lawyer Marc Kasowitz states: “Today, Mr. Comey admitted that he unilaterally and surreptitiously made unauthorized disclosures to the press of privileged communications with the President. The leaks of this privileged information began no later than March 2017 when friends of Mr. Comey have stated he disclosed to them the conversations he had with the President during their January 27, 2017 dinner and February 14, 2017 White House meeting. Today, Mr. Comey admitted that he leaked to friends his purported memos of these privileged conversations, one of which he testified was classified.

He also testified that immediately after he was terminated he authorized his friends to leak the contents of these memos to the press in order to “prompt the appointment of a special counsel.” Although Mr. Comey testified he only leaked the memos in response to a tweet, the public record reveals that the New York Times was quoting from these memos the day before the referenced tweet, which belies Mr. Comey’s excuse for this unauthorized disclosure of privileged information and appears to entirely retaliatory. We will leave it the appropriate authorities to determine whether this leak should be investigated along with all those others being investigated”

So the question is – having called President Trump a liar, did Comey just get caught in an even bigger lie… ?

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At least on his personal involvement.

Chris Matthews: “There’s No ‘There’ There” On Trump-Russia ‘Collusion’ (ZH)

If you count yourself among the die-hard, disaffected Hillary supporters still holding out hope that President Trump will be impeached for conspiring with Russian spies to stage a coup in the United States, then you may want to sit down because earlier today one of your biggest cheerleaders just threw in the towel on that whole narrative. Yes, MSNBC’s very own Chris Matthews, the same man who confessed he “got a thrill up his leg” from simply watching Obama speak, admitted today that Comey’s testimony pretty much confirmed that “there’s no ‘there’ there” when it comes to Trump colluding with the Russians.

“The assumption of the critics of the President, of his pursuers, you might say, is that somewhere along the line in the last year is the President had something to do with colluding with the Russians … to affect the election in some way. Some conversation he had with Michael Flynn or Pual Manafort or somewhere.” “And yet what came apart this morning was that theory in two regards…the President said, according to the written testimony of Mr. Comey, go ahead and get any satellites of my operation and nail them. I’m with you on that…” “And then also, Comey said that basically Flynn wasn’t central to the Russian investigation.” “And I’ve always assumed that what Trump was afraid of was that he had said something to Flynn and Flynn could be flipped on that and Flynn would testify against the President that he’d had some conversation with Flynn in terms of dealing with the Russians affirmatively.” “And if that’s not the case, where’s the there-there?”

And when Chris Matthews throws in the towel on a liberal narrative, you know the gig is up. Oh, and by the way, this probably doesn’t help your case either… Burr: “Director Comey, did the President at any time ask you to stop the FBI investigation into Russian involvement in the 2016 U.S. elections?” Comey: “Not to my understanding, no.” Burr: “Did any individual working for this administration, including the Justice Department, ask you to stop the Russian investigation?” Comey: “No.”

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Theresa May can stay until the Tories throw her out; she’s proven to be an awful liability, not a leader. Far too risky. How much would she lose next time around? Their problem is there’s no-one else who’s obvious, there must be dirty fights in dark and rainy alleys first.

So: Tories will throw out May, while Corbyn will have to throw the Blairites out of Labour who made his position a living hell.

Most likely seems Corbyn as PM of a minority government. But that’s a big risk going into Brexit talks.

Theresa May Has ‘No Intention Of Resigning’ After Losses (BBC)

The UK faces the prospect of a hung parliament with the Conservatives as the largest party after the general election produced no overall winner. With nearly all results in, Theresa May faces having fewer seats than when she called the election. The Tories are projected to get 318 seats, Labour 261 and the SNP 35. Jeremy Corbyn has urged the PM to resign but the BBC understands she has no intention of doing so at this stage and will try to form a government. The prime minister has said the country needs stability after the inconclusive election result and the BBC’s political editor Laura Kuenssberg said Mrs May intended to try and govern on the basis that her party had won the largest number of votes and seats.

Labour is set to make 29 gains with the Tories losing 13 seats – and the SNP down by 22 seats in a bad night for Nicola Sturgeon, with her party losing seats to the Tories, Labour and Lib Dems. The Conservatives are forecast to win 42% of the vote, Labour 40%, the Lib Dems 7%, UKIP 2% and the Greens 2%. Turnout so far is 68.7% – up 2% up on 2015 – but it has been a return two party politics in many parts of the country, with Labour and the Conservatives both piling up votes in numbers not seen since the 1990s. UKIP’s vote slumped dramatically but rather than moving en masse to the Tories, as they had expected, their voters also switched to Labour.

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New elections? One positive for the former Empire: the threat of Scottish independence was wiped out.

This Is Where Theresa May’s Arrogance Will Lead Us Next (Ind.)

Despite a lot of the good news streaming out of counts everywhere right now, make no mistake: this is going to be chaos. A deep and growing sense of frustration is about to ripple through the country, because what May has essentially done in her arrogance is take a gamble that could cost us decades of stability and prosperity. It is likely that what awaits us over the next few weeks is, to put it bluntly, a mess. Hung parliament. No clear majority. No willingness to form a coalition. A possible resignation from the Prime Minister (whether she’s pushed or jumps is yet to be seen) and then yet another leadership contest. Boris Johnson is said on the Westminster grapevine to already be positioning himself as a candidate, yet his reputation has turned increasingly sour over the last few years.

Many now regard him as a cynical power-grabber without much regard for the people he claims to represent. The Tories have spent the last two years playing Russian roulette with the electorate in the hope of cementing their credibility, and causing utter shambles along the way. Having barely recovered from a referendum result which caused deep divisions and painful rifts within our society, and as Europe watches us scramble for any sort of political legitimacy, who will now head into the talks that will determine our economic and political future? Theresa May has now shoved us off a cliff into political unknowns just when what we actually needed was, ironically enough, some strong and stable leadership.

Any reassurance from Westminster that the lives of ordinary people in this country mattered more than political point-scoring would be welcome. What we’ll get instead, despite the Labour surge, is yet another election, whether that be in two months’ or two years’ time. It feels inspiring and hopeful that we have so many progressive and wonderful MPs back in the Commons. But until we have a government and a plan of how to get ourselves through this, that hope is limited to a symbolic step in the right direction. In the words of one particularly concise campaign poster: strong and stable, my arse.

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It’s going to get terrible no matter what. But for now the EU has no-one to talk to. They’re not going to sit down with May if she may last only a few more weeks.

UK’s Shock Election Result May Hamper Brexit Talks, EU Leaders Warn (G.)

The EU will force a humiliated Theresa May to explain her intentions at a face-to-face meeting in Brussels as senior diplomats and politicians warned that the hung parliament resulting from the UK election was a “disaster” that hugely increases the chance of a breakdown in the Brexit negotiations. The result is likely to delay the point at which Michel Barnier, the EU’s chief negotiator, has someone with whom to negotiate. Sources said a meeting of the European council on 22 June was the deadline by which time the EU27 would want to know the prime minister’s plans. Guenther Oettinger, the German member of the European commission, said: “We need a government that can act. With a weak negotiating partner, there’s the danger than the negotiations will turn out badly for both sides … I expect more more uncertainty now.”

It had been hoped that officials from both sides would have informal talks next week over the logistics of the negotiations, before formal talks began on the week starting 19 June. With the prime minister needing to both seek to form a minority or coalition government, as well as potentially revise her goals for the talks in the light of the election result, the original timetable seems unrealistic to officials in Brussels. The EU had, until now, believed it understood that May wanted to take the UK out of both the single market and the customs union, but in the early hours of Friday morning the Brexit secretary, David Davis, had suggested the election result could prompt a rethink.

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All on red.

The Myth of “Cash on The Sidelines” (Roberts)

[..] despite 8-years of a bull market advance, one of the prevailing myths that seeming will not die is that of “cash on the sidelines.” To wit: “Underpinning gains in both stocks and bonds is $5 trillion of capital that is sitting on the sidelines and serving as a reservoir for buying on weakness. This excess cash acts as a backstop for financial assets, both bonds and equities, because any correction is quickly reversed by investors deploying their excess cash to buy the dip,” Nikolaos Panigirtzoglou, the managing director of global market strategy at JPMorgan, wrote in a client note. This is the age old excuse why the current “bull market” rally is set to continue into the indefinite future. The ongoing belief is that at any moment investors are suddenly going to empty bank accounts and pour it into the markets.

However, the reality is if they haven’t done it by now after 3-consecutive rounds of Q.E. in the U.S., a 200% advance in the markets, and ongoing global Q.E., exactly what will that catalyst be? However, Clifford Asness previously wrote: “There are no sidelines. Those saying this seem to envision a seller of stocks moving her money to cash and awaiting a chance to return. But they always ignore that this seller sold to somebody, who presumably moved a precisely equal amount of cash off the sidelines.” Every transaction in the market requires both a buyer and a seller with the only differentiating factor being at what PRICE the transaction occurs. Since this must be the case for there to be equilibrium to the markets there can be no “sidelines.”

Each month, the Investment Company Institute releases information related to the mutual fund industry. Included in this data is the total amount of assets invested in mutual funds, ETFs and money market funds. As a rough measure of investor sentiment, this indicator looks at the total assets invested in equity mutual funds and ETFs, and compares it to the total assets invested in the safety of money market funds. The higher the ratio, the more comfortable investors have become holding stocks; the lower the ratio, the more uncertainty there is in the market. Currently, with the ratio at the highest level on record there is little fear of holding stocks. Negative free cash balances also suggest the same as investors have piled on the highest levels of leverage in market history.

Furthermore, with investors once again “fully invested” in equities, it is not surprising to see cash and bond allocations near historic lows. Cash on the sidelines? Not really. Everyone “all in the boat?” Absolutely. Historical outcomes from such situations? Not Great.

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The No Price Discovery Bubble.

US Household Net Worth Hits Record $95 Trillion… There Is a Catch (ZH)

In the Fed’s latest Flow of Funds report, today the Fed released the latest snapshot of the US “household” sector as of March 31, 2017. What it revealed is that with $110.0 trillion in assets and a modest $15.2 trillion in liabilities, the net worth of the average US household rose to a new all time high of $94.835 trillion, up $2.4 trillion as a result of an estimated $500 billion increase in real estate values, but mostly $1.78 trillion increase in various stock-market linked financial assets like corporate equities, mutual and pension funds, as the stock market continued to soar to all time highs . At the same time, household borrowing rose by only $36 billion from $15.1 trillion to $15.2 trillion, the bulk of which was $9.8 trillion in home mortgages.

And the historical change of the US household balance sheet.

And while it would be great news if wealth across America had indeed risen as much as the chart above shows, the reality is that there is a big catch: as shown previously, virtually all of the net worth, and associated increase thereof, has only benefited a handful of the wealthiest Americans. As a reminder, from the CBO’s latest Trends in Family Wealth analysis, here is a breakdown of the above chart by wealth group, which sadly shows how the “average” American wealth is anything but.

While the breakdown has not caught up with the latest data, it provides an indicative snapshot of who benefits. Here is how the CBO recently explained the wealth is distributed: In 2013, families in the top 10% of the wealth distribution held 76% of all family wealth, families in the 51st to the 90thpercentiles held 23%, and those in the bottom half of the distribution held 1%. Average wealth was about $4 million for families in the top 10% of the wealth distribution, $316,000 for families in the 51st to 90th percentiles, and $36,000 for families in the 26th to 50th percentiles. On average, families at or below the 25th percentile were $13,000 in debt In other words, roughly three-quarter of the $2.4 trillion increase in assets went to benefit just 10% of the population, who also account for roughly 76% of America’s financial net worth,

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Trump and Congress had better go out and do something.

Opioid Overdoses The Leading Killer Of American Adults Under 50 (ZH)

The opioid crisis that is ravaging urban and suburban communities across the US claimed an unprecedented 59,000 lives last year, according to preliminary data gathered by the New York Times. If accurate, that’s equivalent to a roughly 19% increase over the approximately 52,000 overdose deaths recorded in 2015, the NYT reported last year. Overdoses, made increasingly common by the introduction of fentanyl and other powerful synthetic opioids into the heroin supply, are now the leading cause of death for Americans under 50. And all evidence suggests the problem has continued to worsen in 2017. One coroner in Western Pennsylvania told a local newspaper that his office is literally running out of room to store the bodies, and that it was recently forced to buy a larger freezer. The initial data points to large increases in these types of deaths in states along the East Coast, particularly Maryland, Florida, Pennsylvania and Maine.

In Ohio, which filed a lawsuit last week accusing five drug companies of abetting the opioid epidemic, the Times estimated that overdose deaths increased by more than 25% in 2016. In some Ohio counties, deaths from heroin have virtually disappeared. Instead, the primary culprit is fentanyl or one of its many analogues. In Montgomery County, home to Dayton, of the 100 drug overdose deaths recorded in January and February, only three people tested positive for heroin; 97 tested positive for fentanyl or another analogue. In some states in the western half of the US, data suggest deaths may have leveled off for the time being – or even begun to decline. Experts believe that the heroin supply west of the Mississippi River, traditionally dominated by a variant of the drug known as black tar which is smuggled over the border from Mexico, isn’t as easily adulterated with lethal analogues as the powder that’s common on the East Coast.

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Fake News.

Trump’s $110 Billion Arms Deal With Saudis Mostly Speculative (RT)

That $110 billion arms deal President Donald Trump signed with Saudi Arabia isn’t much of a deal at all, according to reports which found the majority of the agreement was based on memos, rather than contracts. On May 20, Trump negotiated an arms deal with Riyadh. The State Department said it was worth nearly $110 billion to support “the long-term security of Saudi Arabia and the Gulf region in the face of malign Iranian influence and Iranian related threat.” White House Press Secretary Sean Spicer hailed it the “largest single arms deal in US history.” The State Department then released a general list of the weapons that were included in the deal. However, many experts have said that most of the arms sales had not been cleared by the State Department, Congress or even the industries themselves.

On Thursday, Defense News released a more detailed list of the weapons included in the deal, according to documents they obtained from the White House. The ‘deal’ lists $84.8 billion under memos of intent (MOI) “to be offered at visit,” and $12.5 billion under letters of agreement (LOA), rather than contracts. NPR also obtained a list of commercial deals from a White House spokeswoman and found that it added up to $267 billion, but said most of the deals were listed as “memoranda of understanding” (MOU). “There is no $110 billion deal,” Brookings Institution Senior Fellow Bruce Riedel wrote in blog post Monday. “Instead, there are a bunch of letters of interest or intent, but not contracts,” Riedel said. “Even then the numbers don’t add up. It’s fake news.”

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So what did they do to prove that?

Defense Minister Kammenos Says US Is Greece’s Best International Ally (K.)

Washington is Greece’s only true international ally, Defense Minister Panos Kammenos insisted on Thursday, and accused the country’s European partners of showing a lack of respect. “The Greek people are well aware that the United States has been the country’s only genuine ally,” Kammenos said. “The others are allies, but they are [allies] only in the form of creditors, without [any sense of] respect and this is because some of them will never forget that they lost World War II to this country,” Kammenos, who is also leader of junior coalition partner Independent Greeks, added during a speech marking the 70th anniversary of the US Office of Defense Cooperation in Athens yesterday. “For this reason, we welcome US support at this very difficult moment for our country,” said Kammenos, who also called for the strengthening of the Hellenic Navy with US help so “that it can operate from Crete to the Suez.”

Bolstering the navy and the country’s military aviation capabilities are necessary, he said, to intercept the flow of drugs, weapons and fuel through which terrorism is funded. He also said that Greece is positively inclined to extend the time frame of the defense agreement between the two countries, adding that Prime Minister Alexis Tsipras and his government are working in that direction. He also referred to the latest developments in the Gulf states and stressed that he supports describing the Muslim Brotherhood as a terrorist organization. Aiming his fire at Turkey, he said that each country must choose “whose side they want to be on.” It is certain, he said, that “Greece will be on the side of the US.” For his part, US Ambassador to Greece Geoffrey Pyatt praised relations between Athens and Washington, adding that as Greece’s economy stabilizes, it will become even more active in its role as a bridge between countries of the region.

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Nobody cares unless you hold their feet to the fire.

European Court Of Justice: Refugee Crisis Trumps Dublin Regulation (K.)

Any countries in the European Union receiving asylum requests from refugees have an obligation to process them irrespective of where the applicants first entered into the bloc, an advocate general at the European Court of Justice said on Thursday. Eleanor Sharpston said in a non-binding opinion that under the “exceptional circumstances” of the refugee crisis, member states should not be bound by the Dublin Regulation’s requirement that first-entry states handle all asylum applications, even after a refugee or migrant has moved on to a different country. “The words ‘irregular crossing’ in the Dublin III Regulation do not cover a situation where, as a result of the mass inflow of people into border member states, those countries allowed third-country nationals to enter and transit through their territory in order to reach other member states,” she wrote.

Sharpston referred to the case of a Syrian national who traveled to Slovenia via Croatia and that of an Afghan family that entered Europe in Greece and then made its way to Austria. Slovenia and Austria should be responsible for examining their asylum applications, she said. “If border member states… are deemed to be responsible for accepting and processing exceptionally high numbers of asylum seekers, there is a real risk that they will simply be unable to cope with the situation,” Sharpston wrote. “This in turn could place member states in a position where they are unable to comply with their obligations under EU and international law,” she added.

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The last thing Greece has left is rumored to be on the way out.

The Shield of Law and Humanism (K.)

It is difficult to believe that after Greece’s judiciary offered protection to eight members of the Turkish military, rejecting Ankara’s request for their extradition, the government would agree to the illegal, secret and inhuman expulsion of people who requested asylum here. Yet unease grows. On Wednesday the government spokesman stated, “The Greek government does not engage in pushbacks.” Let us hope that is so. The Hellenic League for Human Rights cites two instances where groups of Turkish citizens who requested asylum in Greece appear to have been handed over illegally to Turkish authorities. The Council of Europe’s commissioner for human rights, Nils Muiznieks, the UN High Commissioner for Refugees and the head of the Alliance of Liberals and Democrats in the European Parliament, Guy Verhofstadt, have expressed concern at the possibility.

There is also the strange story of three Turkish military men who where arrested in Edirne last month, accused of being part of a group that intended to kidnap President Recep Tayyip Erdogan during the failed coup last July. Turkish media said the men were arrested while on their way to Greece; some Greek lawyers, however, claim that the three had crossed into Greece when they disappeared, only to turn up in Turkish custody. The Citizens’ Protection Ministry in Greece scoffed that the claims were “fairy tales.” The case of the eight servicemen who arrived in Alexandroupoli in a helicopter the day after the coup attempt shows how difficult it is for any country to withstand Ankara’s pressure. It is understandable that no government would like to open a new front with a neighbor who can cause problems at will. But it is of paramount importance that Greece withstand such pressures.

In the past few years, among our country’s very few victories were the welcome provided to refugees and the institutional way in which it dealt with the “Eight.” Our great wound, though, is the lack of strategy, of method, of goals – of follow-up. On the refugee issue, government incompetence undermined the initial, heroic efforts of citizens. In the case of Turkish asylum seekers, the difficulties of handling the case of the Eight should not lead to cynicism, to injustice, to the violation of international conventions. Greece has a responsibility toward its own people and toward the Turkish people, to serve the principles of humanism, to abide by the law. Strenuous defense of these principles is part of the identity we aspire to but also our shield. And it is the best thing that we can offer our neighbors – the hope that there is something better than that which they are now enduring.

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Jun 082017
 
 June 8, 2017  Posted by at 9:37 am Finance Tagged with: , , , , , , , , , ,  1 Response »
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Roy Lichtenstein Femme d’Alger 1963

 

UK Press Gang Up On Jeremy Corbyn In Election Day Coverage (G.)
US Market Risk Is Highest Since Pre-2008 Crisis – Bill Gross (BBG)
Global Financial System More Leveraged Than 2008 – Paul Singer (BBG)
UK Housing Weakens Further as Market Emits ‘Ominous’ Signals (BBG)
The Cost of Getting It Wrong (Claire Connelly)
The UAE Needs Qatar’s Gas to Keep Dubai’s Lights On (BBG)
Oil Prices Drop More Than 4% On Surge In Stockpiles (CNBC)
China’s Top Property-Bubble Prophet Says Prices Set to Soar 50% (BBG)
Banco Popular Wipeout Leaves CoCo Bonds On The Drawing Board (BV)
A Reform Beyond Macron’s Grip: The Revolving Door of French Politics (BBG)
OECD Puts Greek Growth At Just 1.1% This Year (K.)
Athens To Seek Growth Package At Eurogroup Meeting (K.)
Greece Says Colombian Gangs Plundering Hospitals Europe-Wide (AP)
Greek Room Owners Threaten To Return Permits in Airbnb Challenge (K.)
Bid For EU States To Stop Migrants, Refugees ‘Asylum Shopping’ (K.)

 

 

The Daily Mail ran 13 pages yesterday on the theme of Corbyn and Labour being terrorist apologists. No shame, no morals. In the same vein, I tried to find an objective piece on the Comey testimony, but couldn’t find one. The UK press has no faith in its voters, the US press has none in its Senate: the press draws the conclusions before anyone else can. The media cares little about credibility, it’s all echo chambers all the way down.

UK Press Gang Up On Jeremy Corbyn In Election Day Coverage (G.)

The Sun has urged its readers not to “chuck Britain in the Cor-bin” on its final front page before the country votes in the general election. The tabloid, owned by Rupert Murdoch’s News Corp, published an editorial on its front page under the headline “Don’t Chuck Britain in the Cor-bin” alongside 10 bullet points that described the Labour leader Jeremy Corbyn as a “terrorists’ friend”, “useless on Brexit”, “puppet of unions” and “Marxist extremist”. The article said readers could “rescue Britain from the catastrophe of a takeover by Labour’s hard-left extremists”. The Daily Mail front page roared, “Let’s reignite British spirit” on the back of a Theresa May speech and also promoted a feature inside called “Your tactical voting guide to boost the Tories and Brexit”.

The Daily Mirror reiterated its support for the Labour party with a front page headline of “Lies, damned lies, and Theresa May”, while the Daily Telegraph ran a story headlined “Your Country Needs You” based on an editorial by the prime minister that urged “patriotic” Labour supporters to vote Conservative. The Daily Express front page said: “Vote for May Today”. Meanwhile, the Times reported that the Conservatives had a seven-point in the final opinion poll before the election, and the Guardian covered May and Corbyn’s late attempts to win support from voters. Thursday’s front pages come after the Daily Mail devoted 13 pages to attacking Labour, Jeremy Corbyn, Diane Abbott and John McDonnell on Wednesday under the headline: “Apologists for terror”. The tabloid urged readers to support the Conservatives in an editorial on its first and second pages, but concentrated its fire on Labour’s leadership, compiling hostile anecdotes dating back to the 1970s.

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“Instead of buying low and selling high, you’re buying high and crossing your fingers…”

US Market Risk Is Highest Since Pre-2008 Crisis – Bill Gross (BBG)

U.S. markets are at their highest risk levels since before the 2008 financial crisis because investors are paying a high price for the chances they’re taking, according to Bill Gross, manager of the $2 billion Janus Henderson Global Unconstrained Bond Fund. “Instead of buying low and selling high, you’re buying high and crossing your fingers,” Gross, 73, said Wednesday at the Bloomberg Invest New York summit. Central bank policies for low-and negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks and insurance companies, according to Gross. The U.S. economy is expected to grow 2.2% this year and 2.3% in 2018, according to forecasts compiled by Bloomberg. Trump administration officials have said their policies will boost annual growth to 3%.

Despite being concerned about high asset prices, Gross said he feels required to stay invested and sees value in some closed-end funds. Examples he gave are the Duff & Phelps Global Utility Income Fund and the Nuveen Preferred Income Opportunities Fund. He also said he has about 2% to 3% in exchange-traded funds to get yield and add diversification. “They’re appetizers, not entrees,” he said in an interview outside the conference. Gross’s fund has returned 3.1% in the year through June 6, outperforming 22% of its Bloomberg peers. It has posted a total return of 5.4% since Gross took over management in October 2014 after he was ousted from PIMCO. ”If there’s a common factor it’s the expansion of credit,” Gross said on Bloomberg TV Wednesday. “And the credit that’s being generated by central banks. Money is being pumped out into the system and money that is yielding less than nothing seeks a haven not only in bonds that are under-yielding but in stocks that are overpriced.”

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We know.

Global Financial System More Leveraged Than 2008 – Paul Singer (BBG)

Billionaire investor Paul Singer said “distorted” monetary and regulatory policies have increased risks for investors almost a decade after the financial crisis. “I am very concerned about where we are,” Singer said Wednesday at the Bloomberg Invest New York summit. “What we have today is a global financial system that’s just about as leveraged – and in many cases more leveraged – than before 2008, and I don’t think the financial system is more sound.” Years of low rates have eroded the effectiveness of central banks to contend with downturns, Singer said at the event in an interview with Carlyle Group co-founder David Rubenstein. “Suppressive” fiscal, regulatory and tax policies have also exacerbated income inequality and led to the rise of populist and fringe political movements, he added. Confidence “could be lost in a very abrupt fashion causing conceivably a ruckus in bond markets, stock markets and in financial institutions,” said Singer, founder of hedge fund Elliott Management, which is known for being an activist investor.

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Volatility is back.

UK Housing Weakens Further as Market Emits ‘Ominous’ Signals (BBG)

While the general election had an impact on activity in May, damping buyer demand and new sellers coming to the market, RICS used its latest monthly report to highlight broader, and more damaging, risks. That includes the dearth of homes for sale, which has pushed up values in recent years, cutting off many potential first-time buyers. RICS Chief Economist Simon Rubinsohn said the report shows the issue of affordability may even worsen further.“Perhaps the most ominous signal is that contributors still expect house prices to increase at a faster pace than wages over the medium term despite the difficulty many first-time buyers are clearly having,” he said. On the shortage, “it’s hard to see this as anything other a major obstacle to the efficient functioning of the housing market.”

In May, RICS’s monthly price index fell to 17 – the lowest since August – from 23 in April, indicating modest price gains. A gauge for London, where prime properties have been under pressure, remained below zero for a 14th month. Nationally, the supply-demand imbalance means it’s a sellers’ market and recent reports show that any uncertainty about the election had little effect on U.K. asking prices, which according to Rightmove jumped 1.2% to a record in May. For some, it’s reminiscent of the overheating seen before the financial crisis.“Prices are too expensive,” Josh Homans at surveyors Valunation said in the RICS report. “Excessive” valuations are increasing and “we are now in a 2007 situation,” he said.

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One of those must reads. Economics is all but dead, but not entirely yet.

The Cost of Getting It Wrong (Claire Connelly)

What most of us have long believed about how the economy works is based on a set of fundamental myths, supported by a series of inappropriate and misleading metaphors, from which it is difficult to escape. The emotional investment we have made in these myths has allowed for levels of unemployment, underemployment, inequality and relative poverty which would have seemed incredible a generation ago. Somehow we have convinced ourselves of the following:
– Governments need taxpayers’ money to pay for things.
– Governments, like households, need to at least balance their budgets.
– Deficits are bad and government surpluses are good.
– Deficits paid for by printing money causes inflation.
– Surpluses set aside savings which can be spent in the future.
– Lower wages promote full employment.

Wrong, wrong, all wrong. The federal government does not need taxpayers’ money. Actually, it is the other way around. The government issues the currency. We use it. Taxes help to control inflation and stop us spending too much. (It can also be used to control behaviour, as witnessed by taxes on cigarettes and alcohol). Professor Steve Keen says the government, and the public, have the most basic fundamentals of macroeconomics backwards. “Expenditure is what causes income,” he said. “Reducing expenditure also reduces income.” “Individuals can save (without a significant effect on national income), but if you extrapolate that to the whole economy, you are going to make a huge error.” Similarly, the economist says the idea that the government can save by paying down the national debt is misleading.

“Believing that government saving will increase employment or growth is like believing the Earth sits at the centre of the universe”, he says. All it does is destroy spending which would otherwise have created private sector incomes. “If you don’t understand where income comes from, then it means you don’t understand economics, or the economy.” “Individuals can save money by spending less than they earn but if everyone decides to do that, income falls by precisely as much as you try to save. If the government does the same thing, by saving money at a national level, you cause a recession.”

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As solid as the Saudi grip on OPEC cuts: “Abu Dhabi’s Petroleum Ports Authority removed the ban on Wednesday – just one day after announcing it.”

The UAE Needs Qatar’s Gas to Keep Dubai’s Lights On (BBG)

When it comes to natural gas shipments, the United Arab Emirates needs Qatar more than Qatar needs the U.A.E. The U.A.E. joined Saudi Arabia in cutting off air, sea and land links with Qatar on Monday, accusing the gas-rich sheikhdom of supporting extremist groups. But the U.A.E., which depends on imported gas to generate half its electricity, avoided shutting down the pipeline supplying it from Qatar, which has the world’s third-largest gas deposits. Without this energy artery, Dubai’s glittering skyscrapers would go dark for lack of power unless the emirate could replace Qatari fuel with more expensive liquefied natural gas. Qatari natural gas continues to flow normally to both the U.A.E. and Oman through a pipeline, with no indication that supplies will be cut, according to a person with knowledge of the matter who asked not to be identified because the information isn’t public.

Qatar sends about 2 billion cubic feet of gas a day through a 364-kilometer (226-mile) undersea pipeline. Dolphin Energy, the link’s operator, is a joint-venture between Mubadala Investment, which holds a 51% stake, and Occidental Petroleum and Total, each with a 24.5% share. Since 2007, the venture has been processing gas from Qatar’s North field and transporting it to the Taweelah terminal in Abu Dhabi, according to Mubadala’s website. Dolphin also distributes gas in Oman. Apart from preserving gas shipments from Qatar, the U.A.E. on Wednesday actually eased efforts to isolate its smaller neighbor. The oil-port authority in Abu Dhabi, the U.A.E. capital, lifted restrictions on international tankers that have sailed to Qatar or plan to do so. Abu Dhabi’s Petroleum Ports Authority removed the ban on Wednesday – just one day after announcing it.

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The Saudi-Qatar spat is growing and oil plunges? Huh?

Oil Prices Drop More Than 4% On Surge In Stockpiles (CNBC)

U.S. crude prices plunged toward $46 a barrel on Wednesday after weekly government data left the oil market with virtually nothing to cheer. West Texas Intermediate futures dropped more than 4% as stockpiles of oil in the US surged by 3.3 million barrels in the week ended June 2, according to the Energy Information Administration. That confounded analysts’ estimates for a 3.5 million-barrel decline. WTI prices fell as far as $45.92, a four-week low, following the report. The drop below $47 was a “big deal” said John Kilduff at energy hedge fund Again Capital. The next level to watch is the March low just below $44 a barrel, struck after oil prices fell through a number of key technical levels, culminating in a flash crash to $43.76. The bad news kept on coming below the headline figure. Gasoline stocks also jumped by 3.3 million barrels, more than five times the expected increase. Inventories of distillate fuels like diesel and heating oil rose by 4.4 million barrels, 15 times the anticipated rise.

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Author of “China’s Guaranteed Bubble”.

China’s Top Property-Bubble Prophet Says Prices Set to Soar 50% (BBG)

China’s home prices could rise by another 50% in the nation’s biggest cities, as the latest measures to rein them in are likely to be eased by policy makers seeking to support the broader economy. So says Zhu Ning, deputy director of the National Institute of Financial Research at Tsinghua University in Beijing and author of “China’s Guaranteed Bubble: How Implicit Government Support Has Propelled China’s Economy While Creating Systemic Risk.” As measures to curb housing prices drag on growth in the second half and early next year, he says, the government will resort to its old playbook of dialing them back again to shore up expansion. “We’re living through a bubble,” Zhu said. “If we don’t engage in more meaningful reform, which we haven’t, we’re very likely to have a financial crisis or a burst of the bubble. It’s a matter of sooner or later.”

Real estate prices in major cities will surge again “by another 50% or so” after measures to rein them in are eased, said Zhu, without specifying a time. Because policy makers have previously imposed curbs only to ease them again, people see them as a bluff, he said. Last year 45% of new loans went to mortgages. Local authorities have boosted down-payment requirements, restricted purchases by non-residents, and capped the number of dwellings that a household can own. Since March, at least 26 cities have imposed resale lock-up periods, with Hebei’s Baoding city slapping a decade-long ban on some homes, according to Shanghai-based Tospur Real Estate Consulting.

Zhu said he arrived at the 50 percent estimate based on the average price appreciation after past curbs were lifted, an ever-stronger belief among buyers that housing prices will rise, China’s humongous supply of credit, and tighter controls on capital outflows. Over the past year, however, Zhu, who earned his doctorate in finance at Yale, said he’s had more doubts over whether the thinking of western-trained economists applies to a nation that’s proven naysayers wrong “with its might and its determination” for three decades. “Over the past 12 months my confidence has really been shaken,” he said, adding that a crisis remains probable. “Could China be the black swan that we’ve never seen before?”

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Where would the EU be without creative accounting?

Banco Popular Wipeout Leaves CoCo Bonds On The Drawing Board (BV)

Banco Popular’s wipeout has left CoCo bonds on the drawing board. The Spanish lender’s failure and rescue by rival Santander did not provide the expected test for bonds which convert into equity under stress: the securities were wiped out before they could be triggered. It’s still not clear whether the bonds work as intended. The collapse of Spain’s sixth-largest bank by assets marked the first big loss for investors in so-called contingent convertible bonds. The securities were created after the 2008 financial crisis to provide an extra buffer when banks are struggling. They permit lenders to preserve capital by suspending dividends, and convert into ordinary shares when capital ratios run low.

The Popular trauma has eased one fear: that investors would panic when a CoCo bond went down, creating a spiral of contagion to other lenders. Similar securities issued by other Spanish banks actually rose in value on June 7, suggesting that investors see Popular as an isolated case. Yet in another way, Popular’s bonds fell short. The securities are supposed to provide extra capital before a bank fails, allowing it to absorb losses over time without failing or requiring a government bailout. But regulators deemed Popular non-viable before any of the triggers in its bonds could blow. The CoCo bonds suffered the same fate as other, more senior bonds that only suffer losses when a bank goes bust.

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Civil servants and jobs for life. It’s like talking about dinosaurs.

A Reform Beyond Macron’s Grip: The Revolving Door of French Politics (BBG)

French President Emmanuel Macron has promised to change how politics is done in France, starting with the parliament to be elected beginning Sunday. Half of the 500-plus candidates for his young party are women. Half have never held office. They all had to apply online. But he isn’t taking the biggest step: requiring that anyone running for parliament resign from his or her government job. Unlike many other other developed countries, France allows bureaucrats to hold political office—multiple offices, in fact—without having to quit the civil service. And they have a guaranteed right to return. Should the bureaucrat-candidate lose an election, there’s a job for life waiting back at the Agriculture Ministry or the Ministry for Overseas Territories. And a pension at retirement.

Having lawmakers remain part of the civil service creates conflicts of interest, said Dominique Reynie, head of Fondapol, a political research institute. “You have lawmakers making funding decisions about institutions such as universities and hospitals where they are still officially employed,” he said. “We have a parliament that’s inbred.” Among the many beneficiaries of the system: Macron’s prime minister, Edouard Philippe, several others in the cabinet and fully 55% of the parliament that just finished its five-year term. Macron himself, though he’s never been in parliament, kept bureaucrat status through several government and private jobs until he resigned last year to start his political party.

[..] “France is one of the rare countries in Europe where a civil servant can serve an elected mandate without resigning, and with the certainty of going back to their job in case of failure,” said Luc Rouban, a professor at Sciences Po in Lille who has compiled a database of all 2,857 French members of parliament back to 1958. “The absence of professional risk encourages employees from the public sector to run for office.”

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And that will make any agreements with the Troika impossible. All growth assumptions are wrong.

OECD Puts Greek Growth At Just 1.1% This Year (K.)

The OECD has further doused hopes regarding Greek growth this year, forecasting an expansion of 1.1%, and stresses the need to implement reforms and for the national debt to be lightened. The Organization for Economic Cooperation and Development wrote in its annual report on the global economy published on Wednesday that “delays in reform implementation and reaching an agreement on debt relief would weigh on confidence, hampering investment,” while adjusting its Greek GDP forecast. The 1.1% growth it expects contrasts with the 2.7% growth the budget provides for, the recent European Commission estimate for 2.1% and even the 1.8% forecast included in the midterm fiscal plan the government voted for last month.

Still, the OECD says in its Global Economic Outlook that the economy will expand by 2.5%. It anticipates the primary budget surplus to slide from last year’s 3.8% of GDP, but no lower than 2.5% of GDP for the next few years. The report notes that the Greek economy is beginning to recover although uncertainty remains over the country’s growth prospects. Further progress in reforms is necessary for productivity and exports to grow, the OECD argues. It makes special reference to the reforms in the products markets and in the reduction of nonperforming loans, which could lead to more exports and investments. It also warns that “the expansion of exports depends largely on the pace of world trade growth. Geopolitical tensions among Greece’s neighbors and a renewed large influx of refugees would pose additional risks.”

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Who does any of the parties involved think they’re fooling? A serious question.

Athens To Seek Growth Package At Eurogroup Meeting (K.)

Ahead of yet another crucial Eurogroup on June 15, the government has its mind set on seeking a package of growth-inducing measures which it hopes may, finally, pry open the door that will ultimately put Greece on the road to recovery. Athens believes that securing such a package could work to bridge the difference between the country’s EUpartners, and lead to an agreement which could pave the way for Greece to access international markets. Speaking to reporters on Wednesday, government spokesman Dimitris Tzanakopoulos outlined three basic principles that should govern any proposal that comes Greece’s way at the meeting of the eurozone finance ministers. Firstly, he insisted that the proposal must specify, in the clearest possible way, what midterm debt relief measures Greece should expect.

Secondly, these measures should also allow all the institutions, including the ECB, to proceed with positive sustainability studies of the Greek debt. Finally, he said, a proposal must include specific measures that will boost growth. The government reckons that a growth-oriented agreement will prompt the IMF to positively revise its projections on the Greek economy, reduce its demands with regard to the Greek program, and open the way for an agreement. Athens believes the formula that is being promoted to get the Fund to join the Greek bailout will stipulate that it will not have to provide immediate funding. Instead, the IMF’s contribution will be placed in a fund of sorts, which will be made available at a later date, on the condition that the midterm debt relief measures are implemented.

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Why have none of the other countries involved ever said a word?

Greece Says Colombian Gangs Plundering Hospitals Europe-Wide (AP)

Greek authorities say Colombian organized crime rings were behind a string of heists targeting costly medical diagnostic equipment from hospitals in Greece and another 11 European countries. Police say three Colombian suspects have been identified in connection with last month’s four thefts in Greece. Four out of about a dozen stolen pieces of equipment, worth more than half a million euros, have been recovered in Colombia. There were similar thefts in the past four years in France, Germany, Italy, Austria, the Netherlands, Spain, Poland, Lithuania, Luxembourg, Croatia and the Czech Republic, Major-General Christos Papazafeiris said. Papazafeiris, head of security police for the greater Athens region, said Wednesday the stolen equipment had been mailed to Colombia, and was seized in cooperation with local authorities.

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Airbnb is huge in Athens. Must cost the government a fortune in taxes. Why then liberalize laws even more?

Greek Room Owners Threaten To Return Permits in Airbnb Challenge (K.)

Owners of rooms for rent are threatening to return their operating licenses to the state unless the government withdraws legal clauses that fully liberalize the short-term urban lease market where accommodation is advertised through platforms such as Airbnb and Homeaway. According to a statement by the Confederation of Greek Tourism Accommodation Entrepreneurs (SETKE), if the room owners do hand in their licenses they will be able to enjoy the special privileges of the short-term rental market, which, it argues, has created unfair competition at the expense of legal accommodation. In its statement it claims this will lead to the elimination of the tourism accommodation sector’s 30,000 small entrepreneurs. “Instead of withdrawing the semi-liberal status of the short-term urban lease market under the 2016 law, the government is fully liberalizing it with a 2017 law abolishing the quantitative and qualitative limitations and permitting the rental for tourism purposes of all properties of all owners year round without any income limits,” SETKE says.

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The EU keeps thinking reality is whatever it wants it to be. The European Parliament President says: “The rules have to be the same for everybody.”. They’re not. They’re obviously different for Greece, and that’s not Greece’s doing.

Bid For EU States To Stop Migrants, Refugees ‘Asylum Shopping’ (K.)

As Greece continues to struggle to host thousands of migrants, European Parliament President Antonio Tajani on Wednesday called for a common agreement from all European Union member-states on the implementation of asylum procedures aimed at stopping migrants traveling from one country to another “shopping for asylum status.” “At the moment the rules are not properly harmonized,” Tajani told reporters. “The rules have to be the same for everybody. Otherwise we will end up with people shopping for asylum status, which undermines our credibility.” He noted that many refugees who have been accepted in European countries as part of an EU relocation program have continued their journeys to more prosperous nations such as Germany or Sweden.

Latvia welcomed 380 refugees as part of the relocation program but most of those – 313 – have already moved on to Sweden or Germany, according to Agnese Lace from Latvia’s Center for Public Policy. She said low salaries, a lack of jobs and language barriers meant asylum seekers had little incentive to remain in the country. Meanwhile Andras Kovats of the Hungarian Association for Migrants said Hungary’s failure to support integration was pushing new arrivals abroad. In a related development, Nils Muiznieks, the Council of Europe’s commissioner for human rights, expressed concern at reports of collective expulsions of asylum seekers from Greece to Turkey. “I urge the Greek authorities to cease immediately the pushback operations and uphold their human rights obligation to ensure that all people reaching Greece can effectively seek and enjoy asylum,” Muiznieks said in a statement.

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Jun 072017
 
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Olivier Drot Morning in Downtown Athens June 7 2017

 

Spring Rally in Stocks, Bonds, Gold and Bitcoin Unnerves Investors (WSJ)
Trump’s America Is Facing a $13 Trillion Consumer Debt Hangover (BBG)
Bars Open Early Tomorrow So People Can Drink While Watching Comey Testify (BI)
Other Times Unemployment Has Been This Low, It Didn’t End Well (WSJ)
UK’s May Says She’d Rip Up Human Rights Law to Beat Terrorists (BBG)
Corbyn: UK Foreign Policy Increases Terrorism Risk. Most Britons Agree (Ind.)
Australia’s Economy Marks Record 26 Years Without Recession (AFP)
Australians Curb Spending As Household Debt Balloons (R.)
Is There A Magic Money Tree? Yes Children, But That’s The Wrong Question (G.)
Santander Buys Struggling Spanish Banco Popular For €1 (BBG)
Don’t Count on China as Next Climate Crusader (WSJ)
Gimme Shelter (Jim Kunstler)
98% Of Greeks Downbeat About Their Current Economic Situation (K.)

 

 

The inevitable result of no price discovery for years on end. Do note that no price discovery also means there are no investors.

Spring Rally in Stocks, Bonds, Gold and Bitcoin Unnerves Investors (WSJ)

Stocks, bonds, gold and bitcoin—assets that rarely move in unison—have all been surging this spring, an everything rally that leaves investors confounded about how to play the plodding U.S. expansion and vulnerable to sharp reversals in fortune. Major U.S. stock indexes have soared to records this month, reflecting some investors’ confidence in the continued U.S. economic recovery along with expectations that large technology firms will accrue further market-share gains. At the same time prices of bonds, which often decline when stocks are rising, have risen lately, as U.S. inflation readings cooled off alongside a slowdown in some key industries. Gold has gained following terror attacks in the U.K., and turmoil in U.S. politics centering on the administration’s legislative prospects and a key congressional hearing this week featuring former FBI director James Comey.

The simultaneous gains have begun to concern some investors. Many point to a wave of money that is driving up asset prices, tied in part to lower bond yields and a lower dollar—a confluence of events they say feels good while it lasts but can’t go on forever. “We do think there are distortions” in the markets, said Iman Brivanlou, who oversees high-income equities at asset manager TCW. The Dow Industrials this month have posted two record closes, their first since March, and the 30-stock index remains just 0.33% below its all-time high despite a decline Tuesday of 47.81 points to 21136.23. The Nasdaq Composite Index has hit more than three dozen new highs this year, reflecting the surge of red-hot tech stocks such as Alphabet and Amazon.com , both of which this month have surpassed $1,000 a share. Bitcoin has tripled this year, hitting a record high Tuesday.

At the same time, U.S. bond yields on Tuesday sank to their 2017 low at 2.147% and the price of gold, long viewed as a barometer of market concern about potential risks ahead, settled at $1,294.40, its highest in seven months. A Goldman Sachs Group index of financial conditions that takes into account credit spreads, equity prices and other market gauges, this month suggested the easiest conditions since early 2015, before the Federal Reserve began lifting rates. Another measure of stress in U.S. money markets fell to near its lowest in seven years, while measures of expected stock-market swings have been at the lowest in a decade.

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A global issue.

Trump’s America Is Facing a $13 Trillion Consumer Debt Hangover (BBG)

After bingeing on credit for a half decade, U.S. consumers may finally be feeling the hangover. Americans faced with lackluster income growth have been financing more of their spending with debt instead. There are early signs that loan burdens are growing unsustainably large for borrowers with lower incomes. Household borrowings have surged to a record $12.73 trillion, and the%age of debt that is overdue has risen for two consecutive quarters. And with economic optimism having lifted borrowing rates since the election and the Federal Reserve expected to hike further, it’s getting more expensive for borrowers to refinance. Some companies are growing worried about their customers. Public Storage said in April that more of its self-storage customers now seem to be under stress.

Credit card lenders including Synchrony Financial and Capital One Financial are setting aside more money to cover bad loans. Consumer product makers including Nestle posted slower sales growth last quarter, particularly in the U.S. Companies may have reason to be concerned. Consumer spending notched its weakest gain in the first quarter since the end of 2009, a problem in an economy where consumers account for 70% of spending, though analysts expect the dip to be transitory. And debt delinquencies are rising even as the job market shows signs of strength. “There are pockets of consumers that are going to be sorely tested,” said Christopher Low, chief economist at FTN Financial. “We’ve conditioned American consumers to use debt to close the gap between their wages and their spending. When the Fed hikes, riskier borrowers are going to get pinched first.”

Since the 2008 financial crisis, the Fed has kept rates low to encourage companies and consumers to borrow more and spur economic growth. Much of the gains in household debt since 2012 have come from student loans, auto debt and credit cards. Over that time, wage growth has averaged around 2.2% a year, and the pace has been slowing for much of this year. Even if economists forecast that income growth will accelerate, those pickups have remained elusive. Donald Trump won the U.S. presidential election in part by convincing voters that he understood their economic pain. Keeping up with household debt payments is still broadly manageable for consumers. As of the end of last year, the ratio of principal and interest payments to disposable income for Americans was just shy of 10%, less than the average going back to 1980 of 11.33%.

And it’s too soon to say whether growing signs of pain among borrowers are just a return to more normal levels of delinquencies or evidence of a more serious credit downturn. Loan delinquencies are creeping higher after plunging from 2010 until the middle of 2016, but are still below historical averages.

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This can only disappoint. The echo chamber is overcrowded.

Bars Open Early Tomorrow So People Can Drink While Watching Comey Testify (BI)

If you want to have a drink while watching former FBI director James Comey testify before the Senate Intelligence Committee on Thursday, you’re in luck. Bars in Washington, DC, San Francisco, and Houston, Texas, are opening early on Thursday to screen Comey’s testimony, which is scheduled to begin at 10 a.m. EST. “Come on… you know you want to watch the drama unfold this Thursday,” Shaw’s Tavern, which will be serving $5 Stoli vodka and “FBI” sandwiches, wrote on Facebook. “Grab your friends, grab a drink and let’s COVFEFE!”

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Oh boy, you can’t win, can you?

Other Times Unemployment Has Been This Low, It Didn’t End Well (WSJ)

There have been only three fleeting periods in the past half-century when the U.S. unemployment rate was as low as it is today. This would be cause for celebration but for one disturbing fact: in hindsight, each period was associated with boiling excesses that led to serious economic trouble. Low unemployment of the late 1960s preceded an inflation spiral in the 1970s. The late 1990s bred the Dot-com bubble and bust. The mid-2000s saw the buildup and collapse of U.S. housing. While there is reason to believe today’s economy isn’t boiling over as in the past, those episodes call for caution. “It’s not a matter of superstition, it’s a matter of being mindful of the history of what such a low unemployment rate usually is followed by,” said Michael Feroli, chief U.S. economist of J.P. Morgan Chase.

While initially a welcome development, low unemployment in the 1960s laid the groundwork for a buildup of wage and price pressures, spurred on by low interest rates and aggressive government spending programs. The unemployment rate dropped to 4.3% in September 1965 and then below 4%. Today’s unemployment rate, also at 4.3%, could drop below 4% in the next year if it maintains its present trajectory. Unemployment returned again to 4.3% in January 1999. This time the inflation rate remained below 2% and it seemed that, unlike the late 1960s, the economy wasn’t overheating. But asset prices—the stock market in particular—soared after what had already been a long climb. The DJIA shot above 10000 for the first time in March 1998. Highflying tech companies commanded billion-dollar valuations with no profits to report. In hindsight, an internet bubble grew out of control.

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Hoping to get the nazi vote?

UK’s May Says She’d Rip Up Human Rights Law to Beat Terrorists (BBG)

Prime Minister Theresa May said she’d be willing to tear up human rights legislation in the battle against terrorists, as security continued to dominate the final days of the U.K. election campaign. Speaking to supporters at a campaign event in Slough, west of London, the premier said she wanted to make it easier for the authorities to deport foreign terror suspects and to limit the freedoms of individuals who pose a threat but who can’t be prosecuted in court. “If our human rights laws stop us from doing it, we will change the laws so we can do it,” May said. “If I am elected as prime minister on Thursday, that work begins on Friday.” May is facing criticism over her record overseeing U.K. homeland security in the wake of two terrorist attacks in two weeks ahead of Thursday’s national vote.

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Those arms sales will be under heavy pressure no matter who wins.

Corbyn: UK Foreign Policy Increases Terrorism Risk. Most Britons Agree (Ind.)

An overwhelming majority of people agree with Jeremy Corbyn that British involvement in foreign wars has put the public at greater risk of terrorism, according to a new poll. The exclusive ORB survey for The Independent found 75% of people believe interventions in Iraq, Afghanistan and Libya have made atrocities on UK soil more likely. The poll – conducted before Saturday night’s devastating attack – comes after Mr Corbyn was lambasted for suggesting foreign policy decisions were linked to terrorism in the UK and that the “war on terror” had failed. The deadly strike at London Bridge and Borough Market, the third attack in Britain in as many months, has seen security dominate the final days of the election campaign, with cabinet ministers squabbling over whether it could have been stopped.

Theresa May’s record as Home Secretary has been questioned and she has faced a call to resign over the matter from Mr Corbyn, not to mention a former aide to ex-Prime Minister David Cameron. In the wake of the Manchester attack, which killed 22 people last month, the Labour leader highlighted the potential role foreign military interventions play in increasing the likelihood of atrocities in the UK. Despite experts like Baroness Eliza Manningham-Bullerformer, a former MI5 chief, and Baroness Pauline Neville-Jones, ex-chair of the Joint Intelligence Committee, expressing similar views, he was accused by Conservatives of making excuses for terrorism.

But the ORB survey for The Independent found three-quarters of people – taking in all age groups, political persuasions and social classes – agreed Britain’s military involvement in Iraq, Afghanistan and Libya had increased the risk of terrorist acts. Within that, some 68% of Tory voters agreed foreign wars have enhanced the risks of terrorism at home. So did 80% of Labour supporters and 79% of people that voted for the Liberal Democrats in 2015.

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This is hilarious in combination with the next article.

Australia’s Economy Marks Record 26 Years Without Recession (AFP)

Australia marked a world-record 26 years without a recession Wednesday, as the economy grew 0.3% in the first-quarter, official data showed. The Australian Bureau of Statistics put the annual rate of growth at 1.7%, down from 2.4% in the previous three months. The soft quarterly reading was widely expected by analysts amid the impact of category four Cyclone Debbie on eastern Australia in late March, weaker trade figures and tepid wages growth. “The results today demonstrate the continued resilience of the Australian economy,” Treasurer Scott Morrison told reporters. The Australian dollar rallied by a quarter of a US cent to 75.27 cents just after the data was released, as some analysts had predicted a negative first-quarter reading.

Australia last recorded two negative quarters of economic growth in March and June 1991, before enjoying 103 quarters without a recession to equal the record set by the Netherlands. Economists said the resources-rich nation’s long stretch of expansion was supported by economic reforms in the 1980s and 1990s, such as the floating of the local currency, a flexible labour market, financial sector and capital markets deregulation and lower tariffs. Australia has also benefited from China’s economic growth and hunger for natural resources, which led to an unprecedented mining investment boom and record commodity prices. But economists have warned that economic growth in the next few years may not be as rosy. “In the context of the past few years, it is still a fairly weak outcome,” JP Morgan economist Tom Kennedy told AFP of the latest figures.

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A record run without a recession entirly paid for with leveraged private debt: “They are all on a budget. Everyone’s got all their money in houses, that’s how it is.”

Australians Curb Spending As Household Debt Balloons (R.)

Australia’s economy may have achieved a remarkable winning streak, avoiding a recession for 25 years, but there are now clear signs that the consumers who have driven much of the growth are running out of puff. With cash interest rates at a record low and house prices near record highs, the nation’s household debt-to-income ratio has climbed to an all-time peak of 189%, according to the Reserve Bank of Australia (RBA). That means there are an increasing number of people who have little cash for discretionary spending – on everything from cars to electrical appliances and new clothes – as their pay packets get consumed by large mortgages and high rental payments in the country’s red-hot property market.

And it’s not as if a sudden plunge in home prices would help – it might well expose and exacerbate the problem, at least in the short run, squeezing many who have bought into the frothy market with high mortgage repayments and little equity in their homes. “We are seeing a considerable spike in stress even in more affluent households. Large mortgages, big commitments but no income growth,” said Digital Finance Analytics (DFA) Principal Martin North. “Stressed households are less likely to spend at the shops, which acts as a drag anchor on future growth.” North estimates a record 52,000 households risk default in the next 12 months and that 23.4% of Australian families are under mortgage stress, meaning their income does not cover ongoing costs. That compares with about 19% a year ago.

“People are up to their ears in mortgages,” said Brad Smith, a car sales consultant at MotorPoint Sydney which has seen a stark slowdown in sales in the past six months. “They are all on a budget. Everyone’s got all their money in houses, that’s how it is.” Australians are also facing a cash crunch because price inflation in essential items such as food, electricity and insurance is accelerating at a 3.4% annual rate at a time when Australian wages are rising at their slowest pace on record, just 1.9% in the year to March. Meanwhile, growth in retail sales, personal loans and luxury car sales are all at multi-year lows, suggesting the household sector – nearly 60% of Australia’s A$1.7 trillion ($1.3 trillion) economy – is under severe strain.

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Steve Keen’s efforts are having an effect.

Is There A Magic Money Tree? Yes Children, But That’s The Wrong Question (G.)

Does anyone who has witnessed the pomp and circumstance of the Queen’s Jubilee, the funnelling of public money into Syrian airstrikes, or the systematic cutting of taxes for the rich really think we’re not paying nurses properly because we simply don’t have the money? Absolutely not: we don’t pay nurses properly because the government makes a choice not to. This fact calls to mind the words of the Texan minister Robert Fulghum: “It will be a great day when our schools have all the money they need, and our air force has to have a bake-sale to buy a bomber”. But the magic money tree is not a just daft expression in terms of how governments spend public money, it’s also misleading in terms of how the economy works as a whole.

Since 2008, we’ve been encouraged to see the economy like a household budget: if households spend too much money, they need to cut down on living costs so they don’t get into too much debt. To that end, the magic money tree says that if we spend too much money, we can’t just simply grow more. But actually, a country’s whole economy can grow more money if it needs to. Since 2009 the Bank of England has created £453bn of new electronic money to buy debt from the private sector using a mechanism called quantitative easing. Yes, you read that right: the Bank of England has created £453,000,000,000 of new money in the last eight years. Turns out the magic money tree is pretty big. Growing money is possible because an economy is nothing like a household budget. In a household, money comes in via people’s wages and goes out via living costs.

But in an economy, we all pay each other’s wages. Money doesn’t just travel in one direction in the economy, it circulates around. It’s the difference between one car driving in one end of a tunnel and out of the other, and lots of cars zigzagging around Spaghetti Junction. The issue isn’t whether we can grow money or not (we can – that’s just a fact), it’s where the money goes once it’s been grown. And the problem is that it doesn’t go to nurses, teachers or the public services they work for. It goes to institutions such as banks. The nurse in the BBC debate was highlighting a problem that exists across the whole economy: real wages haven’t increased for more than a decade, and this has meant more people have been relying on credit cards, with personal debt now higher than it was before the 2008 crash.

In other words, the fact that the nurse hasn’t had a pay rise is not just bad for her, it’s bad for all of us – because if that nurse is not earning enough, she won’t be spending money. And if she does spend money, she’ll do it by getting into unsustainable debt – which is itself outrageous considering the important, skilled work nurses do.

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Raise €7 billion to buy a bank for €1.

Santander Buys Struggling Spanish Banco Popular For €1 (BBG)

Banco Popular Espanol has been taken over by Santander after European regulators deemed that the bank was likely to fail. Popular will continue to operate under “normal business conditions” after all the bank’s shares and capital instruments were transferred to Santander, said the EU’s Single Resolution Board. The purchase price was €1, according to a statement. Santander plans to raise about €7bn (£6.1bn) of capital as part of the transaction. Popular had been looking for a buyer or a possible share sale after its balance sheet was battered by soured real estate loans that eroded its capital.

Its shares have dropped 53pc since the beginning of last week. In a statement, the ECB, which oversees the largest banks in the eurozone, said: “The significant deterioration of the liquidity situation of the bank in recent days led to a determination that the entity would have, in the near future, been unable to pay its debts or other liabilities as they fell due. “Consequently, the ECB determined that the bank was failing or likely to fail and duly informed the Single Resolution Board (SRB), which adopted a resolution scheme entailing the sale of Banco Popular Espanol to Banco Santander.”

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That Paris accord is a hoax.

Don’t Count on China as Next Climate Crusader (WSJ)

For years, a wide spectrum of groups in the U.S. lectured, cajoled and entreated China to go green. Multinationals and nonprofits teamed up with Chinese environmental groups to promote eco-friendly causes; Coca-Cola restored forests in the upper Yangtze. U.S. labs offered scientific support. Academics collaborated on research. The former Treasury secretary, Hank Paulson, championed China’s disappearing wetlands, a haven for migratory birds. The well-funded effort amplified voices within China demanding the government take action. It was, says Orville Schell, a longtime China watcher and environmentalist, “the most effective missionary work in the past couple hundred years.” So it’s an irony of historic proportions how the roles have reversed: China, the world’s worst polluter by far, is now a convert on climate change while the White House under Donald Trump has turned apostate.

In pulling out of the 2015 Paris climate-change agreement, Mr. Trump has repudiated a signal accomplishment of the Obama presidency: persuading Beijing to become a partner in the effort to prevent the planet from heating up to the point of no return. Without China’s support, the Paris deal might have fallen apart. Mr. Paulson issued a statement saying he was dismayed and disappointed. “We have left a void for others to fill,” he said. When it comes to the environment, China is still torn by conflicting priorities. It has installed more solar and wind capacity than any other nation—and plans to invest another $360 billion in renewable energy between now and 2020. The economy is rebalancing away from heavy industry and manufacturing toward much cleaner services and consumption.

Coal consumption has declined for three straight years. On current trends, many scientists expect that China will reach peak carbon emissions well before its target date of 2030 under the Paris accord. Yet Beijing remains committed to rapid growth. And coal is still king. Just ask the residents of Beijing. Whenever economic policy makers set out to boost growth, spending flows to new real-estate and infrastructure projects, the steel mills around the capital fire up their coal furnaces—and commuters reach for their face masks. This winter was particularly hard on the lungs. A spending splurge meant that Beijing’s average pollution levels last year were double the national standard set by the State Council.

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“How could they fail to come up with a video of the Donald and Vladimir swatting each other playfully with birch switches in a Moscow banya?”

Gimme Shelter (Jim Kunstler)

“Have you all lost your mind?” Vladimir Putin replied to one of Megyn Kelly’s thrusts about alleged Russian perfidy toward the US in the gala interview that debuted her new Sunday Night star-chamber on NBC. Old Vlad put his finger on something there. His view of the late goings-on in America is like that of the proverbial detached Martian observer of strange Earthly doings, rattling his antennae and clicking his mouth-parts in mirth. To which retort, by the way, one would have to answer, ”Yes, absolutely.” The toils of slow economic collapse, accompanied by the ceaseless effort by various arms of the Deep State to spin “the narrative” around the voting public’s collective head, has driven the polity insane. And this, of course, is on view in the bedlam that US politics has become, Trump and all.

I’m waiting for The New York Times to run the three-column headline that says Russia Racist, Misogynist, and Islamophobic to finally bring together the programmed paranoia of NeoCon / DemProg alliance with the esprit de corp of the new collegiate Red Guard. Mr. Putin does not have to lift a finger to detonate the groaning garbage barge of US domestic affairs. It’s already ignited and is faring toward a very peculiar species of civil war. You can be sure that the NeoCon/DemProg axis is determined to get rid of Trump at all costs. Impeachment requires some sort of high crime or misdeamenor. So far, going on a year, they haven’t come up with any evidence that the Golden Golem of Greatness acted as a Russian agent in some fashion, and that itself has got to be a little suspicious, considering the thousands of clerks in the spinning mills of those legendary seventeen Intel outfits the government runs.

How could they fail to come up with a video of the Donald and Vladimir swatting each other playfully with birch switches in a Moscow banya? Five TV sitcom writers could surely come up with an angle — as long as it was a plausible entertainment. In the meantime, Trump prevails, the mad bull elephant of the Republican herd, majestically swinging his trunk against everything breakable in the political china shop while trumpeting “Covfefe! Covfefe!” Last week it was the Paris Climate Accords. The op-ed writers in the usual places bounced off the walls of their virtual rubber room in response. Paul Krugman had to be dragged down to hydrotherapy at the NYT after he set his hair on fire. And Rachel Maddow practically popped a carotid artery in her muscular neck from all that shrieking.

I’m a bit more sanguine about the US withdrawal. To me, the Paris Accords were just another feel-good PR stunt enabling politicians to pretend that they could control forces that are already way out-of-hand, an international vanity project of ass-covering. The coming economic collapse will depress global industrial activity whether anybody likes it or not, and despite anyone’s pretense of good intentions — and then we will have a range of much more practical problems of everyday life to contend with.

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It’s getting time to rise up.

98% Of Greeks Downbeat About Their Current Economic Situation (K.)

Greeks are among the most pessimistic people in the world, according to the findings of a survey by the Pew Research Center which found that many Europeans as well as Japanese and Americans feel better about their national economies now than before the global financial crisis nearly a decade ago. Questioned about their national economy, only 2% of Greeks were upbeat, the lowest rate among the 32 countries polled. The Dutch, Germans, Swedes and Indians see their national economies in the most positive light, with more than 80% expressing optimism. The Pew survey also detected widespread concern about the future. A median of just 41% said they believed that a child in their country today would grow up to be better off financially than their parents. The most pessimistic about prospects for the next generation are the French (9%), the Japanese (19%) and the Greeks (21%).

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May 212017
 
 May 21, 2017  Posted by at 9:29 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle May 21 2017
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Alfred Buckham Tower of London and Tower Bridge c1920

 

Trump’s $115 Billion Saudi Weapons Deal Ratifies US Support For Yemen War (WE)
A Quarter Of Americans Can’t Pay All Their Monthly Bills (ZH)
U.K. Threatens to Quit Brexit Talks If It Faces Massive Bill (BBG)
Tory Support Wobbles as Labour Attacks May’s Pensioner Plans (BBG)
May’s Plan To End Free School Lunches ‘To Hit 900,000 Struggling Families’ (O.)
Theresa May’s Tory Manifesto Scraps The Ban On Elephant Ivory Sales (EP)
Comey Has Changed His Mind On Trump Trying To Influence Him (ZH)
The Fallacy of Demonizing Russia (CN)
CIA Incompetence Allowed China To Murder A Dozen CIA Assets (ZH)
Those Exposed By WikiLeaks Should Be Investigated, Not Assange (RT)
Varoufakis Reveals Worst Kept Secret In Europe: EU Is A German Empire (MW)
Germany Limits Refugee Family Reunions From Greece (DW)
Schäuble: Germany Will Not Accept Any Greek Debt Cut at Present Time (GR)
Greek State Debt Rises To €326.5 Billion (GR)

 

 

Crazy. In America it is still considered OK to kill people for profit. Has been for ages.

But look at what’s not even being said: talking about Saudi Arabia without mentioning its support for Salafi religion and terrorism paints only part of the picture. To make a buck, and to create more chaos, the US supports the very terrorists it claims to be fighting.

Trump’s $115 Billion Saudi Weapons Deal Ratifies US Support For Yemen War (WE)

President Trump’s newly announced arms agreement with Saudi Arabia ratifies an Obama administration policy that has drawn criticism from a voluble, bipartisan minority of senators. Saudi Arabia, armed with American weapons, fought a proxy war with Iran in Yemen, where the government was overthrown by a rebel group tied to the Iranians. Allegations that Saudi Arabia has bombed civilians and committed other human rights abuses compromised what would otherwise tend to be unanimous U.S. support for the conflict. A $1.15 billion arms deal last year turned controversial, but that pact is dwarfed by the $110 billion pact signed Saturday. “[M]any of the armaments we’re providing to Saudi Arabia will help them be much more precise and targeted with many of their strikes, but it’s important that pressure be kept on the rebels in Yemen,” Secretary of State Rex Tillerson told reporters following meetings in Riyadh.

But Saudi Arabia has attacked civilians intentionally, according to Senate critics of such agreements, rather than by mistakes borne of imprecise airstrike technology. “[T]he country is on the brink of famine in part because the Saudis have intentionally destroyed transit hubs and key bridges, and blocked the delivery of humanitarian aid into Yemen,” Sen. Chris Murphy, D-Conn., wrote in a piece published by the Huffington Post. “By selling the Saudis these precision-guided weapons more — not fewer — civilians will be killed because it is Saudi Arabia’s strategy to starve Yemenis to death to increase their own leverage at the negotiating table. They couldn’t do this without the weapons we are selling them.”

Sen. Todd Young, R-Ind., wanted Tillerson to make a series of demands on the Saudis designed to ease civilian suffering in Yemen, such as ending delays on humanitarian aid at a port city held by the rebels. “First, renounce any intention to conduct a military operation against the Port of Hudaydah,” Young, a former Marine who sits with Murphy on the Senate Foreign Relations Committee, said last week during a colloquy on the Senate floor with the Connecticut Democrat. “Second, redouble efforts to achieve a diplomatic solution. Third, end any delays to the delivery of humanitarian aid caused by the Saudi-led coalition. And, fourth, permit the delivery of much-needed U.S.-funded cranes to the Port of Hudaydah that would permit the quicker delivery of food and medicine. I said it before, with more than 10 million Yemenis requiring humanitarian assistance there is no time to waste.”

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Reports of poverty in America won’t stop coming in.

A Quarter Of Americans Can’t Pay All Their Monthly Bills (ZH)

There was some good news and some not so good news in the Fed’s latest annual Report on the Economic Well-Being of U.S. Households. First the good news. The report, based on the Board’s fourth annual Survey of Household Economics and Decisionmaking conducted in October 2016, presents a “picture of improving financial well-being among Americans”, at least according to the report (read on to see if this is merited). Overall, 70% of the more than 6,600 respondents said they were either “living comfortably” or “doing okay,” up 1% from 2015 and up 8% from the first survey results in 2013. Not surprisingly, the highest percentage, or 92%, of those who responded they were “living comfortably” was among the group with more than $100,000 in family income.

For Americans making less than $40,000 the breakdown was almost evenly split with 49% saying they are “just getting by.” According to the same study, 28% of respondents said that their income in the last 12 months was less than $25,000, and 40% report that their income was less than the key $40,000 cutoff, which suggests that roughly 4 in 10 Americans are “finding it difficult to get by.” The improvements in well-being as reported by the survey respondents were concentrated among high-income adults, with at least some college education, and prompted the WSJ to write that “U.S Household financial health improved in recent years.” Even so, most of the changes reported in the survey were relatively modest, “reflecting a slowly improving economy and an unemployment level at or below 5% throughout 2016.”

Now, the not so good news. Nearly eight years into an economic recovery, nearly half of Americans didn’t have enough cash available to cover a $400 emergency. Specifically, the survey found that, in line with what the Fed had disclosed in previous years, 44% of respondents said they wouldn’t be able to cover an unexpected $400 expense like a car repair or medical bill, or would have to borrow money or sell something to meet it. Troubling as this statistic remains, the overall share of adults who would struggle to come up with $400 in a pinch has declined by 2% from the last survey conducted in 2015, and down 6% since 2013. Of the group that could not pay in cash, 45% said they would go further in debt and use a credit card to pay off the expense over time. while a quarter would borrow from friends of family, and another 27% just couldn’t pay the expense. Others would turn to selling items or using a payday loan.

The breakdown was largely by education attainment: 79% of those with at least a bachelor’s degree said they would still be able to pay all of their other bills in full if hit with a $400 charge. Just 52% of those with no more than a high school diploma said the same. Just as concerning were other findings from the study: just under one-fourth of adults, or 23%, are not able to pay all of their current month’s bills in full while 25% reported skipping medical treatments due to cost in the prior year. Additionally, 28% of adults who haven’t retired yet reported to being grossly unprepared, indicating they had no retirement savings or pension whatsoever.

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Election talk.

U.K. Threatens to Quit Brexit Talks If It Faces Massive Bill (BBG)

The U.K. will quit Brexit talks unless the EU drops its demands of a divorce payment of €100 billion ($112 billion), Brexit Secretary David Davis said. Britain’s negotiations on leaving the EU would otherwise be plunged into “chaos,” and even a £1 billion settlement would be “a lot of money,” Davis said in an interview published in the Sunday Times. The size of Britain’s exit bill, and which types of negotiations can begin before it has been agreed, has been a source of debate for weeks. European Commission President Jean-Claude Juncker has said the U.K. will have to pay about £50 billion, while Luxembourg’s Prime Minister Xavier Bettel has signaled a figure between €40 billion and €60 billion. The Financial Times estimated the cost could balloon to €100 billion, while a study by the Institute of Chartered Accountants in England and Wales put the cost at as little as £5 billion ($6.5 billion).

Prime Minister Theresa May’s government has said it will meet its commitments to the EU, but has questioned how the EU’s preliminary estimates have been reached. “We don’t need to just look like we can walk away, we need to be able to walk away,” Davis said. “Under the circumstances, if that was necessary, we would be in a position to do it.” In an interview with the Sunday Telegraph, May said that “money paid in the past” by the U.K. into joint EU projects and the European Investment Bank ought to be taken account in the final divorce bill. “There is much debate about what the U.K.’s obligations might be or indeed what our rights might be,” she said. “We make it clear that we would look at those both rights and obligations.”

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Is there enough time left for May to alienate enough people? She certainly tries.

Tory Support Wobbles as Labour Attacks May’s Pensioner Plans (BBG)

U.K. Prime Minister Theresa May’s hopes of boosting her parliamentary majority suffered a blow on Saturday, as Jeremy Corbyn’s opposition Labour Party edged closer in the polls and Conservatives faced a backlash over proposed changes to social care. Labour cut the Tories’ lead in the latest Opinium Research survey to 13 points from 15 points a week earlier, and a new YouGov survey in the Sunday Times put Corbyn’s party nine points behind. The last time Labour managed a single-digit deficit in the YouGov series was in September. The tightening polls mark a setback for May as she seeks to strengthen her position ahead of upcoming Brexit negotiations. In another blow, 47% of respondents in a Survation poll said they opposed May’s plan to require people to tap into assets above £100,000 ($130,000), excluding the value of their homes, to pay for the costs of their old-age care.

Attacking May’s social care pledge and manifesto promises to pensioners, a demographic that traditionally votes Conservative, Corbyn labeled the Tories a “nasty” party in a speech in Birmingham on Saturday. He reiterated the accusation in an emailed statement and set out five pledges for how his party would help older voters. “Theresa May and the Conservatives won’t stand up for pensioners,” Corbyn said in the statement. “Their only concern is their billionaire friends.” Labour’s pledges to older voters include preserving a so-called triple lock on pension payments for five years, under which the government guarantees pensions will rise annually by whichever is greatest: the rate of inflation, the rise in earnings, or 2.5%. The Tories say they’ll drop the 2.5% provision starting in 2020.

Corbyn’s party also says it will guarantee winter fuel subsidies for all pensioners, and will not raise the state pension age beyond 66. The Conservative manifesto, unveiled by May on Thursday, would scrap the fuel payments for well-off pensioners, and said the state pension age should reflect increases in life expectancy. In a lengthy Facebook post Saturday, May warned that a lot is “at stake” in the election and said the U.K. has “great challenges,” including the need to provide “security for older people while being fair to the young”. “If I lose just six seats I will lose this election, and Jeremy Corbyn will be sitting down to negotiate with the presidents, prime ministers and chancellors of Europe,” May wrote. Labour’s leader would “bring chaos to Britain,” she said.

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It’s plenty bad enough that it’s needed. And then scrap it? Scrapping it merely confirms that Britain is a third world country run by a cynical elite. Good thing there’s an election right ahead.

May’s Plan To End Free School Lunches ‘To Hit 900,000 Struggling Families’ (O.)

About 900,000 children from struggling families will lose their right to free school lunches under a cut unveiled in the Conservative manifesto. The total includes more than 600,000 young children recently defined as coming from “ordinary working families”, according to analysis for the Observer by the Education Policy Institute. It means that the surprise measure risks undermining Theresa May’s pledge to prioritise families that are “just about managing” – those who are in work, but struggling to make ends meet. May opted to end universal free school lunches for infants, introduced under the coalition government, and replace them with free breakfasts. The money saved will be used to see off a looming Tory rebellion over school funding.

The move risks punishing exactly the kind of families the prime minister has promised to help and will cost families about £440 for every child hit by the cut. It is likely to save about £650m a year. However, the Conservatives pointed to recent evidence that free breakfasts were more cost-effective, adding that the poorest children would still receive a free lunch. After a week in which the parties released their election manifestos, more Tory candidates expressed private reservations about their party’s plan to make people pay for their old-age home care through their estates.

With the large Tory poll lead closing slightly in recent days, some nervous candidates are urging the leadership to make another attempt to explain the policy to voters, while others are planning to lobby for concessions after the election. May has insisted it is a fair measure that ensures only those with estates worth more than £100,000 will pay. Jeremy Corbyn attempted to exploit the row by accusing the Tories of provoking a “war between generations”. He accused May of drawing up an “anti-pensioner package” that weakened protections for the state pension, removed the winter fuel allowance from many and forced thousands to pay huge amounts for home care. Tim Farron, the Lib Dem leader, said May’s social care policy would “go down as her poll tax”.

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“Interestingly, this policy puts the Tories in direct conflict with Prince William, who has been a vocal supporter of a total ban on ivory sales. Will we see the Duke of Cambridge campaigning for Labour – which has pledged to introduce the total ban the Prince has been lobbying for?”

Theresa May’s Tory Manifesto Scraps The Ban On Elephant Ivory Sales (EP)

After heavy lobbying from wealthy antiques dealers, Theresa May has sneakily dropped the proposed outright ban on elephant ivory sales from the Tories’ 2017 manifesto. Following bans in both the US and China, David Cameron had pledged in the 2015 Conservative manifesto to put a complete ban on all ivory trading. However, after huge pressure from rich and powerful antiques dealers, Theresa May has conveniently decided to completely scrap the plans altogether. The Tories did not decide to implement the ban during the two years after it was announced by David Cameron, and even their staunch supporters in the British press were writing negative pieces about the Tories reticence in pushing through the much-needed legislation.

A quote from a Daily Mail article written in March entitled “Tories’ shame over blood ivory”, said: “A much more likely reason (for the Tories dropping the ivory ban) is that they are being swayed by the powerful antiques industry, which fears it will lose millions of pounds if antique ivory sales are stopped, and whose figurehead happens to be Victoria Borwick, Conservative MP for Kensington, and president of the British Antique Dealers’ Association.” The most powerful UK antique traders association is The British Antiques Dealers’ Association, and their President, Lady Victoria Borwick (also the Conservative MP for Kensington) can be seen shaking hands with Theresa May in the image above.

The only mention of the subject in the Conservative Party’s latest 2017 manifesto is a general pledge to work with international organisations to protect endangered species and the marine environment. Meanwhile, the Labour Party’s 2017 manifesto has specifically pledged to introduce a “total ban on ivory trading”. An elephant is killed for its ivory every 15 minutes on average, and their numbers have fallen by almost a third in Africa since 2007. So as well as being in favour of bringing back fox hunting, Theresa May also couldn’t really care about elephants being killed either. Are you seriously going to vote for a woman who bows to lobbyists over a practice as disgusting as elephant poaching?

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Should be quite the event, that Senate testimony of his.

Comey Has Changed His Mind On Trump Trying To Influence Him (ZH)

Clearly disappointed to have been left out of the headline heroics from Friday night (courtesy of The Washington Post and The New York Times), CNN has decided that anon-sourced perspectives on officials’ feelings now warrants reportage. The latest in the sad sage of mainstream media’s downward spiral, as The Hill reports, is that former FBI Director James Comey is expected to testify that he believes President Trump was deliberately trying to meddle in the FBI’s investigation of Russian interference in the presidential election, according to a report late Friday. Despite swearing under oath that he “had never” been influenced during an investigation, and further that if he had he would have reported it immediately… CNN now reports that, according to a source, Comey has come to believe the president intended to influence him…

Former FBI Director James Comey now believes that President Donald Trump was trying to influence his judgment about the Russia probe, a person familiar with his thinking says, but whether that influence amounts to obstruction of justice remains an open question. “You have to have intent in order to obstruct justice in the criminal sense,” the source said, adding that “intent is hard to prove.” Comey will testify publicly before the Senate intelligence committee after Memorial Day, the panel’s leaders announced Friday. The central question at that blockbuster hearing will be whether Comey believed the President was trying to interfere with his investigation.

Sources say Comey had reached no conclusion about the President’s intent before he was fired. But Comey did immediately recognize that the new President was not following normal protocols during their interactions. So to clarify, a disgruntled fired employee, who previously said no effort to influence was undertaken, has now changed his mind, according to sources, and thinks his former boss was trying to influence him (according to sources).

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The west has rewritten WWII history from the start.

The Fallacy of Demonizing Russia (CN)

We entered the monument to the siege of Leningrad from the back. There is a large semi-circle with eternal flame torches at intervals and embedded sculptures of Lenin’s face, and other symbols of the Soviet era. The monument was built in the post-war period so the Soviet iconography is understandable. In the middle is a sculpture of a soldier, a half-naked woman looking forlorn into the distance, and another woman collapsed on the ground with a dead boy in her arms. There are several concentric steps that follow the semi-circle and I sat down on one of them and took in the feel of the area. Classical style music played in the background with a woman’s haunting voice singing in Russian. It was explained to me that it was a semi-circle instead of a full-circle to represent the fact the city was not completely surrounded and ultimately not defeated.

I finally got up and went through the opening in the semi-circle and came out to the front where a tall column with 1941 and 1945 on it stood with a large statue of two soldiers in front of it. There are several statues on either side of the front part of the monument of figures, from soldiers to civilians, who labored to assist in alleviating the suffering of the siege and defending the city. Soldiers and civilians helped to put out fires, retrieve un-exploded ordnance from buildings, repair damage, and built the road of life over a frozen body of water to evacuate civilians and transport supplies. The siege lasted 872 days (Sept. 8, 1941, to Jan. 27, 1944), resulting in an estimated 1.2 million deaths, mostly from starvation and freezing, and some from bombing and illness.

Most were buried in mass graves, the largest of which was Piskarevskoye Cemetery, which received around 500,000 bodies. An accurate accounting of deaths is complicated by the fact that many unregistered refugees had fled to Leningrad before the siege to escape the advancing Nazi army. According to Wikipedia, by the end of the siege: “Only 700,000 people were left alive of a 3.5 million pre-war population. Among them were soldiers, workers, surviving children and women. Of the 700,000 survivors, about 300,000 were soldiers who came from other parts of the country to help in the besieged city.”


sculpture commemorating the defense of Leningrad during World War II. (courtesy of saint-petersburg.com.)

I told Mike that I didn’t think the average American could even begin to fathom this level of suffering. With the exception of a very small percentage of the population sent to fight our myriad and senseless conflicts, war is something that happens to other people somewhere else. It’s an abstraction – or worse yet, fodder for entertainment. [..] it all made me ponder how spoiled Americans have been in this respect, with a vast ocean on either side and weak or friendly neighbors to the north and south. We have not experienced a war on our soil since the 1860’s and have not suffered an invasion since 1812. I can’t help but think that this, along with our youth, goes a long way toward explaining our lack of perspective and humility as a nation. Only those without wisdom would characterize themselves as “exceptional” and “indispensable.”

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Under Obama and Clinton.

CIA Incompetence Allowed China To Murder A Dozen CIA Assets (ZH)

You know what they say about biting the hand that feeds. The NYT just dropped its latest deep-state scoop, and boy is it a doozy. But instead of using the information as more leverage to attack President Trump, the leaks reveal allegedly extreme incompetence at the highest levels of the CIA, what NYT’s “current and former government sources” characterized as the worst intelligence breach in decades. These officials revealed that “the Chinese government systematically dismantled CIA spying operations in the country starting in 2010, killing or imprisoning more than a dozen sources over two years and crippling intelligence gathering there for years afterward.”

The sheer number of U.S. assets lost rivaled those lost to the Soviet Union and Russia during the betrayals of both Aldrich Ames and Robert Hanssen during the 1980s and 1990s, the NYT noted. The timing of the scoop is also curious: Instead of dropping it during the market day, standard practice for anti-Trump revelations from WaPo, NYT and CNN, this story appeared at noon on a Saturday, when global markets were shuttered – almost guaranteeing it won’t dominate the cable-news cycle, which will likely be laser-focused on Trump’s first trip abroad. One possible reason: the head of the CIA from 2010 to 2013 was Mike Morell, an outspoken supporter of Hillary Clinton, who in August of 2016 penned “I Ran the C.I.A. Now I’m Endorsing Hillary Clinton.”

That is explainable: after all Hillary Clinton was Secretary of State at the time when, as we now learn, China was killing CIA spies. Beginning in 2010, CIA operatives meant to collect information on the innerworkings of the Communist Party started disappearing. The NYT reports that between the final weeks of 2010 through the end of 2012, the Chinese killed at least a dozen of the CIA’s sources. According to three sources, one was shot in front of his colleagues in the courtyard of a government building – a grisly killing meant to send a message to any others who might have been working for U.S. intelligence. Still others were imprisoned. All told, the Communist Party killed or imprisoned 18 to 20 of the CIA’s sources.

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Every country is willing to break every law, domestic or international, if it suits them.

Those Exposed By WikiLeaks Should Be Investigated, Not Assange (RT)

Prominent jurist and head of Julian Assange’s legal team Baltasar Garzon told RT that the US has been secretly conducting an investigation into his client and WikiLeaks, arguing that those implicated in crimes should face legal action instead. Garzon, a renowned human rights judge who sat on Spain’s central criminal court and once indicted Chilean dictator Augusto Pinochet, said in an interview to RT Spanish that while Sweden dropping charges against the WikiLeaks co-founder is a welcome step, the main threat to his freedom comes from Washington. “He [Assange] is satisfied, but, in his own words, the war only begins now. We understood that Sweden was merely a tool in the fight against the freedom of speech. This [role] is the main occupation of the US,” Garzon said.

Assange’s legal team has been preparing to use all means available to gain the upper hand in a possible legal battle, including UN resolutions and international law “in the hopes that this country, despite all its power, admits that neither Julian Assange, nor WikiLeaks, nor freedom of speech advocates are to blame for its woes,” Garzon said. Those who should be held accountable are not whistleblowers and their sources, he argued, but those “ham-fisted leaders who neglected their responsibility to protect freedom and security in the society.” The ones who should be “investigated and persecuted” are “those who were exposed by WikiLeaks,” he said.

Not much is known about the clandestine proceedings allegedly underway in Virginia, Garzon said, noting that all the scant data they managed to obtain was received through information leaks and that they continue to be in the dark about the status of the proceedings. “Since 2010, the US has been carrying out a secret investigation against Julian Assange and WikiLeaks for revealing secret materials, for the fight for the freedom of speech and information,” Garzon said, adding that as far as he is aware, no charges have been brought against his client at this point.

As for the UK police warning that Assange would be arrested for failing to surrender to the British courts back in June 2012, Garzon believes it only serves as a pretext to limit his freedom of movement, barring him from leaving the embassy. “I believe that it is against the law, because he did not breach any pre-trial restrictions. He was on the embassy’s territory, because he was granted political asylum. He obtained refugee status. That is to say, this situation goes against the law,” the lawyer said. He went on to say that the British police failed to inform Assange that this sort of proceedings had been opened against him during his five-year stay in the embassy.

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A ‘secret’ I’ve only mentioned 1000 times.

Varoufakis Reveals Worst Kept Secret In Europe: EU Is A German Empire (MW)

Forget all the claims and protestations about “families of nations” and a “new Europe” and “the European project.” The European Union, and especially the eurozone, is a German empire. The new capital of Europe is not Brussels — let alone Strasbourg, the home of the European Parliament — but Berlin. The ultimate power of the EU is not the president of the European Commission, but the chancellor of Germany. That’s the takeaway from “Adults in the Room: My Battle With Europe’s Deep Establishment,” the sensational memoir by the ill-fated, but colorful, former Greek Finance Minister Yanis Varoufakis. His account of his role in the Greek debt crisis of early 2015 is the talk of the town in London, where it has just been published. And it has been tossed into the middle of the Brexit war of words with the EU, and the British election, like a grenade.

Varoufakis gives a detailed and candid account of the shenanigans that went on behind the scenes as he tried, and failed, to prevent the Greek debt crisis from bringing the country to its knees. He doesn’t spare himself, and he comes across — to his own admission — as politically naive and diplomatically inept. It’s a staggering tale of endemic lying in Brussels and corruption in Athens. But what is most fascinating is how, in the end, all roads lead to Berlin. When a roadblock is thrown up to a Greek debt deal, even in a meeting in Brussels or London or elsewhere, it almost always turns out to be the work of Wolfgang Schäuble, Germany’s hard-line finance minister.

[..] Most astonishingly, and outrageously, Varoufakis reveals that Berlin actually went behind the scenes to scupper a rescue deal struck between Athens and Beijing. The Germans didn’t want to let the Greeks off the hook. It was late March 2015. Greece was on the rack. It had just days left before literally running out of money and shutting the banks. And then, miraculously, Beijing stepped in with the offer of help. The Chinese wanted to get their exports to the heart of Europe faster. So they were offering to make major investments in the Athenian Port of Piraeus, and in Greek railways, as part of a “new Silk Road,” or commercial route. And along with the deal, they were willing to buy short-term Greek paper to keep the country afloat.

The Chinese were awash with surplus euros and dollars that needed a home, and Greece’s entire budget shortfall was chicken feed to them anyway. But days after agreeing to the deal, they suddenly, and mysteriously, pulled back. Varoufakis was shocked when they virtually sat out two auctions of short-term Greek government debt. He then discovered that the Chinese ambassador was also surprised, and this was a decision taken secretly at the highest levels in Beijing. Varoufakis recalls: “I told Alexis [Tsipras, the prime minister] what had happened and suggested strongly that he contact the Chinese prime minister. “The next day Alexis relayed the news from Beijing. Someone had apparently called Beijing from Berlin with a blunt message: Stay out of any deals with the Greeks until we are finished with them.”

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Germany wants chaos in Greece. Breaking laws and treaties won’t stop one second.

Germany Limits Refugee Family Reunions From Greece (DW)

German Interior Minister Thomas de Maiziere has reduced the number of asylum-seeker family members allowed into the country from Greece to 70 a month, German news group RedaktionsNetzwerk Deutschland reported on Friday. The group of local papers said the information was provided by Chancellor Angela Merkel’s government following a request from the Left Party. In its response, the Interior Ministry said the decrease in numbers had to do with “limited support and accommodation capacities,” as well as the “considerable logistical coordination effort by state and federal authorities.” Left lawmaker Ulla Jelpke described the explanation as a “miserable excuse,” and accused the government of shirking its responsibilities under the EU’s Dublin regulation.

The law stipulates that separated refugee and asylum-seeking families are entitled to a legal reunion once an immediate relative arrives in a country covered by the Dublin rule. “The federal government is trampling all over EU law and child welfare,” Jelpke said, adding that the cap should be removed because there was a need for as many as 400 refugee family members per month to be reunited with their loved ones in Germany. The EU took in some 1.6 million refugees and migrants – most of them from Syria – between 2014 and 2016. The majority arrived in Germany via frontline states like Italy and Greece. But the scale of the influx prompted many countries to introduce extra controls and to close their borders, blocking the so-called Balkan route and leaving tens of thousands of people stranded in Greece’s refugee camps.

According to information published by Greek newspaper “Efimerida ton Synakton”, around 2,000 refugees are waiting in Greece to be reunited with their families in Germany. It reported that Germany received only 70 Dublin transfers from Greece in April under the new cap, compared to 540 in March and 370 in February.

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This will not stop. It’s a feature of German and therefore Troika behavior.

Schäuble: Germany Will Not Accept Any Greek Debt Cut at Present Time (GR)

“At the present time, Germany will not accept any Greek debt reduction,” said a spokesperson for German Finance Minister Wolfgang Schaeuble, speaking to Bild. The German official also told the German newspaper that Berlin will not accept extending the debt repayment period, neither will accept that the European Stability Mechanism acquires the International Monetary Fund loans to Greece. The representative of Schaeuble said that on Monday the euro zone finance ministers would examine in detail what the Greek government has voted. “We welcome the ratification of the measures, it is an important step. At the Eurogroup on Monday we will look in every detail of what the Greek government has voted on. The goal is to close the second evaluation, but we can not prejudge the outcome of a comprehensive agreement,=” the German official said.

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After years of ever more severe austerity, the debt only keeps going up. How is that possible? What’s the way out? The Troika makes sure there’s no way out. All exits are blocked.

Greek State Debt Rises To €326.5 Billion (GR)

Greece’s central government debt went up in 2017, from €326,258 billion in December to €326,528 billion in March, according to data released on Friday by the Public Debt Management Agency. The Greek government cash reserves stood at €2,908 billion at the end of March, compared with 2,791 billion at the end of December. Two thirds (67.6%) of the total debt has a variable interest rate. The Greek government wants to “lock” that at a fixed interest rate, in view of the new debt settlement. In this case, it will be protected in the long run from the risk of rising interest rates, but in the short term there will be a burden in relation to the very low variable rate of 1% of the bailout loans. Of the total soverign debt, €56.6 billion is in state bonds and 14.9 billion in short-term securities.

To these, must be added another €13.6 billion from public authorities’ repos. Repos increased by €2.3 billion in three months, a trend that shows that the Greek government is pumping from every source of liquidity in the public sector, but with a rather costly interest rate. A total €254.9 billion are loans, mainly from the European Stability Mechanism, received under the country’s economic rescue plans. The average duration of the Greek debt is 18.19 years, but the government seeks to restructure the debt and extend maturities. In 2017, payments for loans and bonds amount to about €8.5-9 billion. According to the medium term debt repayment plan, in 2017 and 2018 the public debt should be reduced to €319-320 billion.

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May 202017
 
 May 20, 2017  Posted by at 9:05 am Finance Tagged with: , , , , , , , , , ,  2 Responses »
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Minor White Windowsill Daydreaming Rochester NY 1958

 

The Housing Moment Investors Dread Is Here (DDMB)
Home Ownership Among Young UK Families Halves In 20 Years (TiM)
A Monster Eating the Nation (Jim Kunstler)
Democrats Are Falling For Fake News About Russia (Vox)
Harvard Study Reveals Extent of Anti-Trump Media Bias (HeatSt.)
Comey’s 2007 Brush With Scandal: Jim’s Loyalty Was More To Chuck Schumer (SD)
Constitutional Crisis In Washington? More Like Attempted Coup (David Goldman)
Brazil Plea-Bargain Testimony Says President Took $4.6 Million In Bribes (R.)
Maduro to Trump: ‘Get Your Dirty Hands Off Venezuela!’ (R.)
Theresa May To Create New, Government Controlled Internet in UK (Ind.)
Arctic Stronghold of World’s Seeds Flooded After Permafrost Melts (G.)
Varoufakis Claims Tsipras Pressured Him To Accept Creditors’ Demands (K.)
‘They Stole My Money’: Greek Dreams Of Retirement Turn Sour (AP)
Teen Refugees Trapped In Greece Turn To Prostitution (Spiegel)

 

 

Cracks in the mirage.

The Housing Moment Investors Dread Is Here (DDMB)

Amid the carnage in the auto sector, economists have sought solace in the comforts of home, sweet home. A recent Census release suggests that Millennials, long sidelined, have finally started to tiptoe into the home-buying market. The reception to the data was so effusive that other reports, suggesting housing has reached a much different sort of turning point, were lost in the fray. The good news is that the trend is unequivocal, based purely on supply and demand. The bad news is in the actual message. The May University of Michigan Consumer Sentiment survey showed a six-year low among those who think it’s a good time to buy a house and a 12-year high among those who say it’s a good time to sell. Disparities of this breadth tend to coincide with break points and that’s just where we’ve landed in the cycle.

The beginning of May officially marked the advent of a buyers’ market, defined simply as sellers outnumbering buyers by a wide enough margin to trigger falling prices. Yes, it’s the moment buyers have been waiting for. It is also the moment private equity investors, those who’ve crowded out natural buyers, have been dreading. Three factors determine home sales: interest rates, unemployment and prices. The recent decline in interest rates has provided some semblance of relief; purchase applications have bounced off April’s levels, when they were down four% over last year. April and May are obviously critical to the spring sales season. The low unemployment rate would seem to be a huge plus if it wasn’t for the stress building around thousands of layoff announcements across the retail and auto sectors that won’t find their way into this most lagging of economic indicators for months.

That is not to say those getting pink slips don’t know their fate, which should influence home sales going forward. Price is the one bright spot, with one glaring caveat: Falling home prices tend to be associated with a negative macroeconomic backdrop, which does not bode well for any buyer of, well, anything. Dig into the Federal Reserve’s recently released first quarter Senior Loan Officer Survey and you will see nothing of note on the residential mortgage side – banks reported that both loan demand and lending standards remained unchanged in the first three months of the year. But that is the here and now. Demand and supply in the auto sector, where pricing has been under pressure for some time, looked quite similar to that for houses several months back.

According to the Fed survey, at minus 13.3%, demand for auto loans flat-lined in deeply negative territory, as was the case in last year’s fourth quarter, the worst levels of the current expansion. This data point corroborated the Michigan survey, which showed that those who said it was a good time to buy a car fell to the lowest level since August 2014. Meanwhile, demand for credit card loans slid to minus 10.2% from minus 8.3% in the last three months of last year. In the event you’re detecting a trend, households are sending out distress signals that have just begun to be picked up in housing, even as household debt levels recapture their pre-crisis highs.

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A radical change to an entire society, and one that will take decades to absorb.

Home Ownership Among Young UK Families Halves In 20 Years (TiM)

The number of young family owning their own homes has halved across large parts of the country in the space of a generation, and the struggle to get on the housing ladder is not restricted to the South East. Research by The Resolution Foundation found that 31% of 25 to 34-year-olds surveyed were home owners in 2016, compared to 58% in 1994. Regionally, 30% of those surveyed in West Yorkshire owned homes last year, compared to 61% in 1994. Similarly, in Greater Manchester, home ownership levels fell to 29% from 59% over the same 22-year period. The South West also suffered a decline, to 36% last year from 62% in 1994, while East Anglia fell to 34% from 61% in the same period. The decrease was most pronounced in outer London, where home ownership dropped to 20% in 2016 from 55% in 1994.

Big falls were also recorded in other areas of the South East including Brighton, Southampton, Reading and Milton Keynes, with home ownership in the younger age group bracket declined from to 34% last year from 64% in 1994. The Resolution Foundation argued that such a ‘seismic shift’ in home ownership puts the younger generation in a very different position from that of the older, baby boomer generation, leaving many more young families living in the private rented sector. Lindsay Judge, a senior policy analyst at the Resolution Foundation, said: ‘London house prices always dominate the headlines, but with all eyes on the capital we’re missing the bigger picture. ‘From Bristol to East Anglia and up to West Yorkshire, large swathes of young families across the country simply cannot afford to buy their own home.’This has implications for their living standards in the here and now, but also in the future when their children grow up and they approach retirement without this key asset to draw upon in old age.

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“Why do you suppose nations employ foreign ministers and ambassadors, if not to conduct conversations at the highest level with other national leaders? And might these conversations include matters of great sensitivity, that is, classified information?”

A Monster Eating the Nation (Jim Kunstler)

Is there any question now that the Deep State is preparing to expel President Donald Trump from the body politic like a necrotic organ? The Golden Golem of Greatness has floundered pretty badly on the job, it’s true, but his mighty adversaries in the highly politicized federal agencies want him to fail spectacularly, and fast, and they have a lot of help from the NY Times / WashPo / CNN axis of hysteria, as well as such slippery swamp creatures as Lindsey Graham. There are more problematic layers in this matter than in a Moldavian wedding cake. America has been functionally ungovernable for quite a while, well before Trump arrived on the scene. His predecessor managed to misdirect the nation’s attention from the cumulative dysfunction with sheer charm and supernatural placidity — NoDrama Obama.

But there were a few important things he could have accomplished as chief exec, such as directing his attorney general to prosecute Wall Street crime (or fire the attorney general and replace him with someone willing to do the job). He could have broken up the giant TBTF banks. He could have aggressively sponsored legislation to overcome the Citizens United SOTUS decision (unlimited corporate money in politics) by redefining corporate “citizenship.” Stuff like that. But he let it slide, and the nation slid with him down a greasy chute of political collapse. Which we find embodied in Trump, a sort of tragicomic figure who manages to compound all of his other weaknesses of character with a childish impulsiveness that scares folks. It is debatable whether he has simply been rendered incompetent by the afflictions heaped on by his adversaries, or if he is just plain incompetent in, say, the 25th Amendment way.

I think we’ll find out soon enough, because impeachment is a very long and arduous path out of this dark place. The most curious feature of the current crisis, of course, is the idiotic Russia story that has been the fulcrum for levering Trump out of the White House. This was especially funny the past week with the episode involving Russian Foreign Minister Lavrov and Ambassador Kislyak conferring with Trump in the White House about aviation security around the Middle East. The media and the Lindsey Graham wing of the Deep State acted as if Trump had entertained Focalor and Vepar, the Dukes of Hell, in the oval office. Why do you suppose nations employ foreign ministers and ambassadors, if not to conduct conversations at the highest level with other national leaders? And might these conversations include matters of great sensitivity, that is, classified information? If you doubt that then you have no understanding of geopolitics or history.

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The writer starts off quite right, but then veers off into this incomprehensible stuff: “There are even legitimate reasons to believe that Trump’s campaign worked with Russian hackers to undermine Hillary Clinton. That may or may not turn out to be true, but it is least plausible and somewhat supported by the available evidence.”

Legitimate reasons that may not be true? “Somewhat” supported by evidence? That’s where I stop reading.

Democrats Are Falling For Fake News About Russia (Vox)

President Donald Trump is about to resign as a result of the Russia scandal. Bernie Sanders and Sean Hannity are Russian agents. The Russians have paid off House Oversight Chair Jason Chaffetz to the tune of $10 million, using Trump as a go-between. Paul Ryan is a traitor for refusing to investigate Trump’s Russia ties. Libertarian heroine Ayn Rand was a secret Russian agent charged with discrediting the American conservative movement. These are all claims you can find made on a new and growing sector of the internet that functions as a fake news bubble for liberals, something I’ve dubbed the Russiasphere. The mirror image of Breitbart and InfoWars on the right, it focuses nearly exclusively on real and imagined connections between Trump and Russia. The tone is breathless: full of unnamed intelligence sources, certainty that Trump will soon be imprisoned, and fever dream factual assertions that no reputable media outlet has managed to confirm.

Twitter is the Russiasphere’s native habitat. Louise Mensch, a former right-wing British parliamentarian and romance novelist, spreads the newest, punchiest, and often most unfounded Russia gossip to her 283,000 followers on Twitter. Mensch is backed up by a handful of allies, including former NSA spook John Schindler (226,000 followers) and DC-area photographer Claude Taylor (159,000 followers). There’s also a handful of websites, like Palmer Report, that seem devoted nearly exclusively to spreading bizarre assertions like the theory that Ryan and Sen. Majority Leader Mitch McConnell funneled Russian money to Trump — a story that spread widely among the site’s 70,000 Facebook fans. Beyond the numbers, the unfounded left-wing claims, like those on the right, are already seeping into the mainstream discourse.

In March, the New York Times published an op-ed by Mensch instructing members of Congress as to how they should proceed with the Russia investigation (“I have some relevant experience,” she wrote). Two months prior to that, Mensch had penned a lengthy letter to Vladimir Putin titled “Dear Mr. Putin, Let’s Play Chess” — in which she claims to have discovered that Edward Snowden was part of a years-in-the-making Russian plot to discredit Hillary Clinton. Last Thursday, Sen. Ed Markey (D-MA) was forced to apologize for spreading a false claim that a New York grand jury was investigating Trump and Russia. His sources, according to the Guardian’s Jon Swaine, were Mensch and Palmer:

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First, media exposure was a main factor in winning Trump the election. Now, not so much.

Harvard Study Reveals Extent of Anti-Trump Media Bias (HeatSt.)

A major new study out of Harvard University has revealed the true extent of the mainstream media’s bias against Donald Trump. Academics at the Shorenstein Center on Media, Politics and Public Policy analyzed coverage from Trump’s first 100 days in office across 10 major TV and print outlets. They found that the tone of some outlets was negative in as many as 98% of reports, significantly more hostile than the first 100 days of the three previous administrations:

The academics based their study on seven US outlets and three European ones. In America they analyzed CNN, NBC, CBS, Fox News, the New York Times, the Washington Post and the Wall Street Journal. They also took into account the BBC, the UK’s Financial Times and the German public broadcaster ARD. Every outlet was negative more often than positive. Only Fox News, which features some of Trump’s most enthusiastic supporters and is often given special access to the President, even came close to positivity. Fox was ranked 52% negative and 48% positive. The study also divided news items across topics. On immigration, healthcare, and Russia, more than 85% of reports were negative. On the economy, the proportion was more balanced – 54% negative to 46% positive:

The study highlighted one exception: Trump got overwhelmingly positive coverage for launching a cruise missile attack on Syria. Around 80% of all reports were positive about that.

The picture was very different for other recent administrations. The study found that President Obama’s first 100 days got a good write-up overall – with 59% of reports positive. Bill Clinton and George W Bush got overall negative coverage, it found, but to a much lesser extent than Trump. Clinton’s first 100 days got 40% positivity, while Bush’s got 43%. Trump has repeatedly claimed that his treatment by the media is unprecedented in its hostility. This study suggests that, at least when it comes to recent history, he’s right.

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Comey has a past.

Comey’s 2007 Brush With Scandal: Jim’s Loyalty Was More To Chuck Schumer (SD)

[..] the current episode is not the first time Comey and his associates plotted to oust a sitting Republican official through highly orchestrated political theater and carefully crafted narratives in which Comey is the courageous hero bravely fighting to preserve the rule of law. To understand how Comey came to be FBI director in the first place, and how he operates in the political arena, it is important to review the last scandal in which Comey had a front-row seat: the 2007 U.S. attorney firings and the fight over the 2004 reauthorization of Stellar Wind, a mass National Security Agency (NSA) surveillance program designed to mitigate terrorist threats in the wake of the 9/11 attacks. The pivotal scene in the Comey-crafted narrative, a drama that made Comey famous and likely paved the road to his 2013 appointment by President Barack Obama to run the FBI, occurred in a Beltway hospital room in early 2004.

In Comey’s view, Comey was the last honest man in Washington, the only person standing between a White House that rejected any restraints on its power, and the rule of law protecting Americans from illegal mass surveillance. A former White House counsel and attorney general with extensive first-hand experience dealing with Comey, however, paints a very different picture of what happened in that hospital room, and disputes numerous key details. In this account, Comey’s actions showcase a duplicitous, secretive schemer whose true loyalties were not to the officials to whom he reported, but to partisan Democrats like Senate Minority Leader Chuck Schumer (D-N.Y.). To fully understand and appreciate Jim Comey’s approach to politics, the writings and testimony of Alberto Gonzales, who served as both White House counsel and attorney general during the events in question and is intimately aware of Comey’s history of political maneuvering, is absolutely essential.

Gonzales’s descriptions of his interactions with Comey, included in his 2016 book “True Faith And Allegiance,” are detailed and extensive. While his tone is measured, the language he uses to describe Comey’s actions in 2004 and 2007 leaves little doubt about the former top Bush official’s views on Comey’s character. Gonzales’s opinion is clearly colored by the fact that Comey cravenly used him to jumpstart his own political career by going public with surprise (and questionable) testimony that Gonzales had attempted to take advantage of a deathly ill man in order to ram through authorization of an illegal surveillance program. Bush’s Attorney General John Ashcroft had taken ill and was in the hospital at a pivotal time. The legal authorization of a surveillance program meant to find and root out terrorist threats was days from expiring.

What happened in Ashcroft’s hospital room in March of 2004 later became political fodder for a hearing in which Senate Democrats used Comey to dredge up the 2004 hospital meeting to tar Gonzales’ credibility and suggest he was unfit to continue serving as attorney general. As the 2004 and 2007 sagas show, Comey is clearly no stranger to using the unarguably legal dismissal of government employees as the backdrop for casting himself as the story’s protaganist standing up to the forces of corruption. “[I] told my security detail that I needed to get to George Washington Hospital immediately. They turned on the emergency equipment and drove very quickly to the hospital,” Comey testified. “I got out of the car and ran up — literally ran up the stairs with my security detail.” “I was concerned that, given how ill I knew the attorney general was, that there might be an effort to ask him to overrule me when he was in no condition to do that,” Comey said.

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It’s a politics and media crisis.

Constitutional Crisis In Washington? More Like Attempted Coup (David Goldman)

This is NOT a Constitutional crisis, contrary to press hype, but an attempted coup, as a senior Republican statesman told a private briefing this week. As Prof. Jonathan Turley of George Washington University wrote yesterday at TheHill.Com, the much-ballyhooed Comey memo is “pretty thin soup” as far as obstruction of justice is concerned. “Encouraging leniency or advocating for an associate may be improper,” Prof. Turley added, but it doesn’t come close to the legal threshold for impeachment, especially because no criminal proceedings were underway or even contemplated against Gen. Flynn. What exactly is going on? The Democrats never accepted the Trump election victory, and neither did the McCain wing of the Republican Party, which was humiliated and sidelined by Trump. The Wall Street Journal editorial page published a signed op-ed yesterday claiming that Trump’s alleged leak of covert intelligence to Russian Foreign Minister Lavrov showed his unfitness for office.

Presidents and Cabinet members leak secret intelligence frequently, but whether they are held to account for it is a political matter. Obama and his then Defense Secretary Leon Panetta leaked the fact that Seal Team 6 had killed Osama bin Laden as well as the fact that a Pakistani physician had tipped the US off to his whereabouts, life-threatening leaks for which Obama was given a free pass. The object of all of this, said the Republican statesman, is to persuade a sufficient number of Republican congressman and senators to abandon Trump and declare him “unfit” for office. Nothing quite like this ever has happened in American politics. Trump will NOT be caught in an impeachable offense, but his detractors will NOT give up–so a prolonged “cold civil war” (Prof. Angelo Codevilla’s phrase) is likely to paralyze policy-making in Washington for some time. That can’t be good for the stock market.

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He shouldn’t last the weekend.

Brazil Plea-Bargain Testimony Says President Took $4.6 Million In Bribes (R.)

Brazil’s top court released plea-bargain testimony on Friday accusing President Michel Temer and his two predecessors of receiving millions of dollars in bribes, the most damaging development yet in a historic political corruption probe. The testimony made public by the Supreme Court is from executives of the world’s largest meatpacking company, and raises serious doubts about whether Temer can maintain his grip on the presidency. The scandals that have engulfed Brazil’s political class and many business elites reduce the chances that Temer, a conservative who took office after leftist former President Dilma Rousseff was impeached last year, can push through economic reforms crucial for Latin America’s biggest country to recover from its worst recession on record.

The Supreme Court on Thursday said it approved an investigation of Temer for corruption and obstruction of justice. Calls for his resignation intensified, including an editorial in the O Globo newspaper, which is normally criticized by leftists for backing conservative politicians. “This is easily the worst moment in Brazil since we returned to democracy,” said Claudio Couto, a political scientist at the Getulio Vargas Foundation, a top university, calling the claims “the mother of all plea bargains.” “This testimony is hitting everyone, all the major political players and, most importantly, a sitting president,” he added.

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How is it possible that in no western media reports on Venezuela the CIA is ever mentioned? Think they left when Chavez died? Think the country implodes like this all by itself?

Maduro to Trump: ‘Get Your Dirty Hands Off Venezuela!’ (R.)

Venezuelan President Nicolas Maduro blasted Donald Trump on Friday after a fresh round of U.S. sanctions and strong condemnation of his socialist government from the U.S. leader. “Enough meddling … Go home, Donald Trump. Get out of Venezuela,” Maduro thundered in a speech carried on live TV. “Get your dirty hands out of here.” The Trump administration imposed sanctions on the chief judge and seven other members of Venezuela’s Supreme Court on Thursday as punishment for annulling the opposition-led Congress in a series of rulings this year. The new sanctions package was aimed at stepping up pressure on Maduro and his loyalists following a crackdown on street protests and efforts to consolidate his rule of the South American oil-producing country. At the White House on Thursday, Trump expressed dismay at how once-booming Venezuela was now mired in poverty, saying “it’s been unbelievably poorly run” and calling the humanitarian situation “a disgrace to humanity.”

Maduro had initially urged the world to give Trump a chance after he was elected in November but his government unleashed its strongest condemnation to date of the Republican president. “President Trump’s aggressions against the Venezuelan people, its government and its institutions have surpassed all limits,” said a government statement that accused Washington of seeking to destabilize Venezuela and foment foreign intervention. The statement also accused Washington of financing the Venezuelan opposition while ignoring problems at home like income inequality and rights violations. “The extreme positions of a government just starting off only confirmed the discriminatory, racist, xenophobic, and genocidal nature of U.S. elites against humanity and its own people, which has now been heightened by this new administration which asserts white Anglo-Saxon supremacy,” the statement said.

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Classic. Using fear, of terrorism, of pornography, etc., to clamp down on everyone’s freedom, according to a certain party’s views. No privacy for you, guys. Use your votes wisely.

Theresa May To Create New, Government Controlled Internet in UK (Ind.)

Theresa May is planning to introduce huge regulations on the way the internet works, allowing the government to decide what is said online. Particular focus has been drawn to the end of the manifesto, which makes clear that the Tories want to introduce huge changes to the way the internet works. “Some people say that it is not for government to regulate when it comes to technology and the internet,” it states. “We disagree.” Senior Tories confirmed to BuzzFeed News that the phrasing indicates that the government intends to introduce huge restrictions on what people can post, share and publish online. The plans will allow Britain to become “the global leader in the regulation of the use of personal data and the internet”, the manifesto claims.

It comes just soon after the Investigatory Powers Act came into law. That legislation allowed the government to force internet companies to keep records on their customers’ browsing histories, as well as giving ministers the power to break apps like WhatsApp so that messages can be read. The manifesto makes reference to those increased powers, saying that the government will work even harder to ensure there is no “safe space for terrorists to be able to communicate online”. That is apparently a reference in part to its work to encourage technology companies to build backdoors into their encrypted messaging services – which gives the government the ability to read terrorists’ messages, but also weakens the security of everyone else’s messages, technology companies have warned.

The government now appears to be launching a similarly radical change in the way that social networks and internet companies work. While much of the internet is currently controlled by private businesses like Google and Facebook, Theresa May intends to allow government to decide what is and isn’t published, the manifesto suggests.

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They never thought about this?

Arctic Stronghold of World’s Seeds Flooded After Permafrost Melts (G.)

It was designed as an impregnable deep-freeze to protect the world’s most precious seeds from any global disaster and ensure humanity’s food supply forever. But the Global Seed Vault, buried in a mountain deep inside the Arctic circle, has been breached after global warming produced extraordinary temperatures over the winter, sending meltwater gushing into the entrance tunnel. The vault is on the Norwegian island of Spitsbergen and contains almost a million packets of seeds, each a variety of an important food crop. When it was opened in 2008, the deep permafrost through which the vault was sunk was expected to provide “failsafe” protection against “the challenge of natural or man-made disasters”. But soaring temperatures in the Arctic at the end of the world’s hottest ever recorded year led to melting and heavy rain, when light snow should have been falling.

“It was not in our plans to think that the permafrost would not be there and that it would experience extreme weather like that,” said Hege Njaa Aschim, from the Norwegian government, which owns the vault. “A lot of water went into the start of the tunnel and then it froze to ice, so it was like a glacier when you went in,” she told the Guardian. Fortunately, the meltwater did not reach the vault itself, the ice has been hacked out, and the precious seeds remain safe for now at the required storage temperature of -18C. But the breach has questioned the ability of the vault to survive as a lifeline for humanity if catastrophe strikes. “It was supposed to [operate] without the help of humans, but now we are watching the seed vault 24 hours a day,” Aschim said. “We must see what we can do to minimise all the risks and make sure the seed bank can take care of itself.”

The vault’s managers are now waiting to see if the extreme heat of this winter was a one-off or will be repeated or even exceeded as climate change heats the planet. The end of 2016 saw average temperatures over 7C above normal on Spitsbergen, pushing the permafrost above melting point. “The question is whether this is just happening now, or will it escalate?” said Aschim. The Svalbard archipelago, of which Spitsbergen is part, has warmed rapidly in recent decades, according to Ketil Isaksen, from Norway’s Meteorological Institute. “The Arctic and especially Svalbard warms up faster than the rest of the world. The climate is changing dramatically and we are all amazed at how quickly it is going,” Isaksen told Norwegian newspaper Dagbladet.

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I don’t know if they still talk.

Varoufakis Claims Tsipras Pressured Him To Accept Creditors’ Demands (K.)

Former finance minister Yanis Varoufakis on Friday hit out at Prime Minister Alexis Tsipras, claiming that the premier had tried to scare him into yielding to creditors’ demands. “In the summer of 2015 Alexis Tsipras told me that I should fear a new Goudi,” Varoufakis told VICE magazine, referring to a military coup that took place in Greece in 1909 amid simmering social tensions. The former minister, who has launched his own party, DiEM25, said the alleged statement struck him as a threat aimed at forcing him to agree with Tsipras’s decision to give in to creditors. In a Skai TV interview last week, Varoufakis said Greece “will become Kosovo, a protectorate run by an employee of the European Union.”

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Greece’s problem is public debt, not private debt. The people did not cause the crisis, they only pay for it.

‘They Stole My Money’: Greek Dreams Of Retirement Turn Sour (AP)

It was supposed to be a time to look forward to. After decades of work, retirement was for many meant to provide a chance to slow down and enjoy life. A holiday, an evening out with old friends, the odd fishing trip. Instead, many Greek pensioners say they are struggling to get by. The government has repeatedly cuts old age benefits as part of the country’s three international bailouts and many retirees now say they are at breaking point financially. Some have unemployed children they try to help on shrinking pensions, others are seeing rising taxes eat into lifetime savings. A new austerity bill approved in parliament early Friday cuts their pensions even further, putting their plight in focus.

Greece once had a generous pension system – too generous to be sustainable, especially with an aging population. Retirement was possible from as early as the age of 55 after 30 years of work. Many had extra perks: public sector employees could retire as early as 52. Some women with young children could retire with a reduced pension at 50. But the financial crisis left Greece reliant on international creditors, who pushed for economic change – not least to pensions. The standard retirement age is now 67. Many early retirement provisions have been abolished. Including pensions, incomes have dropped 40% over the last seven years of crisis. Here is a look at the problem through the stories of four pensioners.

Mina Griva, 78, widow and former factory worker Griva’s husband, who worked in a steel plant in Greece, died eight years ago. Her initial widow’s pension of €998 ($1,110) and a €300 supplementary pension have been cut to €560 and €150 respectively. “They’ve destroyed us,” said Griva, who now helps out daily at a municipal care center for the elderly. “Pensioners are crying.” A mother of five, she uses her pension to help her son, who’s been unemployed for five years. She moved out of her small Athens apartment to give it to him, and lives in a single room on the last floor of the building. Now, she avidly watches political talk shows on TV to figure out how much further her pension will drop.

Griva left Greece in 1964 and worked for 15 years in Germany, initially as a cleaner in a cheese factory and later working an ironing press in a clothing factory. Times were tough in Greece then, and she worked double eight-hour shifts to send money home to her family. She saved, and eventually had enough to secure homes for her children, and a small apartment for herself. She thought she was securing her family’s future. “We left here to build something,” said Griva. Instead, the austerity measures ate into their lives, with new property taxes, layoffs and income cuts. “Now you can’t even buy a bread ring for your grandchildren,” she said. “I don’t know where this will go. Things are very, very hard.”

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Damn you, Brussels. Damn you, Merkel, Rutte, Hollande, Cameron, Renzi. You created this.

Teen Refugees Trapped In Greece Turn To Prostitution (Spiegel)

Mohammed is approached by a middle-aged man wearing greasy beige pants, a blue shirt and a blue baseball cap. Although the man speaks Greek, the 17-year-old boy from Afghanistan knows exactly what he wants. “No,” Mohammad repeatedly says in English, his voice cracking and his eyes filling with tears. But the man keeps pushing. “Come with me. I will give you food, pay you.” The man only stops when he realizes he is being watched. He then grudgingly walks away and sits down on a nearby bench. From there, he starts scouring the field again, searching for another boy. It was broad daylight on a sunny Tuesday morning on Victoria Square in the heart of Athens. The square has been a meeting place and a makeshift home for thousands of migrants since the refugee crisis hit Greece two years ago – and now it is increasingly becoming a prostitution hub for underage refugees.

Mohammad hasn’t gone that far yet, but he says it is only a matter of time until he goes home with a man. He has just 30 euros left in his pocket, and he is quickly losing hope. “When this money runs out, I fear I will have no other choice but do what the others are doing. Have sex with these older men. What should I do? I have no place to stay, nothing to eat. Should I just die in the park?” he says, finally bursting into tears. Mohammed says he lost his parents in an attack in Afghanistan. He has been in Athens for a month, he says, after fleeing his home alone and reaching the Greek island of Lesbos last February, where he registered as a minor. He then claimed to be an adult to escape the violence in the island’s notorious Moria camp. Since then, despite looking very much like a teenager, with pimples, a small stature and thin voice, he has been turned away from shelters for minors.

When night comes, Mohammad rolls himself up in a blanket on a corner of the square. His only possession is a yellow envelope that he guards closely. Inside, he keeps his refugee registration papers and a single-page CV. According to Mohammad’s papers, he applied for asylum in Lesbos in November 2016. The date set for his interview is January 4, 2018. It is mostly boys from Afghanistan, Pakistan and Syria – who either came alone or were separated from their families along their perilous journey to Europe – who are now waiting for their refugee claims to be processed in Greece. In the meantime, the authorities are supposed to look after them, but there are only 53 shelters with 1,272 spots. Of the approximately 2,000 registered minors, about 800 are housed in large camps, are in police custody or are homeless.

[..] Everyone – the authorities, the NGO workers, the police – know what is going on. But nobody seems willing or able to do anything about it. And this despite the fact that the adult clients are breaking the law, despite the fact that various institutions have devoted themselves to protecting young refugees. But prostitution is booming because the system is failing. Because Greece doesn’t have the resources to take care of underage refugees. Because the processing of asylum applications is chaotic and authorities from one agency don’t know what authorities from other agencies are doing. And because the boys need to file criminal complaints before their clients can be prosecuted.

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May 102017
 
 May 10, 2017  Posted by at 3:32 pm Finance Tagged with: , , , , , , , , ,  8 Responses »
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Ray K. Metzker Philadelphia 1962

 

You might have thought, and hoped, that recent events, such as the election of Trump as president of the US, or Brexit, or the rise of Marine Le Pen and other non-establishment forces in Europe, would, as a matter of -natural- course, have led to increased conversation and discussion between parties, entities, whose divisions were material in sparking these events.

But the opposite has happened, and continues to happen at an ever faster and fiercer pace. Various sides of various divides become ever more deaf to what other sides have to say. What still poses as conversation turns into blame games and shouting matches replete with innuendo, fake news and insinuations.

The mainstream media even find they are to an extent redeemed by this -at least financially-. Formerly last-gasp ‘news sources’, suffering from the advent of the interwebs, like the New York Times, CNN, HuffPo and WaPo, as well as Fox, Breitbart on the other side, and many others, have seen their reader- and viewerships expand over the past year as they turned into increasingly impenetrable echo chambers.

They may be losing a lot of potential attention -and revenues- from one side of the -former- debate, but that is more than made up for by rising attention from their faithful flocks. The public feel they need to have an opinion on political matters, and the media are more than willing to define, construct and phrase that opinion for them, to first confirm what people already think, and then raise it a notch or two, or three, or ten.

It works like a charm, and their finance people are looking at the numbers saying: whatever it is you guys do, keep on doing it and add some more, because we’re selling like hotcakes. Still, at least some of the writers must be wondering what exactly it is they’re doing, wondering how to define ‘journalism’ in this day and age.

All this represents a giant loss, one that not a single democracy can arguably tolerate for long, even if few of us seem to care. In democracies, it’s essential that people who do not agree, talk to each other, and do so all the time. The end of that conversation spells the end of democracy.

 

If anything in the future is revealed about a possible -political- connection between Trump and Russia, it will be gravely tainted by the fact that so much opinion posing as news, and so much news that was not real news, has been published about that possible connection already over the past year and change, without any evidence. The WaPo’s and HuffPo’s of the world will not even be vindicated by such a potential revelation anymore, because they lowered their journalistic levels to match those of the National Enquirer.

But even writing down something as neutral as that last paragraph is prone to lead to demonization from all kinds of ‘sources’. The Russian hack story has embedded itself so profoundly in certain corners of American and European society that it can no longer be denied or even questioned without being interpreted as suspect, if not an outright admission of guilt. All you need to know is there once was PropOrNot and its list of alleged 200 Russian propaganda sites.

It doesn’t matter how often Putin and Foreign Minister Lavrov and spokeswoman Maria Zakharova ask for proof of the accusations, because for a large and influential segment of western mainstream media that is a phase that has long since been passed. There is such an all-encompassing conviction that Russia hacked and otherwise influenced western elections that no proof is deemed necessary.

Or rather, the idea has taken on such a life of its own that things are taken to have been proven that never were. “News’, just like advertizing, has to a large extent become based on the concept of relentless repetition. Say something often enough and people will believe it, certainly when it confirms what they were looking to have confirmed to begin with. If the echo chambers fit enough lost souls, before you know it nobody asks for proof anymore.

 

It’s not about whether Trump is or has ever been guilty of anything he’s accused of, it’s that the insinuating narratives about that have long been written and repeated ad nauseam. It’s about whether the witch hunt exemplified by PropOrNot makes objective news gathering impossible. And the only possible response to that question must be affirmative. If only because you can’t tell one type of ‘news’ from the other anymore.

The MSM have focused on getting Hillary elected, and they failed miserably. So did she, of course, it wasn’t just them. A failure they attempt to hide from view behind a veil of never-ending anti-Russian stories that even now they still can’t prove. Which is where the FBI comes in. Sure, some of it may yet prove to be true, but even if that is so, that’s in the future, not today.

Does Trump deserve being resisted? It certainly looks that way much of the time. But he should be resisted with facts, not innuendo of yellow paper quality. That destroys the media, and the media are needed to maintain a democracy. That is both their task and their responsibility. They exist to inform people, but have instead turned into opinion-fabricating machines. Both because that expresses the opinions of their ownership, and because it’s commercially more attractive.

Take a step back and oversee the picture, and you’ll find that Trump is not the biggest threat to American democracy, the media are. They have a job but they stopped doing it. They have turned to smearing, something neither the NYT nor the WaPo should ever have stooped to, but did.

 

Democracy is not primarily under threat from what one party does, or the other, or a third one, it is under threat because parties have withdrawn themselves into their respective echo chambers from which no dialogue with other parties is possible, or even tolerated.

None of this is to say that there will be no revelations about some ties between some Russian entities or persons and some Trump-related ones. Such ties are entirely possible, and certainly on the business front. Whether that has had any influence on the American presidential election is a whole other story though. And jumping to conclusions because it serves your political purposes is, to put it mildly, not helping.

The problem is that so much has been said and printed on the topic that was unsubstantiated, that if actual ties are proven, that news will be blurred by what was insinuated before. You made your bed, guys.

A lot of sources today talk about how Trump was reportedly frustrated with the constant focus on the alleged Russia ties, but assuming those allegations are not true, and remember nothing has been proven after a year of echo-chambering, isn’t it at least a little understandable that he would be?

Comey was already compromised from 10 different angles, and many wanted him gone, though not necessarily at the same time . The same Democrats, and their media, who now scream murder because he was fired, fell over themselves clamoring for his resignation for months. That does not constitute an opinion, it’s the opposite of one: you can’t change your view of someone as important as the FBI director every day and twice on Sundays without losing credibility.

And yes, many Republicans played similar games. It’s the kind of game that has become acceptable in the Washington swamp and the media that report on it. And many of them also protest yesterday’s decision. Ostensibly, it all has to do not with the fact that Comey was fired, but with the timing. Which in turn would be linked to the fact that the FBI is investigating Trump.

But what’s the logic there? That firing Comey would halt that investigation? Why would that be true? Why would a replacement director do that? Don’t FBI agents count for anything? And isn’t the present investigation itself supposed to be proof that there is proof and/or strong suspicion of that alleged link between Russia and the Trump election victory? Wouldn’t those agents revolt if a new director threw that away with the bathwater?

Since we still run on ‘innocent until proven guilty’, perhaps it’s a thought to hold back a little, but given what we’ve seen since, say, early 2016, that doesn’t look like an option anymore. The trenches have been dug.

These are troubled times, but the trouble is not necessarily where you might think it is. America has an undeniable political crisis, and a severe one, but that’s not the only crisis.