constitution Archives - Page 2 of 3

Pro-democracy demonstrators planned on Sunday to choke travel routes to Hong Kong’s international airport after a chaotic night of running battles between police and masked protesters, the latest wave of unrest to hit the Chinese-ruled city. Protest organizers have urged the public to overwhelm road and rail links to the airport, one of the world’s busiest, on Sunday and Monday, potentially disrupting flights. People would begin gathering at 1 p.m. (0500 GMT), protest groups said. The airport closed one of its car parks and advised passengers to use public transport, without giving a reason.

A similar so-called “stress test” of the airport last weekend failed to gain momentum. Three weeks ago, some flights were delayed or canceled after protesters swarmed the airport. Late on Saturday and into the early hours, police fired tear gas, water cannon and rubber bullets and protesters threw petrol bombs, escalating clashes that have plunged the Asian financial center into its worst political crisis in decades. As government helicopters hovered overhead, protesters who had been banned from demonstrating set fires in the streets and threw bricks at police near government offices and Chinese military headquarters.

Officers fired two warning shots in the air to scare off a group of protesters who had them surrounded and were trying to steal their pistols, the police said, only the second time live rounds have been used in more than three months of unrest. Police sprayed demonstrators with blue-dyed water to make it easier to identify them later. Parts of the metro system ground to a halt as skirmishes spread to the subway, with television showing images of people being beaten as they cowered on the floor behind umbrellas. Police said they arrested 40 people inside Prince Edward metro station on suspicion of obstructing officers, unlawful assembly and criminal damage. Three stations stayed shut on Sunday.

“..the eight-word British constitution established in 1689 – What The Crown Assents In Parliament Is Law – is a decaying, time-worn construct on which to protect and advance today’s democracy..”

• The Sheer Scale Of The Crisis Facing Britain’s Decrepit Constitution (O.)

To prorogue parliament for no better reason than to avoid parliamentary scrutiny of a no-deal Brexit may have been an intolerable abuse of power, and an affront to democracy, but in Britain it is constitutionally possible. As a result, for all the threats of judicial review and court actions, it will be difficult, if not impossible, to challenge. For the prime minister controls everything, from the business of the House of Commons to the ability to prorogue it. He or she is lent monarchial sovereignty, the same sovereignty that Charles 1 tried to justify because the monarch was supposedly God’s representative on Earth: the divine right of kings, now transmuted into the divine right of Boris.

Part of the-then cleverness of the 17th-century deal was that it co-opted the crown into being the above-the-fray, holder-of-the-ring of proper parliamentary procedure and process. But today, that capacity has evaporated. So when Jacob Rees-Mogg travelled to Balmoral last week to ask the Queen to prorogue parliament, there was virtually no prospect of her refusing – as an elected head of state might have done. She did have the option of saying that on such a controversial use of prerogative power she wanted to go beyond the minimum quorate of three for a privy council meeting (the chief whip and leader of the House of Lords accompanied Rees-Mogg on a separate plane to Balmoral to avoid suspicion) and call for a full meeting including former ministers from other parties, purportedly the constitutional forum to advise her on use of the royal prerogative.

But that would have been seen as a political act. She folded. Exposed as a constitutional cipher, the case for an elected head of state has suddenly become unanswerable. It is but one of the many constitutional earthquakes triggered by Brexit whose aftershocks will be felt for decades. Even the character of the referendum itself is testament to our lack of a constitution. No super-majority was required for this fundamental change in Britain’s relationship with Europe, any more than it was for the Scottish referendum: amazingly, a 42-year and a 300-year union could be ripped apart by a majority of one citizen’s vote.

It is a peculiar chain of events no matter what you think of it.

• How A Secret Plan To Close Parliament Sparked Uproar Across Britain (O.)

For much of August the plan to shut down parliament for five weeks was kept a very tight secret at the heart of government. For the few Whitehall officials who were made aware of it early on, however, it was not difficult to decipher whose fingerprints were all over it. It was clear to that small group that the bombshell idea had been hatched by Boris Johnson’s closest adviser, Dominic Cummings, and No 10’s director of legislative affairs, Nikki da Costa. Cummings has long been known at Westminster for his disdain for Whitehall and the way the entire system of British government works. He doesn’t mince his words or tolerate those he regards as fools. “If he meets resistance from ministers or officials he will just tell them to fuck off, whoever they are,” said one Whitehall source, who has worked with him.

[..] Last Friday an email between a Whitehall official and No 10 was leaked to this newspaper. It made clear that Johnson had approached Cox for advice on a five-week suspension from around 9 September to 14 October. Cox’s initial view, the correspondence made clear, was that it would probably be legal, unless various court actions being planned by Remainers to block prorogation were successful. Downing Street’s official response when asked about the leak was, at first, muted. “No 10 officials ask for legal and policy advice every day,” said a government source.

But when the Observer story broke last Saturday evening, as Johnson and his team were in Biarritz for the G7 summit preparing for meetings with US president Donald Trump and EU council president Donald Tusk the next day, Downing Street changed tack and tried to dismiss the story in a way that was to backfire spectacularly. Johnson’s press team issued a statement saying that “the claim that the government is considering proroguing parliament in September in order to stop MPs debating Brexit is entirely false”. It did not deny that the attorney general had been consulted about prorogation but its intent was clear: to create the impression that shutting down parliament was not going to happen.

But less than 72 hours later more leaks were to follow from people inside the government machine to media organisations saying that the prime minister was to make an announcement about prorogation on Wednesday morning. After the BBC got wind of the new leaks, some senior staff were initially dubious that they were genuine, given No 10’s previous denials. When Johnson announced the exact same plan on which his team had poured buckets of cold water four days earlier, large sections of the media, as well as MPs and much of the country, were understandably furious.

Johnson is just a figurehead.

• British PM Johnson Challenges Lawmakers To Deliver Brexit (R.)

British Prime Minister Boris Johnson challenged lawmakers to deliver on the Brexit vote and not thwart his plans to take Britain out of the European Union on October 31. Johnson has pledged to deliver Brexit with or without a deal, but opposition lawmakers – and several lawmakers from Johnson’s Conservatives – want to act to rule out a no deal Brexit when parliament returns from recess on Tuesday. Previous votes have indicated a majority in parliament opposing a no-deal Brexit, but in a newspaper interview, Johnson said that backing opposition Labour leader Jeremy Corbyn risked there being no Brexit at all.

“The fundamental choice is this: are you going to side with Jeremy Corbyn and those who want to cancel the referendum? Are you going to side with those who want to scrub the democratic verdict of the people — and plunge this country into chaos?,” Johnson told the Sunday Times. “Or are you going to side with those of us who want to get on, deliver on the mandate of the people and focus with absolute, laser-like precision on the domestic agenda? That’s the choice.”

He’s seen enough.

• EU’s Barnier Not Optimistic About Avoiding A No-Deal Brexit (R.)

The European Union’s top Brexit negotiator Michel Barnier said he was not optimistic about avoiding a no-deal scenario as the EU could not meet Britain’s demands that the backstop for the Irish border is removed from the withdrawal agreement. Writing in the Sunday Telegraph, Barnier said that the so-called “backstop” had to stay to protect the integrity of the EU’s single market while ensuring an open border on the island of Ireland. “I am not optimistic about avoiding a no-deal scenario, but we should all continue to work with determination,” Barnier said, according to extracts of his article on the newspaper’s front page.

“The backstop is the maximum amount of flexibility that the EU can offer to a non-member state.” Prime Minister Boris Johnson has vowed to take Britain out of the EU with or without a deal on October 31. Opposition lawmakers plan to act next week to stop no-deal in parliament. Writing in the same newspaper, Johnson’s de facto deputy Michael Gove said that to remove the option of a no-deal Brexit on Oct 31 would “diminish” the “chances of securing changes” to the Brexit deal that could get it passed through parliament.

Translation: the new ECB head does not have confidence in free markets. She thinks central bankers can do a better job.

• Lagarde Says Negative Rates Have Helped Europe More Than They’ve Hurt (MW)

The next head of the European Central Bank, Christine Lagarde, appears to be as much of a fan of negative interest rates as the current chief, Mario Draghi. In written answers provided to the European Parliament that were released on Thursday, Lagarde said negative interest rates have helped Europe. The ECB’s deposit rate is negative 0.4%. “On the one hand, banks may decide to pass the negative deposit rate on to depositors, lowering the interest rates the latter get on their savings,” she wrote. “On the other hand, the same depositors are also consumers, workers, and borrowers. As such they benefit from stronger economic momentum, lower unemployment and lower borrowing costs.

“All things considered, in the absence of the unconventional monetary policy adopted by the ECB – including the introduction of negative interest rates – euro area citizens would be, overall, worse off.” European banks have complained about the impact on profitability, but even there the current managing director of the International Monetary Fund defended the move. “With regard to the impact of negative rates on banks’ profitability, empirical analysis suggests that the negative effects on banks’ net interest income have been so far more than offset by the benefits from more bank lending and lower costs for provisions and impairments due to the better macroeconomic environment, which to a significant extent is a result of accommodative monetary policy,” she wrote.

“..Trump is “going to eleven” on trade: He’s going to turn it up so high that there is going to have to be a deal. That’s the way he wants to do this. He will just make it intolerable so everybody has to sit down and cut a deal.”

• Bianco Warns “Negative Rates Are Extremely Toxic” (Gisiger)

Jim Bianco, President of Bianco Research, cautions against evermore unconventional monetary policy interventions. He fears that the global slowdown is going to get worse and he spots opportunities in long-term bonds and gold. The global economy is on the brink: Europe is headed for recession, Japan as well and China’s growth rate is the slowest in almost thirty years. Only the economy in the United States seems to hold up. But for how long? «We live in a global world and if Japan and Europe are struggling and the world has a problem it’s going to come to the US eventually», says Jim Bianco. According to the internationally renowned macro strategist, the biggest threat to the US economy is the inverted yield curve.

«This is the market’s way of saying the Federal Funds Rate is too high and must come down», Mr. Bianco is convinced. Against this backdrop, the founder and President of Chicago based Bianco Research argues that the Federal Reserve should cut its target rate by 50 basis points at the next FOMC meeting. He also cautions against introducing negative interest rates in the United States during the next recession because in his view that would cripple the global financial system.

[..] First, the trade and currency wars where the situation reminds me somewhat of «This Is Spinal Tap». It’s a cult satire movie from the eighties about a rock band and they coined the phrase «up to eleven» because that’s how high their amplifier went. So the expression «turning it up to eleven» refers to the act of taking something to an extreme. I’m saying this because I think Trump is “going to eleven” on trade: He’s going to turn it up so high that there is going to have to be a deal. That’s the way he wants to do this. He will just make it intolerable so everybody has to sit down and cut a deal.

Pension funds are dead.

• Low Interest Rates Compound The Big Problems Facing Pension Funds (MW)

The largest public pension funds have over $1 trillion in aggregate unfunded liabilities. Low interest rates are going to make it harder for these and other pension plans to rely on investment returns alone to meet their obligations to retirees. Interest rates in the U.S. have been declining for over 20 years, and short-term rates have been hovering close to zero over the last decade. Negative interest rates in Japan and Europe and mounting expectations of rate cuts by the Federal Reserve have expanded the pool of bonds with negative yields to more than $16 trillion, or around 27% of the global bond market. Initially, low interest rates are good for asset prices.

Simplistically, this is because investors seeking similar returns as before are now forced to take capital that they would have otherwise invested in safe government bonds and deploy it into riskier assets (equities, high yield bonds, etc.), thereby driving up prices of these assets. In addition to stronger economic growth coming out of the 2008 financial crisis, this is one of the factors leading to strong performance of equities over the past decade. However, going forward it is unlikely that asset returns are going to be similar to what we witnessed over the last decade. One of the reasons is that risky asset returns are generally priced as a spread over risk-free real returns (i.e. inflation-adjusted returns). This makes intuitive sense, as investors would demand additional return for taking on risk.

If the risk-free rate is low, and there is high demand for risky assets, then the total investment return (risk free rate + risk premia/spread) will likely be lower than in a scenario with higher interest rates, all else being equal. According to Voya Investment Management’s capital market assumptions, expected returns for equities over the next 10 years is likely to be around 1.50 percentage points to 3.3 percentage points lower than assumptions in 2013.

Like with student debt, helping only some people appears counter-productive.

• Bernie Sanders Proposes Canceling $81 Billion US Medical Debt (R.)

U.S. presidential contender Bernie Sanders proposed a plan on Saturday to cancel $81 billion in existing past-due medical debt for Americans, but offered no details on how it would be financed. Sanders, an independent U.S. senator from Vermont, said in a statement that under his plan, the government would negotiate and pay off past-due medical bills that have been reported to credit agencies. The proposal, he said, would also repeal some elements of the 2005 Bankruptcy reform bill and allow other existing and future medical debt to be discharged. “In the United States of America, your financial life and future should not be destroyed because you or a member of your family gets sick,” said Sanders.

“That is unacceptable. I am sick and tired of seeing over 500,000 Americans declare bankruptcy each year because they cannot pay off the outrageous cost of a medical emergency or a hospital stay.” According to Sanders, medical debt is the leading cause of consumer bankruptcy, with more than half a million Americans filing due to medical expenses each year. He said the 2005 Bankruptcy reform bill made it difficult to discharge medical debt by imposing strict means tests and eliminated fundamental consumer protections for Americans. “It also trapped families with medical debt in long-term poverty, mandated that they pay for credit counseling before filing for bankruptcy, and increased the need for expensive legal services when filing a case for medical bankruptcy,” the senator said.

“..the strategy of the powerful appears to be to know as much as possible about the rest of us while ensuring that we know as little as possible about them and how they operate..”

• Breaking The Media Blackout on the Imprisonment of Julian Assange (MPN)

The role of journalism in a democracy is publishing information that holds the powerful to account — the kind of information that empowers the public to become more engaged citizens in their communities so that we can vote in representatives that work in the interest of “we the people.” There is perhaps no better example of watchdog journalism that holds the powerful to account and exposes their corruption than that of WikiLeaks, which exposed to the world evidence of widespread war crimes the U.S. military was committing in Iraq, including the killing of two Reuters journalists; showed that the U.S. government and large corporations were using private intelligence agencies to spy on activists and protesters; and revealed how the military hid tortured Guantanamo Bay prisoners from Red Cross inspectors.

It’s this kind of real journalism that our First Amendment was meant to protect but engaging in it has instead made WikiLeaks publisher Julian Assange the target of a massive smear campaign for the last several years — including false claims that Assange is working with Vladimir Putin and the Russians and hackers, as well as open calls by corporate media pundits for him to be assassinated. The allegations that Assange conspired with Putin to undermine the 2016 election and American democracy as a whole fell completely flat earlier this month when a U.S. District Court for the Southern District of New York dismissed this case as “factually implausible,” with the judge noting that at no point does the prosecution’s “threadbare” argument show “any facts” at all, and concluding that the idea that Assange conspired with Russia against the Democratic Party or America is “entirely divorced from the facts.”

[..] It is important to ask ourselves what Julian Assange’s real crime is. In an era, dubbed the Information Age, where the strategy of the powerful appears to be to know as much as possible about the rest of us while ensuring that we know as little as possible about them and how they operate, Assange worked to prevent that imbalance from becoming a rout, and stuck like a bone in the throat of the mighty.

Interesting take for sure.

• Fifty Shades of Epstein (Hope Kesselring)

A few weeks ago, half the top ten Amazon best sellers in romantic erotica were based around the trope of the BDSM billionaire, with Grey by E. L. James holding firm in the top ten. In the world of erotic romance, the 50 Shades of Grey series has been a continuous presence for over seven years. Thousands of riffs on the sexy and sadistic billionaire exist: Russian billionaire, billionaire blackmailer, billionaire stepbrother. I’m not trying to kink shame, but it would take a lot of money to convince me to write detailed descriptions of torture sessions in a gilded dungeon. This is especially true in the shadow of financier Jeffrey Epstein’s death. Mental and sexual abuse by an obscenely wealthy man now just seems, well, obscene.

I should point out that James’ character, Christian Grey, strikes me as more a domestic abuser than a real BDSM enthusiast. He is a billionaire in the tech industry who fixates on Ana, a 21-year old virgin. He puts surveillance software on her phone. He harasses her to sign a submissive’s contract, and even though she never signs it, he still treats her like a sex slave. He manipulates Ana into doing sex acts for which she doesn’t give consent. Blatant consumerism sits on the page in stark contrast to real life. 50 Shades of Grey eroticizes money and abuse. The writing is universally panned and mocked by critics, yet it’s sold 125 million copies. How in the world of publishing did it even come to be? Let’s go back to 2008. That year the economy was melting down, Jeffrey Epstein pleaded guilty to a felony sex offense, and the Twilight series of vampire romance novels for teen girls were bestsellers.

Twilight was a young adult twist on the long-popular vampire romance, which had flourished in that market since Anne Rice’s Interview With the Vampire appeared. Probably some of Epstein’s victims read the Twilight books. 50 Shades of Grey marks a shift in the erotic romance genre from vampires to billionaires. In 2009, E. L. James started publishing her version of Twilight on fanfiction websites, churning out a chapter every couple of days. Master of the Universe, as it was called then, was popular but criticized for being too racy, so she moved it to her own website and renamed the characters. James didn’t know it yet, but she was about to be catapulted to international fame by some upper middle class moms in the suburbs of New York City.

[..] In the autumn of 2011, news about Occupy Wall Street, a movement that began in reaction to the deeds of the predatory class, dominated headlines. Posters portrayed the 1% as greedy Monopoly men, far from sexy. Occupy protesters had the media’s attention for a short time before the idea was squashed. That November, Jeffrey Epstein registered as a sex offender in New York after completing his jail term and moving back into his Manhattan mansion, free to continue abusing girls. 2012 was E. L. James’ year. A prominent lifestyle blog (started by an NYU communications graduate married to a talent manager) promoted James’ fanfiction novel as sexually liberating to fashion-conscious moms in upscale suburban New York. James got a book deal and “mommy porn” was born. Paperbacks with necktie covers appeared on bookshelves and in beach bags everywhere.

Debt Rattle March 3 2019

Mar 032019

March 3, 2019 Posted by Raúl Ilargi Meijer at 10:54 am Finance Tagged with: Assange, Brexit, Chelsea Manning, constitution, May, repression, Salvini, Social Security, Trump, Venezuela, yellow vests 9 Responses »

Pablo Picasso The artist and his model 1926

• US is Cleanest Dirty Shirt Among Manufacturing Giants (WS)

• Trump Just Might Have Won the 2020 Election Today (Reason)

• Massive Cuts Are Coming To Social Security (MW)

• Balance Sheet “Error” Hits UK’s Fastest Growing, Most Popular Bank (DQ)

• Brexit Supporters Give May Three Tests For EU Deal (R.)

• Will Brexit Be UK’s Constitutional Moment? (IT)

• Guaido To Return To Venezuela After Touring Neighbor Countries (R.)

• Europe’s Leaders Are Aiding Italy’s Populists (Varoufakis)

• France’s ‘Yellow Vests’ March Largely Without Violence As Tensions Ease (R.)

• Chelsea Manning Ordered To Testify Before Grand Jury In Assange Probe (WaPo)

• Chelsea Manning Shows Federal Grand Juries Are Tools of Repression (IC)

Great set of graphs from Wolf Richter. Makes one wonder what will happen once this becomes clear outside of graphs.

• US is Cleanest Dirty Shirt Among Manufacturing Giants (WS)

The global slowdown in manufacturing progressed another notch in February. Among the top four manufacturing giants in the world, the US is the cleanest dirty shirt. Together, they produced 58% of the world’s “value added in manufacturing” in 2016: • China: $3.08 trillion (26% of global total) • US: $2.18 trillion (18% of global total) • Japan: $979 billion (8% of global total • Germany: $718 billion (6% of global total) In February, [China] manufacturing output declined for the third month in a row, and at the steepest rate since March 2016, according to the official Purchasing Managers Index (PMI), released by China’s National Bureau of Statistics. For these PMI measures, a value below 50 means “contraction,” and a value above 50 means “expansion”:

Small-sized manufacturers in China got hit the worst, with their PMI falling to 45.3, while the index for mid-sized manufacturers dropped to 46.9. Large manufacturers showed growth, at 51.5.[..] The Nikkei Japan Manufacturing PMI fell to a 32-month low of 48.9 in February. New orders declined at a quickened pace as new export orders continued to fall “amid lower sales to China.” “Deteriorating demand conditions were signaled in the February PMI survey,” according to IHS Markit, which compiles the survey. New orders for Japanese manufacturers “dropped at the fastest rate in over two-and-a-half years.” And the decline in orders was “broad-based across both domestic and foreign markets, with falling new export sales also recorded.”

The IHS Markit/BME Germany Manufacturing PMI in February dropped below 50 for the second month in a row, and at 47.6 to the lowest level – the fastest contraction – since December 2012, “showing a deepening downturn in new orders and the first drop in output in almost six years”. All sub-indices except employment were in contraction mode. Hardest hit were the intermediate and capital goods sectors. Only manufacturers of consumer goods recorded an increase in output. IHS Market added that the downturn in new orders is “gathering pace, led by a sharp and accelerated decline in export sales. The level of new business from abroad fell the most since October 2012.”

But it’s not just in Germany… The IHS Markit Eurozone Manufacturing PMI fell to 49.3. Germany led the decline. The index for Spain (49.9) entered contraction mode for the first time since November 2013. The index for Italy (47.7) was in contraction mode for the fifth month in a row, and at the lowest level since May 2013. The chart below is on the same scale as the chart for Germany above; so you can see that the peak, and the decline from the peak, have been less pronounced than in Germany alone, with the manufacturing sectors in several Eurozone countries still in expansion mode – including in France, the Netherlands, Austria, Ireland, and Greece:

Operating conditions in the US manufacturing sector in February showed “softer, but still solid improvement … amid slower expansions in output and new orders,” according to the IHS Markit US Manufacturing PMI. Backlogs were still increasing, as was employment. The index, at 53.0, shows the slowest expansion in 18 months, “with firms reporting a marked easing in production growth in February, linked to a similar slowdown in order book growth.

Others say the CPAC speech was just rambling. Fact remains there’s no-one anywhere close to running against him, none have a chance. And that’s pretty scary when you think about it: the Democrats haven’t advanced a single inch from 2016. The only thing they can think of, after seeing Russigate die, is to dig for more smear.

But if you can’t let go of oyour echo chamber hate of Trump, how are you ever going to understand him, a prerequisite for beating him?!

• Trump Just Might Have Won the 2020 Election Today (Reason)

It’s way too early to be thinking this, much less saying it, but what the hell: If Donald Trump is able to deliver the sort of performance he gave today at the Conservative Political Action Conference (CPAC), the annual meeting of right-wingers held near Washington, D.C., his reelection is a foregone conclusion. There is simply no potential candidate in the Democratic Party who wouldn’t be absolutely blown off the stage by him. I say this as someone who is neither a Trump fanboy nor a Never Trumper. But he was not simply good, he was Prince-at-the-Super-Bowl great, deftly flinging juvenile taunts at everyone who has ever crossed him, tossing red meat to the Republican faithful, and going sotto voce serious to talk about justice being done for working-class Americans screwed over by global corporations.

In a heavily improvised speech that lasted over two hours, the 72-year-old former (future?) reality TV star hit every greatest hit in his repertoire (“Crooked Hillary,” “build the wall,” “America is winning again,” and more all made appearances) while riffing on everything from the Green New Deal to his own advanced age and weird hair to the wisdom of soldiers over generals. At times, it was like listening to Robin Williams’ genie in the Disney movie Aladdin, Howard Stern in his peak years as a radio shock jock, or Don Rickles as an insult comic. When he started making asides, Trump observed, “This is how I got elected, by going off script.” Two years into his presidency and he’s just getting warmed up.

First and foremost, Trump was frequently funny and outre in the casually mean way that New Yorkers exude like nobody else in America. “You put the wrong people in a couple of positions,” he said, lamenting the appointment of Robert Mueller as a special prosecutor, “and all of a sudden they’re trying to take you out with bullshit.” He voiced Jeff Sessions in a mock-Southern accent, recusing “muhself” and asked the adoring crowd why the former attorney generally hadn’t told him he was going to do that before he was appointed.

Democrats backing the Green New Deal (GND) “are talking about trains to Hawaii,” he said. “They haven’t figured out how to get to Europe yet.” He begged the Democrats not to abandon the GND because he recognizes that the more its details and costs are discussed, the more absurd it will become. “When the wind stops blowing, that’s the end of your energy,” he said at one point. “Did the wind stop blowing, I’d like to watch television today, guys?” “We’ll go back to boats,” he said, drawing huge laughs when he added, “I don’t want to talk [the Democrats] out of [the GND], I just want to be the Republican who runs against it.”

He railed against Never-Trump Republicans: “They’re on mouth-to-mouth resuscitation,” he said, adding “they’re basically dishonest people” that no one cares about. He joked about being in the White House all alone on New Year’s because of the government shutdown. “I was in the White House and I was lonely, so I went to Iraq,” he said, recounting that when his plane was approaching the U.S. airstrip in Iraq, all lights had to be extinguished for landing. “We spend trillions of dollars in the Middle East and we can’t land planes [in Iraq] with the lights on,” he said, shaking his head in disbelief. “We gotta get out.”

Every western country, and even China, should think about this.

• Massive Cuts Are Coming To Social Security (MW)

The mother of all political battles is coming, and it’s about a wall. No, not that one. It’s another, much bigger wall. One that fewer people are talking about — so far. It’s the wall that Social Security is due to run into in just 15 years. That’s when, say Social Security’s trustees, the program’s trust fund is scheduled to run out of money. If nothing else is done, they say, after 2034 Social Security’s annual income will only be enough to pay “about three-quarters of scheduled benefits.” We’re talking about a 25% cut in payments. How big a deal will this be? As it happens, the Federal Reserve just put out a report that tackles this.

According to Fed data, at most one quarter of people currently nearing retirement are going to be able to shrug off any cuts at all in Social Security. Actually, it’s probably considerably less than one quarter. And everyone else will be in serious trouble. Half of those nearing retirement will end up in dire straits. That’s because most of them have little or nothing in private retirement plans. The country’s 401(k)s and individual retirement accounts? The old-fashioned company pension plans? Most of these assets are owned by the wealthiest 25% of the country, the Fed calculates. Between 83% and 85% of the total balance is in the hands of the highest-earning one-fourth.

For everyone else? It’s down to Social Security or bust. And that’s especially so for the bottom half of the income distribution. “Social Security is the key to understanding retirement resources for most families,” says the Fed. For example, the Fed looked at the balance sheets of those currently in their 50s who are nearing retirement. For the middle two quartiles by income — in other words, the middle 50% — Social Security accounts for somewhere between 47% and 64% of their total retirement wealth. For those in the bottom 25% it’s nearly all of it. They hold, on average, just $28,000 in private retirement plans.

[..] In 10 years’ time, when this issue becomes urgent, people in or near retirement will make up more than half the voting age population. They’ll make up and even bigger share of the actual likely voters. And those people, as we’ve just seen, can’t do without Social Security — no way, and no how. According to the U.S. Census, by 2030 those over age 65 will account for 26% of the voting age population, and those aged 45 to 59 and nearing retirement another 29%. And according to the U.S. Elections Project, in the last presidential elections just 43% of those in their 20s bothered to vote. The figure for the over 60 was 71%. Put those two things together, and by 2030 around 60% of likely voters will be over 45 — and half of those — will already be over 60. Good luck passing a 25% Social Security cut.

“In the last five weeks the lender has lost 60% of its market cap..”

• Balance Sheet “Error” Hits UK’s Fastest Growing, Most Popular Bank (DQ)

Shares of the UK’s fastest growing high street lender, Metro Bank, are in free fall. They tumbled 16% on Tuesday, 25% on Wednesday and 6.86% on Thursday, to come to rest at a price of 889 pence, the lowest since the London-based bank went public in 2016. In the last five weeks the lender has lost 60% of its market cap and is now worth just £866 million, down from £4 billion a year ago. The crisis began in earnest on January 22 when Metro’s shares crashed almost 40% — the worst one-day fall suffered by any British lender since the financial crisis — following an announcement by the bank’s management that it had incorrectly classified a huge chunk of commercial property loans and loans to commercial buy-to-rent operators that should have been among its “risk-weighted assets”.

The “error” left a gaping £900 million hole on Metro’s balance sheet. On Tuesday this week, things got even worse when the bank revealed that the Prudential Regulation Authority (PRA), the institution that had first flagged up Metro Bank’s accountancy error, and the Financial Conduct Authority (FCA) are investigating the circumstances behind the error. The bank also announced plans for a £350 million rights issue, after raising £303 million from investors last July. But investors — led perhaps by well-connected investors — have been smelling a rat since March 2018. By the time the initial disclosure whacked the shares on January 22, 2019, they’d already dropped 45%. Now they’re down 77% from March 2018:

Metro’s tribulations are a timely reminder of how important a force trust can be in the financial markets, particularly when it comes to banks. To gauge how much of a credit risk a bank could pose to market participants, including the bank’s bondholders and counterparties, investors rely on the bank’s capital ratio, which itself depends on the amount of risk assigned to each portfolio. By assigning a lower risk weight to its mortgage lending portfolio, whether by accident or intentionally, Metro left investors thinking it was safer than it actually is.

Not going to happen. Why give the Brexiteers what they want, and thereby leave the rest of the people alone?

• Brexit Supporters Give May Three Tests For EU Deal (R.)

Brexit-supporting lawmakers who voted down British Prime Minister Theresa May’s European Union withdrawal deal in January have outlined demands for a revised treaty to ensure their support, the Sunday Times newspaper said. Lawmakers overwhelmingly rejected May’s deal in January. Many were unhappy with the “Irish backstop”, insurance to prevent return of hard border controls between EU member Ireland and British-ruled Northern Ireland. Critics said it could leave the country tied to EU rules indefinitely. Britain, due to exit the bloc on March 29, is attempting to amend the deal to provide assurances that the backstop would not be indefinite.

The Sunday Times said hardline Brexit supporters from May’s Conservative Party had drawn up a document outlining three tests the deal must pass to gain their support. These are a “clearly worded, legally binding, treaty-level clause which unambiguously overrides” the text of the withdrawal agreement, with language that goes beyond emphasizing the temporary nature of the backstop and a clear means to exit the backstop if subsequent trade talks fail. [..] In a further sign that former opponents of May’s deal might now back a revised version, Graham Brady, a senior Conservative lawmaker, said he would support it with legally binding assurances on the backstop.

“Once we have that, my colleagues in parliament need to recognize the strength of feeling,” he wrote in the Mail on Sunday newspaper. “The whole country is tired of vacillation and delay. When the right compromise is offered, we should pull together behind the Prime Minister and help her to deliver our exit from the European Union on March 29.”

No haveng a written constitution leaves you open to havening more people insisting their multiple interpretations are the only correct one.

• Will Brexit Be UK’s Constitutional Moment? (IT)

Does Brexit pose a constitutional crisis for the United Kingdom? Can its constitution be remade after Brexit or is it too late for that to happen? What are the consequences for Ireland and Northern Ireland? Constitutions are the set of fundamental rules governing a political system, usually defined as a nation. Typically they are written, short and legally entrenched, making them difficult to amend. Highly untypically, the UK’s constitution is unwritten and largely uncodified, sprawling over its common law and informal political conventions – even though the word was coined when the deposed King James II was accused in 1688 of having violated the “fundamental constitution of the kingdom”.

That continuing ideology was perfectly caught when the novelist AS Byatt last year told a disbelieving German writer, Matthias Matussek, in London: “You know, we British don’t need a constitution. We are the oldest democracy in the world.” She paused briefly before continuing: “For young countries like you Germans, constitutions could very well be useful.” The unwritten rules are now precariously balanced between the doctrine of absolute parliamentary sovereignty subject in principle to the monarch, and the shift to entrenchment represented by the 2016 Scotland Act which declared its self-government permanent, only to be abolished by a popular referendum.

At a conference last week in Mansfield College Oxford on remaking the UK constitution, the political theorist Stuart White said there is a real tension between these two conceptions of parliamentary and popular sovereignty. The Brexit maxim to “take back control” draws on both the notion of reversible treaty commitments and the 2016 referendum decision to leave the European Union. They are especially difficult to reconcile in a multinational polity like the UK where there is no longer a single people or demos.

Can he be resuscitated? Or will he be arrested?

• Guaido To Return To Venezuela After Touring Neighbor Countries (R.)

Venezuelan opposition leader Juan Guaido said on Saturday he would return home after a visit to Ecuador and called for new protests next week against President Nicolas Maduro, whose government had banned him from traveling abroad. Guaido has spent the past few days touring between Latin American countries to muster support for his campaign to form a transition government and oust Maduro, whom he denounces as an illegitimate usurper. He had visited Brazil, Argentina and Paraguay after leaving Venezuela last week for Colombia to coordinate efforts there to send humanitarian aid into his country, though troops loyal to Maduro blocked a convoy of aid trucks and turned them back.

“As for the next steps for Venezuelans, I announce my return home from Ecuador,” Guaido told a news conference in the coastal town of Salinas alongside Ecuadorean President Lenin Moreno. Guaido did not say when exactly or how he would return to Venezuela. He is expected to leave Ecuador at 9.30 a.m. local time on Sunday, according to the Ecuadorean government’s schedule for his visit. His return opens the possibility that Venezuelan authorities will try to arrest him. The Supreme Court had imposed a travel ban on him after he invoked the country’s constitution on Jan 23 to assume an interim presidency, which most Western nations now recognize as legitimate.

“The fact that Italy’s public debt has a lower credit rating than private debt is a reflection not of public debt’s intrinsic inferiority but of a political choice made by European leaders. And, by bolstering an authoritarian politician, that choice is now blowing back on them.”

• Europe’s Leaders Are Aiding Italy’s Populists (Varoufakis)

Italy is now the frontline in the battle of the euro. Deputy Prime Minister Matteo Salvini is being propelled by a political tailwind that may, after the European Parliament elections in May, enhance his capacity to inflict serious damage on the European Union. What is both fascinating and disconcerting is that the xenophobia underpinning Salvini’s ever-increasing authority is being generated by the eurozone’s faulty architecture and the ensuing political blame game. In its recent report on the economic imbalances afflicting each EU member state, the European Commission blames the Italian government for its failure to rein in debt, which, it says, results in tepid income growth.

According to the Commission, the government’s reluctance to cut its budget deficit has spooked the bond markets, pushed interest rates up, and thus shrunk investment. Salvini could not be more pleased. The report presents a splendid opportunity to blame the Commission itself for Italy’s travails, by arguing that it was actually the EU’s fiscal austerity policies which constricted growth, pushed the economy to the brink of a new recession, and led to the election of the populist government now dominated by Salvini. And, as if that were not enough, it was the Commission’s threats of penalizing Italy unless it imposed even greater austerity that unnerved bond traders and pushed interest rates up.

Italy’s tragedy is that the Commission and Salvini are both right – and also both wrong. It is correct that Salvini’s announcement that the government would rescind its promise to impose pre-agreed levels of austerity alarmed investors, made Italian debt less viable, and caused capital flight. But it is also correct that the Commission’s fiscal rules, were they to be implemented fully, would have caused a recession that would have made Italian debt less viable anyway.

BS headline. In France the protesters’ numbers are treated much as unemployment numbers are: whenever people ain’t looking, you push them down. And Reuters complies. Various videos tell a different story.

• France’s ‘Yellow Vests’ March Largely Without Violence As Tensions Ease (R.)

Turnout for a 16th round of “yellow vest” protests in France on Saturday was below last week’s levels and marches were largely peaceful, in a relief for President Emmanuel Macron who has struggled to find a response to the movement. While turnout figures at midday were only half of last week, by nightfall the Interior Ministry counted a total of 39,300 protesters nationwide, of which 4,000 were in Paris. Last Saturday there had been 46,600 marchers, including 5,800 in Paris, compared with 41,000 the week before and 51,400 the week before that – well down on the more than 300,000 who marched at the start of the movement in November in a protest which degenerated into clashes with police in subsequent weeks.

Protesters marched largely peacefully on Saturday from the Arc de Triomphe to Place Denfert-Rochereau on the residential left bank, though water cannon were briefly used to douse protesters on the Champs Elysees boulevard. Tear gas and water cannon were also used in Bordeaux, and in Toulouse, where some protesters marched behind a “cacatov party” banner – a play on Molotov cocktail firebombs – encouraging people to throw “poo-bombs” at police. There were no reports of anyone being hit by a “catatov”, but the threat of excrement projectiles was of concern to reporters covering the marches in Toulouse and Paris. Large parts of central Paris were in lockdown as thousands of police cordoned off key areas around the presidential palace and government buildings.

If this footage was from Russia, Syria, or Venezuela, rather than France today, it would be televised incessantly all across our mainstream media. #YellowVests #GiletsJaunes pic.twitter.com/cxvChJcwCQ

— Sarah Abdallah (@sahouraxo) March 2, 2019

Word is they want Assange for harm to US operatives.

• Chelsea Manning Ordered To Testify Before Grand Jury In Assange Probe (WaPo)

Chelsea Manning has been called to testify before a grand jury in the investigation of Julian Assange, officials said. The summons is one of several indicators that prosecutors remain interested in WikiLeaks‘ publication of diplomatic cables and military war logs in 2010. Prosecutors in Virginia have been pursuing a case based on conduct that predates WikiLeaks’ publication of hacked emails during the 2016 presidential campaign, and it is not clear investigators are interested in that activity. Officials discussed the investigation of Mr Assange, who founded WikiLeaks, on condition of anonymity because of the secrecy of the grand jury process.

Ms Manning, whose subpoena was first reported by the New York Times, is a former Army private who served seven years in a military prison for passing secret State Department cables and military documents to WikiLeaks before receiving a commutation from Barack Obama. Ms Manning’s attorneys have filed a motion to quash the subpoena. “I object strenuously to this subpoena, and to the grand jury process in general,” Ms Manning said in a statement. “We’ve seen this power abused countless times to target political speech. I have nothing to contribute to this case and I resent being forced to endanger myself by participating in this predatory practice.”

The subpoena was signed last month by Gordon Kromberg, a national security prosecutor on the Assange case. Mr Kromberg last month persuaded a judge to leave sealed an indictment against Mr Assange despite its inadvertent exposure in an unrelated court filing last year. Under Mr Obama, Justice Department officials had decided not to pursue charges against Mr Assange and WikiLeaks after concluding that to do so could set a precedent that paved the way for prosecuting news organisations for publishing classified information. But the case got a fresh look under Donald Trump.

Steve Vladeck, a professor at the University of Texas at Austin School of Law, said the Justice Department probably indicted Mr Assange last year to stay within the 10-year statute of limitations on unlawful possession or publication of national defence information, and is now working to add charges. “There’s nothing else that would make sense,” he said. “The heart of the controversy is, there’s never been a successful prosecution” for publishing classified information, Mr Vladeck said. “There has always been the spectre of a First Amendment defence.”

Secret Courts and Secret Juries and Secret Documents and Secret Accusations. Nice country.

• Chelsea Manning Shows Federal Grand Juries Are Tools of Repression (IC)

Chelsea Manning was subpoenaed to appear before a federal grand jury and give testimony on March 5. The whistleblower filed a motion to quash the subpoena. As such, Manning risks incarceration under the coercive operations of the federal grand jury system. For Manning, the threat of further imprisonment is a particularly brutal one. Beginning in 2010, she was arrested, court-martialed, imprisoned, and tortured for exposing some of the worst crimes and brutalities of the Iraq and Afghan wars. She was released in 2017. Given the secrecy of federal grand jury procedures, we can’t know with any certainty to which potential case the subpoena pertains, or what Manning would be asked.

But since it was issued in the Eastern District of Virginia, we can make the informed speculation that it relates to inadvertently disclosed charges filed under seal against Wikileaks founder Julian Assange in that same district. The New York Times reported that “there were multiple reasons to believe that the subpoena is related to the investigation of Mr. Assange,” including the district where the subpoena was issued and the assistant United States attorney that requested the subpoena, who is tied to the Assange prosecution. Another Assange associate, David House, told the Washington Post that he testified before the grand jury as well. “It was all related to disclosures around the war logs,” House said, a reference to the Iraq war documents that Manning released and Wikileaks published.

Manning’s decision to fight her subpoena, however, is not a question of protecting Assange, nor obstructing valid government investigations into federal crimes. Her challenge is an act of resistance against government repression and in defense of a free press.

The Ritual Burial of the US Constitution

Sep 122018

September 12, 2018 Posted by Raúl Ilargi Meijer at 1:17 pm Finance Tagged with: Alex Jones, CIA, constitution, Facebook, FBI, Google, Julian Assange, NSA, Silicon Valley, Trump, Twitter 9 Responses »

Winslow Homer Salt Kettle, Bermuda 1899

In the wake of a number of the Lehman and 9/11 commemorations in America, and as a monster storm is once again threatening to cause outsize damage, we find ourselves at a pivotal point in time, which will decide how the country interacts with its own laws, its legal system, its Constitution, its freedom of speech, and indeed if it has sufficient willpower left to adhere to the Constitution as its no. 1 guiding principle.

The main problem is that it all seems to slip slide straight by the people, who are -kept- busy with completely different issues. That is convenient for those who would like less focus on the Constitution, but it’s also very dangerous for everyone else. Americans should today stand up for freedom of speech, or it will be gone, likely forever.

The way it works is that president Trump is portrayed as the major threat to ‘the rule of law’, which allows other people, as well as companies and organizations, to drop below the radar and devise and work on plans and schemes that threaten the country itself, and its future as a nation ruled by its laws.

Bob Woodward’s book “Fear: Trump in the White House” and the anonymous op-ed published in the NYT a day later serve as a good reminder of these dynamics. If you succeed in confirming people’s idea that Trump is such an unhinged idiot that an unelected cabal inside the White House is needed to save the nation from the president it elected, you’re well on your way.

Well on your way to separate the country from its own laws, that is. Not on your way to saving it. You can’t save America by suspending its Constitution just because that suits your particular political goals or points of view.

Late last night, Michael Tracey wrote on Twitter: “Trump’s preference to pull out of Afghanistan is depicted in the Woodward book as yet another crazy impulse that the “adults in the room” successfully rein in.” “We’re going to save you from yourselves, thank us later!” Nobody voted for those adults in the room anymore than anyone voted for the Afghanistan ‘war’ to enter year 17.

Meanwhile Infowars said: “Several people within Trump’s inner circle know the threat to the mid-terms and his re-election chances that social media censorship poses, including Donald Trump Jr. and Brad Parscale, his 2020 campaign manager. However, older members of the administration are completely unaware of the fact that banning prominent online voices and manipulating algorithms can shift millions of votes and are oblivious to the danger. This ignorance has placed a temporary block on Trump taking action, despite the president repeatedly referring to Big Tech censorship in tweets and speeches over the last few weeks.”

Yes, Infowars, I know, everybody loves to hate Alex Jones. And perhaps for good reasons, at least at times. But does that mean he can be banned from a whole slew of internet platforms without this having been run by and through the US court system? Without even one judge having examined the ‘evidence’, if it even existed, that leads to such banning, blocking and shadowbanning?

Alex Jones is an ‘easy example’ because he’s so popular. Which is also, undoubtedly, why all the social media platforms ban him so easily, and all at the same time. ‘He’s a terrible person’, say so many of their readers. But that’s not good enough, far from it. Twitter and Facebook should never be allowed to ban anyone, using opaque ‘Community Standards’ or ‘Terms and Conditions’ interpreted by kids fresh out of high school.

These platforms have important societal functions. They are for instance the new conduits governments, police, armies use to warn people in case of emergencies and disasters. You can’t ban people from those conduits just because a bunch of geeks don’t like what they say. If you can at all, it will have to be done through the legal system.

That this is not done at present poses an immense threat to that legal system, and to the Constitution itself. But Americans, and indeed Congressmen and Senators, have been trained in a Pavlovian way to believe that it’s not Google and Facebook who threaten the Constitution, but that it’s Trump and his crew.

Meanwhile, Trump is being put through Bob Mueller’s Special Counsel legal wringer 24/7, while Alphabet, Jack Dorsey and Mark Zuckerberg escape any such scrutiny at all. That discrepancy, too, is eating away at the foundations of American law.

And like it or not, Trump had it right when he said “You look at Google, Facebook, Twitter and other social media giants and I made it clear that we as a country cannot tolerate political censorship, blacklisting and rigged search results..”

America as a country cannot tolerate a few rich companies deciding whose voice can be heard, and whose will be silenced. It is entirely unacceptable. That goes for voices Trump doesn’t want to hear as much as it does for whoever Silicon Valley doesn’t. That’s why neither should be in charge of making such decisions. It kills the Constitution.

None of the above means that everyone should be free to post terrorist sympathies or hate speech on social media platforms. But it does mean that legislative and judicial systems must define what these things mean, that this not be left up to arbitrary ‘Community Standards’ interpreted by legally inept Silicon Valley interns, nor should it be left to secret algorithms to decide what news you see and what not.

America itself hangs in the balance, and so do many other western countries. What exactly is the difference between China’s overt internet censorship and America’s hidden one? That is what needs to be defined, and that can only be done by the legal system, by Congress, by the courts, by judges and juries.

And it’s not something that has to be invented from scratch, it can and must be tested against the Constitution. That is the only way forward. That social media have taken over the country by storm, and nary a soul has any idea what that means, can never be an excuse to leave banning and silencing voices over to private parties, whoever they are.

It’s not a unique American problem. In Europe there are all sorts of attempts to ban ‘hate speech’, but there are very few proposals concerning who will define what that is. And since Europe has no Constitution, but instead has 27 different versions of one, it will be harder there. Then again, it will also be easier to get away with all sorts of arbitrary bannings etc.

Hungary will be inclined to ban totally different voices than for instance Denmark and so on. And nobody over there has given any sign of understanding how dangerous that is. Banning ‘hate speech’ doesn’t mean anything if the term hasn’t been properly defined. But that also allows for banning voices someone simply doesn’t like. To prevent that from happening, we have legal systems.

It’s essential, it’s elementary, Watson. But it’s slipping through our fingers because our politicians are either incapable of, or unwilling to, comprehending the consequences. Why stick out your neck when nobody else does? It’s like the anti-thesis of what politics means: stay safe.

So the social media’s industry’s own lobbying has a good shot at getting its way: they tell Washington to let them regulate themselves, and everything will be spic and dandy. That would be the final nail in the Constitution’s coffin, and it’s much closer than you think. Do be wary of that.

In the end it comes down to two things i’ve said before. First, there is no-one who’s been as ferociously banned and worse the way Julian Assange has. His ban goes way beyond Silicon Valley, but it does paint a shrill portrait of how far the US, CIA, FBI, is willing to go, and to step beyond the Constitution, to get to someone they really don’t like.

But has Assange ever violated and US law, let alone its Constitution? Not that we know of. Mike Pompeo has called WikiLeaks a ‘hostile intelligence service’, and the DOJ has said the 1st Amendment, and thereby of necessity the entire US Constitution, doesn’t apply to Assange because he’s not an American, but both those things are devoid of any meaning, at least in a court of law.

Bob Woodward has an idea of what Assange faces, and he’d do much better to focus on helping him than trying to put Trump down through anonymous sources. And that also leads me to why I, personally, have at least some sympathy for Alex Jones, other than because he’s being attacked unconstitutionally: Jones ran/runs a petition for Trump to free Julian Assange.

Come to think of it: it’s when that petition started taking off that Jones’s ‘real trouble’ started. Given how closely interwoven Silicon Valley and the FBI and CIA have already become, I’m not going to feign any surprise at that.

And before you feel any wishes and desires coming up to impeach Trump, do realize that he may be the only person standing between you and a complete takeover of America by the FBI/NSA/CIA/DNC and Google/Facebook/Twitter, which will be accompanied by the ritual burial of the Constitution.

Think Trump is scary? Take a step back and survey the territory.

Debt Rattle September 12 2018

Sep 122018

September 12, 2018 Posted by Raúl Ilargi Meijer at 9:14 am Finance Tagged with: Armageddon, Brexit, censorship, constitution, copyright, deficit, Florence, Mangkhut, Monsanto, Putin, Skripal 16 Responses »

Vincent van Gogh Mountainous Landscape Behind Saint-Rémy 1888

• US Federal Deficit Soars 32% To $895 Billion (Hill)

• The Fed’s Lost Opportunity to Return to Normal (Rickards)

• China ‘National Team’ Bought Billions In Stocks in Q2 – Goldman (CNBC)

• Putin Bashes Protectionism, ‘Sanctions, Bans And Political Bias’ (CNBC)

• Skripal Poisoning Suspects Are Civilians, Not Criminals, Says Putin (G.)

• UK Police Prepares For Disorder At Ports If UK Crashes Out Of EU (Ind.)

• Barnier Confronts Raab Over Discovery Of Brexit No-Deal Letters To EU27 (G.)

• Europe Is Voting On Controversial Internet Copyright Law (CNBC)

• Americans Need Social Media Guided by the US Constitution (Krieger)

• Internet Industry Group Backs ‘National’ Data Privacy Approach (R.)

• Armageddon Rides In The Balance (PCR)

• Tsipras Warns “Europe Has No Future If It Doesn’t Admit Mistakes” (KTG)

• Monsanto-Bayer Merger Hurts Farmers and Consumers (CP)

• ‘Monster’ Hurricane Florence To Pummel US Southeast For Days (R.)

Steady as she goes.

• US Federal Deficit Soars 32% To $895 Billion (Hill)

The federal deficit hit $895 billion in the first 11 months of fiscal 2018, an increase of $222 billion, or 32 percent, over the same period the previous year, according to the Congressional Budget Office (CBO). The nonpartisan CBO reported that the central drivers of the increasing deficit were the Republican tax law and the bipartisan agreement to increase spending. As a result, revenue only rose 1 percent, failing to keep up with a 7 percent surge in spending, it added. Revenue from individual and payroll taxes was up some $105 billion, or 4 percent, while corporate taxes fell $71 billion, or 30 percent.

The August statistics were somewhat inflated, however, due to a timing shift for certain payments, putting the deficit measure through August slightly out of sync with the previous year, the CBO noted. Had it not been for the timing shift, the deficit would have increased $154 billion instead of $222 billion. Earlier analysis from CBO projected that deficits would near $1 trillion in 2019 and surpass that amount the following year.

With 10 years of such market manipulation that there is no market left, what exactly is normal?

• The Fed’s Lost Opportunity to Return to Normal (Rickards)

Current Fed policy will push the U.S. economy to the brink of recession, possibly by later this year. When that happens, the Fed will have to reverse course and ease monetary policy. Meanwhile, the economic cheerleaders recite recent GDP figures and the stimulative effects of the Trump tax cuts. There’s one problem with the happy talk about 3–4% growth. We’ve seen this movie before. In 2009, almost every economic forecaster and commentator was talking about “green shoots.” In 2010, then-Secretary of the Treasury Tim Geithner forecast the “recovery summer.” In 2017, the global monetary elites were praising the arrival (at last) of “synchronized global growth.”

None of this wishful thinking panned out. The green shoots turned brown, the recovery summer never came and the synchronized global growth was over almost as soon as it began. Strong quarters have been followed by much weaker quarters within six months on six separate occasions in the past nine years. There’s no reason to believe this time will be any different. This expansion has been extraordinarily long — over 30% longer than average — indicating that a recession should be expected sooner rather than later. Into this mix of weak growth comes the Federal Reserve, which is tightening monetary policy, reducing the base money supply and supporting a strong dollar. All of these policies are associated with slower growth ahead and a high probability of recession.

Plunge protection. Imitating ECB.

• China ‘National Team’ Bought Billions In Stocks in Q2 – Goldman (CNBC)

As the mainland Chinese stock market dropped in the second quarter, groups with government ties bought shares, according to a Goldman Sachs analysis. The “national team” of entities related to or influenced by the state was formed in 2015 to help support stocks during that summer’s market turmoil. The Shanghai composite crashed more than 40 percent that year, and has struggled to recover since. The index’s losses accelerated in June, when it fell 20 percent from a recent high, or into a bear market. Beijing’s efforts to reduce the economy’s reliance on debt has led to tighter financial conditions, while rising U.S.-China trade tensions have added to pressure on growth. In all, the Shanghai composite lost 10 percent in the second quarter.

During that time, the national team bought an estimated net 116 billion yuan — or nearly $17 billion — worth of local stocks known as A shares, Goldman Sachs’ Chief China Equity Strategist Kinger Lau said in a Friday report.The second-quarter purchases account for about 0.2 percent of market capitalization and follow sales of 71 billion yuan in the first quarter, Lau said. Overall, his team estimated the national team holds 1.5 trillion yuan worth of A shares, or about 2.9 percent of the listed market capitalization. The findings are based on analysis of required quarterly disclosures of the top 10 shareholders in A share companies.

Source: Goldman Sachs Global Investment Research

Trump unites China and Russia.

• Putin Bashes Protectionism, ‘Sanctions, Bans And Political Bias’ (CNBC)

President Vladimir Putin appeared to take another thinly veiled swipe at Trump’s economic policies on Wednesday, a day after Russia and China vowed to stand together to fight protectionism. “The world and global economy are coming up against new forms of protectionism today with different kinds of barriers which are increasing,” Russian President Vladimir Putin told a plenary session at the Eastern Economic Forum (EEF) in Vladivostok, Russia. “Basic principles of trade — competition and mutual economic benefit — are depreciated and unfortunately undermined, they’re becoming hostages of ideological and fleeting political situations, in that we see a serious challenge for all of the global economy, especially for the dynamically-growing Asia-Pacific and its leadership,” he added.

Putin’s comments come as China and Russia appeared united on Tuesday after the leaders of both countries pledged to stand together to fight protectionism. The comments were seen as a thinly veiled attack on U.S. President Donald Trump who has implemented a massive package of tariffs on Chinese imports and threatened further sanctions on Moscow. [..] Putin said Wednesday that Russia and its eastern economic partners should work to keep trade free of barriers. “We’re convinced that in order for our region to continue to achieve high growth rates, and to remain a key participant in the global economy and trade, it should retain the spirit of economic freedom, to be the space of business initiative without sanctions, bans and political bias ,” Putin told delegates.

With a whole series of CCTV images. Because Russian secret agents on murder missions are too stupid to avoid their photos being taken. There is even one where they take time to ‘pose’ by looking into a shop window with a camera, taken AFTER the ‘attack’.

• Skripal Poisoning Suspects Are Civilians, Not Criminals, Says Putin (G.)

The two men accused by the UK of carrying out a nerve agent attack in Salisbury have been identified and are civilians, not criminals, Vladimir Putin has said. “We know who they are, we have found them,” Putin said at an economic forum in the eastern Russian city of Vladivostok, adding that the two men – named by the UK as Alexander Petrov and Ruslan Boshirov – might soon make appearances in the media to protest their innocence. “These are civilians,” Putin said in remarks reported by Russian news agencies. “There is nothing criminal here.” British officials have said the men were agents of Russian military intelligence dispatched to kill Sergei Skripal, a former Russian spy who had given information to British intelligence. He was imprisoned in Russia before being released in a spy swap in 2010.

Putin’s remarks appeared to be a denial that the men worked for Russia’s military intelligence service the Main Directorate, commonly called the GRU. British officials this month charged the two men in absentia with the attempted murder with novichok of Sergei Skripal, his daughter, Yulia, and a police officer who investigated the scene. Scotland Yard released CCTV images of the two suspects at Salisbury train station on the day of the attack. [..] Putin called on the two men to appear in the media to protest their innocence, saying he “wanted to address them directly”. The Russian’s president’s words marked a departure from his country’s earlier position, which was to disregard the evidence released by Scotland Yard as a fabrication.

And the military too. And this is just what you’re allowed to know.

• UK Police Prepares For Disorder At Ports If UK Crashes Out Of EU (Ind.)

Police are preparing for disorder at British ports in the event of a no-deal Brexit, Metropolitan Police Commissioner Cressida Dick has revealed. The head of Scotland Yard said her force was also bracing for the loss of key European data systems that are “very important” for keeping London safe. She said that the police were conducting careful, calm and sober contingency planning for eventualities, particularly relating to ports in Kent as well as in other parts of the UK. “Is there going to be protests, is there going to be disorder?” she asked, while addressing delegates at the Police Superintendents’ Association conference in Leicester. “At the moment in planning terms it’s a long-way off because there are so many uncertainties that could happen.”

Her comments came after a leaked document prepared by the National Police Coordination Centre revealed the “real possibility” of police calling on the military to help with civil disorder caused by a no-deal Brexit. It warned of traffic queues at ports and said concerns around medical supplies could “feed civil disorder”, while a rise in the price of goods could also lead to “widespread protest” and trigger crimes such as theft. Ms Dick raised additional concerns over the potential loss of access to EU systems including the European Arrest Warrant, Europol and databases containing information on criminals and terrorists entering the UK. “At any one time in my custody suites I will have 35, 40 per cent foreign nationals, over half EU citizens and a huge chunk would have travelled through Europe,” she explained.

The UK still thinks they can make separate deals. It doesn’t understand the EU.

• Barnier Confronts Raab Over Discovery Of Brexit No-Deal Letters To EU27 (G.)

Dominic Raab has been reprimanded by Michel Barnier after the EU’s chief negotiator discovered the British government had written to the 27 other member states asking for side negotiations on transport in the event of a no-deal Brexit. The Brexit secretary was confronted by Barnier during their most recent meeting in Brussels over correspondence sent in recent days to EU capitals by the Department for Transport. The letters had asked the member states to prepare to engage with the British government in side deals on aviation and haulage, to allow key trade flows to continue in the event of the UK and the EU failing to come to an agreement on leaving the union by 29 March 2019.

The transport secretary, Chris Grayling, had ordered the letters to be sent despite being told less than two weeks ago by the European commission’s most senior trade official, Violeta Bulc, that without a deal this autumn, there would be no other agreements made to protect the UK economy. Barnier is said to have reiterated that message to Raab, telling the cabinet minister: “If there is no deal, there is no trust.” The bruising exchange came on the same day that Theresa May told cabinet members the UK should remain “the EU’s closest ally” after Brexit, amid a growing belief in Downing Street that progress was gradually being made in the long-running divorce talks.

A few of them may understand the issues, but the majority sure don’t.

• Europe Is Voting On Controversial Internet Copyright Law (CNBC)

European parliamentarians are set to vote on a controversial copyright law that some critics believe could stop people from sharing memes and articles online. Lawmakers in Strasbourg, France, will cast their votes on the European Union’s new copyright directive on Wednesday. The result of that vote could determine whether large tech companies including Facebook, Twitter and Google are forced to use filtering systems that block copyrighted content. Two particular parts of the directive have attracted the most criticism from pro-internet freedom activists. One is Article 13. This section calls on internet giants to take “appropriate and proportionate” measures to prevent user-generated content that infringes a rightsholder’s copyright.

This part of the law has come under heavy criticism over concerns that tech giants could end up using automated content filtering systems. The law states that “effective content recognition systems” should be put in place by digital companies to prevent copyrighted materials from being distributed on their platforms. Campaigners have scrutinized this part of the legislation over concerns that it could amount to censorship, and argue that the use of copyright-protected material by way of commentary or parody should be permitted under the doctrine of “fair use.” Particular attention has been paid to the status of “memes,” which often rely on copyright protected images or pieces of video, and whether they could be censored as a result.

Echoing a point I’ve been making.

• Americans Need Social Media Guided by the US Constitution (Krieger)

This past Friday, Alex Jones was de-platformed from the last couple of third party tools he had been using to publicly communicate his message after Twitter and Apple permanently banned him and his website Infowars. This means an American citizen with a very large audience who played a meaningful role in the 2016 election, has been banned from all of the most widely used products of communication of our age: Twitter, Facebook, Google’s YouTube and Apple’s iTunes. You can point out he still has his radio show and website, and this is unquestionably true, but when it comes to the everyday tools most people interact with to receive information and communicate in 2018, Alex Jones has been thrown down the memory hole. Not because he was convicted of a crime or broke any laws, but because corporate executives decided he crossed an arbitrary line of their own creation.

It’s not against the law to be crazy or say crazy things in this country. It’s also not against the law to say hateful things. It’s pretty obvious the main reason Alex Jones was deleted from public discourse by Silicon Valley executives relates to his impact and popularity. [..] unabashed bigots like David Duke and Louis Farrakhan continue to have active presences across social media, and rightly so. The difference is neither David Duke nor Louis Farrakhan played a major role in the election of Donald Trump, whereas Alex Jones did. Jones and Infowars were having an outsized impact on the U.S. political discourse in a manner tech giant executives found threatening and offensive, so they collectively found excuses to silence him.

When the outrage mob consisting of politicians, corporate media outlets like CNN, and even his own employees, complained to Twitter’s Jack Dorsey on the issue of Alex Jones, he couldn’t hold the line on free speech because his company’s own policies are junk. Twitter, Facebook and YouTube should have a clear policy when it comes to speech, and it should be this: If it isn’t breaking the law – in other words, if it’s protected speech under the First Amendment – it stays up. Period. When you have corporate rules against “hate speech,” you’re relying on a concept that doesn’t really have any sort of legal standing when it comes to free speech in this country. There is no “hate speech” exception to the First Amendment of the U.S Constitution.

They want to regulate themselves. Don’t let them.

• Internet Industry Group Backs ‘National’ Data Privacy Approach (R.)

A group representing major internet companies including Facebook, Amazon.com and Alphabet said on Tuesday it backed modernizing U.S. data privacy rules but wants a national approach that would preempt California’s new regulations that take effect in 2020. The Internet Association, a group representing more than 40 major internet and technology firms including Netflix, Microsoft and Twitter, said “internet companies support an economy-wide, national approach to regulation that protects the privacy of all Americans.” The group said it backed principles that would ensure consumers should have “meaningful controls over how personal information they provide” is used and should be able to know who it is being shared with.

Consumers should also be able to seek deletion of data or request corrections or take personal information to another company that provides similar services and have reasonable access to the personal information they provide, it said. The group also told policymakers they should give companies flexibility in notifying individuals, set a “performance standard” on privacy and data security protections that avoids a prescriptive approach and set national data breach notification rules. Michael Beckerman, president and chief executive officer of the Internet Association, said in an interview the proposals were “very forward looking and very aggressive” and would push to ensure the new rules apply “economy wide.” He said the group “would be very active working with both the administration and Congress on putting pen to paper.”

Leftwing and intelligence.

• Armageddon Rides In The Balance (PCR)

For some time I have pointed out the paradox of the American liberal/progressive/left being allied with the CIA, FBI, military/security complex and deep state. Now leftist Ann Garrison has noticed the paradox of this alliance. She concludes that the left has lost its mind. Indeed, it has. Out of its hatred of Trump the left has united with the forces of evil and war that are leading to conflict with Russia. The left’s hatred of Trump shows that the American left has totally seperated from the interests of the working class, which elected Trump. The American left has abandoned the working class for the group victimizations and hatreds of Identity Politics. As Hillary put it, the working class comprises the “Trump deplorables.” The Democratic Party, like the Republicans, represents the ruling oligarchy.

I have explained that the leftwing lost its bearings when the Soviet Union collapsed and socialism gave way to neoliberal privatizations. The moral fury of the leftwing movement had to go somewhere, and it found its home in Identity Politics in which the white heterosexual male takes the place of the capitalist, and his victim groups—blacks, women, homosexuals, illegal immigrants—take the place of the working class. The consequences of the leftwing’s alliance with warmongers and liars is the leftwing’s loss of veracity. The left has endorsed a CIA orchestration—“Russiagate”—for which there is no known evidence, but which the left supports as proven truth. The purpose of “Russiagate” is to prevent President Trump from normalizing relations with Russia.

In these times when so many Americans are hard pressed, normal relations could adversely impact the budget and power of the military/security complex by reducing the “Russian threat.” If there is no real Russian threat, only an orchestrated perceived one, the question arises: why does the military/security complex have a taxpayer-supported annual budget of $1,000 billion dollars? The presstitutes have kept the truth from emerging that the “Russiagate” investigation has found no sign of a Trump/Putin plot to steal the 2016 presidential election from Hillary. Indeed, it has been proven beyond all questioning that the Hillary emails were not hacked but were downloaded on a thumb drive. This proof collapses the entire premise of “Russiagate.” Nevertheless, the hoax continues.

He might as well be talking about himself.

• Tsipras Warns “Europe Has No Future If It Doesn’t Admit Mistakes” (KTG)

Europe will have no future if the bloc does not admit mistakes in handling the financial and the migration crisis, Prime Minister warned the European Parliament on Tuesday. Alexis Tsipras said Europe could face an existential crisis over nationalism unless the bloc admits mistakes and its failure to handle a fiscal crisis and the deal with an influx of migrants effectively. The Greek Prime Minister said economic austerity pushed by European governments has fostered fear, racism and the emergence of the far right.“ The economic austerity pursued by European governments had fostered fear, racism and the emergence of the far right, he told lawmakers in the European parliament.

“The EU’s failure to give democratic and effective responses to modern challenges will lead irrevocably to the triumph of chauvinism and will rekindle nationalistic rivalry,” he said. “It will turn it into a fragmented continent, a continent without cohesion, without an international role, and without a future,” he said. Tsipras also criticised Europe’s handling of security and said this could have helped bolster support for far right parties. Several European countries including France and Belgium have seen attacks by Islamist militants in recent years. “The issue at stake is existential for Europe,” said Tsipras. “The handling so far of the financial crisis, the refugee crisis and a security crisis, has exposed huge deficiencies and contradictions.”

“93% of farmers expressed concern that the merger will harm independent farmers and farming communities.”

• Monsanto-Bayer Merger Hurts Farmers and Consumers (CP)

The U.S. Department of Justice issued a stern warning in its lawsuit against the conditionally-approved mega-merger between Bayer and Monsanto in June. The anti-competitive price effects of the merger would, according to the DOJ, “likely result in hundreds of millions of dollars per year in harm, raising costs to farmers and consumers.” The Justice Department warned that the combining of Bayer and Monsanto would reduce competition for vegetable seeds, likely driving up prices. Further, farmers might see prices for GMO cotton, canola, corn and soybean seeds increase, as well as price increases for herbicide and seed treatments. After imposing some limited divestments on Monsanto, the DOJ approved this merger, enabling Monsanto to hide its controversial name brand while giving Bayer anti-competitive control over seeds, pesticides, farmers and consumers worldwide.

But the harm to consumers and farmers will still exist. The DOJ is on the brink of essentially authorizing a monopoly. This is bad news for nearly everyone on the planet except Bayer and Monsanto executives and shareholders. Aside from a combined Bayer-Monsanto, only three other seed companies will be in the market manufacture and sell these products. Farmers overwhelmingly object to the merger. 93% of farmers expressed concern that the merger will harm independent farmers and farming communities. Farmers’ top three concerns were that Bayer/Monsanto “would use its dominance in one product to push sales of other products;” “control data about farm practices;” and that the merger will create “increased pressure for chemically dependent farming.”

Meanwhile, super typhoon Mangkhut is heading straight for Hong Kong.

• ‘Monster’ Hurricane Florence To Pummel US Southeast For Days (R.)

Hurricane Florence, on track to become the first Category 4 storm to make a direct hit on North Carolina in six decades, howled closer to shore on Tuesday, threatening to unleash deadly pounding surf, days of torrential rain and severe flooding. Fierce winds and massive waves are expected to lash the coasts of North and South Carolina and Virginia even before Florence makes landfall by early Friday, bringing a storm surge as much as 13 feet (4 meters), the National Hurricane Center in Miami warned. Catastrophic floods could follow if the storm stalls inland, it said. Although Florence was still days from arrival, authorities took extraordinary measures to move people out of harm’s way. More than 1 million residents have been ordered to evacuate from the coastline of the three states, while university campuses, schools and factories were being shuttered.

The U.S. Coast Guard closed ports in Wilmington and Morehead City, North Carolina and Hampton Roads, Virginia to inbound vessels greater than 500 tons and was requiring vessels of that size to leave if they did not have permission to be in the ports. Packing maximum sustained winds of 140 miles per hour (225 km per hour), the storm ranked as a Category 4 on the five-step Saffir-Simpson hurricane scale and was expected to grow stronger and larger over the next few days, the NHC said. “This storm is a monster,” North Carolina Governor Roy Cooper said. “Even if you’ve ridden out storms before, this one is different. Don’t bet your life on riding out a monster.” He cited forecasts showing Florence was likely to stall over North Carolina, “bringing days and days of rain.”

Graph: weather.com

Social Media vs the Constitution

Aug 292018

August 29, 2018 Posted by Raúl Ilargi Meijer at 1:43 pm Finance Tagged with: banning, blocking, constitution, copyright, Facebook, First Amendment, Google, Internet Association, shadowbanning, Trump, Twitter 7 Responses »

Salvador Dali The burning giraffe 1937
Dali: “The only difference between immortal Greece and our era is Sigmund Freud who discovered that the human body, which in Greek times was merely neoplatonical, is now filled with secret drawers only to be opened through psychoanalysis.”

An ancient Latin saying goes: “Quod licet Iovi, non licet bovi” (what is permissible for Jupiter, is not for an ox). It feels very much on topic when social media are concerned. And as the heat over their censorship is turned up, it may well be the decisive factor.

Reuters reiterates today that on May 23, Manhattan US District Judge Naomi Reice Buchwald ruled that Donald Trump’ Twitter account is a public forum and blocking Twitter users for their views violates their right to free speech under the First Amendment. The same, says the ruling, applies to other government officials’ accounts.

On August 10, the Knight First Amendment Institute at Columbia University sent the Justice Department a list of 41 accounts that remained blocked. Since, at least 20 have been unblocked. Interestingly, the same Justice Department has stated that the ruling was “fundamentally misconceived” arguing Trump’s account “belongs to Donald Trump in his personal capacity and is subject to his personal control, not the control of the government.”

Potentially even more interesting is that “the Internet Association, a trade group that represents Twitter, Facebook Inc, Amazon.com, and Alphabet Inc, filed a brief in the case earlier this month that did not back Trump or the blocked users but urged the court to “limit its decision to the unique facts of this case so that its decision does not reach further than necessary or unintentionally disrupt the modern, innovative Internet.” “

Yeah, they would like that, to make this about Trump only. But that would be strange, because the First Amendment doesn’t only apply to Trump (and/or government officials). It applies to everyone, including Twitter, Facebook, Amazon, and Alphabet. Or does it? Well, not according to the Internet Association:

“Despite any First Amendment status that this court might find in the ‘interactive spaces’ associated with President Trump’s account, Twitter retains authority to revoke access to both his account and the account of any user seeking to comment on President Trump’s account.”

Hmm. So Trump can’t block people from his own Twitter account, but Twitter can do whatever it wishes to that same account. Apart from, you know, banning him, even though many in the ‘left-leaning’ company would like to do just that. Then again, Trump’s 54 million followers make it a profitable account for Twitter. Still, this can obviously not stand. There are no different constitutions for different parties. And they’re not done:

“..there is a considerable risk that any decision that may recognize isolated public forums on Twitter will be misunderstood to hold that Twitter, too, can be subject to First Amendment scrutiny. …Twitter itself is not a state actor when it blocks or withdraws access to its account-holders or users, and it is therefore not subject to the First Amendment’s restraints.”

See? According to the Internet Association, the First Amendment doesn’t apply to its ‘members’, it applies to state actors only. It feels encouraged to make such statements directly by the wording of Judge Buchwald’s ruling. Put differently, Donald Trump’s Twitter account is a public forum but all the rest of Twitter is not (except for other officials).

Now, I’m not a lawyer, but it seems obvious that these people may well be shooting themselves in the foot after first having put it in their mouths. To date, the Internet Association’s members have been able to picture themselves as private enterprises not under the same rules as public ones.

But how much longer is that a feasible attitude? As I said recently, Twitter and Facebook have become the no. 1 warning system in cases of emergencies and disasters, and banning or blocking people from it is as dangerous, life threatening even, as banning people from having radio’s, phones or TVs.

When the first radio’s, phones, TVs were introduced, other warning systems were in place. But over time they became the warning system. As I put it earlier, first you’re an entity, and then you become a utility. And the US judicial system has acted decisively on this in the past, though by no means perfectly.

Twitter, Facebook, Google seek to find the magic sweetspot where they can do whatever they damn well want while raking in billion after billion. But they’re as much behind the curve as the political and legislative systems are. They have already fallen victim to their own success, but they either don’t realize it or try to obfuscate it.

Meanwhile, they’re still banning, shadowbanning and blocking to their heart’s content. They should understand that cannot go on. They’re not some Harvard hobby club anymore. They’re killing off the very legal protection they claim to be protected by, because their position in society shifts. It takes a while, largely because their rise has been meteoric, but politics will catch up; it has to.

Former UK ambassador to Uzbekistan Craig Murray wrote yesterday:

Facebook has deleted all of my posts from July 2017 to last week because I am, apparently, a Russian Bot. For a while I could not add any new posts either, but we recently found a way around that, at least for now. To those of you tempted to say “So what?”, I would point out that over two thirds of visitors to my website arrive via my posting of the articles to Facebook and Twitter. Social media outlets like this blog, which offer an alternative to MSM propaganda, are hugely at the mercy of these corporate gatekeepers.

As for us, the Automatic Earth, Facebook closed our 9-year account a while back without one word of warning or explanation. We asked many times why, but never received an answer. Sent documents to prove who we are, nothing. Gone 1000s of followers, gone traffic, gone revenues. It’s simply too much power for a bunch of geeks, now aligned with the Atlantic Council, to have. It must be broken up.

Murray on the Atlantic Council: “..extreme neo-con group part funded by NATO and whose board includes serial war criminal Henry Kissinger, Former CIA Heads Michael Hayden and Michael Morrell, and George Bush’s chief of Homeland Security Michael Chertoff, among a whole list of horrors.”

The companies could try and hide behind the fact that they’re international, and can’t be defined by US law only, but that would be a risky proposition. Julian Assange has by and large been denied his First Amendment rights by the current administration because he’s not an American, while Christopher Steele was granted his despite not being an American. Wobbly ground, that.

But yes, stay American and Baby Bells loom in your future. Not that this is the only issue Silicon Valley’s legal teams will have to tackle with:

Sammy Ketz, AFP’s Baghdad bureau chief, wrote yesterday:

.. it is not the news organisations who reap the profits but internet platforms, which help themselves to our reporting without paying a cent. [..] The media have endured a lot of pain for a long time before reacting to the financial drain, struggling with the consequences rather than the cause. They have laid off staff almost to the point of absurdity. Now they are demanding that their rights are respected so they can carry on reporting the news. [..]

We can no longer swallow the lie spread by Google and Facebook that an EU directive on such rights would threaten people’s ability to access the internet for free. Free access to the web will endure because the internet giants, which now use editorial content for free, can reimburse the media without asking consumers to pay.

Difficult? Impossible? Not at all. Facebook made $16bn in profits in 2017 and Alphabet (Google’s parent company) $12.7bn. They simply have to pay their dues. That is how the media will survive and the internet titans will be contributing to the diversity and freedom of the press they claim to support.

The Internet Association members don’t appear to get it yet, but their opportunity windows are fast shuttering. There is no way for them to keep on doing what they have, as they have, for much longer. They’ve drawn the ire of Donald Trump, and though they may tend to focus more on denouncing him, they’d better pay attention.

Because they don’t hold the cards. Or rather, they’ve been overplaying them. We know they’ve been meeting with the explicit goal of coming up with a general strategy for the November US mid-term elections. We also know they are left-leaning. And that they’ve banned and blocked many accounts.

All it takes is for a judge or the president to label them a utility, and put them in the same legal frame as a phone company or broadcaster. Because if they can’t be objective, while they are the no. 1 source of news for many people, the potential influence of their secret algorithms and obvious political bias is just too great.

And that is obstruction of democracy, and in the end, justice. As I wrote last week in The Shape of Trump to Come:

Trump will end the ‘monopolies’ of Facebook, Google, Twitter et al. [..] .. you simply can’t have a few roomfuls of boys and girls ban and shadowban people with impunity from networks that span the globe and reach half of the world’s population on the basis of opaque ‘Terms and Conditions’ that in effect trump the US constitution the way they are used and interpreted. Whether they are private companies or not will make no difference in the end.

I have the impression that they think they can fight this. All those billions buy good lawyers. But in the end, you can’t have the president under one set of constitutional rights, and Jack Dorsey or Mark Zuckerberg under another.

Sure, the intelligence community may protest whatever ‘solution’ the White House or DOJ comes up with. But they, too, must realize that elections that are very obviously skewed towards one side are a huge danger to America. And social media have obtained the power to skew them. Much more than a few bucks worth of Russian ads on their podium, that whole story is entirely insignificant compared to America’s ‘own’ social media.

Trump can simply say: if my account must be open, let that be true for everybody else’s too. Forbid any and all banning and blocking unless and until a judge permits it on constitutional grounds, on a case by case basis.

Judge Buchwald has opened that door by declaring Trump’s Twitter account a public forum. That speaks to the status of Twitter -and Facebook et al- in American society. She can’t take that back.

Assange, Infowars and the Constitution

Aug 072018

August 7, 2018 Posted by Raúl Ilargi Meijer at 1:01 pm Primers Tagged with: Alex Jones, Assange, constitution, control, Infowars, kittens, Orwell, Secret Service, social media, Trump 11 Responses »

Vasily Polenov Christ among the teachers (doctors) 1896

This morning I woke up, looked around me, and saw a world sinking into a quagmire of voluntary censorship, a world willing to let someone far away choose what it can and cannot see of itself, and about itself. A world that no longer appears to recognize, or care, that this goes directly against its founding principles of liberty, freedom of speech, freedom of the press.

I can think of many reasons why someone would want to ban Infowars and Alex Jones, and I don’t even know them other than from incidental tweets and comments. But I also acknowledge that that is not the point. Just because you would like to ban a person or organization, just because you don’t agree with them, doesn’t mean you can, or should be able to.

And if Facebook, Google, Apple, Spotify and Pinterest -all within hours of each other-, think it’s a good idea to ban Jones regardless, they had better do a lot better than saying something about violating their ‘community standards’. They should identify specific instances where these alleged violations take place, and identify them publicly.

You can’t ban anyone on vague ‘standards’ from media that cover half the planet. Because that’s a danger to the entire planet, and to all of mankind. As Facebook and Google are very busy lobbying Washington, Brussels et al to drop any anti-trust charges against them, and let them continue to be private enterprises, they are shirking ever close to the various intelligence communities.

Politicians and secret agents alike have long recognized the potential Big Tech offers for controlling their populations. Long before those populations themselves have recognized the danger embedded in this potential. The treatment of Julian Assange and Infowars, 180º different as they are, puts all this in very sharp perspective.

How are you going to be informed, and stay informed, of what’s happening in the world, of what your government does and plans, if your media, both old and new, conspire to let you know only what they want you to, and to present a version of the world, of reality, that they invented in order to safeguard their future and that of their sponsors? Who’s going to tell you what happens behind the infinite layers of curtains?

What is most important here is not who Alex Jones is, or what he’s done and said. What’s most important is that he stands up for Julian Assange as the media, across the board, is either silent or actively smearing Assange with impunity. So for once, go to Infowars and sign the petition to Trump to Free Assange.. If anyone can get through to Trump, it’s Alex Jones, and they’re trying to prevent him from doing just that.

You’re being sold out, your rights and freedoms are being sold out, while you’re busy looking at pictures of what your friends had for dinner last night. And if that’s your thing, fine, but not before and until you’ve checked what is happening to your life and liberty, and that of your children, while you’re watching the next photo of a creme brulée or some cute kitten 1000 miles away.

We all know these things. And we’re all overloaded on info, so we’re all tired and developing headaches in echo chambers, and cute kittens are so much easier to deal with than petitions. But pretty soon, if you’re not careful, kittens will be the only thing you’re allowed to look at. Kittens and ‘news’ about evil Russians allegedly plotting to do to you exactly what your own governments already, and actually, do right now.

In one word: you’re being brainwashed. Brainwashed into handing over the liberties your ancestors fought very hard, and often lost their lives, to obtain and guarantee in your constitution. You can’t just give those things away, you have no right to. You owe it to them to protect what they fought for. If and when your government, your House and Senate, refuse to do that, then you will have to do it.

And that starts with protecting and standing up for Julian Assange. You don’t get to pick and choose which part of freedom you would like to protect, you either protect the entire concept or you do not. Freedom doesn’t mean you get to chop freedom into bits and pieces. And if you fail to stand up for the part you don’t like, you also fail to protect what you do like.

You don’t get to cherrypick, And neither should Google, Apple, and Facebook. Check your constitution for that one. Sure, we get it, it’s hard to stand up for Alex Jones. But if he can get chucked out for violating opaque ‘community standards’ of some private enterprise, then so can you. Well, unless you only look at kittens and desserts. But is that what you want your life to look like going forward?

This is about a principle engraved in the Constitution, and not just the American one. And of course there would always be people trying to get rid of that principle, because it got in the way of their personal power and interests. But that’s exactly why it’s in the Constitution. So it can’t just be eradicated at whim.

New media, social media, have taken the world by storm, and everyone has to scramble to keep up and think about what this means. What it should never ever mean, though, is that some parties get to use the confusion in order to trample on the Constitution. But that is what’s happening today.

We’ll resolve this eventually. You can’t let companies that have half the world as their clients continue as private enterprises; there’s far too much in the way of monopoly and anti-trust law to allow that to continue. But as long as this is not solved, Google and Facebook will be used as political tools, even while their legal status, and that of their policies, will be increasingly questionable.

So, you know, standing up for Alex Jones today equals standing up for the Constitution. That is harder for people to understand than it is that calling for Julian Assange to be protected and freed is. But it is the same thing. This is proven more than anything by the fact that Jones gets shut down at the very moment he seeks to protect Assange.

Swallow your pride and your disapproval of Alex Jones. Sign the petition to Trump to Free Assange.. It’s much bigger than your pride, or whatever you happen to like or dislike. This is about your future. And the people in the past who gave their lives to make it what it is. Don’t give it away. Prove Orwell wrong.

That we must defend Alex Jones just to stand up for Julian Assange should be all you need to know. You can’t defend Assange without also defending Infowars’ right to speak. And if they say things that go against the Constitution, a bunch of geeks in Silicon Valley should never be the judges of that.

Debt Rattle July 3 2018

Jul 032018

July 3, 2018 Posted by Raúl Ilargi Meijer at 8:55 am Finance Tagged with: Assange, buybacks, constitution, crisis, debt, Facebook, holding centers, Japan, Merkel, migration, Ponzi, Snowden, Taleb, Tesla 15 Responses »

Edward Hopper Summer interior 1909

• Buybacks Are The Only Thing Keeping The Stock Market Afloat (CNBC)

• Stock Markets Look Ever More Like Ponzi Schemes (Murphy)

• A Japanese Tsunami Out Of US CLOs Is Coming (HC)

• The Eurozone’s Coming Debt Crisis (Lacalle)

• The ‘Dirty Dozen’ Sectors Of Global Debt (Rochford)

• UK’s Latest Brexit Proposal Is Unrealistic, Say EU Officials (G.)

• Nassim Taleb Slams “These Virtue-Signaling Open-Borders Imbeciles” (ZH)

• Merkel Dodges Political Bullet With Controversial Migrant Deal (AFP)

• Austria Says To ‘Protect’ Its Borders After German Migrant Deal (AFP)

• Is Facebook A Publisher? In Public It Says No, But In Court It Says Yes (G.)

• Tesla’s All-Nighter To Hit Production Goal Fails To Convince Wall Street (R.)

• The New York Times Squares off with the Truth, Again (AHT)

• Anthony Kennedy and Our Delayed Constitutional Crisis (GP)

• ‘Snowden is the Master of His Own Destiny’ – Russia (TeleSur)

And then QE ends.

• Buybacks Are The Only Thing Keeping The Stock Market Afloat (CNBC)

Stocks right now are hanging by a thread, boosted by a bonanza of corporate buying unrivaled in market history and held back by a burst in investor selling that also has set a new record. Both sides are motivated by fear, as corporations find little else to do with their $2.1 trillion in cash than buy back their own shares or make deals, while individual investors head to the sidelines amid fears that a global trade war could thwart the substantial momentum the U.S. economy has seen this year. “Corporate cash is going to find a home, and it’s either going to be in buybacks, dividends or M&A activity. What it’s not going to be is in capex,” said Art Hogan, chief market strategist at B. Riley FBR.

“Individuals are looking at the turbulence we’ve seen this year that we had not seen last year. That creates its own sort of exit sign for investors who don’t want to deal with that.” The numbers showing where each side put their cash in the second quarter are striking. Companies announced $433.6 billion in share repurchases during the period, nearly doubling the previous record of $242.1 billion in the first quarter, according to market research firm TrimTabs. Dow components Nike and Walgreens Boots Alliance led the most recent surge in buybacks, with $15 billion and $10 billion, respectively, last week. In all, 31 companies announced buybacks in excess of $1 billion during June.

At the same time, investors dumped $23.7 billion in stock market-focused funds in June, also a new record. For the full quarter, the brutal June brought global net equity outflows to $20.2 billion, the worst performance since the third quarter of 2016, just before the presidential election. The selling is particularly acute in mutual funds, which saw $52.9 billion in outflows during the quarter and are typically more the purview of the retail side.

“People think their savings and pensions are safe because of rising share prices. They do not realise it is all a con-trick.”

• Stock Markets Look Ever More Like Ponzi Schemes (Murphy)

The FT has reported this morning that: “Debt at UK listed companies has soared to hit a record high of £390bn as companies have scrambled to maintain dividend payouts in response to shareholder demand despite weak profitability.” They added: “UK plc’s net debt has surpassed pre-crisis levels to reach £390.7bn in the 2017-18 financial year, according to analysis from Link Asset Services, which assessed balance sheet data from 440 UK listed companies.” So what, you might ask? Does it matter that companies are making sense of low-interest rates to raise money when I am saying that government could and should be doing the same thing?

Actually, yes it does. And that’s because of what the cash is being used for. Borrowing for investment makes sense. Borrowing to fund revenue investment (that is training, for example, which cannot go on the balance sheet but still adds value to the business) makes sense. But borrowing to pay a dividend when current profits and cash flow would not support it? No, that makes no sense at all. Unless, of course, you are CEO on a large share price linked bonus package and your aim is to manipulate the market price of the company. It is that manipulation that is going on here, I suggest. These loans are being used to artificially inflate share prices.

The problem is systemic. In the US the problem is share buybacks, which I read recently have exceeded $5 trillion in the last decade, meaning that US companies are now by far the biggest buyers of their own shares. That is, once again, market manipulation. And this manipulation does matter. People think their savings and pensions are safe because of rising share prices. They do not realise it is all a con-trick. And companies claim that their pension funds are better funded as a result of these share prices, and so they are meeting their obligations to their employees when that too is a con-trick. They may be insolvent when the truth is known, so serious is the fraud.

Japan plays a strange role in the global economy. It won’t be able to keep that up much longer. The Bank of Japan has many options; none are good.

• A Japanese Tsunami Out Of US CLOs Is Coming (HC)

Japan is at the very centre of the global financial system. It has run current account surpluses for decades, building the world’s largest net foreign investment surplus, or its accumulated national savings. Meanwhile, other nations, such as the US, have borrowed from nations like Japan to live beyond their own means, building net foreign investment deficits. We now have unprecedented levels of cross-national financing.

Much of Japan’s private sector saving is placed in Yen with financial institutions who then invest overseas. These institutions currency hedged most of their foreign assets to reduce risk weighted asset charges and currency write down risks. The cost of hedging USD assets has however risen due to a flattening USD yield curve and dislocations in FX forwards. As shown below, their effective yield on a 10 year US Treasury (UST) hedged with a 3 month USDJPY FX forward has fallen to 0.17%. As this is below the roughly 1% yield many financial institutions require to generate profits they have been selling USTs, even as unhedged 10 year UST yields rise. The effective yield will fall dramatically for here if 3 month USD Libor rises in line with the Fed’s “Dot Plot” forecast for short term rates, assuming other variables like 10 year UST yields remain constant.

As Japanese financial institutions sell US Treasuries, which are considered the safest foreign asset, they are shifting more into higher yielding and higher risk assets; foreign bonds excluding US treasuries as well as foreign equity and investment funds. This is a similar pattern to what we saw prior to the last global financial crisis. In essence, Japan’s financial institutions are forced to take on more risk in search of yield to cover rising hedge costs as the USD yield curve flattens late in the cycle. Critically as the world’s largest net creditor they facilitate significant added liquidity for higher risk overseas borrowers late into the cycle.

I follow these flows closely. One area I think is rather interesting is US Collateralised Loan Obligations (CLOs) which Bloomberg reports “ballooned to a record last quarter thanks in large part to unusually high demand from Japanese investors”. CLOs are essentially a basket of leveraged loans provided to generally lower rated companies with very little covenant protection. Alarmingly, some US borrowers have used this debt to purchase back so much of their own stock that their balance sheets now have negative net equity. A recent Fed discussion paper shows in the following chart that CLOs were the largest mechanism for the transfer of corporate credit risk out of undercapitalised banks in the US and into the shadow banking sector. Japanese financial institutions have been the underwriter of much of that risk in their search for yield.

“This reduction in costs is financed by pensioners and savers who are forced to invest in these debt instruments, often by institutional mandate.”

• The Eurozone’s Coming Debt Crisis (Lacalle)

The European Central Bank (ECB) has signaled the end of its asset purchase program and even a possible rate hike before 2019. After more than 2 trillion euros of asset purchases and a zero interest rate policy, it is long overdue. The massive quantitative easing (QE) program has generated very significant imbalances and the risks far outweigh the questionable benefits. The balance sheet of the ECB is now more than 40 percent of the eurozone GDP. The governments of the eurozone, however, have not prepared themselves at all for the end of stimuli. They often claim that deficits have been reduced and risks contained. However, closer scrutiny shows that the bulk of deficit reductions came from lower cost of government debt.

Eurozone government spending has barely fallen, despite lower unemployment and rising tax revenues. Structural deficits remain stubborn, and in some cases, unchanged from 2013 levels. In other words, the problems are still there, they were just hidden for a while, swept under the rug of an ever-expanding global economy. The 19 eurozone countries have collectively saved 1.15 trillion euros in interest payments since 2008 due to ECB rate cuts and monetary policy interventions, according to German media outlet Handelsblatt. This reduction in costs is financed by pensioners and savers who are forced to invest in these debt instruments, often by institutional mandate.

However, that illusion of savings and budget stability will rapidly disappear as most Eurozone countries face massive amounts of debt coming due in the 2018–2020 period and wasted precious years of quantitative easing without implementing strong structural reforms. The recent troubles of Italian banks are just one precursor of things to come. Taxes rose for families and small and medium-sized enterprises, while current spending by governments barely fell, competitiveness remained poor, and a massive 1 trillion euro in nonperforming loans raises doubts about the health of the European financial system.

Good overview. Crises wherever you look.

• The ‘Dirty Dozen’ Sectors Of Global Debt (Rochford)

When considering where the global credit cycle is at, it’s often easy to form a view based on a handful of recent articles, statistics and anecdotes. The most memorable of these tend to be either very positive or negative otherwise they wouldn’t be published or would be quickly forgotten. A better way to assess where the global credit cycle is at is to look for pockets of dodgy debt. If these pockets are few, credit is early in the cycle with good returns likely to lie ahead. If these pockets are numerous, that’s a clear indication that credit is late cycle.

In reviewing global debt, twelve sectors standout for their lax credit standards and increasing risk levels. There’s excessive risk taking in developed and emerging debt, as well as in government, corporate, consumer and financial sector debt. This points to global credit being late cycle. Central banks have failed to learn the lessons from the last crisis. By seeking to avoid or lessen the necessary cleansing of malinvestment and excessive debt, this cycle’s economic recovery has been unusually slow. Ultra-low interest rates and quantitative easing have increased the risk of another financial crisis, the opposite of the financial stability target many central bankers have.

For global debt investors, the current conditions offer limited potential for gains beyond carry. With credit spreads in many sectors at close to their lowest in the last decade, there is greater potential for spreads to widen dramatically than there is for spreads to tighten substantially. Keeping credit duration low, staying senior in the capital structure and shifting up the rating spectrum will cost some carry. However, the cost of de-risking now is as low as it has been for a long time. If the risks in the dirty dozen sectors materialise in the medium term, the losses avoided by de-risking will be a multiple of the carry foregone.

I’d say it’s about time for the British to wake up to the damage May et al are inflicting on the nation.

• UK’s Latest Brexit Proposal Is Unrealistic, Say EU Officials (G.)

A draft of Theresa May’s Brexit plan has already been dismissed as unrealistic by senior EU officials, who say the UK has no chance of changing the European Union’s founding principles. The prime minister is gathering her squabbling ministers at Chequers on Friday for a one-day discussion to thrash out the UK’s future relationship with the EU. But EU sources who have seen drafts of the long-awaited British white paper said the proposals would never be accepted. “We read the white paper and we read ‘cake’,” an EU official told the Guardian, a reference to Boris Johnson’s one-liner of being “pro having [cake] and pro-eating it”. Since the British EU referendum, “cake” has entered the Brussels lexicon to describe anything seen as an unrealistic or far-fetched demand.

May’s white paper is expected to propose the UK remaining indefinitely in a single market for goods after Brexit, to avoid the need for checks at the Irish border. While the UK is offering concessions on financial services, it wants restrictions on free movement of people – a long-standing no-go for the EU. Jean-Claude Piris, a former head of the EU council’s legal service, said it would be impossible for the EU to split the “four freedoms” underpinning the bloc’s internal market, which are written into the 1957 treaty that founded the European project: free movement of goods, services, capital and people. “The EU is in difficulties at the moment; the one and only success which glues all these countries together is a little bit the money and the internal market,” Piris said. “If you fudge the internal market by allowing a third state to choose what they want … it is the beginning of the end.”

Not easy to find the right position on the topic. But Europe seems to show that uncontrolled immigration leads to the rise of right wing movements. Merkal gave birth to Salvini.

• Nassim Taleb Slams “These Virtue-Signaling Open-Borders Imbeciles” (ZH)

As liberals across America continue to attempt to one-up one another with the volume of virtue they can signal, specifically on the question of ‘open borders’ – especially since ‘jenny from the bronx’ victory over the weekend, none other than Nassim Nicholas Taleb unleashed a trite 3-tweet summary of how farcical this argument is…

What intellectuals don’t get about MIGRATION is the ethical notion of SYMMETRY:

1) OPEN BORDERS work if and only if the number of pple who want to go from EU/US to Africa/LatinAmer equals Africans/Latin Amer who want to move to EU/US

2) Controlled immigration is based on the symmetry that someone brings in at least as much as he/she gets out. And the ethics of the immigrant is to defend the system as payback, not mess it up. Uncontrolled immigration has all the attributes of invasions.

3) As a Christian Lebanese, saw the nightmare of uncontrolled immigration of Palestinians which caused the the civil war & as a part-time resident of N. Lebanon, I am seeing the effect of Syrian migration on the place.

So I despise these virtue-signaling open-borders imbeciles.

Silver Rule in #SkinInTheGame

Mutti’s holding centers.

• Merkel Dodges Political Bullet With Controversial Migrant Deal (AFP)

German Chancellor Angela Merkel survived a bruising challenge to her authority with a compromise deal on immigration but faced charges Tuesday that it spelt a final farewell to her welcoming stance toward refugees. In high-stakes crisis talks overnight, Merkel had put to rest for now a dangerous row with her hardline Interior Minister Horst Seehofer that had threatened the survival of her fragile coalition government. In separate statements, Merkel praised the “very good compromise” that she said spelt a European solution, while Seehofer withdrew a resignation threat and gloated that “it’s worth fighting for your convictions”.

In a pact both sides hailed as a victory, Merkel and Seehofer agreed to tighten border controls and set up closed holding centres to allow the speedy processing of asylum seekers and the repatriations of those who are rejected. They would either be sent back to EU countries that previously registered them or, in case arrival countries reject this – likely including frontline state Italy – be sent back to Austria, pending an agreement with Vienna. CSU general secretary called the hardening policy proposal the last building block “in a turn-around on asylum policy” after a mass influx brought over one million migrants and refugees.

But criticism and doubts were voiced quickly by other parties and groups, suggesting Merkel may only have won a temporary respite. Refugee support group Pro Asyl slammed what it labelled “detention centres in no-man’s land” and charged that German power politics were being played out “on the backs of those in need of protection”. Bernd Riexinger of the opposition far-left Die Linke party spoke of “mass internment camps” as proof that “humanity got lost along the way” and urged Merkel’s other coalition ally, the Social Democrats (SPD), to reject the plan.

And Merkel made Kurz possible, too.

• Austria Says To ‘Protect’ Its Borders After German Migrant Deal (AFP)

Austria’s government warned Tuesday it could “take measures to protect” its borders after Germany planned restrictions on the entry of migrants as part of a deal to avert a political crisis in Berlin. If the agreement reached Monday evening is approved by the German government as a whole, “we will be obliged to take measures to avoid disadvantages for Austria and its people,” the Austrian government said in a statement. It added it would be “ready to take measures to protect our southern borders in particular,” those with Italy and Slovenia. German Chancellor Angela Merkel reached a deal Monday on migration with her rebellious interior minister, Horst Seehofer, to defuse a bitter row that had threatened her government.

Among the proposals is a plan to send back to Austria asylum seekers arriving in Germany who cannot be returned to their countries of entry into the European Union. Austria said it would be prepared to take similar measures to block asylum seekers at its southern borders, with the risk of a domino effect in Europe. “We are now waiting for a rapid clarification of the German position at a federal level,” said the statement, signed by Austria’s conservative Chancellor Sebastian Kurz and his allies of the far-right Freedom party, Vice Chancellor Heinz-Christian Strache and Interior Minister Herbert Kickl. “German considerations prove once again the importance of a common European protection of the external borders,” the statement said.

Wonder what the strategy meetings were like.

• Is Facebook A Publisher? In Public It Says No, But In Court It Says Yes (G.)

Facebook has long had the same public response when questioned about its disruption of the news industry: it is a tech platform, not a publisher or a media company. But in a small courtroom in California’s Redwood City on Monday, attorneys for the social media company presented a different message from the one executives have made to Congress, in interviews and in speeches: Facebook, they repeatedly argued, is a publisher, and a company that makes editorial decisions, which are protected by the first amendment. The contradictory claim is Facebook’s latest tactic against a high-profile lawsuit, exposing a growing tension for the Silicon Valley corporation, which has long presented itself as neutral platform that does not have traditional journalistic responsibilities.

The suit, filed by an app startup, alleges that Mark Zuckerberg developed a “malicious and fraudulent scheme” to exploit users’ personal data and force rival companies out of business. Facebook, meanwhile, is arguing that its decisions about “what not to publish” should be protected because it is a “publisher”. In court, Sonal Mehta, a lawyer for Facebook, even drew comparison with traditional media: “The publisher discretion is a free speech right irrespective of what technological means is used. A newspaper has a publisher function whether they are doing it on their website, in a printed copy or through the news alerts.” [..] Mehta argued in court Monday that Facebook’s decisions about data access were a “quintessential publisher function” and constituted “protected” activity, adding that this “includes both the decision of what to publish and the decision of what not to publish”.

David Godkin, an attorney for Six4Three, later responded: “For years, Facebook has been saying publicly … that it’s not a media company. This is a complete 180.” Questions about Facebook’s moral and legal responsibilities as a publisher have escalated surrounding its role in spreading false news and propaganda, along with questionable censorship decisions. Eric Goldman, a Santa Clara University law professor, said it was frustrating to see Facebook publicly deny that it was a publisher in some contexts but then claim it as a defense in court. “It’s politically expedient to deflect responsibility for making editorial judgements by claiming to be a platform,” he said, adding, “But it makes editorial decisions all the time, and it’s making them more frequently.”

He did pull it off. But it may be too little too late. Biggest no-no: Model 3 was supposed to be $35,000. ended up at $78,000.

• Tesla’s All-Nighter To Hit Production Goal Fails To Convince Wall Street (R.)

Tesla’s burning the midnight oil to hit a long-elusive target of making 5,000 Model 3 vehicles per week failed to convince Wall Street that the electric carmaker could sustain that production pace, sending shares down 2.3% on Monday. Tesla met the target by running around the clock and pulling workers from other projects, workers said. The company also took the unprecedented step of setting up a new production line inside a tent on the campus of its Fremont factory, details of which Chief Executive Elon Musk tweeted last month. Tesla’s heavily-shorted shares rose as much as 6.4% to $364.78 in early trading, but sank after several analysts questioned whether Tesla would be able to sustain the Model 3 production momentum, which is crucial for the long-term financial health of the company.

“In the interim, we do not see this production rate as operationally or financially sustainable,” said CFRA analyst Efraim Levy. “However, over time, we expect the manufacturing rate to become sustainable and even rise.” Levy cut CFRA’s rating on Tesla stock to “sell” from “hold.” Tesla, which Chief Executive Elon Musk hailed on Sunday as having become a “real car company,” said it now expects to boost production to 6,000 Model 3s per week by late August, signaling confidence about resolving technical and assembly issues that have plagued the company for months. Tesla also reaffirmed a positive cash flow and profit forecast for the year. Tesla has been burning through cash to produce the Model 3. Problems with an over-reliance on automation, battery issues and other bottlenecks have potentially compromised Tesla’s position in the electric car market as a host of competitors prepare to launch rival vehicles.

NATO is “justified by the need to manage the security threats provoked by its enlargement.”.

• The New York Times Squares off with the Truth, Again (AHT)

Whenever I’m having a rough day and need a pick-me-up, I turn to The New York Times’ editorial page. It’s always a gas to see how far the empire’s leading propaganda outfit is prepared to go in its mission to pull the wool over we the people’s gullible little eyes. The good editors have come through for me again with their latest entry, “Trump and Putin’s Too-Friendly Summit.” (Original title: “Trump and Putin: Best Frenemies for Life”). No doubt the original headline was deemed rather too impish for such a serious newspaper—it might, for instance, have alerted readers to the fact that the editorial’s content is not to be taken very seriously—and so was understandably jettisoned.

“One would think,” the editors write, “that the president of the United States would let Mr. Putin know that he faces a united front of Mr. Trump and his fellow NATO leaders, with whom he would have met days before the [Putin] summit in Helsinki.” Alas, during said meeting Trump reportedly remarked that “NATO is as bad as NAFTA”—the “free trade” agreement that has succeeded in decimating most of the manufacturing jobs spared by the automation wrecking ball. In other words, Trump does not necessarily think it’s a good idea to encircle Russia with a hostile military alliance whose existence, according to geopolitical expert Richard Sakwa, is “justified by the need to manage the security threats provoked by its enlargement.” (If you haven’t read Professor Sakwa’s comprehensive study of the Ukrainian crisis, Frontline Ukraine, put it at the top of your summer reading list.)

One notes the Turgidsonian delight with which the Times reminds us that, should push come to shove, we’ve got those Russki bastards outgunned. Of course, gullibles like you and I are to pay no mind to the fact that such a confrontation (a military one, for the Times brought up NATO) would almost certainly involve a nuclear exchange, rendering the disparity in manpower that so excites the Times totally meaningless. No, what’s important is that NATO has twenty-nine member states and counting, while the Warsaw Pact was dissolved twenty-seven years ago: ergo, unless he wants the old mailed fist, Putin had better ask “how high?” when we tell him to jump. One would be hard-pressed to come up with a more delusional assessment of where things stand.

“We are in that constitutional crisis now, but just at the start of it.”

• Anthony Kennedy and Our Delayed Constitutional Crisis (GP)

Like “swing vote” Justice Sandra Day O’Connor before him, “swing vote” justice Anthony Kennedy has been one of the worst Supreme Court jurists of the modern era. With swing-vote status comes great responsibility, and in the most consequential — and wrongly decided — cases of this generation, O’Connor and Kennedy were the Court’s key enablers. They • Cast the deciding vote that made each decision possible • Kept alive the illusion of the Court’s non-partisan legitimacy. Each of these points is critical in evaluating the modern Supreme Court. For two generations, it has made decisions that changed the constitution for the worse. (Small “c” on constitution to indicate the original written document, plus its amendments, plus the sum of all unwritten agreements and court decisions that determine how those documents are to be interpreted).

These horrible decisions are easy to list. They expanded the earlier decision on corporate personhood by enshrining money as political speech in a group of decisions that led to the infamous Citizens United case (whose majority opinion, by the way, was written by the so-called “moderate” Anthony Kennedy); repeatedly undermined the rights of citizens and workers relative to the corporations that rule and employ them; set back voting rights equality for at least a generation; and many more. After this next appointment, many fear Roe v. Wade may be reversed. Yet the Court has managed to keep (one is tempted to say curate) its reputation as a “divided body” and not a “captured body” thanks to its so-called swing vote justices and the press’s consistent and complicit portrayal of the Court as merely “divided.”

The second point above, about the illusion of the Court’s legitimacy, is just as important as the first. If the Court were ever widely seen as acting outside the bounds of its mandate, or worse, seen as a partisan, captured organ of a powerful and dangerous political minority (which it certainly is), all of its decisions would be rejected by the people at large, and more importantly, the nation would plunged into a constitutional crisis of monumental proportions. We are in that constitutional crisis now, but just at the start of it. We should have been done with it long ago. Both O’Connor and Kennedy are responsible for that delay.

Image credit: Mike Thompson / Detroit Free Press

A tale of two refugees
Putin: Snowden is free to do whatever he wants
Lenin: I ordered Assange to be gagged and isolated and am coordinating “next steps” with US

• ‘Snowden is the Master of His Own Destiny’ – Russia (TeleSur)

United States President Donald Trump is expected to pressure Russia to hand over NSA whistleblower Edward Snowden in exchange for sanctions relief at the upcoming Trump-Putin summit; however, Russia has emphasized that they “are not in a position” to expel Snowden and will “respect his rights” if any such attempt is made. “I have never discussed Edward Snowden with (Donald Trump’s) administration,” Russian Foreign Minister Sergey Lavrov said to Channel 4 reporters. “When he (Putin) was asked the question, he said this is for Edward Snowden to decide. We respect his rights, as an individual. That is why we were not in a position to expel him against his will because he found himself in Russia even without a U.S. passport, which was discontinued as he was flying from Hong Kong.”

Snowden, who is being prosecuted in the United States for leaking classified documents that showed surveillance abuse by U.S. intelligence agencies, was given political asylum in Russia after his passport was revoked. “Edward Snowden is the master of his own destiny,” Lavrov said. Trump is meeting with Russian President Vladimir Putin on July 16 in Helsinki, where Putin is expected to push for an end to U.S. sanctions. Trump has said he would like better relations with Russia, perhaps as a way of pulling them away from China, but Trump’s opponents in the United States are already applying political pressure on him for holding the summit, in the midst of the tensest U.S.-Russian relations since the height of the Cold War.

The fate of Wikileaks founder Julian Assange also lay in the balance when U.S. Vice President Mike Pence met with Ecuador’s President Lenin Moreno this week. “The vice president raised the issue of Mr. Assange. It was a constructive conversation. They agreed to remain in close coordination on potential next steps going forward,” a White House official said in a statement.

Debt Rattle April 14 2018

Apr 142018

April 14, 2018 Posted by Raúl Ilargi Meijer at 9:54 am Finance Tagged with: constitution, data transfer, hostage, Mattis, May, missiles, Putin, Syria, Trump, US media, war 8 Responses »

Robert Capa Anti-fascist militia women defending a street barricade, Barcelona 1936

• US Media Love War More Than They Hate Trump (Khalek)

• US Defence Secretary Mattis Says ‘This Was A One-Time Shot’ – For Now (Ind.)

• Why Is ‘Bad Guy’ Putin So Popular At Home? (Steve Keen)

• Trump’s Actions in Syria Violate US Constitution (Kucinich)

• Long Wars (Claire Connelly)

• The Deep State Takes A Hostage (Stockman)

• Irish High Court Sets Out 11 Questions For ECJ on EU-US Data Transfers (IT)

• Mark Zuckerberg’s Testimony Lurched From Easy Ride To Headache (G.)

• Making America More Indebted (Roberts)

• JPMorgan Profits Soar 35% Thanks To Donald Trump’s Tax Cuts (Ind.)

How many people actually believe the Skripal and Douma stories they are being fed?

• US Media Love War More Than They Hate Trump (Khalek)

American media outlets can’t help themselves. They love war. They love war more than they hate Trump. They love war so much, they are cheering on the president they hate to militarily escalate in Syria. And if he doesn’t escalate in Syria, it proves he is controlled by the Kremlin, they tell us. If he wants to demonstrate that Russia isn’t calling the shots, he must bomb Syria. And he must bomb Syria to punish Assad for an alleged chemical attack that has yet to be properly investigated to determine whether it took place and who is responsible. The US media isn’t interested in evidence, they have been repeating that Assad was behind this alleged attack from the beginning and through repetition it has become a truth.

NBC recently published claims fed to them by anonymous US intelligence officials claiming to have proof that the attack did indeed take place and that Assad is responsible. It’s not as if US officials have ever lied about weapons of mass destruction in the past to justify war, so why should NBC be skeptical of this? Meanwhile, CNN—when it isn’t busy obsessing over Stormy Daniels—has hosted a parade of war hawks agitating for military escalation against Syria, against Iran, even against Russia. For example US Republican Senator Lindsey Graham, who has never seen a country he doesn’t want to bomb, was allowed to go on air and call Assad a legitimate military target, saying Trump should take him out to “send a strong message other bad actors like North Korea and Iran.”

He went largely unchallenged by the CNN host whose only qualm was where the US could bomb in Syria to properly punish the Assad government. “It’s tough to decide what option to hit. What is a good option? You’d be forced to take out the air force but it doesn’t sound like taking out the air force will stop if it’s chemical attacks coming out of a helicopter,” she said to Graham. The editorial board at the Washington Post, a newspaper that is owned by Amazon billionaire Jeff Bezos who has a $600 million contract with the CIA that is never disclosed by the paper on stories related to the intelligence agency despite the clear conflict of interest, agitated for Trump to go further than just bombing Syria once.

The Post wants to see a longer term plan for regime change and US military domination over Syria. “The reality Mr. Trump has not yet faced is that as long as the dictator he called “Animal Assad” remains in place, Syria’s wars will continue, breeding Islamist terrorists and propelling refugees toward Europe,” said the Post. But the reality is the opposite: it is the US’ war of regime change in Syria that has prolonged the war, bred Islamist terrorists, and propelled refugees toward Europe, and the Post is calling for continuing that regime change operation.

The story is they struck chemical weapons facilities. That means the OPCW has zero credibility from now on; they stated just a few years ago that Syria had none anymore.

• US Defence Secretary Mattis Says ‘This Was A One-Time Shot’ – For Now (Ind.)

The US military has revealed the three-nation stake on Syria targeting alleged chemicals assets is over for now – declaring “right now this is a one-time shot”. Defence Secretary James Mattis said the US, UK and France had acted together, having determined that Syrian leader Bashar al-Assad had used chemical weapons against civilians a week ago. He said it would depend on Mr Assad if there were further strikes. “Right now this is a one-time shot,” he told a briefing on Friday night at the Pentagon. The Chairman of the Joint Chiefs of Staff General Joseph Dunford, said the targets included a Syrian research facility, a chemical weapons storage facility and a command post. The first of these was located in Damascus, the first time that the US had struck close to the capital.

Asked whether the US and its allies was planning further attacks, Mr Mattis said: “That depends open Assad.” The Defence Secretary said he was “certain” the Syrian regime had used chemical weapons in an attack on civilians, something that Mr Assad and its Russian allies have denied. He said the US was still investigating what sort of chemical weapons had been used. “We are aware of one of the chemical agents” that was used, but further assessments were continuing. While it was reported that Russian forces were not warned in advance of the strike, he said that usual deescalation communications did go ahead, the process Moscow and Washington use to avoid unintentional attacks on each other’s forces, or accidental clashes or their aircraft.

“..an extra 2.5-3 million Russian adults died in middle age in the period 1992-2001 than would have been expected based on 1991 mortality..”

• Why Is ‘Bad Guy’ Putin So Popular At Home? (Steve Keen)

The destructive impact of the far-too-rapid transition was an increase in the mortality rate, which medical researchers concluded meant that “an extra 2.5-3 million Russian adults died in middle age in the period 1992-2001 than would have been expected based on 1991 mortality. ” In strict economic terms, the transition was an abject failure – that is, if you think it was intended to improve Russian living standards. GDP virtually halved between 1990 and 1998, living standards plummeted, crime proliferated, and Russian society almost collapsed. Even today, output is barely above pre-transition levels.n

The failure of the rapid transition policies forced on Russia by the US is even more apparent when Russia’s transition performance is compared with China’s, where the communists remained firmly in control, and where the transition was deliberately undertaken at a measured pace. Russia’s per capita GDP today is only slightly above its level at the end of the Soviet period. China’s per capita GDP is ten times what it was in 1990. However, viewed from the very bottom of this brutal process in 1998, Russia has made remarkable progress: from 1998 until now, GDP has more than doubled, in both total and per capita terms. For almost all of this time, Russia’s president or prime minister has been Vladimir Putin.

Prior to his election in 2000, Putin rose to prominence in part because of his successful repression of the Chechen revolt. This hardly endeared Putin to the Chechens. But it gave him the aura of a strongman at the time most Russians believed their country desperately needed one, to eliminate the low-level mafia who tormented the public directly, to subdue the Oligarchs who exploited them, and to stand up to the West when his predecessor Yeltsin had effectively been a puppet. Putin can’t be solely credited with starting the economic turnaround, but his strongman approach to running Russia was welcomed, and is still welcomed, by the majority of his countrymen.

Russia is far from perfect under Putin, and Putin is far from perfect himself. But its economy and its national pride have been restored under his rule, and the Russian public cannot be faulted for feeling substantial antipathy towards the West, and the US in particular. Given that Russia has legitimate grievances about how the West treated it after it decided to join the capitalist camp, and the disastrous outcomes of all previous Western attempts at regime change, I’d rather our so-called leaders aimed for rapprochement with Russia, and yes, with Putin, instead of heightened animosity.

So what is Congress going to do?

• Trump’s Actions in Syria Violate US Constitution (Kucinich)

President Trump acted without congressional authorization in ordering a military attack against Syria tonight. This is a clear violation of the United States Constitution, Article 1, Section 8 which makes it clear that only Congress has the power to declare war. The President’s Article II authority as “Commander in Chief” does not give him the authority to act independent of Congress on matters of war. This is not a mere technicality. The doctrine of separation of powers is the only thing which protects the US from becoming a dictatorship. The President is subject to the law. The gas attack on Douma must be dealt with in an international court of law. If the US does not stand for the rule of law, how can we demand other countries to do so?

The attack on Syria will embolden ISIS. Our military power should not be used to help, directly or indirectly, ISIS and those elements whose philosophy is inimical to the United States of America. The President has violated the Constitution, usurping the power of Congress. This is not about whether or not the President hates Syria’s leaders. It is about whether or not he loves the US Constitution, which he took an oath to defend. The President chose to order a military attack almost a week after the gas attack on Douma. He had plenty of time to seek congressional approval, but he chose not to do so, even though he himself specifically said “The President must get congressional approval before attacking Syria – big mistake if he does not.” (Twitter, August 30th, 2013).

“.. the Arab world under the control of those who live and work in the Arab world.”

• Long Wars (Claire Connelly)

From Syria, to Iraq, Iran to Libya, our understandings of the long-wars in the Middle-East as moral, humanitarian interventions designed to democratise and civilise are the result of a carefully crafted propaganda campaign waged by the US and its allies. Each of these uprisings were launched by US proxies, designed to destabilize the regions, justifying regime change that suit the economic interests of its investors, banks and corporations, captured comprehensively in a new book by Canadian author and analyst, Stephen Gowans, Washington’s Long War on Syria. You might be surprised to know that both the Libyan, Syrian and Iraqi government, led by Muammar Gaddafi, Hafez Al Assad, (succeeded by Bashaar Al Assaad) and Sadaam Hussein respectively, were socialist governments.

Or Ba’ath Arab Socialist governments, to be precise. Ba’ath Arab Socialism can be summed up in their constitutions supporting the values of: ‘freedom of the Arab world, freedom from foreign powers and freedom of socialism’. Its doctrine was supported in Libya, as it was in Iraq and Syria. Of course, particularly in Hussein’s case, we cannot claim that these governments were without their problems. Ethnic cleansing is not to be overlooked, but condemned on the strongest grounds. But of course these were not the reasons the US and its allies decided to get into it. “For the last quarter of a century, the US and its allies have waged highly destructive campaigns of economic warfare against Syria and Iraq, the economic equivalent of nuclear war,” writes Gowans,

“and have done so because they are opposed to Ba’ath Arab Socialist efforts to bring politics and the economics of the Arab world under the control of those who live and work in the Arab world.” In the case of Iraq, it had combined its oil wealth with public ownership of the economy, leading to what is known as ‘The Golden Age’, where, according to a State Department Official: “Schools, universities, hospitals, factories, museums and theatres proliferated employment so universal, a labour shortage developed.” When the Ba’ath Arab Socialists were driven from power in Iraq, the US installed military dictator, Paul El Briener who set about a ‘de-Ba’athification’ of the government, expelling every member of the Ba’ath Arab Socialist party and imposed a constitution forbidding any secular Arab leader from ever holding office in Iraq again.

It ain’t over.

• The Deep State Takes A Hostage (Stockman)

The Donald seems to be taking a Deep Breath on his Syria bombfest, but the Deep State has him by the orange hairs. So we doubt the delay will last much longer. That’s because our Art of the Deal genius is getting bamboozled yet again. They are telling him that wiping out up to a dozen Syrian airfields, military installations and a dog-eared factory or two that can be identified as chemical weapons sites will amount to some pretty serious Shock & Awe where it counts: That is, the mere witnessing of it will cause the Fat Boy of Pyongyang to brown his ample trousers, thereby getting his “mind right” for the upcoming summit. That’s exactly the kind of macho-bargainer stuff that the Donald thrives on, and is further proof that the Deep State has figured out exactly how to press his buttons.

To be sure, Trump is no innocent victim. He voluntarily made himself hostage to the War Party by surrounding himself with failed generals and the most rabid war-mongers to be found in the Imperial City—-John Bolton, Mike Pompeo and Gina Haspel. Indeed, you have to wonder. How could anyone with even a half-baked notion of America First think that a hard core interventionist like John Bolton should be brought up right close and personal to the POTUS ear lobes, Walrus mustache and all? But whatever the Donald was thinking when he made such horrendous choices for his top national security posts, these denizens of the War Party have wasted no time shoving their own agenda right down his throat.

And at the top of that agenda is systematic, relentless escalation of provocations against Russia and Iran. That’s because confrontation with these demonized states is the best way to keep Imperial Washington (and therefore the entire country) on a war-footing and the national security gravy train overflowing with fiscal largesse. As we indicated in Part 1, the impending attack on Syria is actually a shot across the bow aimed at Tehran and Moscow. The cover story is simply a humanitarian sounding ruse. Ostensibly, Bashar Assad is being administered a good hard spanking via a barrage of cruise missile birch switches.

That begs the question, of course, of how homeland security is actually enhanced by selectively spanking some malefactors and not others. In this case, even the surely bogus claim that 40 civilians were gassed in Douma hardly compares to the 10,000 civilians that have been slaughtered by American bombs delivered by the Saudi air force in Yemen; or the thousands of anti-government prisoners that have been summarily executed by General al-Sisi in Egypt under this stewardship of Washington’s $1.2 billion annual stipend; or the thousands of civilians that Israel has killed during its periodic “lawn-mowing” exercises on the Gaza Strip.

Huge challenge to Facebook and the CIA. How come only the Irish Times reports on it? The EU top courts is about to ban transfer on personal data from Europe to the US.

• Irish High Court Sets Out 11 Questions For ECJ on EU-US Data Transfers (IT)

Legal uncertainty surrounds the capacity of companies such as Facebook to transfer European users’ data to the US after a High Court judge asked the most senior EU court to consider 11 questions on the issue. The referral stems from a case taken by Austrian privacy activist Max Schrems. The questions raise significant issues of EU law with huge implications, including whether the High Court has correctly found there is “mass indiscriminate processing” of data by US government agencies under the PRISM and Upstream programmes authorised there. The questions also ask whether EU law applies to the processing of personal data for national security purposes regardless of whether that data processing takes place in the EU or US or other third country.

Other questions concern whether the Privacy Shield Decision and other measures in the US afford adequate protection for EU citizens whose data is transferred there. The ECJ is also asked to decide the extent of a data protection authority’s (DAA) power to suspend data flows if it considers a third country is subject to surveillance laws which conflict with EU law. After Ms Justice Caroline Costello set out the questions on Thursday in a formal request to the ECJ for a preliminary ruling, Paul Gallagher SC, for Facebook, asked for time to consider that in the context of possibly seeking an appeal against the judge’s decision to make a reference to the CJEU in the first place.

Michael Collins SC, for the Data Protection Commissioner (DPC), queried whether there was any entitlement to appeal a High Court decision to direct a reference but did not object to Facebook being given a short time to consider its approach. The judge, noting she had given judgment last October sanctioning a reference, said she was anxious to make the referral but would allow Facebook time to April 30th. Among the questions for reference include whether, when deciding if data privacy rights of an EU citizen are breached, the issue must be examined against the EU Charter and EU law or the national law of one or more EU states, or an amalgam of the laws of all member states. The High Court had found the appropriate comparator was EU law despite Facebook disputing that.

The challenege is in Europe, not the US.

• Mark Zuckerberg’s Testimony Lurched From Easy Ride To Headache (G.)

As Mark Zuckerberg left Congress on Tuesday after testifying to the Senate, he may have felt relieved. The four-hour Q&A session had been largely dominated by mundane questions of fact about how Facebook works, requests for apologies and updates he had already given and was happy to repeat, and shameless begs for the social network’s cash pile to be used to expand broadband access in senators’ home states. Less than 24 hours later, however, a very different pattern of questioning in front of 54 members of the House of Representatives suggested a much more worrying outcome for Facebook – that this could be the week its crisis moves from being about mistakes in the past to inherent problems in the present.

Perhaps, the representatives implied, Facebook doesn’t just have a problem. What if it is the problem? Questions were still asked about Cambridge Analytica, the 9m other apps the company has to investigate for historical data sharing, and the revelation that more than a billion users had their data scraped by third parties abusing a phone or email lookup feature. But just as many were asked about problems that revolved less around mistakes and more around fundamental facets of Facebook’s business. Unsurprisingly, Zuckerberg appeared less inclined to answer those. “Will you make the commitment to change … all the user default settings to minimise, to the greatest extent possible, the collection and use of users’ data,” asked Frank Pallone, the panel’s top Democrat.

Zuckerberg, declining to give a yes or no, eventually agreed to follow up with an answer after the hearing. “Are you willing to change your business model in the interest of protecting individual privacy,” asked the Democratic congresswoman Anna Eshoo. “I’m not sure what that means,” was Zuckerberg’s reply. Europe’s general data protection regulation, Democrat Gene Green noted, gives EU citizens the right to opt out of the processing of their personal data for marketing purposes. “Will the same right … be available to Facebook users in the United States?” Zuckerberg: “Let me follow up with you on that.”

“..an additional dollar of deficit spending will reduce private GDP by $1.01, resulting in a one-cent decline in real GDP..”

• Making America More Indebted (Roberts)

In December of last year, as Congress voted to pass the “Tax Cut & Jobs Act,” I wrote that without “real and substantive cuts to spending,” the debt and deficits will begin to balloon. At that time, I mapped out the trajectory of the deficit based on the cuts to revenue from lower tax rates and sustained levels of government spending.

Since that writing, the government has now lifted the “debt ceiling” for two years and passed a $1.3 Trillion “omnibus spending bill” to operate the government through the end of September, 2018. Of course, since the government has foregone the required Constitutional process of operating on a budget for the last decade, “continuing resolutions,” or “C.R.s,” will remain the standard operating procedure of managing the country’s finances. This means that spending will continue to grow unchecked into the foreseeable future as C.R.’s increase the previously budgeted spending levels automatically by 8% annually. (Rule of 72 says spending doubles every 9-years) The chart below tracks the cumulative increase in “excess” Government spending above revenue collections. Notice the point at which nominal GDP growth stopped rising.

Trillion dollar deficits, of course, are nothing to be excited about as rising debts, and surging deficits, as shown, impede economic growth longer-term as money is diverted from productive investments to debt-service. While many suggest that “all government spending is good spending,” the reality is that “recycled tax dollars” have a very low, if not negative, “multiplier effect” in the economy. As Dr. Lacy Hunt states: “The government expenditure multiplier is negative. Based on academic research, the best evidence suggests the multiplier is -0.01, which means that an additional dollar of deficit spending will reduce private GDP by $1.01, resulting in a one-cent decline in real GDP. The deficit spending provides a transitory boost to economic activity, but the initial effect is more than reversed in time. Within no more than three years the economy is worse off on a net basis, with the lagged effects outweighing the initial positive benefit.“

Oh boy, are we doing great.

• JPMorgan Profits Soar 35% Thanks To Donald Trump’s Tax Cuts (Ind.)

JPMorgan’s profits jumped 35 percent in the last quarter, compared to a year ago, partly thanks to a huge tax cut. Congress slashed the corporate tax rate from 35 per cent to 21 per cent in December as part of a major overhaul pushed for by President Donald Trump that also cut taxes for wealthy individuals. Higher interest rates also helped to boost profits, JPMorgan said. The bank earned $8.7bn (£6.1bn) in the first quarter, or $2.37 a share, up from $6.45bn, in the same period a year earlier. Analysts had predicted JPMorgan would earn $2.28 a share.

Pre-tax income rose by $2.6bn to $28.52bn in the quarter, the company paid $240 million less in taxes compared to a year earlier. “2018 is off to a good start with our businesses performing well across the board, driving strong top-line growth and building on the momentum from last year,“ chief executive Jamie Dimon said. “The global economy continues to do well, and we remain optimistic about the positive impact of tax reform in the US as business sentiment remains upbeat, and consumers benefit from job and wage growth.”

Debt Rattle January 31 2017

Jan 312017

January 31, 2017 Posted by Raúl Ilargi Meijer at 10:50 am Finance Tagged with: attorney general, ban, constitution, executive order, Goldman, Obamacare, refugees, Trump, wall 7 Responses »

Pieter Bruegel the Elder The Fall of Icarus 1558

• White House Immigration Ban Promises Constitutional Showdown (BBG)

• Trump Fires Acting Attorney General Over Executive Order Defiance (AP)

• Philip Roth E-Mails On Trump (NewYorker)

• How a Bank Conquered Washington (Nomi Prins)

• Goldman CEO Takes Lead On Wall Street In Slamming Trump Travel Ban (R.)

• The Pitfalls of Replacing Obamacare (Economist)

• Fed: Banks Under $250 Billion Threshold Get Break on Stress Tests (WSJ)

• Is Italy’s Banking Problem Becoming Too Big to Solve? (DQ)

• The Left Is Self-Destructing (Paul Craig Roberts)

• A Better Solution Than Trump’s Border Wall (Ron Paul)

• More Refugees Could Come To Calgary In The Wake Of Trump’s Ban (CH)

• Alarm Raised Over Third Refugee Death on Lesbos In Six Days (K.)

An excellent discussion to have. However, opinions and interpretations already vary enormously, and it’s Trump who will appoint the next Supreme Court judge(s) – first one today. That could well take it from a showdown to a constitutional crisis.

• White House Immigration Ban Promises Constitutional Showdown (BBG)

Did President Donald Trump’s executive order on immigration ban Muslims from the country on the basis of their religion? That will be a central question when federal judges dig more deeply into the constitutionality of the order, signed on Jan. 27. If the answer is yes, it appears vulnerable to a First Amendment challenge. So far, four U.S. district judges – in Brooklyn, New York; Boston; Alexandria, Virginia; and Seattle – have issued temporary rulings blocking aspects of the order. These provisional, hastily granted judicial rulings didn’t delve into deep constitutional issues. Instead, they sought to prevent deportations or other government actions that would harm individuals affected by it. Lawyers for those individuals will return to court in coming days to flesh out their arguments. The Trump administration presumably will send attorneys from the Justice Department to defend the executive order, and the respective judges will subsequently issue more-thorough rulings.

[..] Strange as it may seem, Trump’s utterances on Twitter or elsewhere could become evidence in court of what he intended to accomplish with the executive order. Some possible examples include his original call during the presidential campaign for a “total and complete shutdown of Muslims entering the United States” and his modified demand for a ban targeting immigrants from majority-Muslim countries. Even some conservative Republicans expressed unease about the constitutionality of the Trump order. Focusing on the First Amendment issue, Senate Majority Leader Mitch McConnell said on ABC’s “This Week” on Sunday: “It’s hopefully going to be decided in the courts as to whether or not this has gone too far.” “I think we need to be careful,” McConnell added. “We don’t have religious tests in this country.”

Roger Pilon, founding director of the Cato Institute’s Center for Constitutional Studies, predicted the debate over Trump’s immigration order would ultimately end up with the Supreme Court. “I don’t see President Trump backing down,” he said. “I do hope, however, that the stays the lower courts are issuing will allow for a measure of ‘business as usual,’ because the initial situation seems very chaotic.”

Yates did what she had to. Question arises how much longer Mattis and Tillerson will stand for being left in the dark about measures, but subsequently having to defend them.

• Trump Fires Acting Attorney General Over Executive Order Defiance (AP)

Accusing her of betrayal and insubordination, President Donald Trump on Monday fired Sally Yates, the acting attorney general of the United States and a Democratic appointee, after she publicly questioned the constitutionality of his controversial refugee and immigration ban and refused to defend it in court. The dramatic public clash between the new president and the nation’s top law enforcement officer laid bare the growing discord and dissent surrounding Trump’s executive order, which temporarily halted the entire U.S. refugee program and banned all entries from seven Muslim-majority nations for 90 days. The firing came hours after Yates directed Justice Department attorneys not to defend the executive order, saying she was not convinced it was lawful or consistent with the agency’s obligation “to stand for what is right.”

[..] Yates’s abrupt decision reflected the growing conflict over the executive order, with administration officials moving Monday to distance themselves from the policy. As protests erupted at airports over the weekend and confusion disrupted travel around the globe, even some of Trump’s top advisers and fellow Republicans made clear they were not involved in crafting the policy or consulted on its implementation. At least three top national security officials — Defense Secretary Jim Mattis, Homeland Security Secretary John Kelly and Rex Tillerson, who is awaiting confirmation to lead the State Department — have told associates they were not aware of details of the directive until around the time Trump signed it. Leading intelligence officials were also left largely in the dark, according to U.S. officials.

Tennessee Sen. Bob Corker, the top Republican on the Senate Foreign Relations committee, said that despite White House assurances that congressional leaders were consulted, he learned about the order in the media. Trump’s order pauses America’s entire refugee program for four months, indefinitely bans all those from war-ravaged Syria and temporarily freezes immigration from Iraq, Syria, Iran, Sudan, Libya, Somalia and Yemen. Federal judges in New York and several other states issued orders that temporarily block the government from deporting people with valid visas who arrived after Trump’s travel ban took effect and found themselves in limbo. Yates, who was appointed deputy attorney general in 2015 and was the No. 2 Justice Department official under Loretta Lynch, declared Monday she was instructing department lawyers not to defend the order in court.

“I am responsible for ensuring that the positions we take in court remain consistent with this institution’s solemn obligation to always seek justice and stand for what is right,” Yates wrote in a letter announcing her position. “At present, I am not convinced that the defense of the Executive Order is consistent with these responsibilities nor am I convinced that the Executive Order is lawful.” [..] Mattis, who stood next to Trump during Friday’s signing ceremony, is said to be particularly incensed. A senior U.S. official said Mattis, along with Joint Chiefs Chairman Joseph Dunford, was aware of the general concept of Trump’s order but not the details. Tillerson has told the president’s political advisers that he was baffled over not being consulted on the substance of the order.

“..wielding a vocabulary of seventy-seven words that is better called Jerkish than English.”

• Philip Roth E-Mails On Trump (NewYorker)

In 2004, Philip Roth published “The Plot Against America.” The four main characters of the novel, which takes place between June, 1940, and October, 1942, are a family of American Jews, the Roths, of Newark—Bess, Herman, and their two sons, Philip and Sandy. They are ardent supporters of Franklin Delano Roosevelt, but, in Roth’s reimagining, Roosevelt loses his bid for a third term to a surprise Republican candidate—the aviator Charles Lindbergh—whose victory upends not only politics in America but life itself. The historical Lindbergh was an isolationist who espoused a catchphrase that Donald Trump borrowed for his Presidential campaign, and for his Inaugural Address: “America First.” The fictional Lindbergh, like the actual Trump, expressed admiration for a murderous European dictator, and his election emboldened xenophobes.

In Roth’s novel, a foreign power—Nazi Germany—meddles in an American election, leading to a theory that the President is being blackmailed. In real life, U.S. intelligence agencies are investigating Trump’s ties to Vladimir Putin and the possibility that a dossier of secret information—kompromat—gives Russia leverage with his regime. Roth wrote in the Times Book Review that “The Plot Against America” was not intended as a political roman à clef. Rather, he wanted to dramatize a series of what-ifs that never came to pass in America but were “somebody else’s reality”—i.e., that of the Jews of Europe. “All I do,” he wrote, “is to defatalize the past—if such a word exists—showing how it might have been different and might have happened here.”

Last week, Roth was asked, via e-mail, if it has happened here. He responded, “It is easier to comprehend the election of an imaginary President like Charles Lindbergh than an actual President like Donald Trump. Lindbergh, despite his Nazi sympathies and racist proclivities, was a great aviation hero who had displayed tremendous physical courage and aeronautical genius in crossing the Atlantic in 1927. He had character and he had substance and, along with Henry Ford, was, worldwide, the most famous American of his day. Trump is just a con artist. The relevant book about Trump’s American forebear is Herman Melville’s ‘The Confidence-Man,’ the darkly pessimistic, daringly inventive novel—Melville’s last—that could just as well have been called ‘The Art of the Scam.’ ”

American reality, the “American berserk,” Roth has noted, makes it harder to write fiction. Does Donald Trump outstrip the novelist’s imagination? Roth replied, “It isn’t Trump as a character, a human type—the real-estate type, the callow and callous killer capitalist—that outstrips the imagination. It is Trump as President of the United States. “I was born in 1933,” he continued, “the year that F.D.R. was inaugurated. He was President until I was twelve years old. I’ve been a Roosevelt Democrat ever since. I found much that was alarming about being a citizen during the tenures of Richard Nixon and George W. Bush. But, whatever I may have seen as their limitations of character or intellect, neither was anything like as humanly impoverished as Trump is: ignorant of government, of history, of science, of philosophy, of art, incapable of expressing or recognizing subtlety or nuance, destitute of all decency, and wielding a vocabulary of seventy-seven words that is better called Jerkish than English.”

Excellent history lesson.

• How a Bank Conquered Washington (Nomi Prins)

At the dawn of the twentieth century, when President Teddy Roosevelt governed the country on a platform of trust busting aimed at reducing corporate power, even he could not bring himself to bust up the banks. That was a mistake born of his collaboration with the financier J.P. Morgan to mitigate the effects of the Bank Panic of 1907. Roosevelt feared that if he didn’t enlist the influence of the country’s major banker, the crisis would be even longer and more disastrous. It’s an error he might not have made had he foreseen the effect that one particular investment bank would have on America’s economy and political system.

There have been hundreds of articles written about the “world’s most powerful investment bank,” or as journalist Matt Taibbi famously called it back in 2010, the “great vampire squid.” That squid is now about to wrap its tentacles around our world in a way previously not imagined by Bill Clinton or George W. Bush. No less than six Trump administration appointments already hail from that single banking outfit. Of those, two will impact your life strikingly: former Goldman partner and soon-to-be Treasury Secretary Steven Mnuchin and incoming top economic adviser and National Economic Council Chair Gary Cohn, former president and “number two” at Goldman. (The Council he will head has been responsible for “policy-making for domestic and international economic issues.”)

Now, let’s take a step into history to get the full Monty on why this matters more than you might imagine. In New York, circa 1932, then-Governor Franklin Delano Roosevelt announced his bid for the presidency. At the time, our nation was in the throes of the Great Depression. Goldman Sachs had, in fact, been one of the banks at the core of the infamous crash of 1929 that crippled the financial system and nearly destroyed the economy. It was then run by a dynamic figure, Sidney Weinberg, dubbed “the Politician” by Roosevelt because of his smooth tongue and “Mr. Wall Street” by the New York Times because of his range of connections there. Weinberg quickly grasped that, to have a chance of redeeming his firm’s reputation from the ashes of public opinion, he would need to aim high indeed. So he made himself indispensable to Roosevelt’s campaign for the presidency, soon embedding himself on the Democratic National Campaign Executive Committee.

Goldman view: Bad for business.

• Goldman CEO Takes Lead On Wall Street In Slamming Trump Travel Ban (R.)

Goldman Sachs CEO Lloyd Blankfein became the first major Wall Street leader to speak out against President Donald Trump’s order to halt arrivals from several Muslim-majority countries. In a voicemail to employees on Sunday, Blankfein said diversity was a hallmark of Goldman’s success, and if the temporary freeze became permanent, it could create “disruption” for the bank and its staff. “This is not a policy we support, and I would note that it has already been challenged in federal court, and some of the order has been enjoined at least temporarily,” Blankfein said, according to a transcript seen by Reuters. In Silicon Valley, the heads of companies such as Apple and Facebook swiftly denounced Trump’s immigration ban.

But the rest of corporate America has been more circumspect in speaking out, underscoring the sensitivities around opposing policies that could provoke a backlash from the White House. Tepid responses from many of Blankfein’s peers made his comments all the more potent, especially because Goldman has gotten attention for the number of its alumni who have joined Trump’s administration. Top BlackRock executives including CEO Larry Fink, sent a memo to staff on Monday saying Trump’s order presented “challenges” to its goals of diversity and inclusion. BlackRock is examining the direct impact on its employees, as well as the broader implications of the order, they said. “We, of course, all want to promote security and combat terrorism, but we believe it needs to be done with respect for due process, individual rights and the principle of inclusion,” they wrote.’

High risk pools. Holy mother. That’s sick.

• The Pitfalls of Replacing Obamacare (Economist)

As Republicans seek to carry out their promise to repeal the Affordable Care Act (ACA), they must keep an eye on their own political health. “Obamacare” may be unpopular, but its components are not. A celebrated part of the law bans insurers from turning away customers who have pre-existing medical conditions. Before the ACA, insurers would routinely deny coverage to those with even minor or old blots on their medical histories. At a recent question-and-answer session, Paul Ryan, the Speaker of the House of Representatives, was confronted by a man who, thanks to a cancer diagnosis, owed his life to this Obamacare rule. Mr Ryan promised the voter that the GOP’s desired ACA overhaul would not have left him for dead. Instead, he could have joined a “high-risk pool”. Beloved by the right, these pools feature in almost every Obamacare alternative, including the one penned by Tom Price, Donald Trump’s pick to be health secretary.

The idea is to hive unhealthy people off into their own dedicated market and then subsidise their coverage. It reverses the logic of the ACA, which lumped everyone together to spread costs around. The law sent premiums skyrocketing for healthy folk who buy their insurance themselves, rather than through an employer. Whittling out higher-risk people from the market would bring those premiums back down. Middle-income earners too well-off to qualify for Obamacare’s tax credits, who have suffered the most from higher costs, would surely cheer such a reform. 35 states ran high-risk pools before the ACA. The biggest and most successful was the Minnesota Comprehensive Health Association (MCHA, or “em-sha”). Established in 1976, MCHA covered 27,000 Minnesotans with pre-existing conditions in 2011, about 10% of the relevant market. It offered a selection of plans, from near-total coverage to catastrophe-only insurance.

All provided good, though not unlimited, care. Separating high-risk people out does not make their costs disappear. Minnesota paid for MCHA in two ways. First, premiums were up to 25% higher than elsewhere. After those were collected, a levy on other health insurance plans covered its losses. This tax inflated healthy folks’ premiums much less than Obamacare does, partly because it applied to a broad base which included employer-provided coverage. MCHA helped create a stable market, argues Peter Nelson of the Centre of the American Experiment, a conservative think-tank. The ACA, by contrast, has led to something of a mess. In 2015 insurers’ costs were 16% higher than their revenue from premiums. Blue Cross Blue Shield, an insurer which covered 103,000 people, has left Minnesota’s market, blaming massive losses. The state is likely to hand out $300m to cushion the blow from huge premium increases for 2017, which by one measure reached 59%.

Why? They don’t have enough people to do the work: “..allowing the Fed to dedicate more of its staff to focusing on the biggest firms.”

• Fed: Banks Under $250 Billion Threshold Get Break on Stress Tests (WSJ)

Twenty U.S. banks with less than $250 billion in assets will be freed from the subjective portion of the Federal Reserve’s annual stress tests under changes the central bank laid out Monday. Banks including Northern Trust and American Express will no longer have to comply with the “qualitative” half of the Fed’s stress tests, which takes a deep dive into a firm’s risk-management systems. Last year, 33 banks participated in the annual exercise. The central bank said it would release scenarios and instructions for the 2017 test by the end of this week. Stress tests have become a centerpiece of the Fed’s postcrisis regulatory framework.

The exercise examines two critical aspects of the largest firms: first, whether banks hold enough capital—money raised from investors or earned through profit—to withstand severe economic stress in the financial system, and second, whether banks have the appropriate internal processes to identify and measure risk when considering their own capital planning. The Fed can reject a bank’s plan to pay out shareholders on either basis. To gain an exemption, a firm must have assets between $50 billion and $250 billion and not be identified as a globally systemically important bank. One important change made by regulators in the final rule was excluding a requirement to have less than $10 billion in foreign exposure.

Those firms will still be required to show regulators they could survive a hypothetical recession with enough capital to continue lending. The change is designed to make the tests less onerous, while allowing the Fed to dedicate more of its staff to focusing on the biggest firms. The 2010 Dodd-Frank financial-overhaul law requires banks with more than $50 billion in assets to undergo the yearly stress tests. Fed officials have been looking for ways to ease requirements for regional banks while raising capital requirements for large, globally systemically important banks by adding a capital surcharge into the stress tests.

Yes. Actually, has been for a long time.

• Is Italy’s Banking Problem Becoming Too Big to Solve? (DQ)

Ever since the European Commission and ECB jointly decided that Italy’s government could bend EU banking rules out of all recognition in order to bail out the country’s third largest bank, Monte dei Paschi di Siena, Europe’s financial stocks have been on a tear. But the good times were brought to a grinding halt Monday after Italy’s largest bank, Unicredit, which employs 55,000 people in 17 countries, announced losses for 2016 of €11.8 billion. By the bank’s logic, it would have announced profits if it hadn’t had to write off €12.2 billion, including billions of euros of non-performing loans (NPLs) festering on its balance sheets. But it got worse. In the registration document for its pending recapitalization, published on its website today, Unicredit also announced that its capital ratios at the end of 2016 might fall short of ECB requirements.

It was enough to prompt a 5.45% slide in its shares. As detected in the ECB’s latest stress test, Unicredit already had the slimmest capital buffer of all Europe’s Global Systemically Important Banks (G-SIBs). And it just got slimmer. The reality today is not comforting: a bank that is officially too big to fail, with over €1 trillion of “assets” on its books, just admitted that things are even worse than initially feared. Somehow, Unicredit will need to raise €13 billion in new capital by the end of June. If successful, it would be the biggest capital expansion of Italian stock market history. Earlier this month, the bank has pushed through a 10:1 reverse stock split, cutting its shares outstanding by a factor of 10 and multiplying the share price by 10. So its shares today plunged 5.45% to €26.20 instead of to, say, €2.62.

It makes the shares look more palatable, but it does absolutely nothing to bank’s market capitalization, which is down to just €16.2 billion. The bank is also planning to cut 14,000 jobs by 2019, close 944 of its 3,800 branches, and offload almost €18 billion of bad loans — a gargantuan ask even at the best of times. And for Unicredit and Italy as a whole, these are most certainly not the best of times. The Italian government has so far pledged €20 billion of taxpayer funds to partially bail out the bondholders of Monte dei Paschi and of a clutch of other banks that will probably include Banca Popolare di Vicenza, Veneto Banca and Genoa-based Carige. That’s already four times the initial estimated outlay of €5 billion. Expect it to keep growing.

“Is everyone too busy hating to do anything sensible?”

• The Left Is Self-Destructing (Paul Craig Roberts)

The mindlessness is unbearable. Amnesty International tells us that we must “fight the Muslim ban” because Trump’s bigotry is wrecking lives. Anthony Dimaggio at CounterPunch says Trump should be impeached because his Islamophobia is a threat to the Constitution. This is not to single out these two as the mindlessness is everywhere among those whose worldview is defined by Identity Politics. One might think that Amnesty International should be fighting against the Bush/Cheney/Obama regime wars that have produced the refugees by killing and displacing millions of Muslims. For example, the ongoing war that Obama inflicted on Yemen results in the death of one Yemeni child every 10 minutes, according to UNICEF. Where is Amnesty International?

Clearly America’s wars on Muslims wreck far more lives than Trump’s ban on immigrants. Why the focus on an immigration ban and not on wars that produce refugees? Is it because Obama is responsible for war and Trump for the ban? Is the liberal/progressive/left projecting Obama’s monstrous crimes onto Trump? Is it that we must hate Trump and not Obama? Immigration is not a right protected by the US Constitution. Where was Dimaggio when in the name of “the war on terror” the Bush/Obama regime destroyed the civil liberties guaranteed by the US Constitution? If Dimaggio is an American citizen, he should try immigrating to the UK, Germany, or France and see how far he gets.

The easiest and surest way for the Trump administration to stop the refugee problem, not only for the US but also for Europe and the West in general, is to stop the wars against Muslim countries that his predecessors started. The enormous sums of money squandered on gratuitous wars could instead be given to the countries that the US and NATO have destroyed. The simplest way to end the refugee problem is to stop producing refugees. This should be the focus of Trump, Amnesty, and Dimaggio. Is everyone too busy hating to do anything sensible? It is very disturbing that the liberal/progressive/left prefers to oppose Trump than to oppose war. Indeed, they want a war on Trump. How does this differ from the Bush/Obama war on Muslims?

Stop warring.

• A Better Solution Than Trump’s Border Wall (Ron Paul)

Just one week in office, President Trump is already following through on his pledge to address illegal immigration. His January 25th executive order called for the construction of a wall along the entire length of the US-Mexico border. While he is right to focus on the issue, there are several reasons why his proposed solution will unfortunately not lead us anywhere closer to solving the problem. First, the wall will not work. Texas already started building a border fence about ten years ago. It divided people from their own property across the border, it deprived people of their land through the use of eminent domain, and in the end the problem of drug and human smuggling was not solved.

Second, the wall will be expensive. The wall is estimated to cost between 12 and 15 billion dollars. You can bet it will be more than that. President Trump has claimed that if the Mexican government doesn’t pay for it, he will impose a 20% duty on products imported from Mexico. Who will pay this tax? Ultimately, the American consumer, as the additional costs will be passed on. This will of course hurt the poorest Americans the most. Third, building a wall ignores the real causes of illegal border crossings into the United States. Though President Trump is right to prioritize the problem of border security, he misses the point on how it can be done effectively and at an actual financial benefit to the country rather than a huge economic drain.

The solution to really addressing the problem of illegal immigration, drug smuggling, and the threat of cross-border terrorism is clear: remove the welfare magnet that attracts so many to cross the border illegally, stop the 25 year US war in the Middle East, and end the drug war that incentivizes smugglers to cross the border. [..] the threat of terrorists crossing into the United States from Mexico must be taken seriously, however once again we must soberly consider why they may seek to do us harm. We have been dropping bombs on the Middle East since at least 1990. Last year President Obama dropped more than 26,000 bombs. Thousands of civilians have been killed in US drone attacks. The grand US plan to “remake” the Middle East has produced only misery, bloodshed, and terrorism. Ending this senseless intervention will go a long way toward removing the incentive to attack the United States.

It’s like a different planet. Curious detail is that western Canada always felt very close to the US, something that comes up every time Québec separation is discussed. Those same people now actively sponsor refugees. Bless you.

• More Refugees Could Come To Calgary In The Wake Of Trump’s Ban (CH)

After the success of last year’s resettlements in Calgary, another wave of refugees could be on its way as the federal government and immigration services monitor the impact of Donald Trump’s refugee ban. And while Prime Minister Justin Trudeau has already suggested Canada will welcome those the U.S. won’t take, immigration advocates say funding for services will have to keep up with rising demand. “There is a lot of confusion around the ban right now, it came down very fast and furious,” said Anoush Newman, community engagement coordinator for the Calgary Catholic Immigration Society. “But Canada is in a very respected position in the world. And people from a lot of countries will aspire to come here.”

Fariborz Birjandian, CEO with CCIS, added that while Calgary’s numbers will increase only if the federal government approves another wave of Syrian refugees similar to last year’s, the possibility is there amid the ban in the U.S. – a country that normally takes in 80,000 refugees a year. “There are hundreds of thousands of refugees in camps right now, dreaming of coming to Canada,” Birjandian said. “But that all depends on whether the federal government will raise its target numbers.” CCIS estimates up to 7,000 refugees arrived in Alberta over the past year, up to 3,400 of them to Calgary, after the Trudeau government announced a goal of taking at least 25,000 refugees last January.

[..] if Canadian cities will be expected to prepare for more refugees, Newman says the federal government also needs to ensure funding for new infrastructure and support services. “When they arrive here, they need schools, health services, language services. We need to make sure they get enough support,” she said. CCIS officials held a public forum Monday updating the community about its refugee resettlement program one year after the Trudeau government announced its 25,000 target. Birjandian commended local efforts, especially among private sponsors who took in up to 2,200 of Calgary’s 3,400 total refugees.

Words fail. A fourth man dies on Samos. Where is the urgency, Europe, where is the outrage?

• Alarm Raised Over Third Refugee Death on Lesbos In Six Days (K.)

The death Monday of a third migrant within a week at the Moria camp on Lesvos has increased concerns about the living conditions of thousands of people who continue to live in tents, and cast fresh doubts over a pledge by the Migration Ministry in early January to take the necessary precautions as heavy snowfall and subzero temperatures engulfed the country. However, Migration Minister Yiannis Mouzalas said Monday that the number of United Nations refugee agency (UNHCR) employees at the camps has dropped, making a difficult situation even tougher. He also said a plan to move people to hotels while the so-called hot spots received a makeover fell through after local authorities and hoteliers disagreed. He vowed to reporters that steps will be taken “to make the situation more manageable,” while migrants, meanwhile, say they are at breaking point.

The latest incidents occurred as the UNHCR and other organizations have called on Greece to improve living conditions. The man who died Monday in his tent was a Pakistani national, aged between 18 and 20. Authorities have ruled out foul play while doctors blamed carbon monoxide poisoning. A 30-year-old Afghan man who shared the same tent was hospitalized but his condition was reportedly not life-threatening. The Pakistani man’s death follows that of an Egyptian man, 22, last Tuesday and a 46-year-old Syrian man on Saturday. A coroner has asked for more tests to ascertain the cause of death for the latter two. Initial assessments attributed their deaths to fume inhalations from stoves they had lit to keep warm. Two camps on Lesvos serve as temporary shelter for some 4,800 refugees and migrants.

Debt Rattle October 31 2016

Oct 312016

October 31, 2016 Posted by Raúl Ilargi Meijer at 9:36 am Finance Tagged with: CETA, Clinton, Comey, constitution, FBI, Hillary, Libor, price hikes, stress, Turkey, Weiner Comments Off

Harris&Ewing State, War & Navy Building, Washington DC 1917

• Economic Stress As World Runs Out Of Dollars (AEP)

• China as Factory to World Mulls the Unthinkable: Price Hikes (BBG)

• European Banks Stuck With $1.3 Trillion of Bad Loans, KPMG Says (BBG)

• FBI Obtains Warrant; Agents Waited Weeks To Tell Comey About Emails (WaPo) (WaPo)

• Why Comey Jumped At The Chance To Reopen Hillary Investigation (DM)

• FBI in Internal Feud Over Hillary Clinton Probe (WSJ)

• Hillary’s Emails Matter: A Retired CIA Officer Explains Why (Hill)

• Ex-FBI Official: ‘Intensive Investigation’ Ongoing Into Clinton Foundation (DC)

• Clinton Supporter Doug Schoen Reconsiders, Cites Constitutional Crisis (RCP)

• James Comey – As Seen Through The Persuasion Filter (Adams)

• Theresa May Lied And Lied Again To Become PM (G.)

• The Dirty Secret Beneath Hong Kong’s Wealth: Slavery (SCMP)

• EU And Canada Sign CETA Free Trade Deal (G.)

• Turkey Detains Editor Of Opposition Newspaper Cumhuriyet (AFP)

• Erdogan Says Greek Islands ‘Used To Be Ours’ (Kath.)

“Our allocation model is now 100pc in cash. This is a warning signal for the market and it happens extremely rarely..”

• Economic Stress As World Runs Out Of Dollars (AEP)

Surging rates on dollar Libor contracts are rapidly tightening conditions across large parts of the global economy, incubating stress in the credit markets and ultimately threatening overvalued bourses. Three-month Libor rates – the benchmark cost of short-term borrowing for the international system – have tripled this year to 0.88pc as inflation worries mount. Fear that the US Federal Reserve may have to raise rates uncomfortably fast is leading to an acute dollar shortage, draining global liquidity. “The Libor rate is one of few instruments left that still moves freely and is priced by market forces. It is effectively telling us that that the Fed is already two hikes behind the curve,” said Steen Jakobsen from Saxo Bank. “This is highly significant and is our number one concern. Our allocation model is now 100pc in cash. This is a warning signal for the market and it happens extremely rarely,” he said.

Goldman Sachs estimates that up to 30pc of all business loans in the US are priced off Libor contracts, as well as 20pc of mortgages and most student loans. It is the anchor for a host of exotic markets, used as a floor for 90pc of the $900bn pool of the leveraged loan market. It underpins the derivatives nexus. The chain reaction from the Libor spike is global. The BIS warns that the rising cost of borrowing in dollar markets is transmitted almost instantly through the global credit system. Changes in the short-term policy rate are promptly reflected in the cost of $5 trillion in US dollar bank loans,” it said. Roughly 60pc of the global economy is linked to the dollar through fixed currency pegs or “dirty floats”, but studies by the BIS suggest that borrowing costs in domestic currencies across Asia, Latin America, the Middle East, and Africa, move in sympathy with dollar costs, regardless of whether the exchange rate is fixed. Short-term “Shibor” rates in China have been ratcheting up.

The cost of one-year swaps jumped to 2.71pc last week, and the spread over one-year sovereign debt is back to levels seen during the Shanghai stock market crash last year. This is not a pure import from the US. The Chinese authorities themselves are taking action to rein in a credit bubble. It is happening in parallel with Fed tightening, each reinforcing the other, and that makes it more potent. Three-month interbank rates in Saudi Arabia have soared to 2.4pc. This is the highest since the global financial crisis in early 2009 and implies a credit crunch in the Saudi banking system. The M1 money supply has fallen 9pc over the last year. The Bank of Japan has doubled its window of dollar credit for Japanese banks to head off an incipient dollar squeeze, drawing on the country’s ample foreign reserves.

It may not be so easy for others. Credit analysts are becoming nervous about the spread between Libor and the overnight index swap, the so-called Libor-OIS spread that is used to gauge problems in the plumbing of the credit system. It has widened to 38 basis points, near levels seen in the eurozone debt crisis and past bouts of stress. The message from the ‘TED spread’ is similar, if less severe. This measures the spread between eurodollar rates in London and three-month futures contracts for US treasuries. The picture is complex. These signals have been distorted by new rules for US prime money market funds, which have shrunk by $560bn and led to a contraction of commercial paper. The deadline for this reform has come and gone, yet the spreads have not settled.

Only thing left to do now is find buyers.

• China as Factory to World Mulls the Unthinkable: Price Hikes (BBG)

China’s factories may be on the cusp of delivering a new shock to the global economy after years of undercutting rivals with cheaper costs. This time, increases in prices could reverberate around the world. To understand why, consider the dilemma facing Jiangmen Luck Tissue Mfy Ltd., now caught in a squeeze between surging wages and tepid demand. The company has already slashed staff by half, shaved prices and automated production to survive. Now, with margins razor thin, it’s weighing the first price increases since 2010. “There’s just no possibility for me to cut prices any more,” says deputy director Roger Zhao, 52, whose company is based in the city of Jiangmen in southern Guangdong province.

“Because costs are already pretty high and I don’t see any possibility they’ll go down, I’m seeking opportunities to raise prices a little bit.” That push to recover lost margins – even as demand remains muted – was shared by exporters of everything from clocks to jacuzzis interviewed in Guangzhou last week at the Canton Fair, a biannual gathering where 25,000 exhibitors and 180,000 mostly foreign buyers ink export deals in booths spanning exhibition space equivalent to about 3,400 tennis courts. For the world economy, decisions from companies like Jiangmen Tissue to stop cutting prices – and even raise them where demand allows – removes a source of disinflationary pressure.

To be decided is whether China, the factory to the world, swings from becoming a drag on consumer prices to a source of pressure nudging them higher. China’s manufacturing prices rose in September for the first time in almost five years and overall producer prices also clambered out of negative territory. Those likely to feel the biggest lift if Chinese export prices follow through with sustained increases would be the country’s top five markets: the U.S., Hong Kong, Japan, South Korea and Mexico. “China’s return to positive growth in producer prices marks a very significant turning point in deflationary pressures both in China and globally,” said Shane Oliver at AMP Capital Investors in Sydney. “This is only step one, though. We are still waiting for step two: stronger global demand and trade.”

Draghi to the rescue. He better be fast.

• European Banks Stuck With $1.3 Trillion of Bad Loans, KPMG Says (BBG)

Eight years after Lehman Brothers’ collapse sparked the financial crisis, Europe’s banks still have €1.2 trillion ($1.3 trillion) of non-performing loans and will probably be stuck with them for decades to come, according to KPMG. Anemic economic growth across the region is making it harder for lenders to off-load toxic assets, hurting profitability while banks also come under pressure from tougher capital rules and fines for misconduct, London-based KPMG said in a report published Monday. Firms could take “decades rather than years” to reduce their exposures, hampering profitability. European lenders are battling to cut soured loans as they face evaporating income from lending amid negative interest rates from the ECB.

Net interest margins, the difference between income from lending versus cost of funding, average about 1.2% in the region compared with about 3% in the U.S., according to KPMG. “Reversing the profitability of European banks is not a lost cause but it will certainly be a lot of hard work,” Marcus Evans, a partner at KPMG’s ECB office, said in a statement. “It’s clear that across Europe banks are still grappling with the new world of low, or negative, interest rates and mounting capital and regulatory costs.” The total value of toxic loans in Europe has surged since 2008 from about 1.5% of lending to more than 5% since 2013, according to the report. This has a negative impact on profitability from unpaid interest, raising provisions against impaired assets and realizing losses when disposing bad debts, according to KPMG.

Lots of Weiner and Comey stuff today. Lots of guessing going on. Accurate picture is slow to seep through.

• FBI Obtains Warrant; Agents Waited Weeks To Tell Comey About Emails (WaPo) (WaPo)

FBI agents investigating Hillary Clinton’s use of a private email server while secretary of state knew early this month that messages recovered in a separate probe might be germane to their case, but they waited weeks before briefing the FBI director, according to people familiar with the case. Director James B. Comey has written that he was informed of the development Thursday, and he sent a letter to legislators the next day letting them know that he thought the team should take “appropriate investigative steps designed to allow investigators to review these emails.” That missive ignited a political firestorm less than two weeks before the election. Almost instantly, Comey came under intense criticism for his timing and for bucking the Justice Department’s guidance not to tell Congress about the development.

And his announcement means that Clinton could have to contend with the news that the FBI has resumed its investigation of her use of a private email server — without any clarity on whether its investigators will find anything significant — up to and beyond Election Day. The FBI has obtained a warrant to search the emails found on a computer used by former congressman Anthony Weiner that may contain evidence relevant to the investigation into Clinton’s private email server, according to law enforcement officials. The warrant was obtained in New York, as FBI agents there have possession of the laptop. [..].. officials familiar with the case said the messages include a significant amount of correspondence associated with Clinton and her top aide Huma Abedin, Weiner’s estranged wife.

People familiar with the case said that agents on the Clinton email team had known about the messages since soon after New York FBI agents seized a computer related to their investigation into Weiner [..] Officials said the agents probing Clinton’s private email server didn’t tell the director immediately because they were trying to better assess what they had. “It’s a step-by-step process,” said one senior law enforcement official. “There are many steps along the way that get you to a place where the director can be appropriately briefed in order to make a decision” about whether to move forward.

Even his wife was on to him. ‘They felt that he betrayed them and brought disgrace on the bureau by letting Hillary off with a slap on the wrist.’

• Why Comey Jumped At The Chance To Reopen Hillary Investigation (DM)

James Comey’s decision to revive the investigation of Hillary Clinton’s email server and her handling of classified material came after he could no longer resist mounting pressure by mutinous agents in the FBI, including some of his top deputies, according to a source close to the embattled FBI director. ‘The atmosphere at the FBI has been toxic ever since Jim announced last July that he wouldn’t recommend an indictment against Hillary,’ said the source, a close friend who has known Comey for nearly two decades, shares family outings with him, and accompanies him to Catholic mass every week. ‘Some people, including department heads, stopped talking to Jim, and even ignored his greetings when they passed him in the hall,’ said the source.

‘They felt that he betrayed them and brought disgrace on the bureau by letting Hillary off with a slap on the wrist.’ According to the source, Comey fretted over the problem for months and discussed it at great length with his wife, Patrice. He told his wife that he was depressed by the stack of resignation letters piling up on his desk from disaffected agents. The letters reminded him every day that morale in the FBI had hit rock bottom. ‘He’s been ignoring the resignation letters in the hope that he could find a way of remedying the situation,’ said the source. ‘When new emails that appeared to be related to Hillary’s personal email server turned up in a computer used by Huma Abedin and Anthony Weiner, Comey jumped at the excuse to reopen the investigation.

‘The people he trusts the most have been the angriest at him,’ the source continued. ‘And that includes his wife, Pat. She kept urging him to admit that he had been wrong when he refused to press charges against the former secretary of state. ‘He talks about the damage that he’s done to himself and the institution [of the FBI], and how he’s been shunned by the men and women who he admires and work for him. It’s taken a tremendous toll on him. ‘It shattered his ego. He looks like he’s aged 10 years in the past four months.’ But Comey’s decision to reopen the case was more than an effort to heal the wound he inflicted on the FBI. He was also worried that after the presidential election, Republicans in Congress would mount a probe of how he had granted Hillary political favoritism.

Maybe the agents should have spoken out earlier?

• FBI in Internal Feud Over Hillary Clinton Probe (WSJ)

The surprise disclosure that agents from the Federal Bureau of Investigation are taking a new look at Hillary Clinton’s email use lays bare, just days before the election, tensions inside the bureau and the Justice Department over how to investigate the Democratic presidential nominee. Investigators found 650,000 emails on a laptop that they believe was used by former Rep. Anthony Weiner and his estranged wife Huma Abedin, a close Clinton aide, and underlying metadata suggests thousands of those messages could have been sent to or from the private server that Mrs. Clinton used while she was secretary of state, according to people familiar with the matter.

It will take weeks, at a minimum, to determine whether those messages are work-related from the time Ms. Abedin served with Mrs. Clinton at the State Department; how many are duplicates of emails already reviewed by the FBI; and whether they include either classified information or important new evidence in the Clinton email probe. Officials had to await a court order to begin reviewing the emails—which they received over the weekend, according to a person familiar with the matter—because they were uncovered in an unrelated probe of Mr. Weiner.

The new investigative effort, disclosed by FBI Director James Comey on Friday, shows a bureau at times in sharp internal disagreement over matters related to the Clintons, and how to handle those matters fairly and carefully in the middle of a national election campaign. Even as the probe of Mrs. Clinton’s email use wound down in July, internal disagreements within the bureau and the Justice Department surrounding the Clintons’ family philanthropy heated up, according to people familiar with the matter.

“Accidentally removing a single classified message from controlled spaces, without any evidence of intent or exposure to hostile forces, can get you fired and cost you your clearance. Repeated instances will land you in prison.”

• Hillary’s Emails Matter: A Retired CIA Officer Explains Why (Hill)

Nobody uses a private email server for official business. Period. Full stop. The entire notion is, to borrow a phrase from a Clinton campaign official, “insane.” That anyone would presume to be allowed to do so is mind-boggling. That government officials allowed Hillary Clinton to do so is nauseating. Classified and unclassified information do not mix. They don’t travel in the same streams through the same pipes. They move in clearly well defined channels so that never the twain shall meet. Mixing them together is unheard of and a major criminal offense. If you end up with classified information in an unclassified channel, you have done something very wrong and very serious.

Accidentally removing a single classified message from controlled spaces, without any evidence of intent or exposure to hostile forces, can get you fired and cost you your clearance. Repeated instances will land you in prison. Every hostile intelligence agency on the planet targets senior American officials for collection. The Secretary of State tops the list. Almost anything the Secretary of State had to say about her official duties, her schedule, her mood, her plans for the weekend, would be prized information to adversaries. It is very difficult, in fact, to think of much of anything that the Secretary of State could be saying in email that we would want hostile forces to know. As we wait for more information on the latest revelations, let’s quickly note what we already know Hillary Clinton did.

While Secretary of State, Hillary Clinton exclusively used a private email address for official business. Instead of using a State Department account, she used a personal email account, housed on a private server located in her home in Chappaqua, New York. The Department of State exercised zero control or oversight in this process. No government security personnel were involved in protecting them. When the House Select Committee on Benghazi asked to see these emails, the Department of State said they did not have them. Clinton’s lawyers then went through all the emails on her server. They turned over 30,000 emails they decided were work related and deleted all of the rest. How they made the decision as to which emails to share and which to destroy remains unknown. Active government officials not were involved in this process.

Hillary says she did not use the account to transmit classified information. This has been proven false. The FBI found over 100 messages that contained information that was classified when sent, including numerous email chains at the level of Top Secret/Special Access Programs. They don’t get any more highly classified, it’s the virtual summit of Mt. Everest. [..] While serving in one of the most senior positions in the United States Government, Hillary Clinton was at a minimum, grossly negligent in the handling of classified information and when confronted with this practice, acted immediately to destroy information and prevent a full, fair and complete investigation of any damage to national security. Anyone else who did such things in the government would long ago have been tried, convicted and sent to jail. ou decide if you want to send her to the White House instead.

A bit of extra juice. And for many a big surprise.

• Ex-FBI Official: ‘Intensive Investigation’ Ongoing Into Clinton Foundation (DC)

Tom Fuentes, a former assistant director at the FBI and a CNN analyst, said Saturday that the bureau has an open investigation into the Clinton Foundation. The statement undermines a report from a team of CNN reporters in August that the Justice Department quashed an investigation into the Clinton family’s non-profit earlier this year. “The FBI has an intensive investigation ongoing into the Clinton Foundation,” Fuentes said Saturday, citing current and former senior FBI officials as sources. “The reports that three divisions came in with a request to Washington to open cases and that they were turned down by the Department of Justice, that’s not true,” he said, referring to the CNN report. “What was turned down was that they be the originating office. Headquarters at the FBI made the determination that the investigation would go forward as a comprehensive unified case and be coordinated,” he added.

[..] Fuentes was discussing the investigation in the context of a letter that FBI director James Comey sent to Congress on Friday stating that the bureau was reopening the investigation into Clinton’s emails. [..] Fuentes asserted that the emails could pertain to the original Clinton email investigation, which was closed in July, as well as to the Clinton Foundation probe. “In a sense, it’s almost turned into a one-stop shopping for the FBI as they could have implications affecting three separate investigations on one computer,” said Fuentes, who served as assistant director at the FBI during the George W. Bush administration.

Precious few voices have dared speaking of a constitutional crisis, though the threat seems obvious. Whoever wins.

• Clinton Supporter Doug Schoen Reconsiders, Cites Constitutional Crisis (RCP)

Hillary Clinton supporter, Fox News contributor, and former pollster Doug Schoen told FNC’s Harris Faulkner Sunday night that the newly renewed FBI investigation into Hillary Clinton is forcing him to “reassess” his support for the Democratic candidate. DOUG SCHOEN: As you know, I have been a supporter of Secretary Clinton… But given that this investigation is going to go on for many months after the election… But if the Secretary of State wins, we will have a president under criminal investigation, with Huma Abedin under criminal investigation, with the Secretary of State, the president-elect, should she win under investigation. Harris, under these circumstances, I am actively reassessing my support. I’m not a Trump —

HARRIS FAULKNER, FOX NEWS: Whoa, whoa, wait a minute. You are not going to vote for Hillary Clinton? SCHOEN: Harris, I’m deeply concerned that we’ll have a constitutional crisis if she’s elected. FAULKNER: Wow! SCHOEN: I want to learn more this week. See what we see. But as of today, I am not a supporter of the Secretary of State for the nation’s highest office.

We don’t need to know reality to survive. So we don’t know it. “..you might believe you are reincarnated from a monk and I might believe my prophet flew to heaven on a winged horse but we can both get through the day just fine.”

• James Comey – As Seen Through The Persuasion Filter (Adams)

As my regular readers know, the Persuasion Filter is related to the idea that the human brain never evolved to accurately comprehend reality. In order for us to be here today, our predecessors only needed to survive and procreate. They had no need to understand reality at any basic level. And we have no such need either. That’s why you might believe you are reincarnated from a monk and I might believe my prophet flew to heaven on a winged horse but we can both get through the day just fine. Many different interpretations of reality are good enough for survival. I like to describe reality as each person living their own movie, which works well unless our script’s conflict. When that happens, one of us goes into cognitive dissonance and rewrites our past to make the movies consistent.

That’s how I see the world. Last year in this blog I suggested that the most productive and predictive way to view reality is through what I call the Persuasion Filter. That’s what I have been using to make spooky-good predictions about the election so far. And that’s what I’ll use today to give you an alternate movie about James Comey. Compare it to the movie you are running in your head and see which one better predicts the future. The base assumption of the Persuasion Filter is that people are irrational 90% of the time and only rarely – when no emotions are involved – truly rational. This is the reverse of the common filter for reality, in which people are assumed to be rational 90% of the time and a bit crazy 10% of the time. That’s some background for context.

[..] The way you know the new emails are disqualifying for Clinton is because otherwise our hero would have privately informed Congress and honored the tradition of not influencing elections. Comey is smart enough to know his options. And unless he suddenly turned rotten at his current age, he’s got the character to jump in front of a second bullet for the Republic. According to this movie, no matter who gets elected, we’ll eventually learn of something disqualifying in the Weiner emails. And we can’t say we weren’t warned. Comey took two bullets to do it. So compare this movie to your own movie and see which one does the best job of explaining the observed facts. And when we find out what is in the Weiner laptop emails, compare that news to my prediction that the information is disqualifying.

Hard hitting Brits.

• Theresa May Lied And Lied Again To Become PM (G.)

Theresa May appeals to a stereotype that has a deep grip on the English psyche. Sober and commonsensical, she behaves with the moral seriousness we expect from a vicar’s daughter. She may be a little clunky, but what a relief it is to have a straightforward leader from the heart of the country after the flash, poll-driven phonies of the past. I am not saying her public image is all a pretence. No focus group told her to campaign against the modern slave trade when she was home secretary. There were few Tory votes in stopping the police targeting young black men, either. But the dominant side of Theresa May is more superficial than David Cameron and more dishonest than Tony Blair. It is a tribute to the power of cliches to stop us seeing what is in front of our noses, that so few have noticed that the only reason she’s prime minister is that she put ambition before principle.

Last week, Downing Street spin doctors were trying and failing to downplay the importance of a secret speech she gave to Goldman Sachs on 26 May, which was leaked to Nick Hopkins and Rowena Mason of the Guardian. In private, May was unequivocal. “The economic arguments are clear,” she told the bankers. Companies would leave the UK if the UK left the EU. In public, however, she made just one speech during the referendum campaign. You forgot it the moment you heard it. May never mentioned the danger of companies fleeing. Her economic case, such as it was, came down to a flaccid, pseudo-impartial argument that “there are risks in staying as well as leaving”. As an orator, May was hopeless. As a politician on the make, she was close to perfect.

When Craig Oliver, Cameron’s former chief of communications, wondered if she was secretly an “enemy agent” for the Leave side, he was being too Machiavellian. May was just making the smart move. She kept her views about the economic consequences of Brexit quiet, so that the Conservative right would accept her as leader if Cameron lost. Failing to state your honest opinion on the most important decision Britain has taken in decades may seem cowardly enough. But the consequences of May’s pretence do not stop with one referendum. Her manoeuvres have forced her into a position where she must make arguments she cannot possibly believe, on behalf of causes she cannot possibly believe in.

Just lovely.

• The Dirty Secret Beneath Hong Kong’s Wealth: Slavery (SCMP)

Hong Kong, a city commonly associated with finance and wealth, has one of the highest proportions of people enslaved across Asia, a new report has found. At least 29,500 people out of a population of more than seven million are trapped in modern slavery in one of the 10 richest cities in the world based on its gross domestic product, according to the Global Slavery Index 2016, which assessed the problem in 167 countries and regions. The sobering figures which specifically concern Hong Kong may come as a surprise, but the hard-hitting report stated that the city has become one of the worst places in Asia for its poor response to the problem, performing worse than mainland China.

The city urgently needs tougher laws and a “transparent plan of action” to combat the problem, human rights group Justice Centre Hong Kong said. Jade Anderson, anti-human trafficking coordinator for the campaign group, said the Global Slavery Index, produced by charitable organisation Walk Free Foundation, came as a “shock” to some Hongkongers. But her organisation’s research had found there were major human rights abuses that went unpunished in the city, and the number of slaves could be much higher than researchers have estimated, she said. The Justice Centre’s investigation involving 1,000 migrant domestic workers found 17% were carrying out “forced labor”, which she said equated to about 55,000 of the city’s 320,000 helpers.

Again: just lovely.

• EU And Canada Sign CETA Free Trade Deal (G.)

The EU and Canada signed a free trade deal on Sunday that was almost derailed last week by objections from French-speaking Belgians , exposing the difficulties of securing agreement from 28 member states as Britain prepares for Brexit talks. The European commission president, Jean-Claude Juncker, said there was no parallel between the deal struck with Canada and looming Brexit talks. “I don’t see any relation between what we are signing today and the Brexit issue,” Juncker said, before greeting Canada’s prime minister, Justin Trudeau, in Brussels Trudeau and top EU officials signed the comprehensive economic and trade agreement, known as Ceta, paving the way for most import duties to be removed early next year. However, the treaty needs the approval of at least 38 national and regional parliaments, including the UK’s, to take full force.

Trudeau was meant to fly to Brussels last Wednesday but he stayed at home when the Wallonia region raised objections that held up agreement until Thursday. Belgium’s regional parliaments endorsed a compromise deal, which addressed concerns about competition for Wallonia’s farmers from Canada, on Friday. Donald Tusk, the president of the European council, who stood beside Trudeau at a news conference, said the delay was caused by Belgium’s internal politics and that the deal would be far less contentious when it went before national parliaments. Tusk said: “Fortunately we live in a democratic system and democracy is less predictable than other political systems but I still prefer democracy. My prediction is there is no huge problem with European parliaments. After my talks with all 28 member states’ leaders, I have no doubt Ceta is the least controversial trade agreement you could imagine.”

Amazing he was still walking free.

• Turkey Detains Editor Of Opposition Newspaper Cumhuriyet (AFP)

Turkish police detained the editor-in-chief of the opposition newspaper Cumhuriyet, state media reported Monday, while CNN Turk said 13 arrest warrants were issued for journalists and executives from the daily. Murat Sabuncu was detained while authorities searched for executive board chairman Akin Atalay and writer Guray Oz, the official news agency Anadolu said. The daily said Oz had already been detained. Police were searching the homes of Atalay and Oz, Anadolu said. The latest detentions came as authorities pressed a massive crackdown over a failed July bid by a rogue faction of the military to oust President Recep Tayyip Erdogan.Tens of thousands of civil servants have since been suspended, fired or detained, with the government pointing the finger of blame for the coup bid at exiled Muslim preacher Fethullah Gulen.

The government has also shut more than 100 media outlets and detained dozens of journalists as it presses a purge that has come under fire by Western leaders and human rights organisations. Sabuncu’s arrest also came as the government fought an insurgency from the outlawed Kurdistan Workers’ Party (PKK). The government’s operation against the Cumhuriyet daily was launched over its alleged “activities on behalf of” the Gulen movement and the PKK. The PKK — proscribed as a terrorist organisation by Ankara, the EU and US — has waged an insurgency inside Turkey since 1984. Cumhuriyet’s former editor-in-chief is Can Dundar, who was sentenced in May by a Turkish court to five years and 10 months in prison for allegedly revealing state secrets. Dundar is now believed to be in Germany after he was freed earlier this year pending an appeal.

It’s too late for an October surprise from Erdogan, but this stuff is so insane it makes you wonder.

• Erdogan Says Greek Islands ‘Used To Be Ours’ (Kath.)

In what was widely seen as a fresh dig at Greece, Turkish President Recep Tayyip Erdogan on Saturday reiterated that several Greek islands in the eastern Aegean “used to be ours.” The Turkish leader made waves recently in Greece when he said that the Treaty of Lausanne, which set the borders between Greece and Turkey in 1923, was unfair on his country. He returned to the subject on Saturday, saying he didn’t understand why his remarks had raised so many objections. “I said Lausanne and they got annoyed. Why are you annoyed?” he said, adding that “these islands were ours.” “We have our monuments and our mosques there [on the islands],” he said. “Whoever signed [for their passing to Greece] bears the responsibility.”

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