Nov 182022
 
 November 18, 2022  Posted by at 9:20 am Finance Tagged with: , , , , , , , ,  76 Responses »


Paul Gauguin Palm trees on Martinique 1887

 

Zelensky Declares Ukraine Corruption-Free (RT)
Ukraine Openly Lied To NATO Over Missile Strike, Diplomat Tells FT (RT)
Zelensky ‘Commanding The US To Lead WWIII’ – Tucker Carlson (RT)
Evidence Suggests Ukrainian Missile Struck Poland – Top Security Official (RT)
Zelensky Backtracks On Missile Claims (RT)
Zelensky Confirms Signals From West On Peace Talks (RT)
Zelensky Cracks Down On Popular News Outlet, Bans CNN, Sky (RT)
Dutch Court Blames Russia for Missile That Struck MH17 (ET)
Enron Liquidator Overseeing FTX Bankruptcy: Never Seen Anything Like This (ZH)
White House Slams GOP For Probing Hunter Biden ‘Conspiracy Theories’
Italian Power Prices More Than Triple – Data (RT)
Elon Musk Eyes Potential Tesla CEO Successor (Axios)
Clinton-Linked Dark Money Group Targets Twitter Advertisers (Turley)
Twitter On Lock Out After Mass Resignation Exodus; Operations At Risk (ZH)

 

 

 

 

Dave

 

 

 

 

Devine

 

 

Monty Python
https://twitter.com/i/status/1593092267619020801

 

 

Mr. Wonderful has most to fear.

 

 


The U.S. says Saudi Prince Mohammed bin Salman’s official standing as the sitting head of a foreign government should give him immunity in the lawsuit filed by the fiancée of slain Washington Post columnist Jamal Khashoggi

 

 

Edward Dowd

 

 

“If there must be trouble, let it be in my day, that my child may have peace.”
– Thomas Paine

 

 

 

 

Ha ha, said the clown.

Zelensky Declares Ukraine Corruption-Free (RT)

Corruption has been eradicated from Ukraine and all Russian influences have left or been chased out, Ukrainian President Vladimir Zelensky told a global audience at the Bloomberg New Economy Forum on Thursday. “No one will be able to forgive corruption in the future Ukraine,” he said, explaining that all the corrupt officials had fled the country in the months following the launch of Russia’s military operation. The remaining officials would not be tempted to “interfere in business operations” because all government services had gone electronic, he added. Zelensky promised there would be “no influence of Russian capital in Ukraine” going forward, explaining that any business interests not “united” behind his government had either “left our enterprises, or we pushed them out” – including the many political parties and media outlets his government has banned, such as the Party of Regions of predecessor Viktor Yanukovych.

The Ukrainian leader revealed he had just met with the vice president of the World Bank in order to “start a ‘pilot’ with them regarding investment insurance in Ukraine” and sought to allay potential concerns about corruption in his country. Investments – particularly by the mining and processing industries – would be safe, he insisted, praising the “independence of the economy, finances, and transparency of investments.” Western media outlets like The Guardian ranked Ukraine at or near the top on lists of the most corrupt nations in the world prior to the start of Russia’s military initiative in the country in February. Last year, Transparency International’s Corruption Perceptions Index ranked it the second-most corrupt in Europe.

Even Zelensky, in his inauguration speech, joked that 28 years of Ukrainian politicians had created a country of opportunities – “opportunities to steal, bribe and loot.” However, many of those voices have since gone quiet for fear of being seen as perpetuating a pro-Russian narrative. In June, the heads of the European Council and European Commission informed members of Zelensky’s government that they would have to “do their homework” to join the EU, tasking them with implementing judicial reforms, “de-oligarchizing” the economy, and fighting corruption successfully. The Council of Europe last month promised to help Kiev along by finding experts to advise it on constitutional reforms and electoral law to help the process along.

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“..such statements could only be seen as an attempt to trigger a direct clash between Russia and NATO..”

Ukraine Openly Lied To NATO Over Missile Strike, Diplomat Tells FT (RT)

Kiev has been accused of “openly lying” about the recent missile that hit Poland killing two civilians, the Financial Times reports citing an unnamed diplomat from a NATO country. Ukraine rushed to pin the blame on Moscow, while the Russian Ministry of Defense stated that footage from the site showed “elements of a missile from an S-300 air defense system used by the Air Force of Ukraine.” “This is getting ridiculous,” the official told the outlet on Wednesday. “The Ukrainians are destroying our confidence in them. Nobody is blaming Ukraine and they are openly lying. This is more destructive than the missile,” he said. The comments come in response to President Vladimir Zelensky claiming that Ukraine had nothing to do with the missile that struck Przewodow, Poland, on Tuesday, insisting that it was Russia that launched the weapon.

Zelensky has insisted that Ukrainian investigators be given access to the crash site, stating that if it turns out that it was indeed a Ukrainian rocket then Kiev would have to apologize. “But, sorry, first I want an investigation, access, the data you have – we want to have this,” Zelensky said, addressing his Western partners. NATO, the US and Poland have stated that there is no evidence to suggest Russia’s direct involvement in the incident. Polish President Andrzej Duda has indicated that the projectile was likely a Ukrainian air defense missile – an opinion that was seconded by NATO Secretary General Jens Stoltenberg and US Defense secretary Lloyd Austin.

Moscow, meanwhile, has condemned efforts to paint it as the perpetrator, saying such statements could only be seen as an attempt to trigger a direct clash between Russia and NATO. After several media outlets as well as Ukrainian and Polish officials initially blamed Russia for the attack, Moscow’s permanent representative to the United Nations, Vassily Nebenzia, stated that if it had not been for the evidence in the form of photos from the scene, “all facts would have been concealed from the public, and Russia would have been proclaimed the guilty side.” Kremlin Spokesman Dmitry Peskov has also stated that the initial claims made by Kiev and other Western officials were “yet another hysterical, rabidly Russophobic reaction that was not based on any real information.”

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“Zelensky’s refusal to admit that a Ukrainian missile caused a fatal explosion in Poland makes him “not worth supporting..”

“It’s a lie that could get millions of Americans killed. So you have to ask yourself, is it time to stop backing this guy? Could the risk be too high? He’s lying on purpose to get us into a war?”

Zelensky ‘Commanding The US To Lead WWIII’ – Tucker Carlson (RT)

Ukrainian President Vladimir Zelensky could be “lying on purpose to get us into a war,” Fox News host Tucker Carlson declared on Wednesday night. Zelensky’s refusal to admit that a Ukrainian missile caused a fatal explosion in Poland makes him “not worth supporting,” Carlson suggested. Zelensky “was commanding the US to lead the Third World War immediately” after the blast, Carlson told his viewers. “The only problem is that it was completely and utterly wrong.” The Ukrainian leader described the explosion, which killed two people, as a Russian attack on NATO territory and called on the West to put Russia “in its place” in response. Anonymous US intelligence officials seconded his claims in statements to the press.

Moscow argued that debris at the blast site showed that it was caused by a missile from the S-300 air defense system, a piece of Soviet-era kit fielded by Ukraine. Within hours, the leadership of the US, NATO, and Poland had all publicly stated that the explosion was caused by a Ukrainian anti-air missile. Zelensky doubled down. “I have no doubt that this is not our missile,” he said in a video address. “I believe that it was a Russian missile, based on our military reports.” “That’s not only untrue,” Carlson said. “It’s a lie that could get millions of Americans killed. So you have to ask yourself, is it time to stop backing this guy? Could the risk be too high? He’s lying on purpose to get us into a war?”

“Maybe he’s not worth supporting in the first place. Maybe he’s just another corrupt Eastern European strongman in a tracksuit, getting as rich as he can on American handouts.” Carlson has been a long-time critic of the US’ support for Zelensky, arguing that Ukraine is not democratic, and that intervening in its conflict with Russia is not in the US’ national security interest. Zelensky has since walked back his claims, saying on Thursday that Kiev doesn’t “know for 100%” what happened.

Tucker Zel

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“It is “normal” for its president to stick to “hypotheses that seem obvious from the national defense point of view” under such circumstances..”

Evidence Suggests Ukrainian Missile Struck Poland – Top Security Official (RT)

Evidence gathered by Poland, the US, and NATO suggests that it was a Ukrainian missile that killed two people on Polish territory not far from Ukraine’s border this week, the head of the country’s National Security Bureau (BBN), Jacek Siewiera, told the local RMF FM radio broadcaster on Thursday. Earlier, Polish President Andrzej Duda said that the missile was likely a Ukrainian one. Washington, meanwhile, admitted it had no evidence that would contradict Duda’s assessment, while Kiev rushed to blame the incident on Moscow. “All the evidence that has been collected on the NATO, American and our sides indicates that we are dealing with an S-300 missile launched by the Ukrainian anti-aircraft defense,” Siewiera said on Thursday, without offering details on the information gathered by investigators.

According to the BBN chief, the Polish Prosecutor’s Office is now leading the probe into the incident. Warsaw would not object to Ukrainian “observers” joining the investigation, Siewiera said, adding that the Polish president in particular “sees no obstacles” for this if all legal requirements are met. He also justified Ukrainian President Vladimir Zelensky’s stance on the issue by reasoning that Ukraine is now going through the “hardest period” of its conflict with Russia when it comes to air strikes. It is “normal” for its president to stick to “hypotheses that seem obvious from the national defense point of view” under such circumstances, the BBN head argued.

Zelensky insisted the missile was Russian and backtracked on this claim only after it was disputed by US President Joe Biden. Later, Zelensky maintained that no one can know for sure whose missile killed the two Poles. On Tuesday, Russia said it did not strike any targets closer than 35 kilometers (21.7 miles) from the border with Poland.

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“The US government always has somebody to ‘hold responsible’ on political grounds.”

Zelensky Backtracks On Missile Claims (RT)

President Vladimir Zelensky has toned down his claims that a Russian missile was responsible for the deaths of two people in a Polish village near the border with Ukraine. “I don’t know what happened this time. We do not know for a 100%,” Zelensky conceded on Thursday. He was responding to a question about the incident during a panel discussion at the Bloomberg New Economy forum in Singapore, which he attended via videolink. “But I am sure that there was a Russian missile and I am sure we were launching air defense missiles,” he added. The incident happened on Thursday evening, as Russia was hitting targets in Ukraine with a barrage of missiles. Zelensky declared that the projectile was Russian and that its landing on Polish territory was an attack on NATO’s collective security, urging retaliation.

Warsaw has since announced that the weapon was most likely a Ukrainian air defense missile that went astray, but Zelensky’s initial reaction was to point the finger at Moscow. The Russian military said it didn’t attack any site near the location of the village and that images of the crash site, which were published by Polish media, clearly identified the projectile as a Ukrainian air defense missile. Zelensky claimed during the Bloomberg panel that the Ukrainian military had told him that the images were not consistent with that kind of weapon. He claimed that nobody could say with full certainty what the origin of the missile was until a full investigation had been carried out.

He also thanked Ukraine’s foreign backers, who put the blame for the deaths in Poland on Russia, regardless of who fired the weapon. NATO and some of its members, including the US, stated that Moscow was responsible because it had launched missiles at Ukraine in the first place. Maria Zakharova, the spokeswoman for the Russian Foreign Ministry, said that Washington’s attitude may give a hint to US citizens about the veracity of American investigations in general. “The US government doesn’t care about getting the results in an investigation,” she said. “The US government always has somebody to ‘hold responsible’ on political grounds.”

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“The statement follows talks between the head of Russia’s Foreign Intelligence Service (SVR), Sergey Naryshkin, and CIA Director William Burns, which took place in Türkiye earlier this week.”

Zelensky Confirms Signals From West On Peace Talks (RT)

Ukrainian President Vladimir Zelensky has acknowledged that Kiev’s foreign backers have been speaking to him about the possibility of peace talks with Moscow. “I had received signals from state leaders, who said: ‘We think [Russian President Vladimir] Putin wants direct negotiations.’ And I said: ‘We will offer a public format [for the talks] because Russia is waging a public war against Ukraine,’” Zelensky told journalists on Wednesday. “I’m ready to recommend such a format. I’ll discuss with my colleagues how to do it,” he said, adding that he does not want to have any “backstage contact”with Russia. Recent reports indicate that Washington has been privately pushing Kiev to drop its uncompromising rejection of the peace process with Moscow.

Last week, the chairman of the US Joint Chiefs of Staff, General Mark Milley, suggested that a Ukrainian military victory might be unachievable and that winter could provide an opportunity to begin talks with Russia. Zelensky also said he does not believe that the US, which has been among Kiev’s main backers amid the conflict with Moscow, was discussing ways to end the fighting behind Ukraine’s back. “We have an agreement that they – the US – don’t discuss Ukraine without us… Is it really the case? We trust our partners,” he said. The statement follows talks between the head of Russia’s Foreign Intelligence Service (SVR), Sergey Naryshkin, and CIA Director William Burns, which took place in Türkiye earlier this week. Both the Kremlin and the White House confirmed the meeting, with the US side saying that it was aimed at keeping channels of communication open, and that a Ukrainian settlement was not on the agenda.

Zelensky has been sending mixed messages about the possibility of peace talks with Moscow throughout the conflict, even signing a decree in October that officially made it impossible for him to negotiate with his Russian counterpart Vladimir Putin. In a video address to the G20 on Tuesday, the Ukrainian leader said he was “convinced now is the time when the Russian destructive war must and can be stopped.” Conflict between Moscow and Kiev should conclude “fairly” and on the basis of the UN Charter, Zelensky insisted, stressing that Ukraine “shouldn’t be offered compromises with its sovereignty, territorial integrity and independence” in exchange for peace. He also claimed that Moscow should not be trusted, warning that Russia could use the cessation of hostilities “to grow its forces and launch a new series of terror and global destabilization.”

Russian Foreign Minister Sergey Lavrov reacted to the speech by saying that Russia is ready for talks, unlike Ukraine, which puts forward “invariably unrealistic and inadequate” terms for dialogue. According to Lavrov, Zelensky’s address was full of “militant, Russophobic and aggressive rhetoric.” Kremlin Press Secretary Dmitry Peskov also said that the speech by the Ukrainian leader “absolutely confirms”the unwillingness of Kiev to look for a settlement of the conflict through negotiations.

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Banning all political parties and media that don’t toe the line. Let’s give him another $100 billion. Give him another 50 for banning CNN.

Zelensky Cracks Down On Popular News Outlet, Bans CNN, Sky (RT)

Ukrainian President Vladimir Zelensky says he has granted a petition demanding that the government take action against popular opposition news website Starana.ua. The petition, which calls on the authorities to ensure the outlet is completely blocked, was submitted to the president’s website in late September, and has so far garnered more than 25,500 signatures. On Thursday, Zelensky announced that he had considered the petition and ordered the head of Ukraine’s National Security and Defense Council, Aleksey Danilov, to “address the issues raised in it, take necessary measures in response and inform the author of the results.”

Commenting on the petition, Zelensky accused Russia of using various forms of hybrid warfare against Ukraine, and said “the issues of protecting the domestic information space require constant attention and urgent response.” The author of the petition called Starana.ua “a pro-Russian” media outlet, which continues to “manipulate the opinions of Ukrainian viewers” despite being banned in the country. The website, which was among the most viewed online publications in Ukraine last year, was officially blocked by Zelensky’s government in August 2021, with more restrictions added this February, just over a week before the launch of Moscow’s military operation in the country. At that time, the journalists claimed that they had been persecuted due to their “alternative view” on the conflict in Donbass and Zelensky’s personal animosity towards them.

However, Starana.ua continued to remain accessible in Ukraine through several mirror sites. The outlet also began to actively develop its YouTube channel, which now has more than 600,000 subscribers. Foreign journalists have also faced obstacles working in Ukraine. On Monday, Kiev removed accreditation from a group of media workers, including those from CNN and Sky News, accusing them of reporting from the recently-retaken city of Kherson without the necessary authorization from the Ukrainian military.

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Said it before: The Dutch are the last party that should have investigated. The main victim does not get to conduct this.

Dutch Court Blames Russia for Missile That Struck MH17 (ET)

A court in the Netherlands determined what country manufactured the missile that struck down a Malaysia Airlines flight in 2014 over eastern Ukraine, killing 298 people. “The court is of the opinion that MH17 (Flight 17) was brought down by the firing of a BUK missile from a farm field near Pervomaisk, killing all 283 passengers and 15 crew members,” presiding judge Hendrik Steenhuis said, according to Reuters news agency. That flight is different than Malaysia Airlines Flight 370, which disappeared in 2014 while flying from Kuala Lumpur, Malaysia, to Beijing. The location of Flight 370, which disappeared about four months before Flight 17 was shot down, has still never been determined.


The statement was issued in the trial of several Russians and a separatist Ukrainian who were found guilty in absentia of the mass murder for their alleged involvement in shooting down Flight 17 over eastern Ukraine. Russians Igor Girkin, Sergey Dubinskiy, and Oleg Pulatov and Ukrainian separatist Leonid Kharchenko were on trial at the Schiphol Judicial Complex in Badhoevedorp, Netherlands, according to reports. Pulatov was acquitted while the three others were found guilty. None of the defendants appeared for the trial that began in March 2020, and if they’re convicted, it’s unlikely they’ll serve any sentence anytime soon. Prosecutors had sought life sentences for all four. Prosecutors and the suspects have two weeks to file an appeal.

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Did they even have an accountant?

Enron Liquidator Overseeing FTX Bankruptcy: Never Seen Anything Like This (ZH)

[..] FTX’s new CEO and liquidator, John Ray III, who also oversaw the unwinding and liquidation of Enron, admits that “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.” And just in case his shock at FTX’s fraud of epic proportions was not quite clear enough, he adds that “from compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”

According to Ray, he has located “only a fraction” of the digital assets of the FTX Group that they hope recover during the Chapter 11 bankruptcy. They’ve so far secured about $740 million of cryptocurrency in offline cold wallets, a storage method designed to prevent hacks. This is just a fraction of the $10-$50 billion in liabilities the company disclosed in its bankruptcy filing. How do we know it’s a fraud: as Ray writes on page 24, although the investigation has only begun and must run its course, it is my view based on the information obtained to date, “that many of the employees of the FTX Group, including some of its senior executives, were not aware of the shortfalls or potential commingling of digital assets.” Many maybe not, but some – and certainly SBF himself – did.

It gets better: Ray said that company’s audited financial statements should not be trusted, Ray said, adding that liquidators are working to rebuild balance sheets for FTX entities from the bottom up. FTX “did not maintain centralized control of its cash” and failed to keep an accurate list of bank accounts and account signatories, or pay sufficient attention to the creditworthiness of banking partners, according to Ray. Advisers don’t yet know how much cash FTX Group had when it filed for bankruptcy, but has found about $560 million attributable to various FTX entities so far.

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Not probing Huter has been politically motivated from the get go.

White House Slams GOP For Probing Hunter Biden ‘Conspiracy Theories’ (RT)

The White House has dismissed Republican efforts to investigate President Joe Biden and his son’s overseas business ties, rejecting allegations that the commander in chief is under the sway of “foreign dollars” as a baseless conspiracy theory.In a statement to the New York Post on Thursday, a spokesman for the White House counsel’s office, Ian Sams, said House Republicans are “wasting time and resources on political revenge” after several lawmakers pledged to open a probe into the Biden family, namely the president’s son Hunter. “Instead of working with President Biden to address issues important to the American people, like lower costs, congressional Republicans’ top priority is to go after President Biden with politically motivated attacks chock full of long-debunked conspiracy theories,” the spokesman said.

Earlier on Thursday, GOP Reps. James Comer and Jim Jordan announced that an investigation into the president would be a priority during the next round of Congress, saying their probe would center whether Biden has been “directly involved with Hunter Biden’s business deals” and if he is in any way “compromised.” The pair of lawmakers alleged the Bidens “were involved in a scheme to try to get China to buy liquefied natural gas,” and said they would attempt to determine if the president was ever “swayed by foreign dollars or influence.” With Republicans taking back a majority in the House after last week’s midterm elections, Comer and Jordan are set to head up the House Judiciary and Oversight committees, respectively, putting them in better positions to spearhead congressional inquiries.

Hunter Biden’s foreign business ties have been questioned by Republicans since an October 2020 New York Post report which published the contents of one of his laptops. Emails and other communications found on the computer indicate the younger Biden used his father’s political influence for personal gain, and raised other questions about whether Joe Biden was involved in any of his son’s dealings. Until the midterms, however, Democrats held majorities in both houses of Congress in addition to the White House, leaving GOP critics unable to press forward with long-sought investigations.

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This will topple governments.

Italian Power Prices More Than Triple – Data (RT)

Electricity prices in Italy set an all-time record in October, the country’s oldest consumer association Unc reported on Thursday. Prices for electricity, which is being sold in the Apennines on the free market, have surged 329% since October last year, and topped the Unc rating of the most expensive goods and services. International flights followed power tariffs, with an annual increase in costs equaling 113%. Gas was next in the ranking, with prices surging more than 96% compared to last year. The Unc report comes on the heels of the latest data released by Italy’s official statistics agency ISTAT, which showed that the domestic price index soared 11.8% in October from a year earlier, the highest since March 1984. Annual consumer price growth led by soaring energy costs hit 12.6% in October, jumping from 9.4% in the previous month.


Basic food items have also seen dramatic inflation in Italy, with the prices of various vegetable oils, excluding olive oil, soaring by 55% year-on-year. Butter grew by 43%, followed by sugar, which picked up 17% from September and rose by 38.8% on an annual basis. The sharp increase is expected to make the average annual food bill rise by €761 ($787), at a time when cash-strapped families are already trying to cope with soaring energy bills. For families with one child, this figure will increase to €937 ($969), for those with two children – up to €1038 ($1073), with three – up to €1240 ($1282), Unc president Massimiliano Donna has said.

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Looking for Twitter CEO. Jack is not available.

Elon Musk Identifies Potential Tesla CEO Successor (Axios)

Elon Musk has recently identified someone as his potential successor to lead Tesla as CEO, according to James Murdoch, one of the company’s directors. Tesla investors have grown increasingly worried about Musk’s divided focus since he initiated steps to buy Twitter earlier this year. As the Twitter saga progressed, Tesla faced its own set of issues — including supply chain challenges in China and the erosion of profits from inflation. Murdoch made the comment while testifying in Musk’s pay package trial on Wednesday. In response to a question from a plaintiff’s lawyer suggesting Musk has never picked anyone as a potential successor, Murdoch responded that Musk “actually has” and has in the “last few months,” but didn’t get into specifics, Reuters reports.


Musk, who also testified Wednesday to defend himself against the lawsuit challenging his large compensation package, has often talked about how much he “hates doing management stuff” and how he doesn’t want to “be the boss of anything.” “I tried not to be CEO of Tesla, but I had to or it would die. I rather hate being a boss. I’m an engineer,” he said last year while testifying about Tesla’s SolarCity acquisition. On the stand this morning, Musk said the CEO title is not an apt description of what he does at his companies. In addition to Tesla, Musk currently leads in one way or another, four other businesses — The Boring Company, SpaceX, Twitter and Neuralink. Musk has served as Tesla’s CEO since October 2008. The pay package he accepted in 2018 stipulates that he stay on as CEO, or chief product officer and executive chairman with a CEO reporting to him, for at least a decade.

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“The letter insists that free speech will only invite “disinformation, hate, and harassment“

Clinton-Linked Dark Money Group Targets Twitter Advertisers (Turley)

In the shift of the left against free speech principles, there is no figure more actively or openly pushing for censorship than Hillary Clinton. Now, reports indicate that Clinton has unleashed her allies in the corporate world to coerce Musk to restore censorship policies or face bankruptcy. The effort of the Clinton-linked “Accountable Tech” reveals the level of panic in Democratic circles that free speech could be restored on one social media platform. The group was open about how losing control over Twitter could result in a loss of control over social media generally. For Clinton, it is an “all-hands on deck” call for censorship. She previously called upon foreign governments to crackdown on the free speech of Americans on Twitter.

We have been discussing how Clinton and others have called on foreign companies to pass censorship laws to prevent Elon Musk from restoring free speech protections on Twitter. It seems that, after years of using censorship-by-surrogates in social media companies, Democratic leaders seem to have rediscovered good old-fashioned state censorship. Accountable Tech led an effort to send a letter to top Twitter advertisers to force Musk to accept “non-negotiable” requirements for censorship. General Motors was one of the first to pull its advertising funds to stop free speech restoration on the site. Of course, the company had no problem with supporting Twitter when it was running one of the largest censorship systems in history — or supporting TikTok (which is Chinese owned and has been denounced for state control and access to data).

Twitter has been denounced for years for its bias against conservative and dissenting voices, including presumably many GM customers on the right. None of that was a concern for GM but the pledge to restore free speech to Twitter warrants a suspension. The letter is open about the potential cascading effect if free speech is restored on one platform: “While the company is hardly a poster-child for healthy social media, it has taken welcome steps in recent years to mitigate systemic risks, ratcheting up pressure on the likes of Facebook and YouTube to follow suit.” The letter insists that free speech will only invite “disinformation, hate, and harassment” and that “[u]nder the guise of ‘free speech,’ [Musk’s] vision will silence and endanger marginalized communities, and tear at the fraying fabric of democracy.”

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Lockdown till Monday. Might make sense.

Twitter On Lock Out After Mass Resignation Exodus; Operations At Risk (ZH)

Hundreds of Twitter’s remaining employees have reportedly resigned ahead of Elon Musk’s “extremely hardcore” cultural reset of the company. After Musk gave an ultimatum to his employees to either commit to the company’s new “hardcore” work environment or leave, many more workers declined to sign on than he expected, potentially putting Twitter’s operations at risk, according to Bloomberg sources, as well as internal Slack messages seen by The Verge and employee tweets. On Thursday afternoon, so many employees decided to take severance that it created a cloud of confusion over which people should still have access to company property.

According to a memo seen by Bloomberg and reports from Platformer’s Zoe Schiffer, Twitter closed its offices until Monday; urging employees to “please continue to comply with company policy by refraining from discussing confidential information on social media, with the press or elsewhere.” According to Bloomberg, in the final hours before his deadline, Musk tried to convince people to stay. Key staff were brought into meetings as the Thursday evening deadline neared to hear pitches on the social network’s future, according to people familiar with the matter. Musk, who had earlier said he was strictly against remote work, also sent a follow-up email Thursday softening his tone. “All that is required for approval is that your manager takes responsibility for ensuring that you are making an excellent contribution,” he wrote, adding that staffers should have in-person meetings with their colleagues not less than once per month.

Despite the ultimatum, no Twitter employees have been deactivated — even those who’ve publicly resigned, the Platformer also reported, adding that “Musk and his team only collected the list of “yes’s” — employees who said they want to be part of Twitter 2.0. They’re still trying to track who is out.” Elon’s attempt to ease the terms of the ultimatum wasn’t enough, and Twitter’s internal communications channels filled with employees offering a salute emoji, which has become a symbol for departing the company. Former staff tweeted the salute publicly, too, along with their internal Slack messages. Some employees who were departing speculated that so many were leaving, along with their knowledge of how the product works, that the social network may have trouble fixing problems or updating systems during its normal operations, according to people familiar with the matter.

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Dog bear

 

 

Tiger babies

 

 

 

 

Illusion

 

 

 

 

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Aug 062016
 
 August 6, 2016  Posted by at 9:00 am Finance Tagged with: , , , , , , , , , , ,  Comments Off on Debt Rattle August 6 2016


Ben Shahn Sideshow, county fair, central Ohio 1938

UK’s Four Biggest Banks £155 Billion Short Of Safety (Ind.)
Want To Avoid Recession? Then Shower UK Households With Cash (G.)
A Realistic Look at July’s Nonfarm Payrolls (M2)
The Politically Incorrect Jobs Numbers Everyone is Hushing Up (WS)
Hacked Bitcoin Firm Plans To Spread Losses Across All Users (CNBC)
In China, When in Debt, Dig Deeper (WSJ)
Only In China: Companies Become Banks To ‘Solve’ Financial Difficulties
Galbraith Says Critics Have It All Wrong Over Greece ‘Plan X’ (Kath.)
Stiglitz Quits Panama Papers Probe, Cites Lack Of Transparency (R.)
Is Hillary Clinton Corrupt? An Archive of Financial Improprieties (Medium)
Average American 15 Pounds Heavier Than 20 Years Ago (HDN)

 

 

“That sum is not far away from the present market capitalisation of these banks, implying that they are massively overexposed.”

UK’s Four Biggest Banks £155 Billion Short Of Safety (Ind.)

The UK’s four biggest banks would need to raise another £155bn in fresh capital to withstand a new financial crisis, despite the view of the Bank of England Governor that lenders have an adequate cushion to cope with further turmoil. Those are the results of research from three respected financial academics – and add to a growing feeling that the Bank of England is dangerously undercooking its capital requirements on UK lenders in the face of swelling instability in financial markets. UK banks had to be rescued in 2008 and 2009 at massive cost to British taxpayers. Capital represents the shareholder funds in banks available to absorb losses. When losses are greater than the capital cushion the bank is bust and may need to tap state support if deemed to be systemically important by politicians and regulators.

In a new paper Viral Acharya of New York University, Diane Pierret of the University of Lausanne and Sascha Steffen of the University of Mannheim calculate that HSBC, Barclays, Lloyds and the Royal Bank of Scotland would need to raise $185bn (£155bn) of new equity between them to retain a 5.5% capital cushion in a crisis, which is the benchmark of safety used in the past by the European Banking Authority. That sum is not far away from the present market capitalisation of these banks, implying that they are massively overexposed. The EBA’s stress test exercise last Friday showed the UK’s major lenders would see their capital diminished in another European economic crisis, but not below the 5.5% level of so-called “risk-weighted assets” that would have created pressure for more equity injections.

[..] Acharya, Pierret and Steffen argue that the broader European banking sector could be undercapitalised to the tune of around €890bn – a figure they calculated using stock market valuations of banks’ equity rather than the sums reported by lenders themselves. Bank share prices have continued to fall since last Friday’s EBA stress test, implying investors are far from reassured by the fact that most lenders received a clean bill of health from the regulators.

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Would it even help anymore?

Want To Avoid Recession? Then Shower UK Households With Cash (G.)

Just give people the money. Give them cash, dole it out, increase benefits, slash VAT, hand it to those most likely to spend it: the poor. Put £1,000 into every debit account. Whatever you do, don’t give it to banks. They will just hoard it or use it to boost house prices. Britain is suffering from a classic liquidity trap. There is insufficient demand. Yet all the Bank of England did on Thursday was wring its hands, blame Brexit and go on digging the same old holes. They are labelled lower interest rates, quantitative easing and more cash for banks. Those policies have been in place for some seven years. They have failed, failed, failed. Not one commentator yesterday thought cutting interest rates to 0.25% would make any difference to the threat of recession.

Worse, by cutting annuity yields it would impoverish many old people who would otherwise spend. The Bank’s cumbersome monetary bureaucracy was set up to keep inflation under control by curbing bank lending. That failed during the credit crunch. Now it is failing in the opposite direction. Channelling policy through the banks has proved useless in protecting the economy from deflation and recession. The Bank is trapped intellectually in the world in which it lives, that of the City and the banking system. Like chateau generals at the Somme, it never ventures to the economy’s frontline, where buyers meet sellers and generate growth. It thinks of bonds, investments and the only glamour spending it recognises, on infrastructure. It believes that an economy can be regenerated through middle-class home ownership and state mega-projects.

But there is no shortage of funds to invest. Companies, like banks, are awash in cash. The problem is that savers are not spending; if they spend on anything it is on property, and that, too, may now slide. It is irresponsible to await the chancellor’s autumn statement and a political fiddle with tax rates. The engine of the economy must crash into forward gear. Money must be got into bank accounts, cash cards, shops tills and revenues. The plea from 35 economists published in the Guardian this week for “unconventional measures” made only one mistake. It suggested more spending on state infrastructure, which is just spending delayed. Where the economists were right was in suggesting “an immediate increase in household disposable incomes”.

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“..the U-6 unemployment number is 10.7% of the nation’s workforce..”

A Realistic Look at July’s Nonfarm Payrolls (M2)

The Bureau of Labor Statistics (BLS) released its nonfarm payroll data this morning, showing that 255,000 jobs were created in July. The unemployment rate remained at 4.9%. May data was revised up from the eyebrow-raising low number of 11,000 jobs to 24,000 jobs while June was also revised upward from 287,000 jobs to 292,000. That brought the monthly average to 190,000 jobs over the past three months. Unfortunately, drilling down into the more granular details, a far less rosy picture emerges; a picture which is far more consistent with an economy feeling the continued weight of unprecedented wealth and income inequality; a picture that is far more correlated to an economy where “58% of all new income since the Wall Street crash has gone to the top 1%,” to quote Senator Bernie Sanders.

The data for July shows that the U-6 unemployment number is 10.7% of the nation’s workforce, more than double the official number of 4.9%. The U-6 unemployment rate includes the number of people unemployed; plus individuals just marginally attached to the labor force; plus those employed part-time for economic reasons. (The Bureau of Labor Statistics provides the following definition of marginally attached: “Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work.)

But a far bigger problem with the BLS data is what constitutes an “employed” worker to our Federal government’s numbers crunchers. According to the Bureau of Labor Statistics, you could be an out of work MBA graduate but if you help your brother in his deli for 15 hours in a week while living in his home, you’re counted as employed. (The BLS says that a worker who makes no money at all donating his or her services to a family business for 15 hours or more per week is considered employed.)

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The US keeps addding more people than jobs.

The Politically Incorrect Jobs Numbers Everyone is Hushing Up (WS)

On its population clock, the Census Bureau estimates that the US population on August 5, 2016, at 4:49 p.m. ET (yup, down to the minute) was 324.17 million. That’s up from 308.76 million in April 2010. Since the darkest days of the Great Recession, the US population has grown by 15.4 million. The Census Bureau also estimates that there are currently 8.6 births per minute, minus 4.6 deaths per minute, plus 2 arriving immigrants (“net”) per minute, for a gain of nearly 6 folks per minute. Everyone ages, so the young ones move into the labor force, but the baby boomers are fit and healthy and don’t feel like retiring, and so they hang on to their jobs for as long as they can, despite the rampant age discrimination they face in many sectors, particularly in tech, though obviously not in politics.

In 2010, 24% of the people were under 18. That was 74 million people. Millions of them have since moved into the labor force, elbowing each other while scrambling for jobs, as have those millions who were then between 18 and their twenties and in college or grad school. These millennials have arrived on the job market in very large numbers. In April 2010, there were 130.1 million nonfarm payrolls. In today’s July report, there were 144.4 million. Hence, 14.3 million jobs have been added to the economy over the time span, even as the total population has grown by 15.4 million. So that’s not working out very well. On average, 205,300 jobs need to be created every month just to keep up with population growth and not allow the unemployment situation to get worse.

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Maybe they should be forced to pay back all their clients and close?

Hacked Bitcoin Firm Plans To Spread Losses Across All Users (CNBC)

The bitcoin exchange Bitfinex has said it is considering sharing losses among all its users after around $70 million worth of bitcoin was stolen earlier in the week. “We are still working out the details so nothing is set in stone, however we are leaning towards a socialized loss scenario among bitcoin balances and active loans to (bitcoin/dollar) positions,” the Hong-Kong based company said on its website on Friday. Bitfinex revealed it had been hacked on Tuesday and suspended trading, causing prices of the digital currency to fall significantly. A total of 119,756 bitcoins, worth $68 million at current prices, were reportedly stolen as a result of a security breach.

The company added in its latest statement that nothing had yet been decided and it was still settling positions and account balances. Bitfinex’s “socialized loss scenario” most likely means it will distribute its losses among all of the platform’s users, according to Charles Hayter, chief executive and founder of digital currency comparison website CryptoCompare. This would mean users whose bitcoins were never originally stolen would be affected. “In essence, (this is) a haircut for all users on their deposits. To what degree depends on the devil in the details and what the total capital held by BitFinex is,” Hayter told CNBC via email.

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A heavily indebted company gets permission to open a bank, to rival another bank that has 25% of its loans off-balance-sheet and non-performing. What could go wrong?

In China, When in Debt, Dig Deeper (WSJ)

When the going gets tough in China, just get a bank. With profits headed south, heavily indebted Chinese heavy-machinery giant Sany Heavy Industries said this week it won approval to set up a bank in the Hunan province city of Changsha. With 3 billion yuan ($450 million) of registered capital, it will be a relatively large institution as Chinese city-based banks go. Sanyplans to join forces with a pharmaceutical company and an aluminum company.

In recent months several city commercial banks in China have been taken over by the likes of tobacco and travel companies, recapitalized and renamed. Banking licenses are scarce in China, and rarely are new banks set up from scratch. Sany’s Sanxiang Bank will be up and running in six months. It will go up against crosstown rival Bank of Changsha, which at the end of last year had substantial 90 billion yuan book of off-balance-sheet loans, more than a quarter of them nonperforming. Sany had better ramp up quickly.

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Comment on the WSJ piece above.

Only In China: Companies Become Banks To ‘Solve’ Financial Difficulties

China is desperate to solve several problems it has due to its debt to GDP ratio being north of 300%. It may have found a pretty unconventional one by letting companies become banks, according to a report by the Wall Street Journal. “With profits headed south, heavily indebted Chinese heavy-machinery giant Sany Heavy Industries said this week it won approval to set up a bank in the Hunan Province city of Changsha. With 3 billion yuan ($450 million) of registered capital, it will be a relatively large institution as Chinese city-based banks go. Sany plans to join forces with a pharmaceutical company and an aluminum company. Sany already operates an insurance and finance division with the goal of internal financing and insurance services for clients.”

One problem is that companies are defaulting on bond payments and there is no adequate resolution mechanism for bad debts, at least according to Goldman Sachs. “A clearer debt resolution process (for example, how debt restructuring on public bonds can be achieved, how valuation and recovery on defaulted bonds are arrived at, the timely disclosure of information and clarity on court-sanctioned processes) would help to pave the way for more defaults, which in our view are needed if policymakers are to deliver on structural reforms,” the investment bank writes in a note. By becoming or owning banks, the companies can just shift debt around different balance sheets to avoid a default, although this is probably not the resolution that Goldman Sachs had in mind when talking about structural reforms.

Another problem is that the regime has more and more difficulties pushing more debt into the economy to grease the wheels and keep GDP growth from collapsing entirely. China needs 11.9 units of new debt to create one unit of GDP growth. At the same time, the velocity of money or the measure of how often one unit of money changes hands during a year has fallen to below 0.5, another measure of how saturated the economy is with uneconomical credit. If the velocity of money goes down, the economy needs a higher stock of money to keep the same level of activity.

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Kathimerini is going off the rails, as are a group of Greeks. Accusing Varoufakis and Galbraith of planning a military coup is so far beyond the pale, it’s reason to look at legal action.

Galbraith Says Critics Have It All Wrong Over Greece ‘Plan X’ (Kath.)

University of Texas professor James Galbraith, a close associate of Yanis Varoufakis, has urged the 23 US-educated Greeks who recently criticized him for his part in last year’s negotiations with Greece’s creditors to read his book. Galbraith’s response came in the form of a letter to Kathimerini, which had published a story on July 29 on the letter from the 23 academics, addressed to the president of the University of Texas. In his own letter, Galbraith mentions the fact that his critics say they learned of his work as head of the team that worked on the so-called “Plan X” from interviews in the Greek press and excerpts of the Greek translation of his book, “Welcome to the Poisoned Chalice” (Yale University Press).

He asks why, given their knowledge of English, they did not read the original: “Had they done so, they would have found that the allegations they made are factually false.” Galbraith characterizes Plan X as “preliminary,” admitting that “the work of a small team cannot fully prepare for such a dramatic event.” He repeats that it would only have been activated if the Europeans had carried out their threat to cut off emergency liquidity via the ECB to Greek banks. “This would have triggered a forced exit of Greece from the euro, against the will of the government,” he notes. “The threat had been delivered by the president of the Eurogroup, Jeroen Dijsselbloem, in late January,” he adds, mentioning also the suggestion by German Finance Minister Wolfgang Schaeuble that Greece take a “holiday from the euro.”

Galbraith further rejects the claim made by the 23 that his plan constituted a “monetary-cum-military coup d’etat” and that it would involve “mobilizing the Greek armed forces to suppress possible civil disorder.” “We did not suggest using the military inappropriately or outside the Constitution. The only use of the word ‘mobilization’ in my book refers to the civil service.” He also denies that the plan included a plot to arrest the governor of the central bank. The memo on Plan X, as Galbraith repeats in his letter, “was prepared at the request of the prime minister” and “at no time was the working group engaged in advocating exit or any policy choice. The job was strictly to study the operational issues that would arise if Greece were forced to issue scrip or if it were forced out of the euro.”

Finally, Galbraith responds to claims in the letter from the 23 that he regretted the non-activation of Plan X. “This claim also is false,” he writes, making reference to his interview with Kathimerini on July 6, 2016, in which he had stated that “we were preparing for a scenario that everyone hoped to avoid.”

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“..even as an expert on economic and organized crime, I was amazed to see so much of what we talk about in theory was confirmed in practice..”

Stiglitz Quits Panama Papers Probe, Cites Lack Of Transparency (R.)

The committee set up to investigate lack of transparency in Panama’s financial system itself lacks transparency, Nobel Prize-winning economist Joseph Stiglitz told Reuters on Friday after resigning from the “Panama Papers” commission. The leak in April of more than 11.5 million documents from the Panamanian law firm Mossack Fonseca, dubbed the “Panama Papers,” detailed financial information from offshore accounts and potential tax evasion by the rich and powerful. Stiglitz and Swiss anti-corruption expert Mark Pieth joined a seven-member commission tasked with probing Panama’s notoriously opaque financial system, but they say they found the government unwilling to back an open investigation.

Both quit the group on Friday after they say Panama refused to guarantee the committee’s report would be made public. “I thought the government was more committed, but obviously they’re not,” Stiglitz said. “It’s amazing how they tried to undermine us.” The Panamanian government defended the committee’s “autonomous” management in a statement issued later on Friday, and while it said it regretted the resignations of Stiglitz and Pieth, it chalked them up to unspecified “internal differences.”

[..] In addition to embarrassing leaders worldwide who had interests tied to secretive business concerns, the leak heaped pressure on Panama, well-known for its lax financial laws, to clean up its act. “I have had a close look at the so called Panama Papers, and I must admit that even as an expert on economic and organized crime, I was amazed to see so much of what we talk about in theory was confirmed in practice,” Pieth said in a telephone interview. In the papers he said he found evidence of crimes such as money laundering for child prostitution rings. “We’re being asked to do this as a courtesy for them and we’re paraded in front of the world media first, and then we’re told to shut up when they don’t like it,” Pieth, a criminal law professor at Basel University, said.

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Long and strong summary by Kristi Culpepper. Damning.

Is Hillary Clinton Corrupt? An Archive of Financial Improprieties (Medium)

[..] Under Clinton’s leadership, the State Department approved $165 billion worth of commercial arms sales to 20 nations whose governments have given money to the Clinton Foundation, according to an IBTimes analysis of State Department and foundation data. That figure – derived from the three full fiscal years of Clinton’s term as Secretary of State (from October 2010 to September 2012) – represented nearly double the value of American arms sales made to the those countries and approved by the State Department during the same period of President George W. Bush’s second term.

The Clinton-led State Department also authorized $151 billion of separate Pentagon-brokered deals for 16 of the countries that donated to the Clinton Foundation, resulting in a 143% increase in completed sales to those nations over the same time frame during the Bush administration. These extra sales were part of a broad increase in American military exports that accompanied Obama’s arrival in the White House. The 143% increase in U.S. arms sales to Clinton Foundation donors compares to an 80% increase in such sales to all countries over the same time period.

[..] It’s really not all that difficult to see why Clinton hasn’t given a press conference in 244 days and avoids the media at her campaign events, is it? Asking her to explain every ethically questionable deal she has been involved in would probably take longer than the State Department requires to vet her emails.

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In just 20 years. Wow.

Average American 15 Pounds Heavier Than 20 Years Ago (HDN)

There’s no doubt about it: Americans are getting heavier and heavier. But new U.S. estimates may still come as a shock – since the late 1980s and early 1990s, the average American has put on 15 or more additional pounds without getting any taller. Even 11-year-old kids aren’t immune from this weight plague, the study found. Girls are more than seven pounds heavier even though their height is the same. Boys gained an inch in height, but also packed on an additional 13.5 pounds compared to two decades ago. When looked at by race, blacks gained the most on average. Black women added 22 pounds despite staying the same average height. Black men grew about one-fifth of an inch, but added 18 pounds, the study found.

[..] According to the report, the average weight of men in the United States rose from 181 pounds to 196 pounds between 1988-1994 and 2011-2014. Their average height remained the same at about 5 feet, 9 inches. The average woman, meanwhile, expanded from 152 pounds to 169 pounds while her height remained steady at just under 5 feet, 4 inches.

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 May 31, 2016  Posted by at 9:14 am Finance Tagged with: , , , , , , ,  6 Responses »


Jack Delano Long stairway in mill district of Pittsburgh, Pennsylvania 1940

Mizuho Chief: Tax Delay Means Abenomics Has Failed (WSJ)
One-Minute Plunge Sends Chinese Stock Futures Down by 10% Limit (BBG)
The Big Short Is Back in Chinese Stocks (BBG)
You’re Witnessing The Death Of Neoliberalism – From Within (G.)
Australia’s Big Four Banks Are Much More Vulnerable Than They Appear (Das)
Ceta: The Trade Deal That’s Already Signed (G.)
Britain Is ‘World’s Most Corrupt Country’, Says Italian Mafia Expert (ES)
The Untold Story Behind Saudi Arabia’s 41-Year US Debt Secret (BBG)
Eric Holder Says Edward Snowden Performed A ‘Public Service’ (CNN)
Vague Promises of Debt Relief for Greece (NY Times Ed.)
Glitch In Greek Bailout Talks Fuels Fears Of Delay (Kath.)
German Unemployment Rate Falls to Record Low (BBG)
Majority Of Athens Homeless Ended Up On Street In Past 5 Years (Kath.)
More Than 45 Million Trapped In Modern Slavery (AFP)

Damned if you do, doomed if you don’t.

Mizuho Chief: Tax Delay Means Abenomics Has Failed (WSJ)

The chief of Mizuho Financial Group said Japan risks a credit-rating downgrade if Prime Minister Shinzo Abe delays a scheduled sales-tax increase without explaining how the government plans to cut its deficit. Yasuhiro Sato, president of Japan’s second-largest bank by assets, said Mr. Abe’s framing of such a decision would determine whether it sparked concerns about the government’s credibility regarding its plans for fiscal consolidation. “The worst scenario is [the government] will just announce a delay in the tax increase. That could send a message that Abenomics has failed or Japan is heading for a fiscal danger zone and then it will harm Japanese government bonds’ credit ratings,” Mr. Sato said in an interview, referring to the prime minister’s growth program.

Mr. Abe acknowledged for the first time Friday that he was considering delaying an increase in the sales tax to 10% from 8% scheduled to take effect in April next year. He said he would decide before an upper house election to be held in July, but Japanese media have reported that a decision could come this week. Mr. Abe has delayed the tax increase once, after the rise to 8% in April 2014 derailed an economic recovery. Consumer spending has yet to fully rebound, and some economists say the prospect of another tax increase next year is already weighing on spending. Mr. Sato acknowledged that raising the tax again would pose a risk to Japan’s economy. “There will be a risk in either case of raising the tax or not, so as long as the government demonstrates a clear road map for fiscal reconstruction, Japanese credibility likely won’t be hurt so much,” he said.

Some bankers say Japan could damage its international credibility if it fails to raise taxes on schedule. The tax increases are part of long-standing efforts to reach a primary government surplus by 2020. A primary surplus is a balanced budget excluding interest payments on government debt. Japan’s government debt is among the largest in the world relative to the size of its economy. Moody’s Investors Service said in a March report, “Postponing the next [sales-tax] increase regardless of the reason would pose a big fiscal burden for Japan.”

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Last year, “Volumes shrank by more than 90% from their peak”. But there’s simply money in shorting China; you can’t stop that.

One-Minute Plunge Sends Chinese Stock Futures Down by 10% Limit (BBG)

Chinese stock-index futures plunged by the daily limit before snapping back in less than a minute, the second sudden swing to rattle traders this month. Contracts on the CSI 300 Index dropped as much as 10% at 10:42 a.m. local time, recovering almost all of the losses in the same minute. More than 1,500 June contracts changed hands in that period, the most all day, according to data compiled by Bloomberg. The China Financial Futures Exchange is investigating the tumble, said people familiar with the matter, who asked not to be named because they aren’t authorized to speak publicly. The swing follows a similarly unexplained drop in Hang Seng China Enterprises Index futures in Hong Kong on May 16, a move that heightened anxiety among investors facing slower Chinese economic growth and a weakening yuan.

Volume in China’s stock-index futures market, which was the world’s most active as recently as July, has all but dried up after authorities clamped down on what they deemed excessive speculation during the nation’s $5 trillion equity crash last summer. Tuesday’s volatility had little impact on the underlying CSI 300, which rose 3%. “Liquidity in the market is really thin at the moment,” Fang Shisheng at Orient Securities said by phone. “So the market will very likely see big swings if a big order comes in. The order looks like it’s from a hedger.” Chinese policy makers restricted activity in the futures market last summer because selling the contracts is one of the easiest ways for investors to make large wagers against stocks. Volumes shrank by more than 90% from their peak after officials raised margin requirements, tightened position limits and started a police probe into bearish wagers.

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Xi Jinping is one nervous man right now.

The Big Short Is Back in Chinese Stocks (BBG)

Chinese equities are once again in the cross hairs of short sellers. Short interest in one of the largest Hong Kong exchange-traded funds tracking domestic Chinese stocks has surged fivefold this month to its highest level in a year, according to data compiled by Markit and Bloomberg. The last time bearish bets were so elevated, such pessimism proved well-founded as China’s bull market turned into a $5 trillion rout. While trading in the Shanghai Composite has become subdued this month amid suspected state intervention, pessimists are betting that equities face renewed selling amid a slumping yuan. The Chinese currency is heading for its biggest monthly loss since last year’s devaluation as the nation’s economic outlook worsens and the Fed prepares to raise borrowing costs, driving a rally in the dollar.

“Some macro funds are seeking opportunities to short index futures to play the currency movement,” said Wenjie Lu at UBS. “A higher chance of a Fed rate hike means there’s pressure for the yuan to soften.” Short interest in the CSOP FTSE China A50 ETF climbed to 6.1% on May 25, the highest level since April 2015, two months before Chinese equities peaked, and up from 1.3% at the end of last month. Bearish bets in the U.S. traded iShares China Large-Cap ETF jumped to a two-year high of 18% of shares outstanding on the same day, up from 3% a month ago. Even as Chinese equities rallied on Tuesday, traders were rattled by a sudden plunge in index futures. Contracts on the CSI 300 Index dropped as much as 10% at around 10:42 a.m. local time, recovering almost all of the losses in the same minute. The move had little effect on the underlying stock gauge, which rose 2.6% at the break.

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I think there’s more to it than that.

You’re Witnessing The Death Of Neoliberalism – From Within (G.)

You hear it when the Bank of England’s Mark Carney sounds the alarm about “a low-growth, low-inflation, low-interest-rate equilibrium”. Or when the Bank of International Settlements, the central bank’s central bank, warns that “the global economy seems unable to return to sustainable and balanced growth”. And you saw it most clearly last Thursday from the IMF. What makes the fund’s intervention so remarkable is not what is being said – but who is saying it and just how bluntly. In the IMF’s flagship publication, three of its top economists have written an essay titled “Neoliberalism: Oversold?”. The very headline delivers a jolt. For so long mainstream economists and policymakers have denied the very existence of such a thing as neoliberalism, dismissing it as an insult invented by gap-toothed malcontents who understand neither economics nor capitalism.

Now here comes the IMF, describing how a “neoliberal agenda” has spread across the globe in the past 30 years. What they mean is that more and more states have remade their social and political institutions into pale copies of the market. Two British examples, suggests Will Davies – author of the Limits of Neoliberalism – would be the NHS and universities “where classrooms are being transformed into supermarkets”. In this way, the public sector is replaced by private companies, and democracy is supplanted by mere competition. The results, the IMF researchers concede, have been terrible. Neoliberalism hasn’t delivered economic growth – it has only made a few people a lot better off. It causes epic crashes that leave behind human wreckage and cost billions to clean up, a finding with which most residents of food bank Britain would agree.

And while George Osborne might justify austerity as “fixing the roof while the sun is shining”, the fund team defines it as “curbing the size of the state … another aspect of the neoliberal agenda”. And, they say, its costs “could be large – much larger than the benefit”. Two things need to be borne in mind here. First, this study comes from the IMF’s research division – not from those staffers who fly into bankrupt countries, haggle over loan terms with cash-strapped governments and administer the fiscal waterboarding. Since 2008, a big gap has opened up between what the IMF thinks and what it does. Second, while the researchers go much further than fund watchers might have believed, they leave in some all-important get-out clauses.

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You kidding me? They’re overloaded to their necks in overvalued property loans.

Australia’s Big Four Banks Are Much More Vulnerable Than They Appear (Das)

Today they face little competition in their home market and have benefited tremendously from Australia’s strong growth, underpinned by China’s seemingly insatiable demand for the country’s gas, coal, iron ore and other raw materials. During the 2012 European debt crisis, Australia’s banks were worth more than all of Europe’s. But Australian financial institutions have made the same fundamental mistake the rest of the country has, assuming that growth based on “houses and holes” – rising property prices and resources buried underground – can continue indefinitely. In fact, despite a recent rebound in Chinese demand, commodities prices look set to remain weak for the foreseeable future. Banks’ exposure to the slowing natural resources sector has reached nearly $70 billion in loans outstanding – worryingly large relative to their capital resources.

If anything, their exposure to the property sector is even more dangerous. Mortgages make up a much bigger proportion of bank portfolios than before – more than half, double the level in the 1990s. And they’re riskier than they used to be: many loans are interest-only, while around 80% have variable rates. With a downturn likely – everything from price-to-income to price-to-rent ratios suggests houses are massively overvalued – losses are likely to rise, especially if economy activity weakens. Australian banks are also more vulnerable to outside shocks than they may first appear. Their loan-to-deposit ratio is about 110%. Domestic deposits fund only around 60% of bank assets; the rest of their financing has to come from overseas. While that hasn’t been a problem recently, Australia’s external position is deteriorating.

The current account deficit is expected to climb to 4.75% in the year ending June 30. Weak terms of trade, a rising budget deficit, slower growth and a falling currency are likely to drive up the cost of funds. If Australia’s economy or the financial sector’s performance falters, or international markets are disrupted, banks’ access to external funds could be threatened.

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“..only 18% of Americans and 17% of Germans support TTIP..”

Ceta: The Trade Deal That’s Already Signed (G.)

The US-Europe deal TTIP (the Transatlantic Trade and Investment Partnership) is the best known of these so-called “new generation” trade deals and has inspired a movement. More than 3 million Europeans have signed Europe’s biggest petition to oppose TTIP, while 250,000 Germans took to the streets of Berlin last autumn to try to bring this deal down. A new opinion poll shows only 18% of Americans and 17% of Germans support TTIP, down from 53% and 55% just two years ago. But TTIP is not alone. Its smaller sister deal between the EU and Canada is called Ceta (the Comprehensive Economic and Trade Agreement). Ceta is just as dangerous as TTIP; indeed it’s in the vanguard of TTIP-style deals, because it’s already been signed by the European commission and the Canadian government. It now awaits ratification over the next 12 months.

The one positive thing about Ceta is that it has already been signed and that means that we’re allowed to see it. Its 1,500 pages show us that it’s a threat to not only our food standards, but also the battle against climate change, our ability to regulate big banks to prevent another crash and our power to renationalise industries. Like the US deal, Ceta contains a new legal system, open only to foreign corporations and investors. Should the British government make a decision, say, to outlaw dangerous chemicals, improve food safety or put cigarettes in plain packaging, a Canadian company can sue the British government for “unfairness”. And by unfairness this simply means they can’t make as much profit as they expected. The “trial” would be held as a special tribunal, overseen by corporate lawyers.

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Would anyone doubt it?

Britain Is ‘World’s Most Corrupt Country’, Says Italian Mafia Expert (ES)

Britain has been described as the most corrupt country in the world, according to a journalist and expert on the Italian Mafia. Roberto Saviano, who wrote best-selling exposés Gomorrah and ZeroZeroZero, made the claim at the Hay Literary Festival. The 36-year-old has been living under police protection for 10 years since revelations were published about members of the Camorra, a Neapolitan branch of the mafia. Mr Saviano told the audience at Hay-on-Wye: “If I asked you what is the most corrupt place on Earth you might tell me well it’s Afghanistan, maybe Greece, Nigeria, the South of Italy and I will tell you it’s the UK. “It’s not the bureaucracy, it’s not the police, it’s not the politics but what is corrupt is the financial capital. 90% of the owners of capital in London have their headquarters offshore.

“Jersey and the Cayman’s are the access gates to criminal capital in Europe and the UK is the country that allows it. “That is why it is important why it is so crucial for me to be here today and to talk to you because I want to tell you, this is about you, this is about your life, this is about your government.” David Cameron came under pressure for the UK to reform offshore tax havens operating on British overseas territories at an anti-corruption summit earlier this month. Mr Saviano also weighed in on the EU referendum debate, warning a vote to leave the union would see Britain even more exposed to organised crime. He added: “Leaving the EU means allowing this to take place. It means allowing the Qatari societies, the Mexican cartels, the Russian Mafia to gain even more power and HSBC has paid £2 billion in fines to the US government, because it confessed that it had laundered money coming from the cartels and the Iranian companies. “We have proof, we have evidence.”

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How power rules.

The Untold Story Behind Saudi Arabia’s 41-Year US Debt Secret (BBG)

Failure was not an option. It was July 1974. A steady predawn drizzle had given way to overcast skies when William Simon, newly appointed U.S. Treasury secretary, and his deputy, Gerry Parsky, stepped onto an 8 a.m. flight from Andrews Air Force Base. On board, the mood was tense. That year, the oil crisis had hit home. An embargo by OPEC’s Arab nations—payback for U.S. military aid to the Israelis during the Yom Kippur War—quadrupled oil prices. Inflation soared, the stock market crashed, and the U.S. economy was in a tailspin. Officially, Simon’s two-week trip was billed as a tour of economic diplomacy across Europe and the Middle East, full of the customary meet-and-greets and evening banquets.

But the real mission, kept in strict confidence within President Richard Nixon’s inner circle, would take place during a four-day layover in the coastal city of Jeddah, Saudi Arabia. The goal: neutralize crude oil as an economic weapon and find a way to persuade a hostile kingdom to finance America’s widening deficit with its newfound petrodollar wealth. And according to Parsky, Nixon made clear there was simply no coming back empty-handed. Failure would not only jeopardize America’s financial health but could also give the Soviet Union an opening to make further inroads into the Arab world. It “wasn’t a question of whether it could be done or it couldn’t be done,” said Parsky, 73, one of the few officials with Simon during the Saudi talks.

At first blush, Simon, who had just done a stint as Nixon’s energy czar, seemed ill-suited for such delicate diplomacy. Before being tapped by Nixon, the chain-smoking New Jersey native ran the vaunted Treasuries desk at Salomon Brothers. To career bureaucrats, the brash Wall Street bond trader—who once compared himself to Genghis Khan—had a temper and an outsize ego that was painfully out of step in Washington. Just a week before setting foot in Saudi Arabia, Simon publicly lambasted the Shah of Iran, a close regional ally at the time, calling him a “nut.” But Simon, better than anyone else, understood the appeal of U.S. government debt and how to sell the Saudis on the idea that America was the safest place to park their petrodollars.

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Inappropriate, illegal, and a public service, all at the same time.

Eric Holder Says Edward Snowden Performed A ‘Public Service’ (CNN)

Former U.S. Attorney General Eric Holder says Edward Snowden performed a “public service” by triggering a debate over surveillance techniques, but still must pay a penalty for illegally leaking a trove of classified intelligence documents. “We can certainly argue about the way in which Snowden did what he did, but I think that he actually performed a public service by raising the debate that we engaged in and by the changes that we made,” Holder told David Axelrod on “The Axe Files,” a podcast produced by CNN and the University of Chicago Institute of Politics. “Now I would say that doing what he did – and the way he did it – was inappropriate and illegal,” Holder added. Holder said Snowden jeopardized America’s security interests by leaking classified information while working as a contractor for the National Security Agency in 2013.

“He harmed American interests,” said Holder, who was at the helm of the Justice Department when Snowden leaked U.S. surveillance secrets. “I know there are ways in which certain of our agents were put at risk, relationships with other countries were harmed, our ability to keep the American people safe was compromised. There were all kinds of re-dos that had to be put in place as a result of what he did, and while those things were being done we were blind in certain really critical areas. So what he did was not without consequence.” Snowden, who has spent the last few years in exile in Russia, should return to the U.S. to deal with the consequences, Holder noted. “I think that he’s got to make a decision. He’s broken the law in my view. He needs to get lawyers, come on back, and decide, see what he wants to do: Go to trial, try to cut a deal. I think there has to be a consequence for what he has done.”

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Times editors’ curious timing.

Vague Promises of Debt Relief for Greece (NY Times Ed.)

European leaders congratulated themselves last week for reaching an agreement to provide more loans to Greece and eventually ease the terms of the country’s huge debt. But there is little to celebrate. Greece is bankrupt in all but name. The country has a debt of more than €300 billion, or about 180% of its GDP, a sum it cannot hope to repay in full. Most of that money is owed to Germany, France, Italy and other countries in the eurozone. After an 11-hour meeting last week, the eurozone finance ministers said that they would lend another €7.5 billion to Greece next month to help it pay off debt and grant it some relief, possibly including lower interest rates and extended payment periods, but not until mid-2018.

The reality is that Greece can’t be squeezed any harder. But the finance ministers are seeking still more spending cuts and increased taxes. They want to see a budget surplus of 3.5% of GDP before interest payments by 2018. A stable and fast-growing country might be able to hit that target, but it is preposterous to expect that from Greece. The IMF wants to see a more realistic surplus of 1.5%. Delaying meaningful debt relief until 2018 will further harm the struggling Greek economy. The Greek unemployment rate was 24.4% in January, and Greece’s economy shrunk in the first three months of the year. The I.M.F., which has also lent Greece money, recently estimated that at its current trajectory, the country’s debt would eventually grow to 250% of GDP.

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Forcing Greece into foolish measures: “..Schaeuble described the decision to raise value-added tax in Greece as “economic foolishness” but noted that Athens was obliged to take that route due to a revenue shortfall.”

Glitch In Greek Bailout Talks Fuels Fears Of Delay (Kath.)

There was fresh concern on Monday that there could be further delays in the disbursement of much-need bailout money to Greece owing to a disagreement between Athens and its creditors, who have demanded changes to prior actions passed in Parliament earlier this month. EU officials on Monday appeared to dismiss Greece’s refusal to implement some of these changes, saying that these are issues that have already been agreed with the Greek government. The country’s lenders had given the green light for the disbursement of a tranche of 10.3 billion euros last week, on the condition the government made amendments to recent legislation it passed on pension, bad loans and privatizations.

However, Finance Minister Euclid Tsakalotos had informed the European Commission representative and the IMF in a letter last week that their demands could not be met, neither could Athens fulfill the demands enshrined in the bailout deal signed last summer to privatize ADMIE, the country’s grid operator, and to freeze the wages of essential services, like those of the coast guard and police. Greece desperately needs the new bailout money to pay state arrears as well as debt repayments to the IMF and European Central Bank in the coming weeks. There were reports on Monday that the government is planning to submit its own amendments on Wednesday to Parliament. If the disagreement between Greece and its creditors persists, then it is likely it will be discussed at the Euro Working Group on Thursday.

In comments on Monday, German Finance Minister Wolfgang Schaeuble described the decision to raise value-added tax in Greece as “economic foolishness” but noted that Athens was obliged to take that route due to a revenue shortfall. “This is why Greece needs an effective public administration,” Schaeuble told a conference on fiscal sustainability, observing that Greek tax collection must be improved to bring in the higher revenues that are being targeted.

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Germany has exported its unemployment to Greece and Spain.

German Unemployment Rate Falls to Record Low (BBG)

German unemployment declined more than economists estimated, pushing the jobless rate to the lowest level since reunification. The number of people out of work fell by a seasonally adjusted 11,000 to 2.695 million in May, data from the Federal Labor Agency in Nuremberg showed on Tuesday. The median estimate in a Bloomberg survey was for a decline of 5,000. The jobless rate dropped to 6.1 percent. The report comes two days before ECB officials convene in Vienna to set monetary policy and assess whether they’ve done enough to sustain an economic recovery in the 19-nation euro region.

The ECB is expected to keep its stimulus plan unchanged after President Mario Draghi announced an expansion of quantitative easing by a third to €80 billion in March and cut the deposit rate further below zero. Unemployment dropped by 8,000 in western Germany and declined by 3,000 in the eastern part of the country, the report showed. Growth momentum in Europe’s largest economy remains strong after gross domestic product expanded at the fastest pace in two years in the first quarter. German business sentiment rose to the highest level in five months in May and consumer prices unexpectedly halted their decline. The Bundesbank predicts the economy will retain its underlying strength, even though expansion will probably slow somewhat this quarter.

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Obviously not a surprise for me, or Automatic Earth readers. And lest we forget: Norway does a lot of good in silence. But more austerity is definitely not going to fix anything at all.

Majority Of Athens Homeless Ended Up On Street In Past 5 Years (Kath.)

71% of the Greek capital’s homeless population has ended up on the streets in the last five years and 21.7% in the last year alone, a study by the City of Athens’s Homeless Shelter (KYADA), funded by the Norwegian government and other European countries, has found. According to the study, which was conducted as part of the “Fighting Poverty and Social Exclusion” program and whose findings were presented by Athens Mayor Giorgos Kaminis on Monday evening, 62% of the capital’s homeless are Greeks, the overwhelming majority (85.4%) are men and most (57%) are aged between 35-55. Of the 451 respondents questioned by KYADA workers from March 2015 until the same month this year, 47% said they ended up on the street after losing their job and 29% said they do not want to move to a shelter or other organized facility.

Less than half of the respondents (41.2%) admitted to using drugs, 7.3% to alcohol and 2% to both. Kaminis also said that in the one-year period, the solidarity program helped distribute 46,156 supermarket food coupons worth around 1.85 million euros to nearly 9,000 beneficiaries in over 3,700 families. “Through its social structures and strong alliances with agencies, partners and simple citizens, the City of Athens help give support to more than 25,000 residents,” Kaminis said at the presentation, which was also attended by Norwegian Ambassador to Athens Jorn Eugene Gjelstad.

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Who we are. Not including debt slaves.

More Than 45 Million Trapped In Modern Slavery (AFP)

More than 45 million men, women and children globally are trapped in modern slavery, far more than previously thought, with two-thirds in the Asia-Pacific, a study showed Tuesday. The details were revealed in the 2016 Global Slavery Index, a research report by the Walk Free Foundation, an initiative set up by Australian billionaire mining magnate and philanthropist Andrew Forrest in 2012 to draw attention to the issue. It compiled information from 167 countries with 42,000 interviews in 53 languages to determine the prevalence of the issue and government responses. It suggested that there were 28% more slaves than estimated two years ago, a revision reached through better data collection and research methods.

The report said India had the highest number of people trapped in slavery at 18.35 million, while North Korea had the highest incidence (4.37% of the population) and the weakest government response. Modern slavery refers to situations of exploitation that a person cannot leave because of threats, violence, coercion, abuse of power or deception. They may be held in debt bondage on fishing boats, against their will as domestic servants or trapped in brothels. Some 124 countries have criminalised human trafficking in line with the UN Trafficking Protocol and 96 have developed national action plans to coordinate the government response.

In terms of absolute numbers, Asian countries occupy the top five for people trapped in slavery. Behind India was China (3.39 million), Pakistan (2.13 million), Bangladesh (1.53 million) and Uzbekistan (1.23 million). As a %age of the population, Uzbekistan (3.97%) and Cambodia (1.65%) trailed North Korea, which the study said was the only nation in the world that has not explicitly criminalised any form of modern slavery.

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