Feb 032018
 
 February 3, 2018  Posted by at 11:08 am Finance Tagged with: , , , , , , , , , , , ,  2 Responses »
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Frank Larson Times Square, New York 1954

 

FISA Memo Released: Here’s What It Says (ZH)
Dow Plummets 666 Points, Capping Worst Week In 2 Years (CNBC)
Did The Market Just Get “Woke?” (Roberts)
Over $100 Billion Wiped Off Global Cryptocurrency Market In 24 Hours (CNBC)
Bitcoin Ban Expands Across Credit Cards as Big US Banks Recoil (BBG)
Sotu Klaatu Barada Nikto (Jim Kunstler)
UK Interest Rates Will Rise At The End Of February (G.)
Green Brexit Is Impossible To Guarantee, EU Is Warned (G.)
German Carmakers Have Lost All Moral Standing (Spiegel)
How YouTube’s Algorithm Distorts Truth (G.)
Blockchain To Track Congo’s Cobalt From Mine To Mobile (R.)
Congo Gripped By Fear As Thousands Flee ‘Bone-Chilling’ Violence (G.)
WikiLeaks Has Published Leaks On Trump Admin And Russia, Seeking More (CJ)
‘Ultra-Processed’ Products Now Half Of All UK Family Food Purchases (G.)

 

 

The differences in interpretation across the aisle are far more stunning than the memo itself is.

FISA Memo Released: Here’s What It Says (ZH)

Update: The just released FISA memo accuses senior officials at the DOJ of inappropriately using biased opposition research into then-candidate Trump to obtain surveillance warrants on transition team members as part of the federal investigation into the Trump campaign and Russia. According to the document, information from the the so-called Steele dossier was “essential” to the acquisition of surveillance warrants on Trump campaign aide Carter Page. It claims that then-deputy FBI director Andrew McCabe told the committee in December that without the information from the Steele dossier, no surveillance warrant for Page would have been sought. The memo alleges that the political origins of the dossier — paid for by Hillary Clinton and the DNC — were not disclosed to the clandestine court that signed off on the warrant request.

The document claims that although the FBI had “clear evidence” that the author of the dossier, former British spy Christopher Steele, was biased against Trump, it did not convey that to the surveillance court when making its warrant applications. Steele told then-associate deputy attorney general Bruce Ohr that he was “desperate that Donald Trump not get elected and was passionate about him not being president,” the memo says. House conservatives have touted the memo’s revelations as “worse than Watergate” and hinted that it could prove the undoing of the federal investigation into Trump’s campaign. Meanwhile, Democrats on the panel say that it is a cherry-picked set of inaccurate accusations designed to kneecap special counsel Robert Mueller. They have drafted their own counter-memo to rebut the Republican-drafted document, but the majority voted against immediately making that document public earlier this week.

The memo is based on a slate of highly-classified materials provided to the committee by the Justice Department itself, in a closed-door deal brokered by Speaker Paul Ryan (R-Wis.). Naturally, the DOJ has claimed that the release of the memo is an abrogation of the terms of that deal, an assertion spokesmen for both Ryan and Nunes have rejected. Meanwhile, the underlying evidence remains classified, a state of affairs that Democrats and some national security analysts say makes it impossible to independently verify the memo’s conclusions. As The Hill reported earlier, ahead of the document’s release, Paul Ryan privately urged House Republicans not to overplay the document — and not to tie it to the Mueller investigation.

Read more …

10 years ago, a drop of 777 was the biggest news on the planet. Today, 666 gets poo-poohed into nothingness.

Dow Plummets 666 Points, Capping Worst Week In 2 Years (CNBC)

U.S. stocks fell sharply on Friday after a stronger-than-expected jobs report sent interest rates higher. The Dow Jones industrial average dropped 665.75 points to close at 25,520.96, capping off the index’s sixth-largest points decline ever. The 30-stock index also fell below 26,000. Friday also marked the first time since June 2016 that the Dow fell at least 500 points. The S&P 500 fell 2.1% and finished at 2,762.13, with energy as the worst-performing sector. The Nasdaq composite plunged 1.96% to 7,240.95 as a decline in Apple and Alphabet offset a strong gain in Amazon shares. The Dow posted its worst day since June 2016. The S&P 500 and Nasdaq had their biggest one-day fall since September 2016 and August 2017, respectively.

“The key for the market today is rising interest rates,” said Mike Baele, managing director at U.S. Bank Wealth Management. “The old adage is: ‘Bull markets don’t die of old age, they are killed by higher interest rates.’ That looms large.” The U.S. economy added 200,000 jobs in January, according to the Bureau of Labor Statistics. Economists polled by Reuters expected growth of 180,000. Wages, meanwhile, rose 2.9% on an annualized basis. The report sent interest rates higher. The benchmark 10-year yield rose to 2.85% on the back of the report, hitting a four-year high. Investors have been jittery about the recent rise in interest rates, worrying they may be rising too fast. On Friday, the 30-year yield rose its highest level since March.

Bank stocks fell as the yield curve widened. The SPDR S&P Bank exchange-traded fund, which tracks bank stocks, dropped 1.2%. Banks typically benefit from higher interest rates. This has been a volatile week for U.S. stocks. The Cboe Volatility index, widely considered the best fear gauge in the market, rose from 11.08 this week to 17.31.

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That graph is stunning.

Did The Market Just Get “Woke?” (Roberts)

Since the beginning of this year, we have been warning of the potential for a correction. Of course, such warnings seemed pointless as the nearly “parabolic” rise in the markets seemed unstoppable. But all of a sudden, something seems to have changed as the market stumbled this past week and has been unable to regain its footing.

So, what “woke” the markets? Was it the sudden realization that Central Banks globally are reducing Q.E. programs? Or, that economic growth may be weaker than expected given recent numbers? Or, something else? Whatever, the excuse turns out to be, the real culprit is seen in the chart below.

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By now, there are some really big losers out there.

Over $100 Billion Wiped Off Global Cryptocurrency Market In 24 Hours (CNBC)

Over $100 billion was wiped off the global cryptocurrency market in 24 hours on Friday amid concerns over tighter regulation and worries that the bitcoin price was manipulated on a major exchange. The total market capitalization or value of all cryptocurrencies in circulation stood at $405 billion Friday morning New York time, according to data from CoinMarketCap.com, which takes into account the prices of digital coins across a number of key exchanges. This was a fall of $112.6 billion in value from a day before. Cryptocurrencies have seen a major sell-off this week. Bitcoin fell below $9,000 on Thursday and briefly dropped below $8,000 Friday morning, according to CoinDesk’s bitcoin price index, which tracks prices from four major cryptocurrency exchanges.

Other major coins including ethereum and ripple were down 12% and 13%, respectively, compared to a day ago as of 9:58 a.m., ET, Friday. The cryptocurrency world has been plagued by a spate of negative news. India’s Finance Minister Arun Jaitley said the country wants to “eliminate” the use of digital currencies in criminal activities, signaling tighter regulation in the country. The New York Times reported Wednesday that an increasing number of digital currency investors are worried the price of bitcoin and other digital currencies have been inflated by cryptocurrency exchange Bitfinex, which is included in CoinDesk’s price index. Bloomberg reported Tuesday that in December, the U.S. Commodity Futures and Trading Commission subpoenaed Bitfinex and a cryptocurrency company called Tether, which is run by many of the same executives.

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What, they figured there was no more profit in there?

Bitcoin Ban Expands Across Credit Cards as Big US Banks Recoil (BBG)

A growing number of big U.S. credit-card issuers are deciding they don’t want to finance a falling knife. JPMorgan Chase, Bank of America and Citigroup said they’re halting purchases of Bitcoin and other cryptocurrencies on their credit cards. JPMorgan, enacting the ban Saturday, doesn’t want the credit risk associated with the transactions, company spokeswoman Mary Jane Rogers said. Bank of America started declining credit card transactions with known crypto exchanges on Friday. The policy applies to all personal and business credit cards, according to a memo. It doesn’t affect debit cards, said company spokeswoman Betty Riess.

And late Friday, Citigroup said it too will halt purchases of cryptocurrencies on its credit cards. “We will continue to review our policy as this market evolves,” company spokeswoman Jennifer Bombardier said. Allowing purchases of cryptocurrencies can create big headaches for lenders, which can be left on the hook if a borrower bets wrong and can’t repay. There’s also the risk that thieves will abuse cards that were purloined or based on stolen identities, turning them into crypto hoards. Banks also are required by regulators to monitor customer transactions for signs of money laundering – which isn’t as easy once dollars are converted into digital coins.

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From before the memo release. As I said, it’s the interpretation more than the memo itself.

Sotu Klaatu Barada Nikto (Jim Kunstler)

The situation certainly puts the nation in a quandary. An uncouth and ridiculous President called forth to battle a vicious, dishonest, bureaucracy and in particular its gigantic, out-of-control “security” apparatus, which appears to have been hijacked by politically interested parties — namely, the minions of Hillary Clinton. You have been reminded here before that history is the supreme prankster. In Fourth Turning terms, the poor old disintegrating USA pined for a “gray champion” and all it got was this booby prize: a Manhattan real estate schmikler with a mean streak. Well, that’s how things roll in a long emergency. And this might only be the beginning of it. In any case, it appears that the FBI, in the hallowed words of Ricky Ricardo, has got some ‘splainin’ to do.

Recall, it was not so long ago that the FBI was run by a cross-dressing maniac addicted to blackmail, so let’s not act as if the agency was something that the Lord Yahweh brought into being on the fifth day of creation, after the lobsters and the cockateels. Granted, J. Edgar Hoover was a hard act to follow, but we are now, evidently, living in an age of even lower men (and women, to be fair). CNN reminded viewers relentlessly last night that The Memo was sure to be a disappointment, a “nothingburger,” for a nation that expects a righteous half-pound beef patty with lettuce, tomato, pickle, and special sauce on a sesame bun. Personally, I expect something more like a three-day-old dead carp in a plain brown wrapper. Maybe “the Resistance” will try to make gefilte fish out of it, which is a burger of sorts: chopped meat, anyway.

Meanwhile, we await the report of DOJ Inspector General Michael Horowitz, who has been rooting around in the same burger den as the House and Senate committees, questioning the same cast of characters. The DOJ report is liable to be more damaging than The Memo. The whole nasty gumball of suspicion and innuendo seems destined to climax in a constitutional crisis. Ludicrous as it seems — like some rogue army out of the stupid Star Wars epic — the “Resistance” bethinks itself the nation’s savior. In the best American tradition, they’ll burn the joint down in order to save it.

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Another little Brexit surprise.

UK Interest Rates Will Rise At The End Of February (G.)

There’s going to be an interest rate rise on 28 February. In just a few weeks you are going to see about 0.25% added to mortgage and savings rates. But you won’t see a press release from the Bank of England that the base rate has gone up. Instead, for the first time in years, banks are going to be scrambling to offer savers better rates – and the losers will be anyone taking out a new mortgage. So what’s happening? On 28 February an extraordinary financial measure, put in place in the days after the Brexit vote, will end. It was called the Term Funding Scheme and was designed to make sure that the 0.25% rate cut in the wake of the shock referendum result in 2016, did actually feed through the financial system (while keeping them profitable). Under the scheme, banks and building societies were able to borrow money from the Bank of England almost for free.

They did so with gusto. They have so far taken £106bn under the scheme, equal to around £3,500 for every working person in the country. Lloyds took £18bn, RBS £14bn, Barclays £10bn, Nationwide £9.5bn and Santander £8bn. Nearly everyone rushed to grab their share: from the tiny Holmesdale building society – which took £4m – through to the Nottingham building society (£395m) and Virgin Money (£4.2bn). Specialist lender Aldermore, which does a lot of buy-to-let mortgages, has drawn £1.4bn from the scheme over a period during which its total net lending has been £1.5bn. It underlines just how important the cash has been. With all this money gushing out of the Bank of England, it has meant that no one has really had to bother chasing savers for their money. So savings rates, already massively depressed by the 2012 Funding for Lending Scheme, were hit further.

But the corner will be turned on 28 February. On that date, the banks and building societies will have to start repaying that £106bn. They’ll have a few years to do it, so maybe I’m being a little dramatic suggesting rates will rise overnight. But let’s say I wouldn’t, right now, lock myself into Lloyds’ one-year bond paying 0.4% or NatWest’s two-year bond paying 0.85%. The banks are going to have to offer much better rates than that to bring the money in. Some of the big banks may pooh-pooh this. Yes, £18bn sounds like a lot for Lloyds, but then it has an £800bn balance sheet, so it’s hardly fatal. But when rivals start offering as much as 3% to get you to move money, banks won’t have a choice but to raise rates. According to Paul Richards, chairman of Insignis Cash Solutions: “It’s likely we will see a 0.25%-0.5% increase in longer-term savings rates over the next 12 months and potentially up to 1% over the next 24-36 months, which could leave a one-year term account getting close to the 3% level.”

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Why should the EU feel ‘warned’ about what may happen when the UK is no longer part of the EU?

Green Brexit Is Impossible To Guarantee, EU Is Warned (G.)

The European Conservative and Reformist group which represents Conservative MEPs has has said Brexit will make it “impossible” to guarantee that current environmental standards can be maintained in Britain or the EU. A leaked document seen by the Guardian also calls for “the closest possible working relationship” between the EU and UK after Brexit, and for a “no regression clause” in future British trade deals. This would “limit any negative effects from deregulation,” says the paper, which was submitted to the European parliament’s Brexit environment steering group. Some Conservative MEPs claimed not to have seen the report that was submitted. The parliament’s Brexit coordinator, Guy Verhofstadt, told the Guardian: “Suggestions that the UK might seek to lower environmental standards after Brexit are alarming and contradict the commitments made by prime minister May in her Florence speech.”

They also showed why a future deal “must contain precise and detailed safeguards, with robust sanctions, to ensure the maintenance of high standards and a level playing field,” he said. The EU’s environmental laws are among its most popular, with polls showing that over 80% of Britons support the same levels of protection – or higher – after Brexit. During the referendum campaign, key government ministers said EU laws such as the birds and habitats directive were “spirit-crushing” and would be scrapped. But Theresa May has sought to defuse fears of conservation backsliding by trying to make the environment a selling point of leaving the bloc. “Let me be very clear,” May said in a speech last month. “Brexit will not mean a lowering of environmental standards.” “We will use the opportunity Brexit provides to strengthen and enhance our environmental protections – not to weaken them.”

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Still haven’t seen one word about prosecuting the people behind all this. Incredible.

German Carmakers Have Lost All Moral Standing (Spiegel)

Starting in 2007, BMW, Daimler, Volkswagen and Bosch maintained a joint lobby organization that was disguised as a research institute. The European Research Association for the Environment and Health in the Transportation Sector (EUGT) purported to dedicate itself to the “environmental-medical effects of road traffic.” But the staff in leadership posts alone shows that the institute was in no way interested in independent research. EUGT head Michael Spallek, for example, had previously spent years employed as a leading company doctor at VW. He retained his VW email address, even after his move to EUGT. The results of the institute’s research were accordingly one-sided. The efficacy of low emission zones in cities that place restrictions on driving cars with high emissions?

There’s no proof, according to one essay the lobby group managed to place in a trade publication for respiratory medicine. Nighttime noise pollution from cars? It’s no problem, as long as it’s continuous. Do diesel emissions cause cancer? Can’t be proven. A short time later, former VW manager and EUGT head Spallek approved the tests with the monkeys. “We have finished our discussions with the company lawyers,” Spallek wrote in an email dating June 14, 2013. The lawyers had given the green light for the study to be carried out, but with one restriction: Non-human primates were to be used instead of human volunteers. Several VW executives at the time were copied in the message, including Stuart Johnson, the head of the company’s Engineering and Environmental Office in the United States.

But it doesn’t appear as though any critical questions were asked. The aim of the experiment with the monkeys had been to deliver definitive proof of how clean “German diesel” really is. The case files compiled by attorney Melkersen illustrate the zeal with which VW’s people organized the test. Nothing was left to chance when engineer James Liang began his journey with a bright-red VW Beetle from California to New Mexico at the beginning of October 2014. The engineer from company headquarters in Wolfsburg, Germany, was already under pressure, even at that point. The U.S. environmental authorities had expressed their doubts about the emissions values of the allegedly squeaky-clean car. VW Chairman Martin Winterkorn had been breathing down his staff’s necks, too. The new diesel models needed to provide the company with a breakthrough in the important U.S. market. As such, anything that might possibly preserve diesel’s environmentally friendly façade had priority.

Which is where the monkeys came in. As of Oct. 2, all final preparations had been made for the test. The VW man moved assiduously around the red Beetle, which had been placed on a chassis dynamometer. The experiment would be led by Jacob McDonald, an athletic young biologist who had quickly risen in his career at the Lovelace Respiratory Research Institute (LRRI). McDonald found it strange that an engineer from Volkswagen would be present for the test. “It’s the first time that I’ve experienced that,” he would later say. And what he really couldn’t grasp was why the VW people wanted to transmit the entire test data in real-time to their research center in California. Engineer Liang had even brought along a transmission device especially for the task.

Read more …

YouTube has the lowest common denominator down to a T. So let kids see videos of kids beating up kids. They’re sure to keep watching.

How YouTube’s Algorithm Distorts Truth (G.)

There are 1.5 billion YouTube users in the world, which is more than the number of households that own televisions. What they watch is shaped by this algorithm, which skims and ranks billions of videos to identify 20 “up next” clips that are both relevant to a previous video and most likely, statistically speaking, to keep a person hooked on their screen. Company insiders tell me the algorithm is the single most important engine of YouTube’s growth. In one of the few public explanations of how the formula works – an academic paper that sketches the algorithm’s deep neural networks, crunching a vast pool of data about videos and the people who watch them – YouTube engineers describe it as one of the “largest scale and most sophisticated industrial recommendation systems in existence”.

Lately, it has also become one of the most controversial. The algorithm has been found to be promoting conspiracy theories about the Las Vegas mass shooting and incentivising, through recommendations, a thriving subculture that targets children with disturbing content such as cartoons in which the British children’s character Peppa Pig eats her father or drinks bleach. Lewd and violent videos have been algorithmically served up to toddlers watching YouTube Kids, a dedicated app for children. One YouTube creator who was banned from making advertising revenues from his strange videos – which featured his children receiving flu shots, removing earwax, and crying over dead pets – told a reporter he had only been responding to the demands of Google’s algorithm. “That’s what got us out there and popular,” he said. “We learned to fuel it and do whatever it took to please the algorithm.”

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How to make rape, murder and pillage more efficiently. And what does Amnesty say? ‘We’re not against it’.

Blockchain To Track Congo’s Cobalt From Mine To Mobile (R.)

Blockchain is to be used for the first time to try to track cobalt’s journey from artisanal mines in Democratic Republic of Congo through to products used in smartphones and electric cars. Sources close to a pilot scheme expected to be launched this year say the aim is eventually to give manufacturers a way of ensuring the cobalt in lithium-ion batteries for products such as iPhones and Teslas has not been mined by children. Tracking cobalt presents many challenges as scores of informal mine sites would have to be monitored, all players in the supply chain would need to buy into the scheme, and accurate, electronic data would need to be transmitted from remote areas – all in a vast country plagued by lawlessness.

But companies are under growing pressure from consumers and investors to show the cobalt they use has come through supply chains free of rights abuses, just as they have for minerals used in electronics such as tantalum, tin, tungsten and gold. Businesses in China, the main destination for Congolese cobalt from artisanal mines, have set up a Responsible Cobalt Initiative, which has been joined by tech giants such as Apple and Samsung, to address child labor. The problem they face is that there are few sure-fire ways of tracing cobalt from the informal mines that produce up to a fifth of the cobalt from Congo, the world’s biggest producer. “The demand to make cobalt more sustainable is going to continue growing, meaning there is a will to find a solution and blockchain will be part of that,” said a source with the project.

[..] Sheila Warren, head of blockchain policy at the World Economic Forum, said it was an open question how well it could work in Congo given the prevalence of conflict, lawlessness and an opaque legal system. “We are prototyping, iterating, testing, scaling,” said Warren, who is working with experts to see how blockchain can improve mineral supply chains. “The technology is not the hard part.” Amnesty International, which detailed the extent of child labor in cobalt mining in Congo in a 2016 report, said it was looking at blockchain, especially with a view to tracing payments to middlemen. “You have to be wary of technological solutions to problems that are also political and economic, but blockchain may help. We’re not against it,” said Amnesty researcher Mark Dummett.

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It is our governments who are behind this. And our media who don’t tell us about that. How anyone can protest when the Congo is labeled a shithole is beyond me. That takes a very large object up one’s behind.

Congo Gripped By Fear As Thousands Flee ‘Bone-Chilling’ Violence (G.)

The UN refugee agency has become the latest aid organisation to voice its alarm over rising violence in the east of the Democratic Republic of the Congo that has forced thousands of people to flee their homes. Amid a worsening humanitarian crisis, almost 7,000 people have crossed to neighbouring Burundi and 1,200 into Tanzania in the past week, according to the UN High Commissioner for Refugees. “Refugees we have spoken to say they fled forced recruitment, direct violence and other abuses by armed groups. Others say they fled in anticipation of military operations and out of fear,” said spokesperson Babar Baloch. Earlier this week, the World Food Programme and the Food and Agriculture Organisation described “alarming food insecurity” in the country, sparked by an extension of conflict into areas previously considered stable, such as the provinces of Kasai and Tanganyika.

Last month, Jean-Philippe Chauzy, DRC’s chief of mission for the International Organisation for Migration (IOM), said the humanitarian crisis in DRC was at “breaking point” amid a massive escalation of inter-ethnic conflict and widespread insecurity. The number of people coping with extreme hunger has risen by 2 million over the past six months, reaching 7.7 million – about 10% of the population. More than 4 million children under the age of five are at risk of acute malnutrition, said the agencies. “The humanitarian situation in the DRC is at breaking point, as is our capacity to respond to extremely limited funding,” said Chauzy. “The stories that Congolese who have been forced from their homes are telling are bone-chilling. They have been through so much already – torture, rape and murder of their loved ones. We cannot stand idly by as they suffer in silence.”

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Without WikiLeaks, we’d be stumbling even more in the dark. We don’t do nearly enough to protect them. We let whoever claim that Assange is some Russian agent, and we owe him a lot more respect than that.

WikiLeaks Has Published Leaks On Trump Admin And Russia, Seeking More (CJ)

Democrats believe that Assange is a Trump-supporting Kremlin asset while Trump supporters believe Assange is a based MAGA hat-wearing ally to their cause, the former because they were told to believe that by CNN and the Washington Post and the latter because they’ve seen him championed by Fox’s Sean Hannity and the elaborate 4chan hoax “QAnon”. Neither could be further from the truth. Today Assange responded to a call for transparency on Trump “tax returns, corporate records, campaign emails, and other documents relevant to Donald Trump’s Russia/WikiLeaks connections” from toxic neocon David Frum with the words “Go for it” and a link to WikiLeaks’ leak submission service. This is not the first time WikiLeaks has solicited documents on the Trump administration, and it won’t be the last.

Since long before the election and continuing through to the present, WikiLeaks has been harshly criticizing the president’s refusal to release his tax returns and publicly asking for leakers to submit them. They are on record trying to persuade Donald Trump Jr to do the same in a conversation that has been spuriously criticized but which when examined impartially is plainly just a leak publishing outlet soliciting a potential source. More importantly, WikiLeaks has already published Trump administration leaks. Its Vault 7 and Vault 8 leak drops exposing the CIA’s scary surveillance and hacking tools are comparable to NSA leaks from Edward Snowden against the Obama administration, and much like the Obama administration’s vindictive backlash against Snowden we are seeing similar retaliation from the Trump administration for the CIA leaks.

Trump’s CIA Director has pledged to shut down WikiLeaks as “a non-state hostile intelligence service often abetted by state actors like Russia,” and his Attorney General has statedthat Assange’s arrest is a priority, which Trump himself has said he would permit. Mike Pompeo’s increasingly vitriolic and threatening rhetoric about WikiLeaks is reminiscent of Joe Biden’s labeling Assange a “hi-tech terrorist” eight years ago. WikiLeaks in reality is not a friend of Republicans anymore than it’s a friend of Democrats, because WikiLeaks is and always will be first and foremost an enemy of corrupt power. The liberals who used to love Assange when he was dropping leaks about the Bush administration now hate him, and the conservatives who used to attack him as an enemy now celebrate him as a hero. This dynamic will necessarily switch again when more leaks drop and conservatives see clearly that Assange’s principles are not for sale.

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An epic tale for future historians. When we found how to feed ourselves, all of us, with good food, we decided not to do that. There’s some deeper meaning there, we don’t have the ability to do this right. We may be smart, but only superficially. And moreover, if we did get it right, we’d end up with 30-40 billion people here. So we poison ourselves.

‘Ultra-Processed’ Products Now Half Of All UK Family Food Purchases (G.)

Half of all the food bought by families in the UK is now “ultra-processed”, made in a factory with industrial ingredients and additives invented by food technologists and bearing little resemblance to the fruit, vegetables, meat or fish used to cook a fresh meal at home. Research by global nutrition experts reveals the scale of our food evolution, from farm-fresh to factory-manufactured. “Real food” has been replaced by salty snacks and sugary cereals, industrially-made bread and desserts, ready-meals and reconstituted meats alongside sweetened soft drinks. The study of 19 European countries is published this month in a special issue of the journal Public Health Nutrition. It shows that UK families buy more ultra-processed food than any others in Europe, amounting to 50.7% of the diet.

Germany comes second, on 46.2% and then Ireland on 45.9%. While the figures are not directly comparable, extracted from national surveys carried out differently and from different years, the trend is clear. The UK data they analysed came from the Living Costs and Food Survey 2008, the latest available. They categorised foods into four groups. More than a quarter of food (28.6%) was unprocessed or minimally so, 10.4% was processed cooking ingredients such as vegetable oil and 10.2% was ordinarily processed, such as cheese or cured meat. Ultra-processed food amounts to more than all the other groups combined.

Professor Carlos Monteiro from the University of Sao Paulo in Brazil, who led the research team, told the Guardian of his deep concern about the links between ultra-processed food with obesity and poor health. Ultra-processed foods may look attractive and are designed with sweet or salty tastes that make us want more. But there is nothing nutritious about them, Monteiro said. “Take breakfast cereals. If you take Froot Loops, for instance, more than 50% is sugar,” he told the Guardian. “[But] there is no fruit … “Ultra-processed foods are essentially new creations of the food industry with very low cost ingredients in a very attractive product.”

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Feb 022018
 
 February 2, 2018  Posted by at 11:01 am Finance Tagged with: , , , , , , , , , ,  9 Responses »
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Vincent van Gogh Pink peach trees (Souvenir de mauve) 1888

 

Trump to Release Memo Friday Morning Without Redactions (DisM)
Bank of Japan Offers ‘Unlimited’ Bond Buying To Curb Rising Yields (CNBC)
Bitcoin’s Brutal Week Is Even Worse in South Korea (BBG)
Chinese Stocks Tumble As Hong Kong ATM Withdrawals Surge (ZH)
Surprise Rise In UK House Prices As Lack Of Homes For Sale Fuels Lift (G.)
Buying Home In UK Cities At Least Affordable Level Since 2007 (Ind.)
UK Labour Party Plans To Make Landowners Sell To State For Fraction Of Value (G.)
Big Banks Accused of Stifling Competition in Stock Lending (Morgenson)
Here Comes the Next Financial Crisis (Nomi Prins)
Texas Shale Challenges North Sea Crude As World Oil Benchmark (R.)
Greek Taxpayers’ Debts To The State Soar To Record Highs (K.)
Erdogan’s Top Adviser Threatens To “Break The Legs” Of Greek PM (KTG)
Polar Bears Could Become Extinct Faster Than Was Feared (G.)
Warming Could Breach 1.5ºC Within Five Years (CCN)

 

 

Finally we get to see how ugly it can get.

Trump to Release Memo Friday Morning Without Redactions (DisM)

According to a recent report by the Washington Examiner, President Trump will declassify the controversial four-page memo that reportedly details surveillance abuses by the Department of Justice and FBI, and send it back to House Intelligence for a Friday morning release. The news comes just days after President Trump’s State of the Union address, where he was overheard stating that he would “100%” release the memo. The Examiner further reports that FBI Director Wray continues to oppose the release of the memo to the American public, citing: “grave concerns about the memo’s accuracy.” However, as the Wall Street Journal reports, it is important to remember that the FBI knows and has known what is in the memo for a long time, as the Bureau had, “refused to provide access to those documents until director Christopher Wray and the Justice Department faced a contempt of Congress vote.”

The Journal further relates that: “The FBI’s public statement appears to be an act of insubordination after Mr. Wray and Deputy Attorney General Rod Rosenstein tried and failed to get the White House to block the memo’s release. Their public protest appears intended to tarnish in advance whatever information the memo contains. The public is getting to see amid this brawl how the FBI plays politics, and it isn’t a good look.” Members of the Democratic Party have also expressed their opposition to the release of the memo. For example, ranking member of the House Intelligence Committee, Rep. Adam Schiff (D-CA), has also come out against the release of the memo to the public.

Last week, Schiff and Sen. Diane Feinstein (D-CA), wrote a letter to Facebook and Twitter, in which they expressed their fears that the top trending hashtag “#ReleaseTheMemo” was being pushed by Russian bots as part of a propaganda effort seeking to “attack our democracy”. However, much to their dismay, it was revealed that the top trending hashtag was not the work of Russian bots, but originated organically by fellow Americans. This news did not deter a California duo from penning a second letter to Facebook and Twitter on Wednesday, in order to raise awareness about potential abuse of their platforms by “agents of foreign influence”.

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Artificial ‘market’. How can anyone see it as a good thing?

Bank of Japan Offers ‘Unlimited’ Bond Buying To Curb Rising Yields (CNBC)

Japanese government bond prices recovered from earlier losses after the Bank of Japan acted decisively on Friday to curb a rise in bond yields, offering “unlimited” buying in long-term Japanese government bonds. Heavy buying of JGBs raises the price of bonds to force down their yield, an essential element of the BOJ’s ultra-loose yield curve control (YCC) policy. It was the first time in more than six months that the BOJ has conducted special operations to buy bonds to achieve the yields it wants to see, rather than the auctions used in regular operations – a powerful show of force to direct the market. On top of that, the BOJ increased the amount of its planned buying in five- to 10-year JGBs to 450 billion yen from the 410 billion amount it has favored since late August.

Following the BOJ’s operations, the price of the 10-year JGB futures rose to as high as 150.31 from the day’s low of 150.09. It was up 0.11 on the day. The benchmark 10-year cash JGB yield edged down to 0.090%, the same level as its previous close, from 0.095% touched earlier. JGB yields have risen in recent weeks, in line with global peers, on rising expectations that the world’s central banks are increasingly leaning towards winding back stimulus as the global economy gains momentum. Investors have started to speculate that the BOJ could also be moving towards an exit from ultra-easy policy, although BOJ Governor Haruhiko Kuroda has denied that he was considering such a major policy adjustment in the near future.

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Significant shift: “The country’s waning frenzy has been reflected in declining activity on domestic exchanges. Data compiled by CryptoCompare.com show that volumes have dropped by about 85% from December highs.”

Bitcoin’s Brutal Week Is Even Worse in South Korea (BBG)

Bitcoin’s brutal start to the year is proving especially painful in South Korea. While prices for the cryptocurrency are falling on major exchanges around the world, nowhere have the declines been faster than in Asia’s fourth-largest economy. The losses have erased a 51% premium for Bitcoin on Korean venues, sending prices back in line with those on international markets for the first time in seven weeks on Friday. The so-called kimchi premium had been so persistent – and so unusual for a large country – that traders named it after Korea’s staple side dish. While its disappearance is partly explained by selling pressure from arbitragers, it also reflects a dramatic reversal of investor sentiment in one of the world’s most frenzied markets for cryptocurrencies.

Bitcoin has tumbled more than 60% from its high in Korea after the nation’s regulators took several steps over the past two months to restrict trading and said they may ban cryptocurrency exchanges outright. Policy makers around the world have been moving to rein in the mania surrounding digital assets amid concerns over excessive speculation, money laundering, tax evasion and fraud. “The bubble in crytpocurrencies has burst” in Korea, said Yeol-mae Kim at Eugene Investment & Securities in Seoul. The kimchi premium began shrinking in mid-January as fears of a regulatory clampdown escalated. Selling by arbitragers – who have been buying Bitcoin on international venues to offload at a higher price in Korea – also played a role, although the country’s capital controls and anti-money-laundering rules made it difficult to execute such transactions in bulk.

Bitcoin traded at about 9.1 million won ($8,449) in Korea on Friday morning, according to a CryptoCompare index tracking the country’s major exchanges. That compared with the $8,601 composite price on Bloomberg, which is derived from venues including Bitstamp and Coinbase’s GDAX exchange. When the kimchi premium reached its peak in January, Bitcoin’s price was about $7,500 higher in Korea. The country’s waning frenzy has been reflected in declining activity on domestic exchanges. Data compiled by CryptoCompare.com show that volumes have dropped by about 85% from December highs.

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Liquidity.

Chinese Stocks Tumble As Hong Kong ATM Withdrawals Surge (ZH)

Chinese stocks are down for the fifth day in a row (something that hasn’t happened since May 2017) with the tech-heavy Shenzhen Composite is now down 5% YTD and the Shanghai Composite is tumbling back towards unchanged. The decline is happening at the same time as Bitcoin is in freefall… And chatter about bankers using WeChat to ask for Deposits. In other words – a liquidity crisis. And that anxiety is only increased by the latest report from Reuters that cash withdrawals at Hong Kong ATMs have surged, prompting scrutiny from monetary authorities, the banking industry, and police amid media reports that mainland Chinese are withdrawing hundreds of thousands of dollars using up to 50 cards at a time. China has battled to curb capital outflows for years. A move that took effect on Jan. 1 caps overseas withdrawals using domestic Chinese bank cards.

The gambling hub of Macau last year introduced facial recognition technology at ATMs to target illicit outflows from mainland China, a move that Hong Kong’s central bank told Reuters could increase cash withdrawals in the financial center. “The HKMA is aware of media reports about people using multiple mainland cards to withdraw cash at ATMs in Hong Kong,” the central bank said in a statement, adding that it was “monitoring the situation and is in discussion with the banking industry and the police about this issue”. A local banker said some commercial banks have stepped up monitoring of cash withdrawals. Hong Kong police said they were working closely with the HKMA and banking industry to respond to any changes in financial crime trends. While this is as much to do with money-laundering and capital flight, the liquidation of stocks, cryptocurrencies, and now mass ATM withdrawals suggests more is going on that the usual pre-new-year liquidity hording.

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There is no lck of homes. There’s a huge surplus in ultra low interest rate loans.

Surprise Rise In UK House Prices As Lack Of Homes For Sale Fuels Lift (G.)

UK house prices rose at the fastest annual pace in 10 months in January, bolstered by a lack of new homes coming on to the market, according to Nationwide. The average price of a home reached £211,756 last month, according to the building society’s monthly survey. Property values were up 0.6% from the month before, the same monthly gain as in December, but the annual growth rate picked up to 3.2% from 2.6%, the highest since March 2017, when it was 3.5%. Robert Gardner, Nationwide’s chief economist, said: “The acceleration in annual house price growth is a little surprising, given signs of softening in the household sector in recent months. Retail sales were relatively soft over the Christmas period, as were key measures of consumer confidence, as the squeeze on household incomes continued to take its toll.”

But he added: “The flow of properties coming on to estate agents’ books has been more of a trickle than a torrent for some time now and the lack of supply is likely to be the key factor providing support to house prices.” Many forecasters predicted the housing market would continue to slow to about 1% this year. This would mean property values falling in real terms. Nationwide is still forecasting price growth of 1-1.5% this year.

Chris Scicluna, an economist at Daiwa, said: “With real wage growth remaining below zero and consumer confidence still subdued, house price growth appears unlikely to extend this upward trend over coming months and quarters. However, a similar pace could well be maintained on the back of very attractive mortgage rates, limited supply, record high employment, and the strong likelihood that consumer price inflation is likely to moderate.” Home ownership in England remained at a 30-year low last year. The government’s latest English housing survey showed that of an estimated 22.8m households, 14.4m – or 62.6% – were owner-occupiers in 2016-17, compared with 62.9% in 2016. This was similar to the rate seen in the mid-1980s and down from a peak of 71% in 2003. Of young adults aged 25 to 34, only 37% owned their home.

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Greater Fool hour.

Buying Home In UK Cities At Least Affordable Level Since 2007 (Ind.)

The typical cost of buying a home in a UK city has reached its least affordable levels in a decade, a report has found. The average house price across cities equated to seven times typical annual earnings in 2017, the Lloyds Bank Affordable Cities Review found. This is the highest house price-to-income multiple since the average city home cost seven and-a-half times earnings in 2007. In 2012, the average city home cost around 5.6 times wages. But over the past five years, the average house price across UK cities has surged by over a third (36%), reaching £232,945 in 2017.

Over the same period, average city earnings have risen by 9% to £33,420. Oxford was found to be the least affordable city in the study, with average property prices there equating to 11-and-a-half times average annual earnings. Stirling in Scotland was identified as the UK’s most affordable city for the fifth consecutive year, with average property prices at around four times annual earnings. Six cities in the study have house prices commanding at least 10 times the average earnings of residents.

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Only, so-called value is highly inflated, profiting from government actions.

UK Labour Party Plans To Make Landowners Sell To State For Fraction Of Value (G.)

Labour is considering forcing landowners to give up sites for a fraction of their current price in an effort to slash the cost of council house building. The proposal has been drawn up by John Healey, the shadow housing secretary, and would see a Jeremy Corbyn-led government change the law so landowners would have to sell sites to the state at knockdown prices. Landowners currently sell at a price that factors in the dramatic increase in value when planning consent is granted. It means a hectare of agricultural land worth around £20,000 can sell for closer to £2m if it is zoned for housing. Labour believes this is slowing down housebuilding by dramatically increasing costs. It is planning a new English Sovereign Land Trust with powers to buy sites at closer to the lower price.

This would be enabled by a change in the 1961 Land Compensation Act so the state could compulsorily purchase land at a price that excluded the potential for future planning consent. Healey’s analysis suggests that it would cut the cost of building 100,000 council houses a year by almost £10bn to around £16bn. With the “hope value” removed from the price of land, the cost of building a two-bed flat in Wandsworth, south-west London, would be cut from £380,000 to £250,000, in Chelmsford it would fall from £210,000 to £130,000 and in Tamworth in the West Midlands, where land values are lower, it would drop from £150,000 to £130,000. “Rather than letting private landowners benefit from this windfall gain – and making everyone else pay for it – enabling public acquisition of land at nearer pre-planning-permission value would mean cheaper land which could help fund cheaper housing,” said Healey.

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Stock lending links to shorting.

Big Banks Accused of Stifling Competition in Stock Lending (Morgenson)

A newly filed lawsuit against six major investment banks contends they worked together to prevent a startup company from competing in the vast and lucrative stock-lending market. The complaint, filed Tuesday in a New York federal court, follows a suit brought last summer against the same institutions by three pension funds who accused the banks of conspiring to keep their stranglehold on the roughly $1 trillion market. The litigation brings increased scrutiny on the stock-loan business, an opaque, over-the-counter market that is a crucial but behind-the-scenes cog in Wall Street’s trading machinery. At issue are stock-lending transactions, in which pension funds, insurance companies and other investors lend their shares to brokerage firms whose customers, such as hedge funds, borrow stock to offset other positions or make bets against companies in trades known as short sales.

Asset managers receive a fee for the stock they lend depending on borrower interest in it. The suit was filed by QS Holdings, the parent of Quadriserv, which was formed in 2001 and built an electronic trading platform. Called AQS, the platform gave stock-loan participants access to real-time prices on trades that reflected actual bids and offers. Transactions on AQS were executed anonymously and centrally settled; the system was registered with the Financial Industry Regulatory Authority and the Securities and Exchange Commission. But it never gained traction and was sold in a distressed sale in 2016. On Jan. 26, the six firms — Bank of America, Credit Suisse, Goldman Sachs, JPMorgan Chase, Morgan Stanley and UBS— filed a motion to dismiss the lawsuit filed last summer by the pension funds.

In that filing, the firms said the allegations were meritless, noting that “none of the plaintiffs’ allegations identified ‘direct evidence’ of conspiracy.” In the stock-loan business, investors borrowing shares from brokerage firms also pay, sometimes steeply, for the service. When many traders want to borrow a company’s shares, its stock is known as “hard-to-borrow” and fees associated with the transaction are far higher. The middlemen in these trades often are Goldman, J.P. Morgan and Morgan Stanley. They make trades in an over-the-counter market where prices are typically given privately to customers. It thus is difficult for them to determine whether they are getting appropriate prices.

The middlemen typically keep most of the fees collected on the most lucrative trades, and critics say that amount would be far lower if borrowers and lenders met in a centralized market where pricing was transparent, like the AQS.

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Squid squared.

Here Comes the Next Financial Crisis (Nomi Prins)

Thanks to the Senate confirmation of his selection for chairman of the board, Donald Trump now owns the Fed, too. The former number two man under Janet Yellen, Jerome Powell will be running the Fed, come Monday morning, February 5th. Established in 1913 during President Woodrow Wilson’s administration, the Fed’s official mission is to “promote a safe, sound, competitive, and accessible banking system.” In reality, it’s acted more like that system’s main drug dealer in recent years. In the wake of the 2007-2008 financial crisis, in addition to buying trillions of dollars in bonds (a strategy called “quantitative easing,” or QE), the Fed supplied four of the biggest Wall Street banks with an injection of $7.8 trillion in secret loans. The move was meant to stimulate the economy, but really, it coddled the banks.

Powell’s monetary policy undoubtedly won’t represent a startling change from that of previous head Janet Yellen, or her predecessor, Ben Bernanke. History shows that Powell has repeatedly voted for pumping financial markets with Federal Reserve funds and, despite displaying reservations about the practice of quantitative easing, he always voted in favor of it, too. What makes his nomination out of the ordinary, though, is that he’s a trained lawyer, not an economist. Powell is assuming the helm at a time when deregulation is central to the White House’s economic and financial strategy. Keep in mind that he will also have a role in choosing and guiding future Fed appointments. (At present, the Fed has the smallest number of sitting governors in its history.)

The first such appointee, private equity investor Randal Quarles, already approved as the Fed’s vice chairman for supervision, is another major deregulator. Powell will be able to steer banking system decisions in other ways. In recent Senate testimony, he confirmed his deregulatory predisposition. In that vein, the Fed has already announced that it seeks to loosen the capital requirements big banks need to put behind their riskier assets and activities. This will, it claims, allow them to more freely make loans to Main Street, in case a decade of cheap money wasn’t enough of an incentive.

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Crude still rules.

Texas Shale Challenges North Sea Crude As World Oil Benchmark (R.)

As the United States approaches a record 10.04 million barrels of daily production, trading volumes of so-called “WTI” futures exceeded volumes of Brent crude in 2017 by the largest margin in at least seven years. A decade ago, falling domestic production and a U.S. ban on exports meant that WTI served mostly as a proxy for U.S. inventory levels. “There was a time when the U.S. was disconnected from the global market,” said Greg Sharenow, portfolio manager at PIMCO, who co-manages more than $15 billion in commodity assets. Two changes drove the resurgence of the U.S. benchmark. One was the boom in shale production, which spawned a multitude of small producers that sought to hedge profits by trading futures contracts.

Then two years ago, the United States ended its 40-year ban on crude exports, making WTI more useful to global traders and shippers. U.S. exports averaged 1.1 million barrels a day through November 2017, rising to an average 1.6 million bpd in the final three months. That compares to just 590,000 bpd in 2016. As U.S. production and exports grow, global firms that increasingly buy U.S. oil are offsetting their exposure by trading in U.S. financial markets. That also gives U.S. shale producers more opportunity to lock in profits on their own production.

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Why Greece needs debt relief across the board “It is estimated that just 20% of expired debts are collectible.”

Greek Taxpayers’ Debts To The State Soar To Record Highs (K.)

Taxpayers’ total overdue debts to the state soared to a record 101.8 billion euros at the end of December, in a clear indication that society’s taxpaying capacity is at breaking point due to overtaxation. In December alone, when 2018 road tax and an installment of the Single Property Tax (ENFIA) came due, new expired debts amounted to 1.3 billion euros. According to data released on Thursday by the Independent Authority for Public Revenue, the new expired debts added last year came to 12.9 billion euros, concerning all tax obligations that went unpaid, from income tax and ENFIA to tax penalties and value-added tax. The phenomenon has major consequences for taxpayers. The figures also showed that confiscations and debt settlements brought 5.07 billion euros into the state coffers in 2017, of which 2.69 billion concerned old debts (dating before 2017). More than 1 million taxpayers have already had assets confiscated over debts to the tax authorities. Their number grew by 14,871 in December to reach 1,050,077 at the end of 2017.

The authority’s data reveal that 4,068,857 taxpayers – or more than half – have expired debts to the state, and that this figure would have been 138,260 higher had those people not settled their dues in December due to fears of repossessions. At the moment taxpayers can enter a tax payment program involving 12 to 24 monthly installments, even for dues that are not classified as expired. The online platform also allows them to add new debts to the fixed plan each month. Taxpayers who want to enter such a payment plan can visit the authority’s website and choose which of their debts that are not overdue they want to add to the 12-installment scheme. The picture regarding expired debts is set to change drastically once the bailout obligation for arrears clearance is completed, separating collectible dues from those that cannot be collected. It is estimated that just 20% of expired debts are collectible.

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Fulminating against the 1923 Lausanne Treaty is easy populist fodder for Erdogan. His gamble is that Turkey’s bust-up with the US in Syria, and the threat to NATO because of it, will allow him to take Greek territory.

Erdogan’s Top Adviser Threatens To “Break The Legs” Of Greek PM (KTG)

Chief advisor of Turkish President Erdogan, Yigit Bulut, has threatened Greece over the disputed islet of Imia in the Eastern Aegean Sea. “Athens will face the wrath of Turkey worse than that in Afrin,” Bulut said in a Television show of a private network. “We will break the arms and legs of officials, of the Prime Minister and any Minister, who dares to step on the Kardak/Imia islet in the Aegean,” he claimed. Bultu’s threats come just a couple of days after Defense Minister Panos Kammenos sailed to Imia and threw a wreath into the sea to honor the three fallen soldiers during the Imia conflict in 1996. Ankara does not miss a chance to challenge Greece’s sovereignty in the islets and islands of the Aegean Sea, escalate tension around Imia and risk an ugly incident that could bring the two neighboring countries at the verge of an armed conflict like two decades ago.

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Much higher metabolism than anyone had ever noticed.

Polar Bears Could Become Extinct Faster Than Was Feared (G.)

Polar bears could be sliding towards extinction faster than previously feared, with the animals facing an increasing struggle to find enough food to survive as climate change steadily transforms their environment. New research has unearthed fresh insights into polar bear habits, revealing that the Arctic predators have far higher metabolisms than previously thought. This means they need more prey, primarily seals, to meet their energy demands at a time when receding sea ice is making hunting increasingly difficult for the animals. A study of nine polar bears over a three-year period by the US Geological Survey and UC Santa Cruz found that the animals require at least one adult, or three juvenile, ringed seals every 10 days to sustain them.

Five of the nine bears were unable to achieve this during the research, resulting in plummeting body weight – as much as 20kg during a 10-day study period. “We found a feast and famine lifestyle – if they missed out on seals it had a pretty dramatic effect on them,” said Anthony Pagano, a USGS biologist who led the research, published in Science. “We were surprised to see such big changes in body masses, at a time when they should be putting on bulk to sustain them during the year. This and other studies suggest that polar bears aren’t able to meet their bodily demands like they once were.” Pagano’s team studied the bears in a period during April over the course of three years, from 2014 to 2016, in the Beaufort Sea off Alaska.

They fitted the bears with GPS collars with video cameras to measure activity levels. Blood chemistry was also taken from the bears. Previously, polar bears were thought to expend relatively little energy during days where they often wait for hours beside holes in the ice, which seals emerge from in order to breathe. But the researchers found that they actually have an average metabolism 50% higher than prior estimates. With previous studies showing recent drops in polar bear numbers, survival rates and body condition, scientists said the new research suggests the species is facing an even worse predicament than was feared.

A recent widely-shared video of an emaciated polar bear is a “horrible scene that we will see more of in the future and more quickly than we thought,” according to Dr Steven Amstrup, who led polar bear research for 30 years in Alaska. “This is an excellent paper that fills in a lot of missing information about polar bears,” said Amstrup, who was not involved in the USGS research. “Every piece of evidence shows that polar bears are dependent on sea ice and if we don’t change the trajectory of sea ice decline, polar bears will ultimately disappear. “They face the choice of coming on to land or floating off with the ice as it recedes, out to the deep ocean where there is little food. We will see more bears starving and more of them on land, where they will get into trouble by interacting with humans.”

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The takeaway from this is not in the numbers. It’s in the certainty that we will not stop the process. All we have is a Paris agreement spearheaded by politicians who see their polls and businessmen who see a profit.

Warming Could Breach 1.5ºC Within Five Years (CCN)

The UK’s meteorological agency has forecast the global temperature might flicker above 1.5C within the next five years. That would be within a decade of the Paris climate deal setting 1.5C as an aspirational limit on global warming. The Met Office’s decadal forecast said the global average temperature was “likely” to exceed 1C between 2018-2022 and could reach 1.5C. “There is also a small (around 10%) chance that at least one year in the period could exceed 1.5C above pre-industrial levels,” the office said in a statement on Wednesday. “It is the first time that such high values have been highlighted within these forecasts.” Met Office scientists were quick to point out that this would not actually breach the Paris Agreement, as that limit refers to a long term average, rather than a yearly reading.

The office’s chief scientist, professor Stephen Belcher, said: “Given we’ve seen global average temperatures around 1C above pre-industrial levels over the last three years, it is now possible that continued warming from greenhouse gases along with natural variability could combine so we temporarily exceed 1.5C in the next five years.” The Paris climate deal, agreed by 197 UN member states in 2015, set a global goal for keeping temperatures “well below 2C”, aiming for 1.5C. The lower goal is considered by many of the most vulnerable countries, especially low-lying island nations, to be the upper limit for their homelands to survive. Coral scientists also predict that more than 1.5C of warming would wipe out most coral reefs.

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Jan 272018
 
 January 27, 2018  Posted by at 10:58 am Finance Tagged with: , , , , , , , , , , ,  10 Responses »
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Grete Stern Bertolt Brecht 1934

 

Bankers, Policy Makers at Davos Revel in ‘Sweet Spot’ Economy (BBG)
IMF Chief Warns Trump’s Tax Cuts Could Destabilise Global Economy (G.)
China Set To Lose ‘Emerging Market’ Status As Growth Declines (F.)
This was 1987. Start Rebalancing – David Rosenberg (ZH)
What Could Possibly Go Wrong? (Lance Roberts)
Equity Allocations At Record Highs As Investor Cash Hits All Time Low (ZH)
Japanese Cryptocurrency Exchange Loses $535 Million To Hackers (CNBC)
How Bitcoin Regulation Will Happen, And What It Will Mean (Ind.)
Bombardier Gets Surprise Win After U.S. Rebuffs Boeing Trade Case (BBG)
Canada Illegally Subsidized Bombardier: Embraer (R.)
More Than Half Of New-Build Luxury London Flats Fail To Sell (G.)
Building More Homes Will Not Solve Britain’s Housing Crisis (Pettifor)
Brexit Saddles EU With A Huge Budget Problem (CNBC)
Deal With France ‘Could Bring Hundreds More Child Refugees To UK’ (G.)

 

 

Not much longer.

Bankers, Policy Makers at Davos Revel in ‘Sweet Spot’ Economy (BBG)

The global elites have rediscovered their animal spirits. As the World Economic Forum drew to a close in the Swiss ski resort, the overarching mood of the executives, policy makers and investors was that their economies are in fine shape and that stock markets have every reason to extend their run. “Let’s celebrate what could go right for the moment because we are in a sweet spot,” IMF Managing Director Christine Lagarde said on the closing panel discussion. The Standard & Poor’s 500 Index has gained about a quarter since the start of 2017 and the IMF is forecasting the strongest worldwide economic growth this year since a brief post-recession bounce in 2011. Some 57% of executives polled by PricewaterhouseCoopers saw the economy improving in 2018, about double the number of a year ago.

The rise of cryptocurrencies was evident in the Swiss town both in conference sessions and on the promenade where companies rent shopfronts to promote their wares. “The greatest worry I’ve heard over the past days in Davos is that there is not enough worry,” Mary Callahan Erdoes, JPMorgan asset-management unit CEO, said on the panel. “It’s O.K. to not be worried, to celebrate how we got here.” Erdoes thanked the policy makers on the stage for working “tirelessly” and “giving all of these government jobs such fabulous prestige and something that I know all of us now perhaps aspire to do.” “Wow,” said Bank of England Governor Mark Carney. “This is fantastic.” Such sentiment led delegates to declare that it was the most upbeat Davos gathering since before the financial crisis. Yet the giddiness also gave some investors pause as they warned against turning too exuberant.

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Lagarde gets what she wants and then turns against it. Cover all your bases.

IMF Chief Warns Trump’s Tax Cuts Could Destabilise Global Economy (G.)

Donald Trump’s huge tax cuts are a threat to the stability of the global economy, the managing director of the IMF has warned. Christine Lagarde singled out Trump’s tax reforms as one of three risks that could destabilise the current economic recovery, especially given the boom in stock markets in the past year. “While the US tax reforms certainly will have positive effects in the short term, for the US and other countries around, it might also lead to serious risks,” Lagarde told the World Economic Forum in Davos. “That has an impact on financial vulnerability, particularly given the high asset prices that we see around the world, and the easy financing that it still available,” she added. She was speaking shortly after the US president told Davos that his tax reforms had created “a big, beautiful waterfall” of pay rises for US workers, as American companies passed the tax cut on.

However, the IMF is concerned that cutting taxes will lead to a bigger US budget deficit, and that extra borrowing by the US Treasury will force up long-term American interest rates. As a result, it fears growth could be choked off in the longer term, making the stock market vulnerable to a sudden downward lurch. Lagarde cautioned against people becoming too complacent about the pick-up in global growth reported by the IMF at the start of the WEF’s annual meeting. The IMF raised its forecasts for global expansion to 3.9% this year and in 2019, reporting that all major economies – the US, EU and Japan – are doing better. “I don’t think that we’ve completed the job,” said Lagarde, who fears that the growing economic inequality in many countries is creating “fractures”. “Having growth is good, improving productive is good, but [policymakers should] make sure that the results of that growth are properly allocated,” said the IMF chief, adding that inequality is growing in many advanced economies, and very high in emerging markets.

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An emerging market that’s stopped emerging.

China Set To Lose ‘Emerging Market’ Status As Growth Declines (F.)

China has been considered an emerging market for over 25 years due to its rapid reform process. Generally speaking, emerging markets are defined as developing countries moving toward an open market economy. Unfortunately, if one takes a close look at growth levels and reform factors, China has shed some of the key characteristics of an emerging market, due to a sharp slowdown in the reform process, an increasingly state centered economy, and lower levels of true growth. China is an upper middle income country that enjoyed gangbusters growth through the 1990s and 2000s, but that is now suffering from a major economic slowdown that has no end in sight. One major reason for slowing growth is that market forces have been quashed by a a buildup in the state sector and mounting economic and financial risks that would result in economic collapse if the reform process is restarted.

Under President Xi Jinping, China’s economic policy has shifted toward enhancing the organization and financial sources of state owned enterprises, and away from liberalizing the currency and financial sector. Strides that were made toward internationalizing the RMB and bringing about a more market-based financial system have been reversed. A simultaneous over-reliance on easy credit has created plenty of risks in the financial sector that now prevent officials from even considering making the financial sector more market-based. Slow reform of the service sector and strong state presence in service subsectors like health and education have contributed to declining growth.

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When fear is gone, all that’s left is greed. No balance.

This was 1987. Start Rebalancing – David Rosenberg (ZH)

When discussing today’s unexpectedly weak Q4 GDP print, which came in at 2.6%, far below consensus and whisper estimates in the 3%+ range, and certainly both the Atlanta and NY Fed estimates, we pointed out the silver lining: personal spending and final sales, which surged 4.6% Q/Q (vs 2.2% in Q3), although even this number had a major caveat: “as we discussed previously, much of it was the result of a surge in credit card-funded spending while the personal savings rate dropped to levels last seen during the financial crisis.” Indeed, recall the stunning Gluskin Sheff chart we presented a month ago, which showed that 13-week annualized credit card balances in the U.S. had gone “completely vertical” in the last few months of 2017 which we said “should make for some great Christmas.”

Meanwhile, even more troubling was the ongoing collapse in the US personal savings rate, which last month tumbled to the lowest level since the financial crisis as US consumers drained what little was left of their savings to splurge on holiday purchases.

And while we highlighted and qualified two trends as key contributors to the spending surge in Q4 personal spending, Gluskin Sheff’s David Rosenberg – who is once again firmly in the bearish camp – did one better and quantified the impact. Not one to mince words, the former Merrill chief economist described what is going on as “The Twilight Zone Economy” for the following reason: “how many times in the past have we seen a 2.6% savings rate coincide with a 4.1% jobless rate? How about never…huge ETF flows driving equities higher, but these metrics are screaming ‘late cycle’.” He then proceeded to give “some haunting math” from the GDP number: “The savings rate fell from 3.3% to 2.6%. If it had stayed the same, real PCE would have been 0.8% (annualized) instead of 3.8% and GDP would have been 0.6% instead of 2.6%.”

[..] a more troubling development is that the conditions observed ahead of the Black Monday crash are becoming increasingly apparent. Here is Rosenberg’s stark assessment of where we stand: “Rising bond yields. Full employment. Fed tightening. Trade frictions. Weak dollar. Rising twin deficits, spurred by tax reform. Sound familiar? It should. This was 1987. Start rebalancing.”

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More 1987.

What Could Possibly Go Wrong? (Lance Roberts)

What goes up, eventually comes down. That is just reality. The bull market that began in 2009, has now entered the final stage of “capitulation” as investors throw caution to the wind and charge headlong into the markets with reckless regard for the consequences.

Of course, it isn’t surprising given the massive amounts of liquidity continually injected into the financial markets and global Central Banks have now figured out that continually rising financial markets solve much of the world’s ills. Simply, with enough liquidity, you can cover up bad (credit risks) by guaranteeing holders they will never default. It’s genius. It’s a “no lose” investment scheme. Unfortunately, we have seen this repeatedly in the past. In the 1980’s it was “Portfolio Insurance” – a “no lose” investment program that eventually erupted into the crash of 1987. But not before the market went into a parabolic advance first.

In the 1990’s – it was the dot.com phenomenon which was “obviously” a “no lose” proposition. Even after Alan Greenspan spoke of “irrational exuberance,” two years later the market went parabolic once again.

Then in 2006-2007, banks invented the CDO-squared, a collateralized derivative obligation based on other collateralized derivative obligations. It was a genius way to invest with “no risk” because the real estate market had never crashed in history.

Today, it is once again an absolute “certainty” that markets will rise from here as global Central Banks have it all under control. What possibly could go wrong?

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Leverage squared.

Equity Allocations At Record Highs As Investor Cash Hits All Time Low (ZH)

While Bank of America may or may not be right in its forecast that as a result of the market meltup, buying panic and sheer euphoria to get into stocks, which just pushed the bank’s proprietary “Bull and Bear” indicator to a level which on 11 out of 11 prior occasions always presaged a ~12% selloff…

… a market correction or worse is imminent, one thing that is indisputable is the funding status of the Private Clients served by BofA’s Global Wealth and Investment Management (GWIM) team. What it shows is that investor cash allocation has just dropped to a record low of just 10%…

… while investor equity exposure is rising at fastest pace in 10 years.

… and total equity allocations are back to record highs.

In other words: ‘bear capitulation’ as everyone is now long stocks in what BofA called a “non-stop euphoric cabaret.” When will this stop, or reverse? According to BofA, keep an eye on the dollar, which as long as it keeps sliding is supporting of risk assets, however the risk is once it bounces, to wit, the “US dollar key catalyst; note US-Europe FX spat sparked ’87 crash” and “higher US$ “pain trade” = risk-off coming weeks”

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Even if cryptos don’t have a security issue, they certainly appear to have one.

Japanese Cryptocurrency Exchange Loses $535 Million To Hackers (CNBC)

Hackers stole several hundred million dollars’ worth of a lesser-known cryptocurrency from a major Japanese exchange Friday. Coincheck said that around 523 million of the exchange’s NEM coins were sent to another account around 3 a.m. local time (1 p.m. ET Thursday), according to a Google translate of a Japanese transcript of the Friday press conference from Logmi. The exchange has about 6% of yen-bitcoin trading, ranking fourth by market share on CryptoCompare. The stolen NEM coins were worth about 58 billion yen at the time of detection, or roughly $534.8 million, according to the exchange. Coincheck subsequently restricted withdrawals of all currencies, including yen, and trading of cryptocurrencies other than bitcoin. Bloomberg first reported the hack. A CNBC email sent to Coincheck’s listed address bounced back.

Cryptocurrency NEM, which intends to help businesses handle data digitally, briefly fell more than 20% Friday before recovering to trade about 10% lower near 85 cents, according to CoinMarketCap. Most other major digital currencies, including bitcoin, traded little changed on the day. Coincheck management said in the press conference that it held the NEM coins in a “hot” wallet, referring to a method of storage that is linked to the internet. In contrast, leading U.S. exchange Coinbase says on its website that 98% of its digital currency holdings are offline, or in “cold” storage. The Japanese exchange said it did not appear that hackers had stolen other digital currencies.

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There will never be a global consensus. Just a lot of poorly understood laws.

How Bitcoin Regulation Will Happen, And What It Will Mean (Ind.)

Bitcoin has been surging and falling in recent weeks. And it seems mostly to come down to one thing: regulation. The lack of regulation is, for now, a large part of bitcoin and other cryptocurrencies’ intrigue: they seem to allow people to avoid the traditional restrictions in place in money and other assets. But they’re also part of their bad reputation, with the same anonymity and decentralisation allowing them to be used for crime. Many governments have suggested they could introduce such rules. But it’s still not clear what they’d look like, or how they’d arrive; here’s an attempt to predict what might be to come in that most unpredictable of markets. In recent weeks, bitcoin has plunged after the threat of regulation in South Korea.

But it was part of a much broader trend – countries around the world have already introduced new rules, and those that haven’t are talking about it. The price has mostly levelled out in recent weeks, after regulation brought volatility and a slowly sliding price. But there might be more disruption coming, as countries look towards regulation, worried about the activity and behaviour that bitcoin could be enabling. That was obvious as world leaders arrived in Davos and were asked their opinion. The event could be a preview of far more wide-ranging controls that could be introduced in March, when the G20 governments’ financial and economic leaders meet in Argentina – a number of the countries attending have specifically said they will focus on fixing regulation of cryptocurrencies at that meeting.

They include France and Germany, which are said to be working together on bitcoin regulation. Many other countries have called for the international community to work together to bring regulation to bitcoin. Davos has been a platform for various world leaders to give their opinion on bitcoin. And they all seem to agree on one thing. “My number-one focus on cryptocurrencies, whether that be digital currencies or bitcoin or other things, is that we want to make sure that they’re not used for illicit activities,” said Steven Mnuchin, Donald Trump’s most senior financial policymaker, told the World Economic Forum in Davos, Switzerland. “We encourage fintech and we encourage innovation, but we want to make sure all of our financial markets are safe,” Mnuchin said. “We want to make sure that the rest of the world – and many of the (Group of) 20 countries are already starting on this – have the same regulations.”

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Airplane makers wars are set to intensify.

Bombardier Gets Surprise Win After U.S. Rebuffs Boeing Trade Case (BBG)

Bombardier can start shipping C Series jets to Delta Air Lines after a surprise ruling by a U.S. trade panel that said the proposed imports won’t hurt American industry. U.S. companies and workers aren’t being harmed by sales of 100- to-150-seat aircraft from Canada, the International Trade Commission said Friday. The tribunal’s unanimous vote blocks a Commerce Department decision last month to impose duties of almost 300%. Friday’s vote deals a blow to Boeing, which said Bombardier sold the C Series in the U.S. at less than fair value while benefiting from government subsidies. The ruling also opens the door for Montreal-based Bombardier to woo new American customers while potentially easing U.S. trade tensions with Canada and the U.K., where the company builds wings for the aircraft. “I’m shocked,” said Chris Murray, an analyst in Toronto. “This clears the way for the jets being to delivered to Delta,” Murray said. “It also removes any concerns about potential future orders in the U.S.”

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Bombardier goes from one lawsuit to another. Should have stuck to making skidoos.

Canada Illegally Subsidized Bombardier: Embraer (R.)

Brazilian planemaker Embraer said on Friday that the U.S. Department of Commerce has shown that the Canadian government “heavily and illegally subsidized” Bombardier and its C Series aircraft, allowing the company to survive and distorting the aviation industry. The statement came just after Bombardier won an unexpected trade victory against U.S. planemaker Boeing when a U.S. agency rejected imposing hefty duties on sales of Bombardier’s new CSeries jet to American carriers.

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Oh well, there’s plenty homeless people.

More Than Half Of New-Build Luxury London Flats Fail To Sell (G.)

Developers have 420 towers in pipeline despite up to 15,000 high-end flats still on the market. More than half of the 1,900 ultra-luxury apartments built in London last year failed to sell, raising fears that the capital will be left with dozens of “posh ghost towers”. The swanky flats, complete with private gyms, swimming pools and cinema rooms, are lying empty as hundreds of thousands of would-be first-time buyers struggle to find an affordable home. The total number of unsold luxury new-build homes, which are rarely advertised at less than £1m, has now hit a record high of 3,000 units, as the rich overseas investors they were built for turn their backs on the UK due to Brexit uncertainty and the hike in stamp duty on second homes.

Builders started work last year on 1,900 apartments priced at more than £1,500 per sq ft, but only 900 have sold, according to property data experts Molior London. A typical high-end three-bedroom apartment consists of around 2,000 sq ft, which works out at a sale price of £3m. There are an extra 14,000 unsold apartments on the market for between £1,000-£1,500 per sq ft. The average price per sq ft across the UK is £211. Molior says it would take at least three years to sell the glut of ultra-luxury flats if sales continue at their current rate and if no further new-builds are started. However, ambitious property developers have a further 420 residential towers (each at least 20 storeys high) in the pipeline, says New London Architecture and GL Hearn. Henry Pryor, a property buying agent, says the London luxury new-build market is “already overstuffed but we’re just building more of them”.

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Building more is the worst of all options. See above. But it’s alos the only option that lets the illusion last a bit longer.

Building More Homes Will Not Solve Britain’s Housing Crisis (Pettifor)

Everyone – from the government, to housing charities, to housebuilders – has bought into the conventional wisdom that the dysfunction that racks our housing market is a matter of demand and supply. We’re not building enough houses, so house prices have been sent rocketing, taking home-ownership out of reach for growing numbers of young people. But in reality, our housing problems are not a simple feature of supply and demand. Rather, our housing market has a bitcoin problem. What has bitcoin mania got in common with house prices, especially in the capital? For starters, both are speculative bubbles. Vast sums of money have been poured into finite supplies of bitcoins and London property. Both have consequently exploded in value, albeit over different time periods.

And so both have become financialised assets that deliver capital gains far in excess of people’s ability to earn income from work, or from investment in the real economy. And as with bitcoin, so with London property: speculators are convinced that prices will continue to rise for ever. It’s speculation in the property market that is fuelling stratospheric house price rises, not shortage of supply. When the “fuel” of private capital, mortgage credit and cash from the bank of mum and dad is supplemented by government subsidies and tax breaks, house prices rise. Moreover, wealthy global and non-resident buyers have funnelled more than £100bn into London property over recent years, making the problem even worse.

So, rather counterintuitively, building more houses is not the right prescription. House prices won’t fall until the tide of cash flowing into the market abates, for example by tightening mortgage credit, or shrinking the pool of buy-to-let investors. That may already be starting to happen as real incomes continue to fall, the Bank of England toughens up buy-to-let mortgages, and stamp duty rises are phased in for second properties. Despite this, the government pretends the real cause of unaffordable housing is a shortage of new builds. It uses this argument to provide cover for further taxpayer-funded subsidies and tax breaks that benefit its property-owning core voters, its close allies in the construction industry and property market, and its supporters in the City of London.

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Germany crony Holland wants to pay less toward Brexit because its economy is hit harder than others. It also wants the entire EU budget cut. Juncker wants to raise that budget and buy more Europe. This could blow up. Expect more heavy handedness from Brussels.

Brexit Saddles EU With A Huge Budget Problem (CNBC)

Brexit is leaving the EU with a big problem on its hands and a “very tough” negotiation ahead, European Commission Vice-President Jyrki Katainen told CNBC on Friday. The U.K. has been one of the main contributors to the European budget, but once it has left the bloc there will be a gap in the EU budget that will have to be worked out somehow, Katainen said. “It is certainly a problem and we have to address it,” he said at the World Economic Forum (WEF) in Davos, Switzerland. “If I should bet something, we need to adjust the budget to a certain extent but also we need fresh money from member states. We also have to look at how money is spent, how we could get more out of less.”

But many EU members do not want to pay more to compensate for the U.K.’s decision to leave the union. Denmark, for example, made it clear last year that it would not step up its financial commitment because of Brexit. Katainen told CNBC that one solution could be using more financial instruments, including equity investments, to finance European projects rather than direct financial contributions. “This is what we are planning or exploring at the moment… it’s going to be a very though negotiation,” he said.

The current EU budget is planned out until 2020. The European Commission is due to come up with proposals on the future of the budget in May. During a speech in September, EC President Jean-Claude Juncker said: “An important element will be the budgetary plans the commission will present in May 2018. Here again, we have a choice — either we pursue the European Union’s ambitions in the strict framework of the existing budget, or we increase the European Union’s budgetary capacity so that it might better reach its ambitions. I am for the second option.”

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Yeah, the ones they previously promised to take but never did.

Deal With France ‘Could Bring Hundreds More Child Refugees To UK’ (G.)

Charities working to bring unaccompanied refugee children to safety are optimistic that agreements signed by Theresa May and Emmanuel Macron could lead to hundreds more receiving permission to travel legally to the UK. Details emerging from last week’s summit show that officials agreed to extend an eligibility deadline so that children fleeing conflict and arriving in Europe before last Friday could be considered under the Dubs amendment, the scheme launched in 2016 under which the government agreed to offer a safe and legal route to refugee children travelling alone. Previously, refugee children had to have arrived in Europe before March 2016 to be considered for acceptance under the scheme. This deadline meant large numbers of vulnerable young people who had arrived in France, Germany and Italy more recently were not eligible.

Lord Dubs, the Labour peer who forced the government to commit to helping more young refugees in January 2016, welcomed the development. “We hope dozens more will be transferred, but it is crucial that they get a move on. In France they are sleeping under the trees in very bleak conditions.” Although the May-Macron agreement focused on France, concerns are growing for the large number of unaccompanied refugee children in Greece where there are currently 3,150 refugee children, travelling without families, and only 1,109 spaces in shelters, according to the charity Safe Passage, which has campaigned to bring more young refugees to the UK. The charity hopes that a further 250 could be brought to safety under the Dubs scheme. The government has committed to accommodating 480 refugee children under the scheme, but has so far only transferred about 220.

Campaigners hope the announcement could reduce the number of young refugees killed on roads outside Calais, after a spike in deaths in recent weeks among asylum seekers attempting to climb on to lorries in order to travel illegally to the UK. The UK government also agreed to speed up the time it spends considering applications from young refugees for transfer to the UK, committing to providing an answer in 10 days, and to transferring them within 15 days after that. George Gabriel, at Safe Passage, said: “For those who are awaiting family reunion, these changes will mean that there is a much lower incentive to make a dangerous journey to reunite with a loved one.”

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Jan 252018
 
 January 25, 2018  Posted by at 10:54 am Finance Tagged with: , , , , , , , , , , , ,  6 Responses »
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Grete Stern Sueño No. 27: No destiñe con el agua 1951

 

Trump to Tell Davos That ‘America First’ Is Good for Globalism (BBG)
A Weaker Dollar Is Good For The US, Treasury Secretary Mnuchin Says (CNBC)
Careless Whisper: Mnuchin Opens Door To New Era Of Currency Wars (BV)
Trump Team Unleashes Verbal Assault On The Dollar (Pol.)
IMF’s Lagarde Urges Mnuchin to Clarify Remarks on Weak Dollar (BBG)
Trump Supports Immigration Plan With Pathway To Citizenship For Dreamers (G.)
Trump ‘Looking Forward’ To Speaking Under Oath In Russia Inquiry (G.)
Ratings Firm Issues First Grades On Cryptocurrencies (CNBC)
Beppe Grillo Steps Aside From Italy’s Five Star Movement (G.)
How About Showing Us The TPP Deal We’re About To Sign? (SMH)
Trump Warns Erdogan To Avoid Clash Between U.S., Turkish Forces (R.)
We Examined Julian Assange, And He Badly Needs Care – But He Can’t Get It (G.)
Washington Post, Legacy Press Betray Assange (DisM)
Greece Pays A Heavy Price For Its Primary Surplus (K.)
Greeks Work Longest Hours in Europe (GR)
Each EU Citizen Creates 31kg Of Plastic-Waste Per Year (Stat.)

 

 

Winning bigly. Triumphant talk of the town in Davos. Jamie Dimon, Lloyd Blankfein are on board. “They’re going to invest a lot of money in this country.” How long will it last?

Trump to Tell Davos That ‘America First’ Is Good for Globalism (BBG)

President Donald Trump has a familiar message for the global elites populating the World Economic Forum in Davos, Switzerland: You were wrong. A year ago, some Davos participants predicted Trump’s protectionist rhetoric would lead to sluggish economic growth and lackluster stock market gains. It didn’t. And the president isn’t about to let that go unnoticed. Trump will arrive at the conference Thursday, joining a large delegation of U.S. officials already there, where he’s expected to boast about U.S. economic performance during his first year in office – unemployment down, the stock market up, robust growth. He’ll also seek to persuade the Davos audience in a major speech on Friday that his populist, “America First” policies can co-exist with globalism.

The president said on Twitter that he plans “to tell the world how great America is” and that “our economy is now booming and with all I am doing, will only get better.” “He wants to shatter the myth that he is only an ‘America First’ president,” said Anthony Scaramucci, the financier who was briefly Trump’s communications director and still informally advises the president. “That’s not the case. He is a globalist. He has a duality to his personality. He’s here to disrupt things, which he does a reasonably good to great job of.” The Swiss mountainside gathering of bankers, corporate chiefs and academics isn’t exactly Trump’s scene, and his administration deliberately spurned the conference prior to his inauguration last year. But now, chief executives are warming up to the president after a year in which his administration began a major deregulation effort and won passage of a law that slashes the U.S. corporate tax rate.

“What I’m bulled up about is that policy makers are making good policy decisions in the U.S. about taxes, about proper regulatory reform,” JP Morgan Chase CEO Jamie Dimon said in Davos. “I like a lot more stuff than I don’t like,” Goldman Sachs CEO Lloyd Blankfein said in an interview with CNBC. [..] Trump will host European executives on Thursday night to argue that the U.S. is a better place for businesses as a result of the tax overhaul and deregulation, his National Economic Council director, Gary Cohn, said Tuesday at a briefing. [..] Trump told reporters late Wednesday that he decided to go to Davos “to get them to bring back a lot of money. They’re going to invest a lot of money in this country.”

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When does Beijing start to talk about currency manipulation.

A Weaker Dollar Is Good For The US, Treasury Secretary Mnuchin Says (CNBC)

Treasury Secretary Steven Mnuchin said the U.S. is open for business and welcomed a weaker dollar, saying that it would benefit the country. Speaking at a press conference at the World Economic Forum in Davos Wednesday, he made a bid for investment into the U.S., saying the government was committed to growth of 3% or higher. “Obviously a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin told reporters in Davos, according to Bloomberg, adding that the currency’s short term value is “not a concern of ours at all.” “Longer term, the strength of the dollar is a reflection of the strength of the U.S. economy and the fact that it is and will continue to be the primary currency in terms of the reserve currency,” he said.

On the eve President Donald Trump’s arrival at the event, he said that the U.S. delegation to Davos was its largest ever. “(The) size of the delegation to Davos this year is testament to the scale of Trump’s work over the past year,” Mnuchin said. “What’s happening in the U.S. (is a) reflection of programs being put in place. As we look at U.S. growth, it continues to look quite good and is a very attractive place to invest,” he added. The dollar dipped slightly after his comments and hit a session low, with the dollar index slipping 0.47% for the day. The British pound climbed to a post-Brexit vote high shortly after 8:30 a.m. London time. Mnuchin iterated that his country is “absolutely” committed to free and fair trade, according to the Associated Press. He added that strong U.S. growth was good for the economy and that there was no inconsistency with Trump’s “America First” agenda, according to the news agency.

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Calculation: others lose more than the US does short term.

Careless Whisper: Mnuchin Opens Door To New Era Of Currency Wars (BV)

Speaking one’s mind can be dangerous, especially for the U.S. Treasury secretary. Steven Mnuchin said on Wednesday that a weaker dollar was good for his country. Textbook theory certainly supports his view that a depreciating currency is good for exporters. But the remarks are a break with what his predecessors have publicly asserted since 1995. If the greenback became a trade weapon it would be to the detriment of foreign holders of U.S. debt. Treasury secretaries since Robert Rubin have repeated the mantra that a strong dollar is in U.S. interests. That meant something when Rubin articulated it in 1995 with the aim of shoring up a weak dollar. But it has been used ad nauseam since then, both when the U.S. authorities were intervening in the currency markets to buy their currency and when they were selling it.

What qualified as strong is up for grabs. Since 1995, an index of the dollar’s value against a basket of other major currencies has risen as high as 121 and then fallen more than 40% without the wording being questioned or amended. The maxim has served its purpose, though, by reassuring investors and other countries that the United States would not try to talk its currency down to win a trade advantage. Little wonder then that the dollar index, which has been on a losing streak since the year started, hit a three-year low after Mnuchin’s comments. He probably had no intention of weakening the dollar and there is no evidence that President Donald Trump’s administration is about to embark on such a policy. The remarks do, however, reveal how focused U.S. policymakers are on domestic interests. From there, actually egging on such moves is only a small step.

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There’s no way to keep the reserve currency down, and there’s no alternative either, but they’ll take what they can get today.

Trump Team Unleashes Verbal Assault On The Dollar (Pol.)

U.S. presidents and Treasury secretaries have a long tradition of declaring their allegiance to a strong dollar policy in public remarks, even if privately many welcomed a softer dollar to boost U.S. exports and reduce trade deficits. If the U.S. is publicly supporting a weak dollar while also imposing tariffs on foreign imports — as the Trump administration did this week — it could invite retaliation from other countries, potentially sparking both currency and trade wars, economists say. “It’s remarkable, really, this kind of bomb-throwing from Mnuchin on the dollar the same week they slap on tariffs,” said Ian Shepherdson of Pantheon Macroeconomics, referring to action this week by the Trump White House to impose tariffs on some imported solar panels and washing machines. “The problem with this is it just invites retaliation. This is not a friendly action.”

A weaker U.S. dollar, while potentially a boost for exports, makes many foreign consumer goods more expensive for Americans to buy. That could hit lower-income consumers the hardest, including less well-off voters in Trump’s political base. Retaliatory tariffs on U.S. exports could also hurt domestic manufacturers. The concept of a public strong-dollar policy dates back at least three administrations to when Lloyd Bentsen and Robert Rubin served as Treasury secretaries under President Bill Clinton. The general approach reflects the belief that a stronger dollar improves the value of U.S. Treasury bonds, equities and other dollar-denominated assets and gives Americans more purchasing power. It also generally reflects an improving U.S. economy.

“I have been consistent in saying, as my predecessors have said, that a strong dollar is good for the United States. If you look at the U.S. economy right now, the truth is our economy is performing quite well,” then-Treasury Secretary Jack Lew said in January 2015, echoing the regular public refrain of U.S. officials. Mnuchin did nod to this tradition in his Davos comments after remarking on the benefits of a weaker dollar. “Longer term, the strength of the dollar is a reflection of the strength of the U.S. economy and the fact that it is and will continue to be the primary currency in terms of the reserve currency,” he said.

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She must appear impartial. But this of course is utter crap: “The dollar is of all currencies a floating currency and one where value is determined by markets..”. There are no markets. There’s only central banks.

IMF’s Lagarde Urges Mnuchin to Clarify Remarks on Weak Dollar (BBG)

IMF Managing Director Christine Lagarde suggested that U.S. Treasury Secretary Steve Mnuchin may wish to explain his comments in which he appeared to back a weak dollar, adding that U.S. tax cuts will probably cause the world’s reserve currency to rally. “I really hope that Secretary Mnuchin has a chance to clarify exactly what he said,” Lagarde said in Bloomberg TV interview with Francine Lacqua and Tom Keene in Davos, Switzerland. “The dollar is of all currencies a floating currency and one where value is determined by markets and geared by the fundamentals of U.S. policy.” The dollar slid to the lowest since December 2014 on Thursday, a day after Mnuchin’s endorsement of a weaker greenback at the WEF. The euro also climbed to its strongest against the dollar since 2014. “Obviously a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin told reporters in Davos.

The currency’s short term value is “not a concern of ours at all.” Losses for the greenback have mounted since U.S. President Donald Trump’s inauguration a year ago, with the currency weakening against every Group-of-10 peer. Lagarde reiterated the IMF’s view, presented in its World Economic Outlook this week, that the U.S. tax reform is likely to lead to dollar’s strengthening in the medium term. For many market analysts, Mnuchin’s comments represent a stark break from previous U.S. administrations and could provoke pushback from other regions before too long. “This is a further break away from the ‘strong USD’ mantra launched in the mid-1990s by Clinton’s Treasury Secretary Rubin and adhered to by subsequent Treasury leaders,” wrote Credit Agricole CIB strategists led by Valentin Marinov in a note to clients. “Inevitably, the Administration’s vocal preference for a weak dollar is likely to raise the risk of global currency wars.”

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A carrot for the Democrats. They’ll take it.

Trump Supports Immigration Plan With Pathway To Citizenship For Dreamers (G.)

Donald Trump on Wednesday said he would support a plan that offered a pathway to citizenship for so-called Dreamers, young undocumented immigrants who were brought to the US as children, as part of a broader immigration package that the White House is expected to unveil next week. Trump made the comments to a group of reporters assembled for a briefing on the president’s immigration plan before he departs to Davos, Switzerland, for the World Economic Forum. According to the Associated Press, Trump said he would be open to allowing certain immigrants to become citizens after “10 or 12 years”. Trump told reporters he would allow the Dreamers to “morph into” citizens over a period of time.

“Whatever they’re doing, if they do a great job, I think it’s a nice thing to have the incentive, of after a period of years, being able to become a citizen.” Lindsey Graham, one of the Republican Senators deeply involved in the negotiations over immigration, called Trump’s statement “a major breakthrough”. “I truly appreciate President Trump making it clear that he supports a path to citizenship for Daca recipients,” he said. “This will greatly help the Senate efforts to craft a proposal which President Trump can sign into law.” Trump had previously rejected the idea of citizenship for the young immigrants as “amnesty”. According to the AP, a senior White House official immediately clarified the remarks, telling reporters that a pathway to citizenship for Dreamers was only a “discussion point” in the plan that the White House would preview to Congress on Monday.

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He’s not bluffing.

Trump ‘Looking Forward’ To Speaking Under Oath In Russia Inquiry (G.)

Donald Trump said late Wednesday that he would be willing to speak to the special counsel office’s under oath, adding that he was “looking forward” to talking with Robert Mueller, who is investigating Russian interference in the 2016 election, including alleged contacts with the Trump campaign. Speaking with reporters at the White House before he set out for the World Economic Forum in Davos, Switzerland, Trump was asked about a potential interview with Mueller. “I’m looking forward to it,” he answered. “I would love to do it.” He added that the interview could occur in “two or three weeks”. Trump’s statement would seem to end months of speculation about whether the special counsel would interview the president, though he also said he would testify under oath last year. The president’s attorneys have met with their counterparts in the special counsel’s office.

Mueller’s team is tasked with investigating Russian meddling in the election, including hacks of Democratic party emails and contacts between members of Trump’s campaign and Russians. The special counsel’s office has charged Trump’s former campaign manager Paul Manafort with money laundering and conspiracy, and his former national security adviser Michael Flynn and one of his former foreign policy advisers, George Papadopoulos, have each pleaded guilty to lying to the FBI about their contacts with Russians. The special counsel’s office is also investigating potential obstruction of justice, and has questioned the attorney general, Jeff Sessions, in part to discuss the president’s decision to fire James Comey as FBI director. Also on Wednesday, Trump rejected criticism of his attacks on the Russia inquiry. “You fight back, oh, it’s obstruction,” Trump said. He added: “We’re going to find out” if he gets a fair shake from Robert Mueller. “There’s been no collusion whatsoever,” Trump said. “There’s no obstruction whatsoever.”

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For what it’s worth.

Ratings Firm Issues First Grades On Cryptocurrencies (CNBC)

Weiss Ratings, which claims to offer the first “ratings” on cryptocurrencies, has judged ethereum to be better than bitcoin. The securities ratings agency announced Wednesday that it gave ethereum a B rating because it “benefits from more readily upgradable technology and better speed, despite some bottlenecks.” Bitcoin received a “fair” C+ rating because the digital currency is “encountering major network bottlenecks, causing delays and high transactions costs,” according to a release. “Despite intense ongoing efforts that are achieving some initial success, Bitcoin has no immediate mechanism for promptly upgrading its software code.” None of the 74 cryptocurrencies the agency covers received an “excellent” A rating. B-rated ethereum and digital currency EOS have the highest ratings.

That tough take is apparently a trademark of the 47-year-old independent financial ratings agency. Reports from Barron’s and The New York Times from 2002 and 1992, respectively, note Weiss’ lack of A ratings in coverage of insurance stocks, mutual funds and other securities. The Florida-based company usually flies under the radar in comparison to better-known agencies such as Standard & Poor’s and Moody’s. Weiss says it does not accept compensation from the companies it rates for issuing the rating. Foreign cryptocurrency investors were apparently very worried that Weiss would issue negative ratings on digital currencies. The agency said in a release Wednesday that “staff was up all night last night fending off denial of service attacks from Korea” and cited Korean social media posts calling others to bring down the ratings agency’s website. The hackers then broke into the website, took information from it and are distorting it on social media, the company said.

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No, Beppe is not ‘gaffe-prone’. He built a formidable force, and he’s the first to recognize he’s too old to take the next step. M5S was always going to be movement by and for the young. Because they’re not yet corrupt.

Beppe Grillo Steps Aside From Italy’s Five Star Movement (G.)

Beppe Grillo, the bombastic comedian who co-founded Italy’s anti-establishment Five Star Movement, has stepped aside in what some speculate could be a move to bolster the party’s chances before the general election on 4 March. Grillo, who has been instrumental in turning the movement into Italy’s most popular party, roared on to the political scene in 2009 after joining forces with the late web strategist Gianroberto Casaleggio to launch a blog that railed against political corruption. The blog struck a chord among an electorate weighed down by the economic crisis and fed up with the traditional political class, and became the driving force behind the movement’s phenomenal success in the 2013 elections, when it snatched the second-largest share of the votes.

But the blog has now removed most references to the party. The 69-year-old has started a new blog, which he said will focus on technology and visions for the future as part of an “extraordinary liberating adventure”. He added that while he “likes to have points of view” he is “fed up with opinions”. Quite what that means has left commentators guessing, but Grillo has been distancing himself from the party for some time. In 2015, just a year after the party made gains in the European elections, he announced that he was leaving politics and returning to comedy. As he toured comedy clubs, the gaffe-prone Grillo was thrust back into the spotlight a year later after taking a swipe at Sadiq Khan, saying the Muslim mayor of London would “blow himself up in front of Westminster”.

After that Grillo took more of a back seat, gradually grooming 31-year-old Luigi di Maio for the party’s leadership. Di Maio, who was elected leader in September and is the party’s candidate for prime minister, said on Tuesday night that the split did not mean “patricide” or “reneging on the past”. “The party is now moving forward on its own legs and getting stronger,” he said. The Five Star Movement is leading in opinion polls, ahead of the centre-left Democratic party, Silvio Berlusconi’s Forza Italia and the far-right Northern League. Roberto d’Alimonte, a political science professor at Rome’s Luiss University, said: “Maybe [Grillo] wants to guarantee its survival and see how it will fly in his absence.”

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“..we won’t see it until after it’s signed, in Chile on March 8. Really. That’s the way things normally work.”

How About Showing Us The TPP Deal We’re About To Sign? (SMH)

What’s in the revised Trans-Pacific Partnership deal for Australia? There’s no way to tell until we’ve seen the text, and we won’t see it until after it’s signed, in Chile on March 8. Really. That’s the way things normally work. After that, there’s still time to back out if we don’t want to ratify it, and there’s a precedent. All 12 would-be members signed up to the original Trans-Pacific Partnership in February 2016. Barack Obama found himself unable to get it through Congress and Donald Trump didn’t try. As best as we can tell, the new deal, TPP-11, is the old one with fewer bad bits. Twenty of the most contentious provisions included at the insistence of the US have been “suspended” until the US decides to join. They include enforced protections for the owners of pharmaceutical patents and extensions to copyright law.

There’s no guarantee they would come back if the US did decide to join. Each of the 11 other members would have to agree. Still in the agreement, although somewhat weakened, are the investor-state dispute settlement provisions insisted on by the US and Korea. They will allow private companies to sue national governments in extraterritorial tribunals, as Philip Morris did over Australia’s tobacco plain-packaging laws using the terms of an obscure Hong Kong investment agreement. John Howard successfully resisted having them in the US-Australia agreement and the Abbott government managed to avoid them in the Australia-Japan agreement, but we have apparently agreed to them now, for Japan, Korea and eight other nations. The upside is that our companies will also be able to sue governments.

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It’s time for Putin to tell Erdogan to back off.

Trump Warns Erdogan To Avoid Clash Between U.S., Turkish Forces (R.)

U.S. President Donald Trump urged Turkey on Wednesday to curtail its military operation in Syria and warned it not to bring U.S. and Turkish forces into conflict, but a Turkish source said a White House readout did not accurately reflect the conversation. Turkey’s air and ground operation in Syria’s Afrin region, now in its fifth day, targets U.S.-backed Kurdish YPG fighters, which Ankara sees as allies of Kurdish insurgents who have fought in southeastern Turkey for decades. Turkish President Tayyip Erdogan said he would extend the operation to Manbij, a separate Kurdish-held enclave some 100 km (60 miles) east of Afrin, possibly putting U.S. forces there at risk and threatening U.S. plans to stabilize a swath of Syria.

Speaking with Erdogan by telephone, Trump became the latest U.S. official to try to rein in the offensive and to pointedly flag the risk of the two allies’ forces coming into conflict. “He urged Turkey to deescalate, limit its military actions, and avoid civilian casualties,” a White House statement said. “He urged Turkey to exercise caution and to avoid any actions that might risk conflict between Turkish and American forces.” The United States has around 2,000 troops in Syria. However, a Turkish source said the White House statement did not accurately reflect the content of their phone call. “President Trump did not share any ‘concerns about escalating violence’ with regard to the ongoing military operation in Afrin,” the source said, referring to one comment in the White House summary of their conversation.

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Get him out of there, to a safe place. Get him treatment. A society that persecutes its smartest and bravest cannot succeed.

We Examined Julian Assange, And He Badly Needs Care – But He Can’t Get It (G.)

Julian Assange, the founder of WikiLeaks, has not stepped outside the heavily surveilled confines of the Ecuadorian embassy in London since he entered the building almost six years ago. Naturally, much of the media attention has focused on his international legal drama and threats to his safety, including arrest and possible extradition to the US. In contrast, ongoing violations of his human rights, including his fundamental right to healthcare in the context of his unusual confinement, have received less coverage. As clinicians with a combined experience of four decades caring for and about refugees and other traumatised populations, we recently spent 20 hours, over three days, performing a comprehensive physical and psychological evaluation of Mr Assange.

While the results of the evaluation are protected by doctor-patient confidentiality, it is our professional opinion that his continued confinement is dangerous physically and mentally to him, and a clear infringement of his human right to healthcare. Packing a stethoscope and blood pressure cuff, and after being conspicuously photographed entering the embassy, we performed our examinations in a poorly ventilated conference room. The reason for examining Mr Assange in these conditions is that he has no access to proper medical facilities. Although it is possible for clinicians to visit him in the embassy, most doctors are reluctant to do so. Even for those who will see him, their capacity to provide care is limited. At the embassy, there are none of the diagnostic tests, treatments and procedures that we have concluded he needs urgently.

As clinicians, it is our ethical duty to advocate for the health and human rights of all people as promised under international law, and to call on our colleagues to hold our professional societies, institutions and governments accountable. In 2012, Ecuador, in accordance with its right as a sovereign state, formally determined that Mr Assange meets the requirements enshrined by the 1951 convention and 1967 protocol relating to the status of refugees. Regardless of the allegations against Mr Assange, he remains a citizen of Australia and a refugee, and, as the Guardian reported last week, he is now also a citizen of Ecuador.

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Trump should support Assange vs their common enemy.

Washington Post, Legacy Press Betray Assange (DisM)

At this juncture, it bears reminding that Jeff Bezos, the current owner of the Washington Post, has a $600 million contract with the CIA in relation to his monolithic company Amazon. The Nation wrote in 2013: “Amazon, under the Post’s new owner, Jeff Bezos, recently secured a $600 million contract from the CIA. That’s at least twice what Bezos paid for the Post this year. Bezos recently disclosed that the company’s Web-services business is building a “private cloud” for the CIA to use for its data needs. Critics charge that, at a minimum, the Post needs to disclose its CIA link whenever it reports on the agency. Over 15,000 have signed the petition this week hosted by RootsAction.” The Nation’s coverage of the CIA’s contract with Amazon has since been removed from their web page for unknown reasons, but is available through archive services.

When discussing The Washington Post’s exercise in gaslighting, it is important to keep the outlet’s well-documented financial connection with the CIA through Bezos in mind. In so doing, it is also pertinent to note that the CIA has made its hatred for Assange very clear, especially over the course of the last year. CIA Director Mike Pompeo put the agency’s hatred for Wikileaks were on full display as recently as yesterday, when the CIA Director lambasted the journalistic organization as a threat on par with Al Qaeda. Pompeo said of Al Qaeda and Wikileaks: “They don’t have a flag at the UN, but they represent real threats to the United States of America.” That a group who publishes information that is inconvenient for the CIA would be likened to a terrorist network speaks to the threat which Wikileaks represents not to the safety of the American public, but to the plutocratic class and the American deep state.

Pompeo is well known for his previous reference to Wikileaks as a “non-state hostile intelligence service.” The Hill wrote of the incident: “In his first major public appearance since taking the top intelligence post in the Trump administration, Pompeo took aim at WikiLeaks founder Julian Assange and former National Security Agency (NSA) contractor Edward Snowden…” The Hill also cited Pompeo’s characterization of Assange as a: “fraud, a coward hiding behind a screen.” Pompeo’s vitriolic characterization of Wikileaks is helpful, because it demonstrates that the CIA’s response to Wikileaks is on par with the force with which terrorist organizations like Al Qaeda are pursued. In that light, the magnitude of the threat faced by Assange and Wikileaks associates cannot be over-estimated. Pompeo’s words are not only absurd in light of Wikileaks being an extremely accurate journalistic organization, but also depict the real impetus behind Assange having been trapped in the Ecuadorian embassy for years.

The CIA Director’s statements, even taken at face value, completely undercut the manipulative coverage of Wikileaks and Assange by outlets like the Washington Post. That providing evidence of corruption is considered an existential threat by the establishment is indicative of the value of Wikileaks to the public. The publisher is only a threat to those whose lies are exposed by their publications. The same plutocracy that has aggressively targeted Assange and Wikileaks has progressively strangled free press and freedom of thought in the United States and the world for decades.

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The zenith of EU cruelty: starve a gutted economy of investment. It’s how you guarantee it can’t ever recover.

Greece Pays A Heavy Price For Its Primary Surplus (K.)

Greece ended 2017 with a revenue shortfall of 719 million euros that was covered by the failure to implement budgeted investments of 1.57 billion euros, leading to a primary surplus of 1.94 billion euros. At the same time Greek taxpayers piled up more arrears to the state, with December witnessing an increase in the creation of new debts. The definitive data of the budget’s execution last year, issued on Wednesday by the Finance Ministry, showed that the primary surplus was far above the target, exceeding it by some 877 million euros. Public Investments Program spending was 800 million euros below target, depriving the economy of much-needed cash just as it is trying to recover.

The shortfall was particularly evident on the program’s EU co-funded side, which missed the target by 1.127 billion euros, while the national part of the program showed a 327-million-euro increase in investment. It is therefore no surprise that the economy is now seen to have grown by an even smaller rate than the revised estimate included in the 2018 budget. The 1.941-billion-euro primary surplus, if confirmed by Eurostat in April, will be added to the so-called cash buffer to be created ahead of the conclusion of the bailout program. The non-execution of public investments co-funded by the EU also had an impact on budget revenues, as inflows from Brussels were 1.213 billion euros short of the target.

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Those that have jobs, that is.

Greeks Work Longest Hours in Europe (GR)

Greeks work the longest hours in Europe, while Germans clock the least hours, new data by the OECD reveal. The OECD includes 35 developed countries and some developing nations. The data were presented during the World Economic Forum in Davos, Switzerland. Mexicans are shown to be the hardest workers in the world, as the average Mexican spends 2,255 hours working per year, the equivalent of around 43 hours per week. In Europe, Greeks work the longest hours, averaging 2,035 hours per year. Germans, on the other hand, work the least in Europe and the world, averaging only 1,363 hours per year. The differences between countries has to do with differences in work cultures, the OECD says.

For instance, Mexicans work the most hours because they have a fear of unemployment, while lax labor rules allow employers to break a 48-hour-week law. However, although South Koreans come third in hours worked per year, employees there aim to boost economic growth. The Japanese, who are stereotyped as working very long hours, in fact put in only 1,713 hours per year, below the OECD average. An important factor regarding hours of work is the level of productivity. According to the study, Germans work the least hours but manage to maintain high productivity levels. The average German worker is reported to be 27% more productive than their British counterparts who work 1,676 hours per year. The Dutch, French and Danes also work fewer than 1,500 hours per year on average, while Americans average 1,783 work hours per year.

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The easiest problem to solve, isn’t. So what hope is there then? If you must have plastic, and you rarely do really, make it compostable, edible. By next year, not 20-30 years from now.

Each EU Citizen Creates 31kg Of Plastic-Waste Per Year (Stat.)

Plastic packaging waste is a huge problem around the world. Despite efforts in some European countries such as plastic bottle deposit schemes or having to pay for plastic bags in the supermarket, Statista’s Martin Armstrong notes that the average EU citizen creates 31kg of plastic waste per year. Eurostat figures show that the UK lies above this average, with its citizens responsible for 35kg of waste. The worst country by a long way though is Ireland. 61kg of packaging is thrown away by the average Irish person, 9kg more than the second most prolific country, Luxembourg. The least is created in Bulgaria where a more acceptable 14kg is disposed of over the year.

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Jan 242018
 
 January 24, 2018  Posted by at 3:59 pm Finance Tagged with: , , , , , , , , , , , ,  11 Responses »
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Rembrandt van Rijn The Storm on the Sea of Galilee 1633
On March 18, 1990, the painting was stolen by thieves disguised as police officers. They broke into the Isabella Stewart Gardener Museum in Boston, MA, and stole this painting, along with 12 other works. The paintings have never been recovered, and it is considered the biggest art theft in history. The empty frames still hang in their original location.

 

 

This is an article written by Dr. D, who last month wrote a series at the Automatic Earth entitled Bitcoin Doesn’t Exist.

It shouldn’t surprise you that bitcoin plays a cameo in his Modest -but actually quite grand- Plan as well.

 

 

Dr. D: With all the talk about the bubble market, people are once again saying Donald Trump is a fool, he should never have taken credit for a Dow that’s about to collapse. In addition, how does he think he can get away with claiming we have a great economy made greater? He said in the election the economy was terrible and the Dow was a bubble, that’s why he won.

But hold on: you have to remember, they’re politicians; they may be dishonest but they’re not stupid. Let’s try a scenario to see what they’re thinking:

We have a situation in the U.S. where 100 million people are out of the workforce, the real economy is on life-support, debt is crushing, and monetary velocity is at an all-time low. The Fed’s every effort at market-rigging, lowering rates and pumping in money, bailing out the banks and giving unearned interest for Fed deposits have run up both the housing market and the stock market, neither of which is their legal mandate. If either one goes higher, they’ll pop as workers, particularly millennials, have no income to buy houses, and stocks are levitating on just 5 insider-paid FAANG stocks.

It’s untenable. However, if either falls, the collateral that upholds the whole system will fail, margins will be called, the housing market will fall, and there will be an instant Depression… You know, more than the 100 million out of work Depression we already have. A Depression that makes Congressmen and government workers lose their profits and 401k’s instead of just turning students to open prostitution, and mass opioid death, and starving people in Oklahoma – you know, a Depression that finally hurts someone who matters.

Since this is self-evident and unsustainable, isn’t Trump just stepping in it by pushing all the same policies as Obama? Not necessarily. Look at what matters to him. A tax plan, and barely, not one he liked, but look at what he settled for: return of foreign profits abroad. Why? Large as it is – and it’s already creating long-withheld bonuses – that’s not enough to turn the dial. But that’s a card he wanted. Tax policy and a high stock market. What else?

Well, we have a crippling high debt, easily 100% even 200% of GDP. With that weight, nothing can move, no way to win. Pensions also are nearly dead, along with insurance companies; the high Dow is all that’s saving them from bankruptcy. What else? Well he was interested in health reform but was willing to let it remain for now. He wrote deferrals but not pardons for 5 banks showing he’d like to keep them functioning for the moment. He wanted to increase the military.

Certainly the only other promise was to create jobs and economies again, in a way saying the few protected industries: Finance, Health Care, and Military would have to become a smaller % of GDP, so those dollars could be returned back to Main Street. But we just said those three aren’t happening.

So. What if instead of pulling money from intractable lobbying groups he got new investment money from abroad? We saw this initially with Carrier and Ford and more recently with Japan. But it’s not enough and he knows all this; they all do. How do you solve the problem? How do you get more?

Calling all 1st year econ students: how do you attract capital to your country? With higher rates. As the US 10-year breaks out above 2.6% you’d have to think that’s attractive. Attractive investing in a bankrupt nation that’s barely moving? It does if you’re a company that must maintain legal investment ratios and you’re getting 0% in Japan, and negative rates in Europe, both with economies as bad or worse.

But aren’t rising rates bad? The Fed model raises rates to clamp down on the economy. Money will leave the stock market and go to bonds. Housing prices will fall as the monthly cost increases. Cats and Dogs living together….except it isn’t true.

 

Let’s go down the list:

 

1. Trump starts with plausible seed corn, a billboard sign: a tax cut and a few trillion overseas to start economic motion.

2. If the Fed raises rates, that will draw in trillions of world capital Trump wants, enough to turn the dial and really matter.

3. Enough money flowing into the U.S. will create demand for the US$, and the US$ will rise. This part has to work. Be flashy, attract attention. Go big or go home.

4. The US$ rising will attract foreign buyers into U.S. investment and together the stock market will counterintuitively rise.

5. The Fed will detect overheating and raise rates again and again in a reinforcing cycle, drawing capital to only the U.S. and suffocating the world.

6. The massive investment re-industrializes the U.S. to some extent while the high US$ gives some relief to Main Street.

7. Foreign buying, better jobs, and low exchange rates hold off the housing collapse, while all the mortgage bonds are also sold overseas.

8. Emerging markets are hammered by the high US$ and fail, driving ever-more capital to safe havens like the US.

9. Ultimately, the U.S. does what all reserve currencies do and fails LAST.

 

See why they think they can get away with this? The U.S. can still ravage the world, and Trump can, in fact, call it his “success.” …Just like all the Presidents since Nixon.

But this is history, and it never ends there.

 

10. The whole world, strangled by the US and its dollar have no choice but to reject the US system entirely in private contracts and move to an alternative.

11. We now have at least three alternatives: the CIPS/Yuan banking bloc, gold, and cryptocurrencies. They aren’t exclusive: the most likely outcome is a gold-backed trading note priced in Yuan on a blockchain, perhaps in the Shanghai Exchange.

12. Being entirely too high the US$ ultimately cripples the U.S. as well, but the alternative currency the world creates becomes the lifeboat to escape. Let’s be simple and say it’s Bitcoin (it won’t be): Bitcoin hits John McAfee’s $1 million. What do you call it when a currency rapidly becomes worth 1/10th, 1/100th, 1/1,000,000th of the standard? Isn’t that hyperinflation?

13. The U.S., like every nation since Adam Smith, defaults on its $20T in $ debt – and all its internal consumer, corporate, and pension debt – using “hyperinflation” of the dollar. New twist is that, instead of gold, it hyperinflates vs. cryptos or the new world exchange standard as planned in 1971 and publicized in 1988.

14. The reset occurs, no one dies (in the U.S.), supply chains are maintained, oil flows, and the economy stops being a feral, diabolical means of theft and control and returns to being a fair, voluntary exchange. For now.

 

That’s not to say they’ll succeed, but this is why they think they can go this way and win at it. What does the Trump world look like?

 

1. Stock market rose, like he said.

2. Manufacturing returns, reindustrializing a hollow nation and allowing the country to catch up to the stock prices, like he said.

3. Unemployment drops, like he said.

4. Crime is reduced and the cities are improved, like he said.

5. This helps win the black vote, snatching the rest of the Democratic base and locking them out for years, like Bannon said.

6. Economic growth normalizes the banking/medical oversize, like he wanted.

7. Free, untracked money for bribes and illegal cover end and law and order returns with fair exchange, like he said.

8. The U.S. is unwelcome overseas, and the breaking of bonds re-sets the multipolar world, where the U.S. is just one trading nation among many, like he said.

9. Without the money of empire the military returns home, like he said.

10. The world is pretty mad at us and that renewed military came in handy. That’s okay, they’ll be consoled that the economy now works and the U.S. can no longer start wars and act terribly.

 

What does the world look like after? A lot more like it was before 1945. You know, back when we were great and before we got terrible.

Again, not to say this WILL happen, but you can see that it CAN happen, and they are now in control of most of the levers required. From their rhetoric, you can see the glass darkly that this is what they find a priority, a possibility, and therefore a doorway out. In addition, downsizing and re-establishing honesty will not allow their opponents to wiggle out and reverse it.

Why wasn’t this done before? My guess is that a) previous planners thought with a little more effort they could take over the world, as seen in the Arab Spring plan that would culminate in the capture of Iran, the only remaining oilfields on the planet, and b) given the world’s first entirely fiat financial system, it was too complex and disruptive to return to a gold standard.

Without a lighting fast crypto base, banking and trade would fail and millions would die. Only when the one was burned out and the other made available could this move be attempted. Watch and see.

 

 

Jan 242018
 
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Horacio Coppola Florida, Buenos Aires 1936

 

Rising Rates and Decelerating Deficits Spell Doom For US Housing -Again (CH)
Global Pension Ponzi – Carillion Collapse One Of Many To Come (GCore)
South Korea Bans Anonymous Cryptocurrency Trading (BI)
South Korea Is Banning All Foreigners From Trading Cryptocurrency (F.)
Mueller Wants To Question Trump On Comey, Flynn Firings (ZH)
Sessions, Comey Questioned By Mueller In Russia Probe (ZH)
Evidence Suggests A Massive Scandal Is Brewing At The FBI (NYPost)
Behind the Money Curtain: Taxes, Spending and Modern Monetary Theory (CP)
Turkey Lodges Third Extradition Request For Eight Servicemen in Greece (K.)
German Politicians Decry Arms Sales To Turkey Amid Attack On Syrian Kurds (RT)
Nearly Half Of Children In London, Birmingham Live In Poverty (Ind.)
UK Opposes Strong EU Recycling Targets Despite Plastics Pledge (G.)
Monsanto Faces A Fight For Soy Market (R.)
Number Of New Antibiotics Has Fallen Sharply Since 2000 (G.)

 

 

Chris Hamilton tends to get stuck in a multitude of data and graphs. Bit of a shame. Sometimes it’s about what you leave out.

But point taken: Demographics, Housing and Debt.

Rising Rates and Decelerating Deficits Spell Doom For US Housing -Again (CH)

I recently wrote an article explaining why a 30% to 50% decline in household net worth is imminent (HERE). No shocker that the primary asset for most in figuring household net worth is real estate, particularly primary residences. This article details why US housing starts and job creation are set to decelerate and a recession will almost surely follow… sending home prices tumbling (and likely equity and bond prices, to boot) severely negatively impacting US households net worth’s. First, the year over year change in housing starts (one unit variety) is highly indicative of the subsequent change (in 12 to 18 months) of full time employees (chart below…year over year change in full time employees blue shaded area) vs. YoY change in housing starts (red line)). As goes housing, so goes subsequent jobs creation.

[..] If you think interest rate changes and housing creation look interdependent…you’re right (chart below).

Again, total annual total population growth, 0-65yr/old population growth, housing starts (1-unit)…but this time including annual change in full time employees.

I believe the interest rate hikes and decelerating deficits will slow housing and jobs creation…but even if I’m wrong, there is still trouble dead ahead as the US is simply running out of employable persons as the percentage of employed 15-64yr/olds is nearing all time highs (also known as potential homebuyers).

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Pensions problems are literally everywhere. But they come to light only when companies themselves collapse first.

Global Pension Ponzi – Carillion Collapse One Of Many To Come (GCore)

The looming pension crisis has been signalled in the collapse of Carillion. The deficit of latest private sector dead-on-arrival Carillion is officially £580 million. However, private reports suggest it could be as high as £2.6 BILLION. According to a Sky News investigation: ‘the £2.6 billion figure relates to the cost to Carillion of paying an insurance company to guarantee all of its pension liabilities, and is significant because it is likely to be the sum claimed on behalf of the pension schemes as part of the liquidation process.’ Nearly 30,000 UK workers’ pensions are at risk thanks to Carillion management’s total mismanagement of a company that has seen its share price collapse 94% in the last 12 months. Carillion’s 27,500-member pension scheme was placed on an ‘at risk list’ in autumn 2017. Arguably, it like many other pension funds should have been there many months ago.

Sadly, Carillion is just the latest in a very long string of serious company collapses that have highlighted the major pension crisis in the UK and around the Western world. It also likely signals that we may be on the verge of many, many more very large corporate bankruptcies in the UK due to massive debt levels and unfunded liabilities. This is not a situation unique to the private sector. It will be repeated in the years ahead – both in the public and the private sector. In November 2017, the OECD warned that the UK’s defined benefit workplace pension plans (final salary schemes) as ‘persistently underfunded’ and the state pension as seriously lacking. Everyone is exposed by this and it emphasises the importance of saving for retirement and ensuring your pension is both funded and properly diversified. These ongoing disasters in the UK’s pension pots are also a threat to the efforts of prudent individuals who have worked hard to set aside enough for their hard-earned retirements.

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This will be copied across the world.

South Korea Bans Anonymous Cryptocurrency Trading (BI)

South Korea has made moves to ban anonymous cryptocurrency accounts from being used for financial transactions. Financial authorities have already banned banks from offering virtual accounts that are needed to buy or sell cryptocurrency. New regulations set for next week will further the ban already in place by introducing a system to verify a person’s identity before they can make a transaction. Planned regulation also prevents foreigners and underage investors from opening cryptocurrency accounts in South Korea, Yonhap reported, citing financial officials. South Korea’s senior financial regulator Kim Yong-beom told reporters that six South Korean banks will begin issuing new trading accounts next week after the system is implemented. Those banks include Shinhan Bank, NH Bank and the Industrial Bank of Korea.

Existing crypto bank accounts not linked to verified users will be banned on the same day, Kim said. Officials also announced on Sunday that cryptocurrency traders would be required to share user data with the banks, according to Yonhap. Newly proposed regulations would require banks to check whether cryptocurrency exchanges comply with the new transparency measures. The government will also be able to access users’ transaction data through compliant banks, according to officials, which may point to the government looking to enforce taxes on cryptocurrency transactions. Stricter trading regulations are part of a government system to curb speculative investment into virtual money, as many fear that the cryptocurrency bubble may soon burst. The government also hopes to prevent the use of cryptocurrency in illegal activity.

Read more …

“Kang noted a loophole. In the new system, foreigners and minors can’t possibly make investments as it operates on a bank’s real-name account, but they could potentially use corporate accounts to make additional investments. “There’s no limit to that for now. We haven’t come up with measures to ban that as there is no actual way to do so,” he said.”

South Korea Is Banning All Foreigners From Trading Cryptocurrency (F.)

The system aims to tackle money laundering and related crimes, along with speculation-driven overheating in the market, Kang Young-soo, head of the FSC’s cryptocurrency response team, said by phone on Tuesday after the announcement. “The government is concerned about manipulation of market conditions and injection of illegal funds while market funds are leaked into speculative investments,” he added. “We view that foreigners’ and minors’ investments contribute to our areas of concern.” All foreigners, including residents, nonresidents and “kyopo” ethnic Koreans with foreign citizenship, will be banned from trading cryptocurrencies in Korea, the FSC’s foreign media department said by email. Minors are banned after Prime Minister Lee Nak-yeon earlier claim the cryptocurrency craze could lead the youth toward crime.

The government first suggested last month to ban minors and nonresident foreigners. But the final decision nets all foreigners regardless of resident status. “If they’re not Korean citizens, then they can invest in exchanges provided in their countries. Why do they have to invest in ours?” Kang quipped. [..] “The government is creating boundaries for instances of foreigners injecting in coins into the country and a phenomenon of more Bitcoins and other cryptocurrency circulating within the Korean market,” says Kim Jin-hwa, corepresentative of the Korea Blockchain Association, which has about 30 member companies including several exchanges. “With the current conditions of our market, higher supply would equate to higher speculation.”

The targets of the latest regulation, says blockchain startup BlockchainOS Choi Yong-kwan, are Chinese investors who have flooded the cryptocurrency market since their country banned cryptocurrency trade last year. Digital coins from China enter Korean exchanges, then are illegally changed into foreign currencies, which are sent back to China, he explained. “These cases are surprisingly high, and difficult to track or identify. This measure can be viewed as a response to ban these illegal activities,” he said by phone, but suggested the ban would have little effect on existing investors. “The biggest problem lies on Chinese cryptocurrency investors, so this matter is an important focus.”

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Trump can simply say NO. But he probably won’t.

Mueller Wants To Question Trump On Comey, Flynn Firings (ZH)

Following the news earlier this month that special counsel Mueller is seeking to question President Trump – and following today’s NYT report that Mueller had interviewed AG Jeff Sessions – moments ago the Washington Post reported that Mueller wants to question Trump over his decision to fire former FBI Director James Comey and the departure of former national security adviser Michael Flynn from the White House. According to two WaPo sources, Trump’s legal team could present conditions for Trump to interview with Mueller’s investigators as soon as next week. The Post also adds that Trump’s lawyers hope to have Trump answer some of Mueller’s questions in an in-person interview and some in writing.

Within the past two weeks, the special counsel’s office has indicated to the White House that the two central subjects that investigators wish to discuss with the president are the departures of Flynn and Comey and the events surrounding their firings. Mueller has also reportedly expressed interest in Trump’s efforts to remove Jeff Sessions as attorney general or pressure him into quitting, “according to a person familiar with the probe who said the special counsel was seeking to determine whether there was a “pattern” of behavior by the president.” Earlier this month, Trump declined to say whether he would grant an interview to Mueller and his team, deflecting questions on the topic by saying there had been “no collusion” between his campaign and Russia during the 2016 presidential election.

“We’ll see what happens,” Trump said when asked directly about meeting with the special counsel. While Trump has told has allegedly told his lawyers that he is not worried about a face to face meeting with the special counsel, some of Trump’s close advisers and friends fear a face-to-face interview with Mueller could put the president in legal jeopardy. A central worry, they say, is Trump’s lack of precision in his speech and his penchant for hyperbole. Roger Stone, a longtime informal adviser to Trump, said he should try to avoid an interview at all costs, saying agreeing to such a session would be a “suicide mission.” “I find it to be a death wish. Why would you walk into a perjury trap?” Stone said. “The president would be very poorly advised to give Mueller an interview”, Stone said.

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I googled Sessions. All articles on this are from WaPo, NYT, CNN etc. Where is the balance?

Sessions, Comey Questioned By Mueller In Russia Probe (ZH)

The leaks from the special counsel’s office just keep coming. After reporting earlier today that AG Jeff Sessions sat for an interview with Mueller last week, the paper is now reporting that Mueller interviewed former FBI Director James Comey last year. The interview with Comey focused on the infamous memo he wrote where he alleged that Trump had asked him to take it easy on Michael Flynn. Many of the special counsel’s critics have warned that Mueller should recuse himself from all dealings with Comey, who is believed to be a key witness in the probe. Comey and Mueller have a long history of working together, and also share a personal friendship, having vacationed together. A spokeswoman for Sessions confirmed that he had appeared before the committee. Circling back to Sessions, the NYT pointed out that Sessions is perhaps one of the most important witnesses to be interviewed by Mueller.

For Mr. Mueller, Mr. Sessions is a key witness to two of the major issues he is investigating: the campaign’s possible ties to the Russians and whether the president tried to obstruct the Russia investigation. Mr. Mueller can question Mr. Sessions about his role as the head of the campaign’s foreign policy team. Mr. Sessions was involved in developing Mr. Trump’s position toward Russia and met with Russian officials, including the ambassador. Along with Mr. Trump, Mr. Sessions led a March 2016 meeting at the Trump International Hotel in Washington, where one of the campaign’s foreign policy advisers, George Papadopoulos, pitched the idea of a personal meeting between Mr. Trump and Mr. Putin. Mr. Papadopoulos plead guilty in October to lying to federal authorities about the nature of his contacts with the Russians and agreed to cooperate with the special counsel’s office.

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The FBI is confident it won’t be investigated. There’s no-one to do it.

Evidence Suggests A Massive Scandal Is Brewing At The FBI (NYPost)

During the financial crisis, the federal government bailed out banks it declared “too big to fail.” Fearing their bankruptcy might trigger economic Armageddon, the feds propped them up with taxpayer cash. Something similar is happening now at the FBI, with the Washington wagons circling the agency to protect it from charges of corruption. This time, the appropriate tag line is “too big to believe.” Yet each day brings credible reports suggesting there is a massive scandal involving the top ranks of America’s premier law enforcement agency. The reports, which feature talk among agents of a “secret society” and suddenly missing text messages, point to the existence both of a cabal dedicated to defeating Donald Trump in 2016 and of a plan to let Hillary Clinton skate free in the classified email probe.

If either one is true -and I believe both probably are- it would mean FBI leaders betrayed the nation by abusing their powers in a bid to pick the president. More support for this view involves the FBI’s use of the Russian dossier on Trump that was paid for by the Clinton campaign and the Democratic National Committee. It is almost certain that the FBI used the dossier to get FISA court warrants to spy on Trump associates, meaning it used the opposition research of the party in power to convince a court to let it spy on the candidate of the other party – likely without telling the court of the dossier’s political link. Even worse, there is growing reason to believe someone in President Barack Obama’s administration turned over classified information about Trump to the Clinton campaign. As one former federal prosecutor put it, “It doesn’t get worse than that.” Joseph diGenova, believes Trump was correct when he claimed Obama aides wiretapped his phones at Trump Tower.

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Quite literally nobody seems to understand that governments are not households.

Behind the Money Curtain: Taxes, Spending and Modern Monetary Theory (CP)

Taxes do not fund government spending. That’s a core insight of Modern Monetary Theory (MMT) whose radical implications have not been understood very well by the left. Indeed, it’s not well understood at all, and most people who have heard or read it somewhere breeze right past it, and fall back to the taxes-for-spending paradigm that is the sticky common wisdom of the left and right. This, despite the fact that the truth of the proposition is obvious if you think through just a few steps about the process of money-creation. What makes it hard to see is the dense knot of conventional theory and discourse in which we are entangled, and which seems impossible to cut as cleanly as MMT suggests.

But the discussion around the newly-enacted Republican tax bill has brought the issue of tax policy to the forefront again, and it’s time for the left to realize how fundamentally wrong that common wisdom is, and how continuing to argue within the phony terms of the taxes-for-revenue paradigm occludes and reproduces a persistent reactionary fiction regarding what taxes are for. The argument of the common-wisdom economic paradigm is that the government must collect taxes (or borrow money—we’ll get to that) to spend on whatever programs it wants to fund. In this paradigm, the government extracts money from an external, economically prior source, and uses it to pay for government programs. For both the left and the right in this paradigm, taxes are for funding government spending: money first flows into the government through taxes collected, and is then spent into economy in various programs and purchases.

The arguments that ensue are over how much money to collect in taxes, from which sources, and which government programs to fund with the money collected. Most leftists take their stance within this paradigm. Bernie Sanders, for instance, says his Medicare-for-all plan would “raise revenue” from various taxes such as income and capital gains, and from limiting “deductions for the rich.” Dean Baker suggests a 4% increase in payroll taxes to “fully fund” Social Security and Medicare. These kinds of analyses, typical of the left, make points that are helpful in immediate political fights, and they’re also grounded in the conventional paradigm about, money, taxes, and government spending. That paradigm not only informs most thinking—whether conservative, liberal, or left-radical—about money in our society, it also informs the legal and institutional policy framework. It’s the paradigm of the household.

We’re comfortable with the household paradigm because it reflects everyday reality. The household has to get money from somewhere to spend it. It’s obvious. But, also obvious, the household (or business or state) does not create money. That teensy little huge fact makes the household-government finance analogy wrong and wildly misleading. Unless we take that fact as of no significance—And how could we?—we need another paradigm. Analyses and critiques—no matter how radical—of government financing as if it worked like household financing are based on false premises, and false premises lead down meandering dead-end paths to wrong conclusions. We have to reject the household analogy whenever it comes up from any source, including our own minds, where it will sneak in. Most leftists, I’m afraid, do end up assuming it, and ignoring the huge little fact that it cannot be right.

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Governments rejecting Supreme Court decisions. Well, perhaps in Turkey that’s the rule.

Turkey Lodges Third Extradition Request For Eight Servicemen in Greece (K.)

Ankara on Tuesday lodged a third request for the extradition of the eight Turkish servicemen who fled to Greece in July 2016 following a failed coup in the neighboring country, sources said. The request by Ankara was lodged just a few hours after Greek Justice Minister Stavros Kontonis received in Athens a delegation from the Turkish Justice Ministry where, according to sources, the Turkish officials underlined Turkey’s insistence on the return of the eight men who are accused of treason. The same sources indicate that Ankara has included new claims about the servicemen in its third request for their extradition.

Speaking after a meeting with Turkey’s Deputy Justice Minister Bilal Ucar in Athens, Kontonis said that the eight could not be send back given that the country’s Supreme Court has rejected the original extradition request. Kontonis said the ruling was “fully respected by everyone and the Greek government.” However, he said, a proposal to try them in Athens was still on the table, adding that it would be up to Ankara “to take the appropriate legal steps.”

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German weapons fight US allies.

German Politicians Decry Arms Sales To Turkey Amid Attack On Syrian Kurds (RT)

German politicians have widely opposed plans to provide Turkey with tank modernization upgrades after Leopard 2 combat vehicles were spotted taking part in the military operation against the Kurds in Syria’s Afrin. Amid rumors of potential resumption of arms sales to Turkey, German opposition parties, the Greens and the Left, urged the government to reconsider such deals with Ankara, pointing out that German weapons are now killing innocent people in Syria. “An immediate halt to all arms exports to Turkey is long overdue,” Agnieszka Brugger, a Greens lawmaker told the Heilbronner Stimme newspaper. “This intense situation should be a wake-up call for the German government.”

Since the 1980s Germany has sold Turkey some 751 Leopard tanks, including 354 modern Leopard 2 type, which has been previously used by Turkey an a cross border operation against Islamic State (IS, formerly ISIS/ISIL) terrorists and US-supported Kurdish militias in Syria. Throughout its military campaign in the neighboring country, Turkey lost a number of 60-ton Leopard 2 tanks, built by Bavaria’s Krauss-Maffei, due to mine explosions. Ankara has recently pressed Berlin and German arms companies to retrofit the hardware to offer better protection against enemy mines. The tanks used by Turkey come from decommissioned stocks of the Bundeswehr. The frontal armor on the hull and turret on the Leopard 2 is much thicker than on the sides and rear of the tracked vehicle.

[..] The massive outcry from the German politicians was caused by the publication of pictures which allegedly showed German tanks used against the Kurds in Syria. An expert from the Bundeswehr confirmed to the German Press Agency in Berlin on Monday that pictures, distributed by the state-owned Anadolu Turkish news agency, showed Leopard 2 A4 tanks of German production. [..] “Angela Merkel must explain her Turkey policy,” said Jan Korte, an MP from the Left. He noted that German soldiers are directly involved in the war of aggression against the Kurds by flying Boeing E-3A Airborne Warning & Control System (AWACS) aircraft missions and not doing anything to stop the bloodshed on the ground.

Free Democratic Party (FDP) MP Graf Alexander Lambsdorff also expressed sharp criticism of the Turkish action against the Kurds in Syria. “This invasion is not legitimized by international law. There is no mandate from the United Nations and it is not self-defense. All states should call on Turkey to end the campaign and ask them to work on a political solution instead.”

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When seeing stats like this, one must fear for what is yet to come in Britain.

Nearly Half Of Children In London, Birmingham Live In Poverty (Ind.)

Almost half of all children in some UK cities are estimated to be living in poverty, new figures reveal, amid warnings that welfare reforms are leading to an “emerging child poverty crisis”. An analysis of data indicates the most deprived areas in the country have experienced the biggest increases in child poverty over the past two years, with parts of London and Birmingham seeing levels rise by 10 percentage points to above half of all children. The “shocking” figures have been attributed to the benefit freeze – which has been in place since 2015 and leaves children’s benefits frozen until the end of the decade – as well as the high cost of credit for low income families, leaving many “spiralling into debt”.

A report by the independent Joseph Rowntree Foundation (JRF) last month found that Britain’s record on tackling poverty had reached a turning point and was at risk of unravelling, with nearly 400,000 more children and 300,000 more pensioners living in poverty than five years ago. The JRF stated that while poverty levels fell in the years to 2011-12, changes to welfare policy – especially since the 2015 Budget – saw the numbers creep up again. Their report showed a total of 14 million people in the UK currently live in poverty – more than one in five of the population.

Now the latest figures, collated by the End Child Poverty coalition through analysis of tax credit data and national trends in worklessness, estimate that child poverty in Manchester and Birmingham stands at 44% and 43% respectively. In the London borough of Tower Hamlets this reaches 53%. [..] A child is said to live in poverty if they are in a family living on less than 60 per cent of median household income. According to the latest official statistics, 60 per cent of median income, after housing costs, was around £248 per week.

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EU targets are for 2035. Ergo, they are not ‘strong’. They’re just as bad and weak as the UK 2042 targets. Don’t be fooled.

UK Opposes Strong EU Recycling Targets Despite Plastics Pledge (G.)

The UK government is opposing strong new recycling targets across the EU despite its recent pledge to develop “ambitious new future targets and milestones”, confidential documents have revealed. A 25-year environment plan was launched earlier in January by the prime minister, Theresa May, who particularly focused on cutting plastic pollution. The plan, aimed partly at wooing younger voters, says “recycling plastics is critical”. A target to recycle 65% of urban waste by 2035 was agreed by the European council and parliament in December and now awaits a vote of approval by member states. But the UK’s opposition is revealed in a record of a subsequent briefing for EU ambassadors, obtained by Greenpeace’s Unearthed team and seen by the Guardian. “The UK cannot support a binding target of 65% for 2035,” said the record, compiled by officials from one member state and confirmed by others. Furthermore, the UK said its opposition meant it would not support the overall waste agreement.

The recycling target had already been watered down from the 70% by 2030 initially sought by the European parliament. The UK’s own environment officials estimated that meeting ambitious recycling targets would bring benefits totalling billions of pounds, according to a July 2017 internal presentation, also obtained by Greenpeace. It suggested a 65% target by 2030 would save almost £10bn over a decade in waste sector, greenhouse gas and social costs. “This Conservative government must be judged on what they do, not on what they say,” said Sue Hayman, shadow environment secretary. “It comes as no surprise that the government are trying to scupper progress on recycling behind the scenes. “Recycling rates have stagnated on this government’s watch and we are way behind meeting our national targets. [Environment secretary] Michael Gove needs to clarify the government’s position on this matter without delay.”

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Fighting GMO resistance with more GMO. A road to nowhere but mass starvation.

Monsanto Faces A Fight For Soy Market (R.)

Monsanto is facing major threats to its historic dominance of seed and herbicide technology for the $40 billion U.S. soybean market. Rivals BASF and DowDuPont are preparing to push their own varieties of genetically modified soybeans. At stake is control over seed supply for the next generation of farmers producing the most valuable U.S. agricultural export. The market has opened up as Monsanto’s Roundup Ready line of seeds – engineered to tolerate the weed killer glyphosate – has lost effectiveness as weeds develop their own tolerance to the chemical. Compounding the firm’s troubles is a national scandal over crop damage linked to its new soybean and herbicide pairing – Roundup Ready 2 Xtend seeds, engineered to resist the chemical dicamba.

The newly competitive sector has sown confusion across the U.S. farm belt, particularly among smaller firms that produce and sell seeds with technology licensed from the agrichemical giants. Many of these sellers told Reuters they are amassing a surplus of seeds with engineered traits from multiple developers – at substantial extra cost – because they can only guess which product farmers will buy. “Our job is to meet our customers’ needs, and we don’t know what those are going to be,” said Carl Peterson at Peterson Farms Seed. “I don’t think I’ve ever seen anything quite like this.” Monsanto has much to lose. Soybeans are the key ingredient in feed used to fatten the world’s cattle, pigs, chickens and fish. Net sales of Monsanto’s soybean seeds and traits totaled almost $2.7 billion in fiscal 2017, or about a fifth of its total net sales. Gross profits from soybean products climbed 35% over 2016, beating 15% growth of its bigger corn seed franchise.

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No, the solution is not more and new antibiotics. The solution is to stop using the present ones the way we do. It can be legislated by tomorrow morning.

Number Of New Antibiotics Has Fallen Sharply Since 2000 (G.)

The number of new antibiotics being developed has fallen sharply since 2000 and drugmakers need to do much more to tackle the rise of superbugs, according to a report. Britain’s biggest pharmaceutical company, GlaxoSmithKline, and its US rival Johnson & Johnson are leading efforts to combat antibiotic resistance, according to the report, which was presented at the World Economic Forum in Davos. The Netherlands-based Access to Medicine Foundation assessed 30 of the world’s biggest drugmakers, including pharma companies, biotech firms and generic drugmakers, and produced the first independent report on the industry’s efforts to address drug-resistant infections.

Overprescription of antibiotics, along with their overuse in animals, has caused growing drug resistance in humans with serious health implications – leading to the rise of superbugs such as MRSA that cannot be treated with existing antibiotics. England’s chief medical officer has repeatedly warned that antibiotic resistance could spell the “end of modern medicine”. Caesarean sections and cancer treatments would become very risky without the drugs used to fight infection. In Europe, an estimated 25,000 people a year die from antibiotic-resistant bacteria. In the US, at least 2m illnesses and 23,000 deaths a year can be attributed to antibiotic resistance, according to the foundation’s report.

New antibiotics are urgently needed but there is little incentive for drugmakers to develop them as they will be tightly controlled once they reach the market to limit the risk of resistance emerging. The number of new antibacterial drugs approved in the US dropped from 33 between 1985 and 1999 to 13 between 2000 and 2014. Jayasree Iyer, the head of the foundation, said: “If we don’t use antibiotics in the right doses or for the right bugs, we risk giving bacteria a chance to adapt and strengthen their defences, which will make it harder to kill them the next time. The threat that once-deadly infections could again become life-threatening is intensifying. “Pharmaceutical companies have a critical contribution to make to the effort to tackle superbugs.”

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Jan 212018
 
 January 21, 2018  Posted by at 11:09 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »
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Francisco Goya The Dog 1819-23

 

US Senate In Weekend Bid To End Shutdown Impasse (BBC)
Trump’s Trip To Davos Is Up In The Air Because Of The Shutdown (CNBC)
Republicans Have Four Easy Ways to #ReleaseTheMemo – and the Evidence (GG)
China Orders Banks To Stop Financing Cryptocurrencies (SCMP)
China Urges U.S. to Abandon ‘Cold War’ Mindset (BBG)
Britain’s Tired Old Economy Isn’t Strong Enough For Brexit (G.)
Macron: Bespoke Brexit Deal Possible If UK Accepts ‘Preconditions’ (G.)
Athens Hopeful For Eurogroup Decisions Despite Problems (K.)
In New Zealand, 100% Pure Is 100% Propaganda (Stuff)
Ain’t No Sunshine: Winter Is One Of Darkest Ever For Parts Of Europe (G.)
Turkey Threatens Refugee Deal With EU (K.)
15 Syrian Refugees Found Frozen To Death On Lebanon Border (BBC)

 

 

Let it go down; why maintain the illusion that the system functions?

US Senate In Weekend Bid To End Shutdown Impasse (BBC)

The US Senate is due back in session to try to end a budget impasse before the start of the working week when the shutdown of many federal services will be felt around the country. Hundreds of thousands of federal staff face the prospect of unpaid leave. On Saturday, recriminations flew around over the Senate’s failure to pass a new budget and prevent the shutdown. A bill to fund the federal government for the coming weeks did not receive the required 60 votes by Friday. The Republican leader of the US Senate, Mitch McConnell, has said there will be a vote at 01:00 in the early hours of Monday (06:00 GMT) on a bill to fund the government until 8 February. The last government shutdown was in 2013, and lasted for 16 days.

This is the first time a government shutdown has happened while one party, the Republicans, controls both Congress and the White House. The vote on Friday was 50-49, falling far short of the 60 needed to advance the bill. With a 51-seat majority in the Senate, the Republicans do not have enough votes to pass the bill without some support from the Democrats. They want funding for border security – including the border wall – and immigration reforms, as well as increased military spending. The Democrats have demanded protection from deportation of more than 700,000 undocumented immigrants who entered the US as children.

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No gloating.

Trump’s Trip To Davos Is Up In The Air Because Of The Shutdown (CNBC)

Donald Trump was set to be the first U.S. president to attend the World Economic Forum in Davos, Switzerland, in nearly two decades, but the government shutdown might have scrambled those plans. White House budget chief Mick Mulvaney said Saturday that Trump’s plans to travel to Davos next week are up in the air while Congress scrambles to strike a deal to fund the federal government. “We’re taking Davos, from the president’s perspective and the Cabinet’s perspective, on a day-by-day basis,” Mulvaney told reporters during an impromptu briefing. The government shut down at midnight Friday, after congressional negotiators failed to pass a budget.

Earlier in the day, Trump cancelled a planned trip to Florida, where he was scheduled to host a party at his private Mar-a-Lago club to mark the one year anniversary of his inauguration. Tickets for the Mar-a-Lago party begin at $100,000 per couple, and proceeds will benefit the Trump reelection campaign and the Republican National Committee. On Saturday, RNC staffers were busy setting up TV screens in the private club, so Trump could address the guests via satellite, according to CNN. The budget impasse showed no signs of letting up on Saturday, as both Democrats and Republicans dug their heels in, and each party blamed the other. The president is scheduled to depart for Switzerland on Wednesday, along with a delegation of more than a dozen Cabinet members, including Treasury Secretary Steven Mnuchin, and top White House aides.

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They have to release it, no choice.

Republicans Have Four Easy Ways to #ReleaseTheMemo – and the Evidence (GG)

One of the gravest and most damaging abuses of state power is to misuse surveillance authorities for political purposes. For that reason, The Intercept, from its inception, has focused extensively on these issues. We therefore regard as inherently serious strident warnings from public officials alleging that the FBI and Department of Justice have abused their spying power for political purposes. Social media last night and today have been flooded with inflammatory and quite dramatic claims now being made by congressional Republicans about a four-page memo alleging abuses of Foreign Intelligence Surveillance Act spying processes during the 2016 election.

This memo, which remains secret, was reportedly written under the direction of the chair of the House Permanent Select Committee on Intelligence, GOP Rep. Devin Nunes, and has been read by dozens of members of Congress after the committee voted to make the memo available to all members of the House of Representatives to examine in a room specially designated for reviewing classified material. The rhetoric issuing from GOP members who read the memo is notably extreme. North Carolina Republican Rep. Mark Meadows, chair of the House Freedom Caucus, called the memo “troubling” and “shocking” and said, “Part of me wishes that I didn’t read it because I don’t want to believe that those kinds of things could be happening in this country that I call home and love so much.”

GOP Rep. Scott Perry of Pennsylvania stated: “You think about, ‘Is this happening in America or is this the KGB?’ That’s how alarming it is.” This has led to a ferocious outcry on the right to “release the memo” – and presumably thereby prove that the Obama administration conducted unlawful surveillance on the Trump campaign and transition. On Thursday night, Fox News host and stalwart Trump ally Sean Hannity claimed that the memo described “the systematic abuse of power, the weaponizing of those powerful tools of intelligence and the shredding of our Fourth Amendment constitutional rights.” Given the significance of this issue, it is absolutely true that the memo should be declassified and released to the public — and not just the memo itself.

The House Intelligence Committee generally and Nunes specifically have a history of making unreliable and untrue claims (its report about Edward Snowden was full of falsehoods, and prior claims from Nunes about “unmasking” have been discredited). Thus, mere assertions from Nunes — or anyone else — are largely worthless; Republicans should provide American citizens not merely with the memo they claim reveals pervasive criminality and abuse of power, but also with all of the evidence underlying its conclusions.

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Don’t worry, the shadow banks will.

China Orders Banks To Stop Financing Cryptocurrencies (SCMP)

The People’s Bank of China has ordered financial institutions to stop providing banking or funding to any activity related to cryptocurrencies, further tightening the noose since its shutdown of crypto exchanges last September sent digital currency enthusiasts fleeing overseas. “Every bank and branch must carry out self-inspection and rectification, starting from today,” according to a document issued by the central bank on Wednesday. “Service for cryptocurrency trading is strictly prohibited. Effective measures should be adopted to prevent payment channels from being used for cryptocurrency settlement.” The Chinese-language document, as seen by the South China Morning Post, was distributed as an internal document among banks, and not published on the central bank’s official website.

“Banks should enhance their daily transaction monitoring, and the timely shut down of the payment channel once they discover any suspected trading of cryptocurrencies,” the document said, adding that the deadline for disclosing the measures is on January 20. The emphasis was on handling any capital settlement to avoid any financial losses by cryptocurrency investors from escalating into public protests – known as “group events” in China – and preserve social stability, the central bank said. [..] Chinese cryptocurrency traders, who once dominated 90 per cent of the world’s trading volume of bitcoin, the most popular and oldest form of cryptocurrency, have moved to the underground market, or overseas to Japan. Bitcoin is considered legal tender in Japan.

“Most of the trading is taking place via US dollar now, as some big accounts active in digital currency trading are already on China’s official watch list and payment channel already blocked,” said Zhao Dong, an individual bitcoin investor who spends most of his time in Japan now. “This move by the PBOC is further pushing capital and innovation out of China.” Still, a person no less than Zhou Xiaochuan, the longest-serving governor in the Chinese central bank, has himself announced that the People’s Bank of China itself is studying the feasibility of developing its own digital currency.

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As does Russia.

China Urges U.S. to Abandon ‘Cold War’ Mindset (BBG)

China’s National Defense Ministry said the U.S. should abandon a “Cold War” mindset and view Chinese national security and military efforts “rationally and objectively.” The instigators of militarization of the South China Sea are “other countries” that don’t seem to want to see peace in the region and are using the banner of “navigational freedom” to undertake military activities in a tyrannical manner, ministry spokesman Ren Guoqiang said in a statement released late Saturday. The statement was in response to a U.S. Defense Department strategy report, released last week, that singled out China’s military modernization and expansion in the South China Sea as key threats to U.S. power.

China has undertaken massive land reclamation in the contested waterway that hosts $5 trillion in trade a year, to strengthen its claim to more than 80 percent of the area. That has strained ties with other claimant states, such as Vietnam and the Philippines, as well as the U.S. The National Defence ministry’s statement on Saturday came shortly after China’s Foreign Ministry vowed to take “necessary measures” to safeguard its sovereignty after a U.S. warship entered waters surrounding the Huangyan Island in the South China Sea. China’s activities in the South China Sea is “a matter within China’s sovereign rights,” Ren said, adding that the country is committed to a path of peaceful development and a harmonious world order.

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A good point not particularly well made.

Britain’s Tired Old Economy Isn’t Strong Enough For Brexit (G.)

Brexit, at its heart, is a recognition that Britain has become steadily weaker since it spent much of its empire wealth fighting two world wars – too feeble in the years before the 2016 referendum to sustain an exchange rate of $1.60 and €1.40, just as it was too poor to cope with $4 to the pound in the 1950s and $2 to the pound in 1992. Manufacturers were unable to make things cheaply, reliably or efficiently enough against the headwind of a high-value currency, forcing many to give up. An economy that boasted 20% of its income coming from manufacturing in the 1980s found it was the source of barely 10% at the beginning of this decade.

Surges in GDP growth in the 70 years since the war can be attributed (and this short list makes the point crudely) to periods when there were cheap raw materials and energy costs; or a growing population; or foreign ownership and management of key industries; or the offloading of vast amounts of state and mutually owned assets; or cheap borrowing. Without these in operation to improve the UK’s performance, a lower exchange rate became inevitable. Some Brexit campaigners made a cheaper currency their explicit aim, arguing that while Britain’s wealth and standing in the world would be diminished in the short term, the breathing space given to manufacturers would allow them to sell abroad at cheaper prices, then use the funds to invest and gain the efficiencies needed to cope with a return to a higher exchange rate sometime in the next decade.

There is a good deal of logic to the argument, but it rests, like so many revolutionary aims, on the many and competing forces in the economy doing exactly what its proponents want them to. For instance, manufacturers, with a few honourable exceptions, have refused to invest more than the bare minimum for decades, even when the exchange rate has helped them. There are windfall profits to be made when currencies fall: but these windfalls have been trousered by shareholders, not invested.

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Little emperor.

Macron: Bespoke Brexit Deal Possible If UK Accepts ‘Preconditions’ (G.)

Emmanuel Macron has said it would be possible for Britain to secure a bespoke trade deal but only if the UK accepts certain “preconditions”. The French president said that while a special solution could be secured, full access to the single market without accepting its rules was “not feasible”. The comments were made during an interview recorded for BBC One’s The Andrew Marr Show on Sunday. Macron has been in the UK for his first visit since taking office. On Thursday, at the end of a joint press conference with Theresa May at Sandhurst military training college, he rejected the idea of a tailored Brexit deal for Britain’s financial services sector. Macron said full access to EU markets would not be possible unless the UK paid into the EU budget and accepted all its rules.

In the interview with Marr, he said there was “a competition between different countries” to attract financial services companies in the future and that France wanted “to attract the maximum activity”. The Brexit secretary, David Davis, has said he is seeking a “Canada plus plus plus” arrangement, based on the EU-Canada trade treaty, but with additional access for services. However, EU negotiators have stressed that Britain would not be allowed to “cherry-pick” sectors. Pressed on whether there would be a bespoke special solution for the UK, Macron said: “Sure, but … this special way should be consistent with the preservation of the single market and our collective interests. “And you should understand that you cannot, by definition, have the full access to the single market if you don’t tick the box.” He added: “So it’s something perhaps between this full access and a trade agreement.”

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It’s starting to feel like Stockholm Syndrome.

Athens Hopeful For Eurogroup Decisions Despite Problems (K.)

Eurozone finance ministers are to meet in Brussels on Monday to assess Greece’s progress in enforcing economic reforms, decide whether to disburse 6.7 billion euros in bailout loans and, Athens hopes, signal talks on debt relief. It was unclear if the loan tranche would be disbursed in its entirety, as some prior actions are pending. However, Greek officials sounded upbeat following a decision late on Friday by Standard & Poor’s to raise Greece’s sovereign credit rating from B- to B with a positive outlook. “Greece’s growth and fiscal outlooks have improved alongside a labor market recovery and amid a period of relative policy certainty,” S&P said.

“These positive developments boost the sense that the trust of the markets and investors in the Greek economy is being restored with steady steps,” the Finance Ministry said on Saturday. “With the conclusion of the program in August 2018 and the securing of steady access to the markets, the Greek economy is definitely moving away from a long period of crisis.” Despite the upbeat rhetoric, there are divisions within SYRIZA over government policies, particularly in the radical Group of 53 faction. In comments to SYRIZA’s central committee on Saturday, Finance Minister Euclid Tsakalotos conceded that there are “many short-term problems” and underlined two major risks. “One is the banks and the other is the IMF,” he said.

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Nice. Kiwis believe in fairy tales.

In New Zealand, 100% Pure Is 100% Propaganda (Stuff)

Ask Tourism New Zealand what 100% Pure means and they’ll tell you: it’s not a ‘clean, green’ campaign, but a campaign that delivers a “100% Pure New Zealand experience”. What it is is 100% pure advertising, and a slogan fit to replace the fertiliser used in the country’s intensive farming. But while Kiwis do seem to be realising there’s something murky about our clean-green image, there is one area we are still fooling ourselves about – the state of our native creatures. Stuff has just wrapped up its Forgotten Species series, a five-part series looking at a handful of the estimated 3700 native species which are either approaching extinction or at risk. Despite having one of the highest proportions of threatened or endangered species of anywhere on the planet, 70% of the public feel the state of our country’s natives is adequate or doing well, according to a recent Lincoln University study.

Ask study co-author Ross Cullen and he will tell you – 70% of the public is “totally wrong”. All countries advertise, and everyone accepts it with a pinch of salt. If we didn’t we would all be jetting off to England expecting a village in the Cotswolds and end up at a sleazy pub in Plumstead, east London. Advertising is advertising, and good advertising brings in tourism money. However, when the public believes its own advertising, it’s no longer advertising, it’s propaganda –and that’s a problem. It’s a problem because if the populace think something’s going well, they ignore it, the political hot-potato cools, and the decline continues. Case in point – the National Government’s Minister for Conservation, Maggie Barry, paraded the new Threatened Species Strategy in front of voters just as the 2017 general election was heating up.

It promised to increase the number of at-risk species directly managed by 40%. On the face of it, this seems great, but when the Budget was released a couple of weeks later, almost all of DOC’s extra funding was ring-fenced for upgrading tourism infrastructure and developing new Great Walks. It was a great ad delivered by a great ex-garden show host. Kiwis might have kicked up a fuss – if the majority didn’t think we were doing a bang up job on protecting native species already. I remember a telling moment after ex-Parliamentary Commissioner for the Environment Jan Wright’s launched her report finding 80% of native birds were threatened. I was present to hear why Tourism Industry Aotearoa chief executive Chris Roberts didn’t fancy this was a problem. “The people come here for our scenery, not our wildlife,” he said. Roberts didn’t disagree with any of the report’s findings, he just thought a visitor levy would do more harm to the country than the rapid die-off of our native birds.

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Depression zone. I went from Athens to Amsterdam 5 weeks ago, lost 2 hours of daylight to begin with, and been dead tired ever since. Vitamin D doesn’t do it either.

Ain’t No Sunshine: Winter Is One Of Darkest Ever For Parts Of Europe (G.)

Sunshine is in short supply across a swathe of north-west Europe, shrouded in heavy cloud from a seemingly never-ending series of low pressure systems since late November and suffering one of its darkest winters since records began. If you live in Brussels, 10 hours and 31 minutes was your lot for the entire month of December. The all but benighted inhabitants of Lille in France got just two hours, 42 minutes through the first half of January. “Sound the alarm and announce the disappearance,” read a despairing headline in photon-deprived northern France’s regional paper, La Voix du Nord. “A star has been kidnapped. We still have no sign of life from the sun.”

Belgium’s Royal Meteorological Institute has declared December 2017 “the second darkest month since 1887”, when it began measuring, after the 10.5 hours of sun recorded at its Uccle weather station last month were beaten only by a bare 9.3 hours in 1934. France’s northern Hauts-de-France region did better with 26 hours of sunshine in December, but that was against a norm of 48. But Météo France described the paltry 2.7 hours of sun recorded from 1 to 13 January in Lille, the region’s biggest city, as “exceptional”. The January average stands at 61.4 hours, according to the agency – meaning Lille and its unfortunate residents were deprived of perhaps 30 hours’ worth of rays in the first part of the month.

[..] Even southern French sun-traps such as Bordeaux and Marseille fell a very long way short of their usual ray quota in the first half of the month, basking in just 10.3 and 26.9 hours respectively against monthly averages of 96 and 92.5. Health experts say a shortage of sunshine can lead to seasonal depression, whose symptoms include a lack of energy, a desire to sleep and a perceived need to consume greater quantities of sugar and fat. “Exposure to morning light inhibits the secretion of melatonin that promotes sleep and favours the production of hormones that will stimulate the body,” Matthieu Hein, a psychiatrist at the Erasmus Hospital in Brussels, said. In the absence of light, we are “rather slow, tired, which is characteristic of SAD, or seasonal affective disorder”. Florent Durand, who runs a massage studio in Lille, told France 3 TV that his €39 light therapy sessions were booked out.

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As Turkey bombs US supported Kurds, Erdogan feels like a god.

Turkey Threatens Refugee Deal With EU (K.)

Turkey’s agreement with the European Union to curb human trafficking across the Aegean appears to be in jeopardy again after a top Turkish official warned that a current impasse with the EU gives Ankara no reason to honor the deal. A collapse of the deal would put more pressure on Greek islands where thousands of migrants are cooped up in overcrowded reception centers. The comments on Friday by Turkey’s minister for EU affairs, Omer Celik, essentially rejected a proposal by French President Emmanuel Macron for a partnership rather than full EU membership for Turkey. “A privileged partnership or similar approaches, we don’t take any of these seriously. Turkey cannot be offered such a thing,” Celik told Reuters.

Celik said the EU was not fully honoring its part of the migration deal, noting that financial aid was “not working well” and that no new chapters have been opened in Turkey’s EU accession bid. “Technically there’s no reason for Turkey to maintain this deal,” he said. The minister’s words echoed those of Turkish President Recep Tayyip Erdogan, who, during a landmark visit to Greece in December, hit out at the EU for giving Turkey just a portion of the aid it had pledged as part of the 2016 migrant deal. During Erdogan’s visit, Prime Minister Alexis Tsipras proposed that Turkey take back migrants from facilities on the Greek mainland to free up space for migrants from overcrowded camps on the islands. Erdogan did not publicly respond to the suggestion.

After Celik’s comments on Friday, a spokesman for the Greek Migration Ministry said the government’s position, that all sides must honor the Turkey-EU deal, remained “fixed and firm.” Migration Minister Yiannis Mouzalas visited Lesvos on Friday, together with Valentin Radev, the interior minister of Bulgaria, which holds the EU’s rotating presidency. Mouzalas reassured local residents, who had gathered at the Moria facility, that measures would be taken to ensure that migrants alleged to have been involved in thefts or other offenses will no longer be allowed to leave the premises. Lesvos Mayor Spyros Galinos said the minister was not doing enough to adequately inform residents and was shifting the blame for the situation on the islands on to local authorities.

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New year, same old lack of humanity.

15 Syrian Refugees Found Frozen To Death On Lebanon Border (BBC)

Fifteen Syrian refugees – some of them children – have been found frozen to death while trying to cross the mountainous border into Lebanon. Thirteen bodies were found on Friday and two more were discovered on Saturday after the area was hit by a fierce snowstorm. Lebanese civil defence officials found the bodies after being told a group of refugees were in trouble near Masnaa. Local reports say the group had been abandoned by smugglers. Two smugglers have reportedly been arrested.

Several refugees were rescued, including a young boy who was found wandering by himself. The group were taking the same route hundreds of thousands of Syrians have taken before them trying to flee the conflict at home. Lebanon, with a population of four million, has taken in nearly one million Syrians since the war began in 2011. The Lebanese authorities brought in new restrictions in 2015 to try to restrict the number of refugees arriving in the country.

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Jan 182018
 
 January 18, 2018  Posted by at 10:34 am Finance Tagged with: , , , , , , , , , , , ,  10 Responses »
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Henry Matisse Bouquet of flowers for July 14 Oct 7 1919

 

Japan and Europe Start the Central Bank Reset (BBG)
The Bubble That Could Break the World (Rickards)
South Korea Considers Shutting Down Domestic Cryptocurrency Exchanges (R.)
Trump Reveals Winners Of Controversial ‘Fake News Awards’ (AFP)
Trump Considers Big ‘Fine’ Over China Intellectual Property Theft (R.)
China’s Communists Take More Stakes In Private Companies (BBG)
Apple Expects to Pay $38 Billion Tax on Repatriated Cash (BBG)
Apple May Not Hire 20,000 New Workers, or Bring Back Its Overseas Cash (MW)
Assange Keeps Warning Of AI Censorship (CJ)
Australia’s Household Debt-to-Income Ratio Reaches 200% (AFR)
Mario Draghi Told To Drop Membership Of Secretive Bankers’ Club (G.)
Global Air Traffic At New Record (AFP)
Europe’s Microwave Ovens Emit Nearly As Much CO2 As 7 Million Cars (G.)
1 Million Tonnes A Year: UK Supermarkets Shamed For Plastic Packaging (G.)
The Plastic-Free Stores Showing The Big Brands How To Do It (G.)

 

 

Coordinated efforts to crash the conomy. Ignore the recovery narrative.

Japan and Europe Start the Central Bank Reset (BBG)

This is going to be an exciting year for monetary policy. In fact, it already is, thanks to Europe and Japan. Investors were taken aback last week when the Bank of Japan bought fewer bonds and the ECB revealed – shock, horror – its language would have to evolve with the euro region’s economy. Both developments, and the reaction, were welcome. They say a lot about the strength of global growth and how it still surprises many people. First to Japan: Investors were wrong to interpret the reduced purchases as a sign that a policy shift is imminent. They were, however, right about the long-term direction of policy. It isn’t going to get looser. Will it remain accommodative as far as the eye can see? Yes.

With Japan’s economic sunny patch extending and inflation headed in the right direction – if still way too low – it’s not a stretch to see Governor Haruhiko Kuroda or his successor ease up a little on the stimulus. Just not right now. That was Jan. 9. Two days later, the fever struck in Europe. The proximate cause was the release of minutes from the ECB’s December meeting and the implication contained therein that communications would have to reflect a stronger growth terrain and improving, albeit still low, inflation. The euro jumped and German bond yields climbed. It feels like we just got through a big change from the ECB: the taper of bond purchases to 30 billion euros a month until September. (Remember when officials hated the word “taper”?) Now, here were policymakers flagging further revisions.

What’s the thread linking these two happenings? Despite all the data and pronouncements about a robust global economy and a synchronized upswing, people are still taken aback by signs that (a) it’s a reality and (b) policy is bound to react. I’m not saying policy is going to change overnight. But if you start with a global framework – we are in a global marketplace, are we not? – key to that framework really ought to be the direction of policy. Ask yourself: Are monetary chieftains going to make policy more easy or less easy, assuming the upswing in growth is sustainable? The answer has to be “less.”

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Because it’s by far the biggest, and it’s a debt bubble, not a gossip one.

The Bubble That Could Break the World (Rickards)

The credit-driven bubble has a different dynamic than a narrative-bubble. If professional investors and brokers can borrow money at 3%, invest in stocks earning 5%, and leverage 3-to-1, they can earn 6% returns on equity plus healthy capital gains that can boost the total return to 10% or higher. Even greater returns are possible using off-balance sheet derivatives. Credit bubbles don’t need a narrative or a good story. They just need easy money. A narrative bubble bursts when the story changes. It’s exactly like The Emperor’s New Clothes where loyal subjects go along with the pretense that the emperor is finely dressed until a little boy shouts out that the emperor is actually naked. Psychology and behavior change in an instant.

When investors realized in 2000 that Pets.com was not the next Amazon but just a sock-puppet mascot with negative cash flow, the stock crashed 98% in 9 months from IPO to bankruptcy. The sock-puppet had no clothes. A credit bubble bursts when the credit dries up. The Fed won’t raise interest rates just to pop a bubble — they would rather clean up the mess afterwards that try to guess when a bubble exists in the first place. But the Fed will raise rates for other reasons, including the illusory Phillips Curve that assumes a tradeoff between low unemployment and high inflation, currency wars, inflation or to move away from the zero bound before the next recession. It doesn’t matter. Higher rates are a case of “taking away the punch bowl” and can cause a credit bubble to burst.

The other leading cause of bursting credit bubbles is rising credit losses. Higher credit losses can emerge in junk bonds (1989), emerging markets (1998), or commercial real estate (2008). Credit crack-ups in one sector lead to tightening credit conditions in all sectors and lead in turn to recessions and stock market corrections. What type of bubble are we in now? What signs should investors look for to gauge when this bubble will burst? My starting hypothesis is that we are in a credit bubble, not a narrative bubble. There is no dominant story similar to the Nifty Fifty or dot.com days. Investors do look at traditional valuation metrics rather than invented substitutes contained in corporate press releases and Wall Street research. But even traditional valuation metrics can turn on a dime when the credit spigot is turned off.

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BTC recovered somewhat overnight.

South Korea Considers Shutting Down Domestic Cryptocurrency Exchanges (R.)

South Korean policymakers joined the global chorus of virtual-coin critics on Thursday, saying Seoul is considering shutting down domestic virtual currency exchanges as the new breed of market exposes users to speculative frenzy and crime. The country’s tough stance comes as policymakers from the United States to Germany struggle to come up with stricter regulation against money laundering and other crimes. Responding to questions in parliament, South Korea’s chief of the Financial Services Commission said: “(The government) is considering both shutting down all local virtual currency exchanges or just the ones who have been violating the law.” Separately, Bank of Korea Governor Lee Ju-yeol told a news conference that “cryptocurrency is not a legal currency and is not being used as such as of now.”

Regulators around the world are still debating how to address risks posed by cryptocurrencies, as bitcoin, the world’s most popular virtual currency, soared more than 1,700% last year. Prices have plummeted since South Korea announced last week it may ban domestic cryptocurrency exchanges. On Wednesday, bitcoin slid 18%. According to Bithumb, South Korea’s second-largest virtual currency exchange, the nation’s bitcoin trading price stood at 15,697,000 won ($14,690.69) as of 0314 GMT on Thursday. On the Luxembourg-based Bitstamp exchange, bitcoin was traded at $11,750. [..] On Thursday, the BOK governor said the central bank had begun looking into the market’s impact on the economy. “We have started looking at virtual currency from a long-term standpoint, as central banks could start issuing digital currencies in the future. This sort of research has begun at the Bank of International Settlements and we are part of that research.”

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“Studies have shown that over 90% of the media’s coverage of President Trump is negative…”

Trump Reveals Winners Of Controversial ‘Fake News Awards’ (AFP)

Donald Trump unveiled the winners of his much-touted “Fake News Awards” late Wednesday, escalating his already persistent attacks on a number of major US media outlets. The awards dropped hours after a senator from Trump’s own Republican party hurled a stinging rebuke at the president, accusing the US leader of undermining the free press with Stalinist language. The brash Republican president announced the ten “honorees” using his preferred medium of Twitter, linking to a list published on the Republican Party’s website that crashed minutes after his big reveal. The “winners” of the spoof awards included top networks and newspapers CNN, The New York Times and The Washington Post, all of which have been regular targets of Trump’s ire.

Nobel-prize winning economist Paul Krugman, who writes a regular opinion column for The New York Times, nabbed the number one spot. The administration said he merited the award for writing “on the day of President Trump’s historic, landslide victory that the economy would never recover.” Following the former reality star’s stunning rise to power, Krugman had written that Trump’s inexperience on economic policy and unpredictability risked further damaging the weak global economy. The list also pointed to a reporting error from ABC’s veteran reporter Brian Ross, who was suspended for four weeks without pay after he was forced to correct a bombshell report on ex-Trump aide Michael Flynn.

[..] 11. And last, but not least: “RUSSIA COLLUSION!” Russian collusion is perhaps the greatest hoax perpetrated on the American people. THERE IS NO COLLUSION!

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“We’re talking about big damages. We’re talking about numbers that you haven’t even thought about,” Trump said.”

Trump Considers Big ‘Fine’ Over China Intellectual Property Theft (R.)

President Donald Trump said on Wednesday the United States was considering a big “fine” as part of a probe into China’s alleged theft of intellectual property, the clearest indication yet that his administration will take retaliatory trade action against China. In an interview with Reuters, Trump and his economic adviser Gary Cohn said China had forced U.S. companies to transfer their intellectual property to China as a cost of doing business there. The United States has started a trade investigation into the issue, and Cohn said the United States Trade Representative would be making recommendations about it soon. “We have a very big intellectual property potential fine going, which is going to come out soon,” Trump said in the interview.

While Trump did not specify what he meant by a “fine” against China, the 1974 trade law that authorized an investigation into China’s alleged theft of U.S. intellectual property allows him to impose retaliatory tariffs on Chinese goods or other trade sanctions until China changes its policies. Trump said the damages could be high, without elaborating on how the numbers were reached or how the costs would be imposed. “We’re talking about big damages. We’re talking about numbers that you haven’t even thought about,” Trump said.

U.S. businesses say they lose hundreds of billions of dollars in technology and millions of jobs to Chinese firms which have stolen ideas and software or forced them to turn over intellectual property as part of the price of doing business in China. The president said he wanted the United States to have a good relationship with China, but Beijing needed to treat the United States fairly. Trump said he would be announcing some kind of action against China over trade and said he would discuss the issue during his State of the Union address to the U.S. Congress on Jan. 30. Asked about the potential for a trade war depending on U.S. action over steel, aluminum and solar panels, Trump said he hoped a trade war would not ensue. “I don’t think so, I hope not. But if there is, there is,” he said.

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This is not going to work. It’s a one way ticket back to Mao.

China’s Communists Take More Stakes In Private Companies (BBG)

After tightening the Communist Party’s grip on state-owned enterprises, President Xi Jinping’s administration is signaling an increasing presence in private companies. Xi has called state enterprises the “backbone” of China’s socialist economy. But most of the giants were founded before the boom in technology-driven industries over the past two decades. That’s created a large swathe of the economy that’s largely private – think tech and consumer champions like Alibaba, Tencent and Baidu, along with innovators in sectors from finance to automation. Now, SOEs are on track to take stakes in private companies. “China wants to maintain state control over every aspect of the national economy, and it needs to keep up with the changes in the economic structure,” said Chen Li at Credit Suisse.

“How can it overlook the most important industries to the future economy?” Much of the overhaul of state-owned enterprises under Xi has focused on a consolidation in the hundreds of sprawling units across the country, such as those that have reshaped the shipping and train-making industries. But a lesser-noticed part of the broad “mixed ownership” initiative features SOEs being encouraged to take stakes in private companies. This part of the initiative has yet to gather pace, though equity strategists anticipate moves to come. They would showcase how China continues to develop its own path toward developed-nation status – not entirely state dominated, but with more control by political authorities than in countries like France that have nurtured state champions.

The head of the Beijing agency that oversees China’s SOEs, Xiao Yaqing, reiterated the push in a People’s Daily article on state enterprise reforms Dec. 13. The private stakes will be acquired through various means, he and other top officials have said. The mechanism has already been applied in the case of the state’s crackdown on financier Xiao Jianhua’s Tomorrow Holding empire. The government ordered the holding company to divest from many of its financial assets, people with knowledge of the matter said this month. State-owned Citic Guoan Group Co. bought a $1.4 billion stake in Hengtou Securities – known as Hengtai on the mainland – with a large part of the purchase coming from Tomorrow Group. Investors applauded the move, in a sign of what could happen when the state invests elsewhere. Hengtou has jumped more than 20% this year after announcing the stake sale.

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More Trump success.

Apple Expects to Pay $38 Billion Tax on Repatriated Cash (BBG)

Apple said it will bring hundreds of billions of overseas dollars back to the U.S., pay about $38 billion in taxes on the money and invest tens of billions on domestic jobs, manufacturing and data centers in the coming years. The iPhone maker plans capital expenditures of $30 billion in the U.S. over five years and will create 20,000 new jobs at existing sites and a new campus it intends to open, the Cupertino, California-based company said Wednesday in a statement. “We are focusing our investments in areas where we can have a direct impact on job creation and job preparedness,” Chief Executive Officer Tim Cook said in the statement, which alluded to unspecified plans by the company to accelerate education programs.

In its December approval of the most extensive tax-code revisions since 1986, Congress scrapped the previous international tax system for corporations — an unusual arrangement that allowed companies to defer U.S. income taxes on foreign earnings until they returned the income to the U.S. That “deferral” provision led companies to stockpile an estimated $3.1 trillion offshore. By switching to a new system that’s designed to focus on domestic economic activity, congressional tax writers also imposed a two-tiered levy on that accumulated foreign income: Cash will be taxed at 15.5%, less liquid assets at 8%. Companies can pay over eight years. Apple has the largest offshore cash reserves of any U.S. company, with about $252 billion in at the end of September, the most recently reported fiscal quarter.

The company, which opened a new headquarters in Cupertino last year, said it also plans to open another site in the U.S. focused initially on employees who provide technical support to Apple product users. Apple said it will announce the location of the new campus at a later date. The company already has a sprawling campus in Austin, Texas, for supply chain and technical support employees.

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Or maybe not.

Apple May Not Hire 20,000 New Workers, or Bring Back Its Overseas Cash (MW)

Apple announced a series of plans Wednesday that were celebrated as promises to hire thousands of workers and bring home billions of dollars in cash. Well, not necessarily. Apple said in its release that the company planned to “create over 20,000 new jobs through hiring at existing campuses and opening a new one.” The key word there is “create,” which Apple really likes to use when discussing jobs: The company even has a portion of its website dedicated to “job creation” that claims it is “responsible for 2 million jobs” in the United States, most of which are jobs “attributable to the App Store ecosystem.” Apple currently employs 84,000 people in the U.S., it said Wednesday, while an October filing with the Securities and Exchange Commission said that it has a total of 132,000 full-time employees worldwide, suggesting that about a third of its employees work abroad.

A quarter of the 2 million jobs Apple claims responsibility for are positions through Apple’s U.S.-based suppliers. “From the people who manufacture components for our products to the people who distribute and deliver them, Apple directly or indirectly supports hundreds of thousands of U.S. jobs,” Apple says on the page. [..] Many also took Apple’s promise to pay $38 billion in repatriation taxes as a promise that Apple would bring home more than a quarter-trillion dollars it currently has overseas. However, Apple does not have to bring home that money, and much of it is tied up in long-term investments that would make it unlikely. The company has to pay taxes on overseas earnings whether it brings the money back to the United States or not, so paying the tax does not mean the money is coming home.

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What I wrote about last week: “digital super states” like Facebook and Google have been working to “re-establish discourse control”.

Assange Keeps Warning Of AI Censorship (CJ)

In a statement that was recently read during the “Organising Resistance to Internet Censorship” webinar, sponsored by the World Socialist Web Site, Assange warned of how “digital super states” like Facebook and Google have been working to “re-establish discourse control”, giving authority over how ideas and information are shared back to those in power. Assange went on to say that the manipulative attempts of world power structures to regain control of discourse in the information age has been “operating at a scale, speed, and increasingly at a subtlety, that appears likely to eclipse human counter-measures.”

What this means is that using increasingly more advanced forms of artificial intelligence, power structures are becoming more and more capable of controlling the ideas and information that people are able to access and share with one another, hide information which goes against the interests of those power structures and elevate narratives which support those interests, all of course while maintaining the illusion of freedom and lively debate. In an appearance via video link at musician and activist M.I.A.’s Meltdown Festival last June, the WikiLeaks editor-in-chief expounded in far more detail about his thoughts on the potential for artificial intelligence to be used for controlling online information and discourse in a way human intelligence can’t hope to keep up with.

Pointing out how AI can already outmaneuver even the greatest chess players in the world, he describes how programs which can operate with exponentially more tactical intelligence than the human intellect can manipulate the field of available information so effectively and subtly that people won’t even know they are being manipulated. People will be living in a world that they think they understand and know about, but they’ll unknowingly be viewing only establishment-approved information. “When you have AI programs harvesting all the search queries and YouTube videos someone uploads it starts to lay out perceptual influence campaigns, twenty to thirty moves ahead,” Assange said. “This starts to become totally beneath the level of human perception.”

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Sell sell sell.

Australia’s Household Debt-to-Income Ratio Reaches 200% (AFR)

The closely tracked Australian household debt-to-income ratio has now reached the 200% level, and analysts at UBS are concerned about rising pressures among borrowers. The increase was because of the Australian Bureau of Statistics revision to include self-managed superannuation debt. That resulted in a 3% rise in household debt from “extremely elevated levels”, and pushed the ratio to income to 199.7%, “one of the highest in the world,” according to UBS. “With subdued growth in household income expected to continue, this implies household leverage is likely to rise further in the near term,” it said. “As a result we expect total household debt to disposable income to peak around 205% before the slow deleveraging process begins.”

High household debt levels will constrain further borrowing and weigh on prospects for earnings growth at the big banks, analysts Jonathan Mott and Rachel Bentvelzen said as they downgraded their forecasts for housing credit growth. House prices, which have begun to decline in Sydney, are expected to slide further as a result of tighter lending standards, the retreat of foreign buyers, lending limits imposed by regulators and concerns about proposed changes to negative gearing and capital gains tax that have been tabled by the Opposition. “Sentiment for investment into the housing market is waning, with the ‘fear of missing out’ euphoria fading quickly, especially in Sydney,” the analysts said in a note to clients.

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The insanity of today.

Mario Draghi Told To Drop Membership Of Secretive Bankers’ Club (G.)

The president of the European Central Bank has been told by the EU’s watchdog he should drop his membership of a secretive club of corporate bankers, after claims the group had been given an inside seat from which it could influence key policies. Following a year-long investigation, Mario Draghi was informed on Wednesday by the European ombudsman, Emily O’Reilly, that his close relationship with the Washington-based G30 group threatened the reputation of the bank, despite his assurances to the contrary. Members of the exclusive club, of which only two of the current 33 are women, are chosen by an anonymous board of trustees, it emerged during the ombudsman’s investigation. Only the identity of the chair of the trustees, Jacob A Frenkel, the chairman of JPMorgan Chase, has been made public.

O’Reilly noted the group’s secrecy and lack of transparency over the content of its meetings. She additionally called for a ban on all future presidents of the ECB taking up membership of the club, previously named the Consultative Group on International Economic and Monetary Affairs. The ruling followed a complaint by the Corporate Europe Observatory (CEO), a Brussels-based NGO, which claimed Draghi’s close relationship to G30 was in contravention of the ECB’s ethical code. During his presidency of the ECB, Draghi, an Italian economist who previously worked at Goldman Sachs, has attended four G30 meetings, in 2012, 2013 and twice in 2015.

O’Reilly said there was a danger that the bank’s independence could be perceived to have been compromised by Draghi’s involvement with the group, whose members include a number of central bank governors, private sector bankers and academics. The governor of the Bank of England, Mark Carney, is a member. But O’Reilly said there was no evidence of sensitive information being shared. The ombudsman said: “The ECB takes decisions that directly affect the lives of millions of citizens. In the aftermath of the financial crisis, and in consideration of the additional powers given to the ECB in recent years to supervise member state banks in the public interest, it is important to demonstrate to that public that there is a clear separation between the ECB as supervisor and the finance industry which is affected by its decisions.”

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Not one word about emissions. Not one. Oh wait, “continuous improvements to its safety, security, efficiency and environmental footprint “. Pants on fire.

Global Air Traffic At New Record (AFP)

Budget carriers continued to push global air traffic to new record levels last year, the International Civil Aviation Organization (ICAO) said on Wednesday. Scheduled air services carried “a new record” of 4.1 billion passengers in 2017, an increase of 7.1% over the previous year, ICAO said, citing preliminary data. The figure compares with 6% growth in 2016. “The sustainability of the tremendous growth in international civil air traffic is demonstrated by the continuous improvements to its safety, security, efficiency and environmental footprint,” ICAO Council president Olumuyiwa Benard Aliu said in a statement from the Montreal-based agency.

Early this month, two industry studies showed that last year was the safest for civil aviation since plane crash statistics were first compiled in 1946. A total of 10 crashes of civil passenger and cargo planes claimed 44 lives, said the Aviation Safety Network. A separate report from the To70 agency said no major airline crashed a plane in 2017. ICAO, a United Nations agency, said Wednesday that low-cost carriers flew an estimated 1.2 billion passengers or about 30% of the global total last year. The budget airline sector “consistently grew at a faster pace compared to the world average growth, and its market share continued to increase, specifically in emerging economies,” ICAO said.

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Missed opportunity: including the emissions of electric cars.

Europe’s Microwave Ovens Emit Nearly As Much CO2 As 7 Million Cars (G.)

Popping frozen peas into the microwave for a couple of minutes may seem utterly harmless, but Europe’s stock of these quick-cook ovens emit as much carbon as nearly 7m cars, a new study has found. And the problem is growing: with costs falling and kitchen appliances becoming “status” items, owners are throwing away microwaves after an average of eight years, pushing rising sales. A study by the University of Manchester worked out the emissions of carbon dioxide – the main greenhouse gas responsible for climate change – at every stage of microwaves, from manufacture to waste disposal. “It is electricity consumption by microwaves that has the biggest impact on the environment,” say the authors.

“Efforts to reduce consumption should focus on improving consumer awareness and behaviour to use appliances more efficiently. For example, electricity consumption by microwaves can be reduced by adjusting the time of cooking to the type of food.” Each year more microwaves are sold than any other type of oven in the EU: annual sales are expected to reach 135m by the end of the decade. David Reay, professor of carbon management at the University of Edinburgh, pointed out that the damage done by microwaves is still a fraction of that done by cars. “Yes, there are a lot of microwaves in the EU, and yes they use electricity,” he said.

“But their emissions are dwarfed by those from cars – there are around 30m cars in the UK alone and these emit way more than all the emissions from microwaves in the EU. Latest data show that passenger cars in the UK emitted 69m tonnes of CO2 equivalent in 2015. This is ten times the amount this new microwave oven study estimates for annual emissions for all the microwave ovens in the whole of the EU.” The energy used by microwaves is lower than any other form of cooking. uSwitch, the price comparison website, lists microwaves as the most energy efficient, followed by a hob and finally an oven, advising readers to buy a microwave if they don’t have one. However, they urge owners to switch them off at the wall after use, to avoid powering the clock.

Read more …

The Guardian can try to chest thump as much as it wants, but it too got triggered for real only through David Attenborough’s Blue Planet II, just like Theresa may et al.

1 Million Tonnes A Year: UK Supermarkets Shamed For Plastic Packaging (G.)

Britain’s leading supermarkets create more than 800,000 tonnes of plastic packaging waste every year, according to an investigation by the Guardian which reveals how top chains keep details of their plastic footprint secret. As concern over the scale of unnecessary plastic waste grows, the Guardian asked Britain’s eight leading supermarkets to explain how much plastic packaging they sell to consumers and whether they would commit to a plastic-free aisle in their stores. The chains have to declare the amount of plastic they put on the market annually under an EU directive. But the information is kept secret, and Tesco, Sainsbury’s, Morrisons, Waitrose, Asda and Lidl all refused the Guardian’s request, with most saying the information was “commercially sensitive”. None committed to setting up plastic-free aisles – something the prime minister called for last week.

Only two supermarkets, Aldi and the Co-op, were open about the amount of plastic packaging they put on to the market. Using their data, and other publicly available market share information, environmental consultants Eunomia estimated that the top supermarkets are creating a plastic waste problem of more than 800,000 tonnes each year – well over half of all annual UK household plastic waste of 1.5m tonnes. The 800,000 tonnes of waste from food and beverage products would fill enough large 10-yard skips to extend from London to Sydney, or cover the whole of Greater London to a depth of 2.5cm. The revelations will add to mounting public concern about the damage that plastic does to the natural world. The Guardian has already revealed the vertiginous growth in plastic production, and the heavy environmental toll it exacts.

Dominic Hogg, chairman of Eunomia, said the figures could be higher. “The data reported for plastic packaging put on the market as a whole is an underestimate in our view,” said Hogg. Supermarkets in the UK keep their plastic footprint secret with a confidentiality agreement signed with the agencies involved in the British recycling compliance scheme. It means the amount of plastic packaging created by each supermarket and the money they pay towards its recycling is kept out of the public domain. One leading supermarket manager is calling for the whole system to be made more transparent and targeted to make the irresponsible producers pay more. Iain Ferguson, head of sustainability at the Co-op, said Britain should adopt the French system of “bonus-malus”, where supermarkets are taxed more for using material which is not easily recyclable and less for sustainable and recyclable packaging.

Read more …

And it really is this simple.

The Plastic-Free Stores Showing The Big Brands How To Do It (G.)

In the past few weeks Richard Eckersley has noticed a change in the type of people who come into his shop. The former Manchester United footballer, who turned his back on the game to set up the the UK’s first “zero waste” store on Totnes high street in Devon, says it is no longer only committed environmentalists who pop in, looking for a cleaner way to shop. “We thought January might be a bit quieter but it has been crazy,” says Eckersley, who set up the Earth.Food.Love shop with his wife Nicola in March. “A lot of new people are coming in – people who have not necessarily been involved in green issues before … it really feels like this [concern about plastic waste] is starting to break out of the environmental bubble.”

Last week Theresa May put cutting plastic pollution at the heart of the government’s 25-year environmental plan, and although critics said it was short on detail she did call for supermarkets to introduce plastic-free aisles to offer customers more choice. But Eckersley says many consumers are already way ahead of politicians. He and his wife have helped people who are planning to set up similar stores in Wales, Birmingham and Bristol. “We are getting calls every week from around the country from people wanting to set up something similar in their towns … it feels like this has really tapped into something that is growing all the time.” More than 200 miles away, Ingrid Caldironi shares the enthusiasm. She set up the plastic-free Bulk Market in east London last year. It has proven so popular that it is now moving to bigger, permanent premises at the end of the month.

“We have had an amazing response, especially in the last couple of months,” she says. Eckersley and Caldironi are at the vanguard of a burgeoning anti-plastics movement in the UK that has been fuelled by newspaper investigations including the Guardian’s Bottling It series, the Blue Planet television series and a general alarm at the damage plastic is doing to the natural environment. But their enthusiasm is not shared by big supermarkets, which have thus far shown little inclination to reduce their plastic waste. “For a nation of shopkeepers we are lagging behind in this race,” says Sian Sutherland, founder of the campaign A Plastic Planet which led the calls for plastic-free aisles. “The most exciting thing is that politicians and industry are no longer claiming that we can recycle our way out of the plastic problem,” she added. “Banning the use of indestructible plastic packaging for food and drink products is the only answer.”

Read more …

Jan 162018
 
 January 16, 2018  Posted by at 10:33 am Finance Tagged with: , , , , , , , , ,  4 Responses »
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Jean-Francois Millet The flight into Egypt 1864

 

Crytocurrencies Crashing Fast On South Korea Regulation Plans (Ind.)
PBOC Official Says China’s Centralized Cryptocurrency Trade Must End (R.)
China’s Shutdown Of Bitcoin Miners Isn’t Just About Electricity (F.)
China Is Heaping Debt on Its Least Productive Companies (CFR)
Xi Jinping’s Debt Clampdown Has Left a Trail of Dead Projects (BW)
Here’s What Historically Happens to Stocks When Bull Markets End (GoldSilver)
UK’s Carillion Crisis Deepens Amid Scramble To Save Jobs After Collapse (G.)
Quarter Of UK’s Poorest Households Are Getting Deeper In Debt (G.)
Greek Parliament Votes Through Raft Of Tough Reforms (K.)
Australia Offers Cash For Great Barrier Reef Rescue Ideas (AFP)
UK Supermarket Iceland To Eliminate Plastic On All Own-Label Products (G.)

 

 

As I’m writing this, I’m seeing bitcoin being obliterated. Other crypto’s were even worse off earlier. BTC down some 16% today at 5 AM ET, at $11,400. It was over $17,000 10 days ago.

Crytocurrencies Crashing Fast On South Korea Regulation Plans (Ind.)

Cryptocurrencies across the market are in the middle of a huge crash. All cryptocurrencies are falling amid a major selloff. Most have fallen more than 10% over the morning, and the price of bitcoin has dropped below $12,000. Just days ago, bitcoin was marching towards $20,000. But just today it has fallen more than 10% – taking it down almost 40% over the last month, but still having risen more than 1,300% over the year. Bitcoin is the best performing of the various cryptocurrencies over the morning. Ripple, the third largest cryptocurrency, had dropped by as much as 25% amid major volatility. Ethereum fell by more than 15%.

The price of cryptocurrencies tends to fluctuate wildly, and far more quickly than other more traditional assets and currencies. But the plunge on Tuesday morning is extreme even in that market. The drop came amid increasing suggestions in South Korea that officials might look to impose new regulations on the currency. Finance minister Kim Dong-yeon suggested that the country might ban trading in the currencies entirely, pending a government review. The government has said that the plans are only a suggestion and that more talks are needed. But another government minister said that trading could be banned last week, triggering another instant sell-off, and the plans have already led 200,000 people to petition the government asking to keep bitcoin trading legal.

Read more …

Little hope left for crypto in China. Korea shaky at best.

PBOC Official Says China’s Centralized Cryptocurrency Trade Must End (R.)

A senior Chinese central banker says authorities should ban centralized trading of virtual currencies as well as individuals and businesses that provide related services, an internal memo from a government meeting seen by Reuters showed. In the memo outlining details of discussions at a meeting of internet regulators and other policymakers last week, PBOC Vice Governor Pan Gongsheng said the government would continue to apply pressure to the virtual currency trade and prevent the build up of risks in that market. National and local authorities should ban venues that provide centralized trading of virtual currencies, of which bitcoin is the biggest, Pan said. They also need to ban individuals or institutions that provide market-making activities, guarantees, or settlement services for centralized trading of the currencies, such as online “wallet” service providers.

Chinese regulators last year banned initial coin offerings, shut down local cryptocurrency trading exchanges and limited bitcoin mining – but activity in the cryptocurrency and bitcoin space has continued through alternative channels in China despite the crackdown. “The financial work conference clearly called for limiting ‘innovations’ that deviate from the need of the real economy and escape regulation,” Pan said, according to the memo, referring to last week’s meeting. Authorities should also block domestic and foreign websites and close mobile apps that provide centralized virtual currency trading services to Chinese users, and sanction platforms that provide virtual currency payment services, Pan said. He also called for local authorities to investigate services that help people move funds overseas.

Read more …

It’s a power game.

China’s Shutdown Of Bitcoin Miners Isn’t Just About Electricity (F.)

China is planning to limit electricity to Bitcoin miners, and government bodies have expressed concern about energy usage. Bitcoin mining is estimated to use up to 4 gigawatts of electricity, equivalent to three nuclear reactors’ production levels. However, this move isn’t just about the electricity. In fact, it is telling that it was China’s central bank that met on the issue of Bitcoin mining, underscoring the fact that the issue is not only, or even primarily, an energy issue. It’s about clamping down on perceived risks of the cryptocurrency, which regulators have associated with malicious acts like fraud and money laundering. Authorities have already cracked down on thousands of criminal cases associated with alternative cryptocurrencies, including Onecoin and Ticcoin. These cryptocurrencies were viewed as Ponzi schemes used to raise illicit funds.

Later, officials shut down cryptocurrency exchanges and banned fundraising through initial coin offerings (ICOs). On Monday, it was reported that Chinese authorities would block cryptocurrency platforms that permit centralized trading. Cracking down on fraud and money laundering alone does not appear to be the way China is addressing risks associated with Bitcoin, however. Authorities are going after the industry more broadly. This may be because China has enough financial risks to regulate at the moment, and it is at capacity, or it could be that officials really do view Bitcoin as insufficiently transparent to represent an appropriate means of exchange or store of value.

Chinese Bitcoin mining companies may be out of luck doing business in a favorable environment. To combat this, some companies have already moved operations overseas. Most recently, Bitmain Technologies set up a subsidiary in Switzerland, which will extend its branches, currently in Amsterdam, Hong Kong, Tel Aviv, Qingdao, Chengdu, Shanghai and Shenzhen. Bitcoin miners have also been attracted to the Canadian province of Québec for its advertised cheap electricity. However, other companies may be forced to shut down. Moving abroad is likely to result in higher energy costs, which can dramatically reduce profit margins gained from mining.

Read more …

“By some estimates, China’s real growth rate, accounting for bad debt, is roughly half the official one of about 6.9%..”

China Is Heaping Debt on Its Least Productive Companies (CFR)

When Chinese President Xi Jinping failed to mention the word “deleveraging” in his long-awaited new economic blueprint in December it was clear that the political tug of war between the advocates of “reform” and “growth” had been won by the latter. In the short-run, growth, as defined by changes in GDP, can be increased by more lending and investing. In the longer-term, however, lending and investing can’t boost GDP if it results in bad debt that is properly written down. The big question is how much bad debt China currently has, and how much more it will be producing in the years ahead. By some estimates, China’s real growth rate, accounting for bad debt, is roughly half the official one of about 6.9%. To gauge whether China has been creating good debt—debt that will produce positive returns—or bad, we’ve examined who the beneficiaries of corporate lending are.

As shown in the left-hand figure below, profits at private-sector enterprises rose 18% between 2011 and 2016, while profits at state-owned enterprises (SOEs) plunged by 33%. As shown in the right-hand figure, however, the share of corporate liability growth accounted for by SOEs soared from 59% in 2010 to 80% by 2016. This is the opposite of what one would expect in a market economy. As we highlighted last year, China’s non-performing loans (NPLs) have been growing. Given the evidence that Xi has abandoned any pretense of concern with NPLs, and our evidence that China is shoveling new loans to companies with the least ability to pay them back, we think China is heading towards a debt crisis.

Read more …

Xi plays a high stakes game.

Xi Jinping’s Debt Clampdown Has Left a Trail of Dead Projects (BW)

A pile of rusty pipes and materials are all that remain of Lanzhou New Area’s tram project. Only a year ago it was a flagship public-private partnership for the planned city in Central China, before it fell victim to President Xi Jinping’s debt clampdown. “The project is dead,” said a guard at the office, who gave only his surname, Le. Nearby, the tram tracks are paved over, the mismatched lines of asphalt scarring a six-lane road that leads to a dead end on the edge of one of China’s most ambitious urban developments. The size of New York City, the zone is a satellite of Lanzhou, capital of China’s poorest province, Gansu, and a place where Xi’s efforts to wean the country off debt and onto services and consumer spending can be seen in stark relief.

In most of China, the economy is powering through Xi’s borrowing bottleneck, with economists surveyed by Bloomberg projecting the nation’s GDP grew 6.8% last year, the first annual acceleration in seven years. But for less-developed areas like Gansu the story is not so simple. Away from the industrial centers along the coast, Gansu came late to the nation’s debt-fueled investment party. During the nation’s economic ascent in the 1990s and 2000s, it became infamous for having the most polluted air in the country, a cocktail of chemicals from petroleum plants and heavy industry mixed with desert dust storms. Lanzhou New Area was only approved in 2012, just before Xi took office, driven by a central government investment spree designed to spread wealth to western regions.

Now, Xi wants to neutralize the risk of soaring debt derailing growth that accounts for more than a third of the global economic expansion. He reinforced that aim at a twice-a-decade Communist Party Congress in October and at the annual Central Economic Work Conference in December, where elite cadres set goals for 2018. From the yuan and bitcoin to banking and housing, taming potential threats is the new priority. Economists and policy makers see the restraints on borrowing as a necessary step toward choking off some of the nation’s construction and investment excesses and building a more sustainable economy. But there are casualties, including Lanzhou New Area’s tram, a network of tunnels for underground utility lines in the city, and more than 200 other public-private projects — almost half the total in Gansu.

Read more …

Average last year of bull market: +16%. Average first year of bear market: -16%.

Here’s What Historically Happens to Stocks When Bull Markets End (GoldSilver)

You undoubtedly know that 2017 was a record-setting year for the broad stock markets. And while gold was up last year despite numerous headwinds, most mainstream investors aren’t paying much attention to gold since they keep seeing so much green in their stock portfolios. Even I was taken back by some of the data from the bull market in stocks… • The Dow hit a record high 71 times last year. On average, a new high was hit more frequently than once a week. • For the first time ever in its almost 90-year history, the S&P 500 rose every month in 2017. And historically there have only been four years with gains in 11 months of the year. • The S&P’s largest pullback in 2017 was 2.8%, the smallest since 1995. • To start 2018, the S&P 500 has risen in each of the five trading sessions, hitting a new record high every day. The last time the index opened the year with at least five straight record highs was 1964.

And as Mike pointed out in his 2018 predictions, the CAPE (Cyclically Adjusted Price-Earnings) ratio has now matched its 1999 level, the second highest reading in over 100 years of data. The CAPE now has a higher reading only in 1929. This all begs the question: is the bull market about to come to an end? This is exactly the kind of frothy behavior a market sees near its apex, so it’s definitely a prudent question to ask. If last year ends up being the top of this bull market, what does history say could happen to stocks this year? We dug up the data for all bull markets in the S&P since the year 1900, and then examined what happened in the very first year after each of those bull markets ended. In other words, what did the first year of the bear market look like after the last full year of the bull market? This could be useful data, if 2017 ends up being the peak of the bull market. Here’s what history shows.

First Year Performance of Bear Market After Bull Market Ends

While the declines for the first year of the bear market varied greatly, you can see that on average, the S&P lost 16% the year immediately following the last year of the bull market. Also notice that in only four cases was the decline measured in single digits—all others were double digit losses. Mike Maloney believes this is the year overvalued stocks begin their descent. If he’s right, the decline could be higher than the historical average, since this is the second longest bull market in history.

Read more …

The fruits of privatization.

UK’s Carillion Crisis Deepens Amid Scramble To Save Jobs After Collapse (G.)

Thousands of staff who worked for the collapsed construction firm Carillion inside private sector companies will have their wages stopped on Wednesday unless their jobs are rescued by other firms, the government has said. Experts also said up to 30,000 small firms were owed money by Carillion, which crashed into liquidation on Monday morning, with insolvency practitioners reporting an immediate rush of calls from worried business owners. Ministers gathered for an emergency meeting on Monday night in an effort to limit the damage caused by the collapse of the sprawling construction and support services business. As the fallout spread, the Cabinet Office minister, David Lidington, faced mounting pressure over the government’s oversight of the firm’s increasingly precarious finances in the months leading up to its failure.

Lidington told parliament the government would continue to pay those among Carillion’s 19,500 UK staff who work in public sector jobs, such as NHS cleaners and school catering. But he admitted thousands of Carillion’s private sector workers – who perform jobs ranging from cleaning to catering, security and postroom services for organisations such as the Nationwide building society and BT Openreach – would be cut loose after 48 hours. “The position of private sector employees is that they will not be getting the same protection that we’re offering to public sector employees, beyond a 48-hour period of grace,” Lidington said. He added that this would give time for Carillion’s private clients to decide if they wanted to terminate the contracts or step in to cover wages themselves. “I think that is a reasonable gesture towards private sector employees,” he said, adding that a Jobcentre Plus helpline had been set up.

Read more …

Only debt leaves the country standing.

Quarter Of UK’s Poorest Households Are Getting Deeper In Debt (G.)

One in four of Britain’s poorest households are falling behind with debt payments or spending more than a quarter of their monthly income on repayments, according to a study. The latest evidence of mounting debt problems for some of the most vulnerable in society is shown in a report by the Institute for Fiscal Studies, on behalf of the Joseph Rowntree Foundation, at a time when borrowing on credit cards, loans and car finance deals returns to levels unseen since before the 2008 financial crisis. The poorest tenth of households are also more likely to be in net debt, owing more on plastic or on overdrafts and loans than they hold in savings. About a third of the poorest homes are in net debt, compared with only 10% of the highest-income tenth.

For a household of two adults and two children aged between 30 and 44 to be in the poorest tenth, they would have a net annual income of up to £23,200. Young adults are much more likely to be in households in arrears or paying large chunks of their income to banks or credit card providers, the study found. David Sturrock, a research economist at the IFS, said: “Debt looks like a real problem for a significant minority of those on low incomes.” [..] Debt problems for the poorest households can prove persistent, and are of growing concern to the Financial Conduct Authority. Of the poorest fifth of households who were in arrears or spending more than a quarter of their income on debt repayments and charges in 2010, more than 40% were found to be stuck in a similar position two years later.

Read more …

Tsipras has become the oppressor. Credibility of the entire Greek political system is gone for many years to come. That does not bode well.

Greek Parliament Votes Through Raft Of Tough Reforms (K.)

As thousands of protesters rallied in Athens and Thessaloniki on Monday, Parliament approved the prior actions included in an all-inclusive bill which the leftist-led coalition government hopes will be the last significant batch of spending cuts and reforms the country has to implement before its bailout program ends in August. The 1,500-page austerity bill, which includes the demands by Greece’s international creditors to expedite auctions of foreclosed properties and changes to labor law that will make it harder for unions to call strikes, was approved by 154 lawmakers in the 300-seat Parliament. Some 141 lawmakers from main opposition New Democracy, Democratic Alignment, Golden Dawn and the Union of Centrists voted against all the provisions included in the bill. Prime Minister Alexis Tsipras told lawmakers that the approval of the multi-bill brings Greece “just one step from the end of the bailout.”

“In the summer, we will… leave behind a tough, unfair and harmful period,” he said, adding that the conclusion of the third review “gives hope to millions of our fellow citizens” but has caused agitation to others, referring to the parties of the opposition. Tsipras rejected claims by the opposition that the new bill will ban the right to strike. “The right to strike is a sacred conquest of the working class. It is not being scrapped and it is not under threat from this government,” he said. For his part, New Democracy leader Kyriakos Mitsotakis denounced Tsipras for “ransoming the country’s future” and damaging its economy. “You are legislating articles that even you don’t agree with,” Mitsotakis said, addressing Tsipras in Parliament, adding that the leftist leader was pushing through measures he was elected to oppose and that he “turned lying into a profession and cynicism into an art.”

Mitsotakis also accused Tsipras and his SYRIZA party of “threatening” investors while they were in the opposition and refuted the government’s narrative that the country is heading for a clean bailout exit in August. The vote in Parliament took place as around a total of 20,000 people in Athens and Thessaloniki marched in protest. Police used pepper spray to disperse rock-throwing protesters outside Parliament. Some demonstrators also sprayed police with red paint. Meanwhile, Monday’s public transport strike – bus, tram, trolley and metro services – in opposition to the bill caused problems for commuters in the Greek capital. The disruption also impacted state-run schools and public hospitals, with teachers and doctors holding work stoppages, while a three-hour walkout by air traffic controllers led to the rescheduling or cancellation of flights.

Read more …

Obvious suggestion: stop pumping mining sludge into the reef system. Did I just make $1 million? Didn’t think so. Don’t be fooled by this sort of crap.

Australia Offers Cash For Great Barrier Reef Rescue Ideas (AFP)

Australia is calling on the world’s top scientific minds to help save the Great Barrier Reef, offering hundreds of thousands of dollars to fund research into protecting the world’s largest living structure. The UNESCO World Heritage-listed reef is reeling from significant coral bleaching due to warming sea temperatures linked to climate change. The 2,300-kilometre (1,400-mile) site is also under pressure from farming runoff, development and predatory crown-of-thorns starfish, with experts warning it could be suffering irreparable damage. On Tuesday, the Australian government announced a Aus$2.0 million (US$1.6 million) funding pot available to people with bright ideas on how to save the reef.

“The scale of the problem is big and big thinking is needed, but it’s important to remember that solutions can come from anywhere,” said Environment Minister Josh Frydenberg. He said the money would be available to the world’s “greatest scientific minds, industry and business leaders, innovators and entrepreneurs”. “Solutions could focus on anything from reducing the exposure of corals to physical stressors, to boosting coral regeneration rates by cultivating reef-building coral larvae that attract other important marine species,” Frydenberg added. Up to Aus$250,000 is available for an initial feasibility stage, where researchers can test the technical and commercial viability of their proposals for up to six months.

More than one proposal is expected to be accepted at this stage, the government said. A further Aus$1 million will then be made available to the best solutions at the proof of concept stage, where applicants develop and test their prototypes for up to 12 months. Those that are successful will retain intellectual property rights and will be able to try to commercialise their innovation.

Read more …

No force suppliers to do the same.

UK Supermarket Iceland To Eliminate Plastic On All Own-Label Products (G.)

Iceland has become the first major retailer to commit to eliminate plastic packaging for all its own-brand products. The supermarket chain, which specialises in frozen food, said it would go plastic-free within five years to help end the “scourge” of plastic pollution. The current plastic packaging would be replaced with paper and pulp trays and paper bags, which would be recyclable through domestic waste collections or in-store recycling facilities. The supermarket recently carried out a survey in which 80% of 5,000 people polled said they would endorse the move to go plastic-free. Iceland managing director, Richard Walker, said: “The world has woken up to the scourge of plastics. A truckload is entering our oceans every minute, causing untold damage to our marine environment and ultimately humanity – since we all depend on the oceans for our survival.

“The onus is on retailers, as leading contributors to plastic packaging pollution and waste, to take a stand and deliver meaningful change.” He also said Iceland would ensure all packaging was fully recyclable and would be recycled, through support for initiatives such as a bottle deposit return scheme for plastic bottles. As it was technologically and practically possible to create less environmentally harmful alternatives, “there really is no excuse any more for excessive packaging that creates needless waste and damages our environment”, Walker added. Iceland has already removed plastic disposable straws from its own label range and new food ranges in the next few months will use paper-based food trays. The move, which has been welcomed by environmental campaigners, comes amid growing concern over plastic pollution in the world’s oceans, where it can harm and kill wildlife such as turtles and seabirds.

Read more …

Jan 122018
 
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Do these people ever consider this perhaps helps Trump? The Man’s on Fire!

 

Bitcoin Steadies But Set For Worst Weekly Slide Since 2015 (BBG)
Cryptos Surge As South Korea Backs Away From Trading Ban (ZH)
South Korea Is Talking Down The Idea Of A Cryptocurrency Trading Ban (CNBC)
China’s Trade Surplus With The US Hit A Record High In 2017 (CNBC)
China Sets New Records for Gobbling Up the World’s Commodities (BBG)
Household Debt Boom Sows The Seeds For A Bust (CBR)
Markets Still Blow Off the Fed, Dudley Gets Nervous, Fires Warning Shot (WS)
We’re Going To See A Radically Changing World In 2018 – (Nomi Prins)
Why We Have to Talk About a Bubble (BBG)
Uber’s Secret Tool for Keeping the Cops in the Dark (BBG)
Monsanto Seeks To Cash In On The Organic Food Market (CP)
Electric Car Dreams Run Into Metal Crunch (BBG)
Greece Is Now Worse Off Than When It Defaulted For The First Time (ZH)

 

 

It’s a slide! It’s a surge! Depends who you ask, and what time of day. Ask again every half hour, or you may miss the big moves. Translation: bitcoin is far from ready for the big leagues. It’s about stability.

Bitcoin Steadies But Set For Worst Weekly Slide Since 2015 (BBG)

Bitcoin steadied Friday after four days of losses for the largest cryptocurrency amid increasing scrutiny from regulators around the world with concerns ranging from investor losses to strains on power systems. Bitcoin was little changed on the day, at $13,467 as of 1:27 p.m. Hong Kong time, reversing an earlier decline. It was down as much as 23% for the week at one point, on track for the deepest decrease since January 2015, according to Bloomberg composite pricing, and is now down about 20%. The token peaked in mid-December soon after the introduction of futures trading on regulated exchanges in Chicago. Among the blows to cryptocurrencies this week was the South Korean justice minister’s reiteration of a proposal to ban local cryptocurrency exchanges, though the comments were later downplayed by a spokesman for the president.

Meanwhile, bitcoin mining is set to become more expensive as China’s government cracks down on the industry, in part out of concerns about power use. In the U.S., scrutiny is set to increase amid concerns about the potential use of cryptocurrencies for fraudulent purposes such as money laundering. Securities and Exchange Commission Chairman Jay Clayton and Commodity Futures Trading Commission Chairman J. Christopher Giancarlo are set to testify to the Senate Banking Committee on risks tied to bitcoin and its counterparts, according to a person with direct knowledge of the matter. The committee intends to hold a hearing in early February, the person said.

Read more …

The reaction scared the sh*t out of Seoul. But they still have to act, because bitcoin’s wide acceptance in the country means it’s a real danger to the whole economy.

Cryptos Surge As South Korea Backs Away From Trading Ban (ZH)

After what has seemed like a non-stop barrage of bad news for crypto bulls from South Korea, we noted some cracks in the foundation of the anti-cryptocurrency push as the ministry of finance refused to support the ministry of justice’s exchange shutdown bill. Tonight we get further clarification that the end of South Korean crypto trading is not nigh as Yonhap reports the various government ministries need more time and more consultations over the mininstry of justice’s plan to ban crypto-exchanges. “The issue of shutting down (cryptocurrency) exchanges, told by the justice minister yesterday, is a proposal by the justice ministry and it needs consultations among ministries,” Kim said.

Ministers reportedly seek a “soft-landing” considering the shock the measures may have on the market is an issue that can result in huge social, economic damage. Additionally Yonhap notes that even if pursued, shutdown of exchanges would take some time as it needs discussion at parliament (it would take months or even years for a bill to become a law). All of which can be roughly translated as – we have no idea of the impact of banning this stuff and just how much damage to the nation’s wealth could occur if we do… The result is a broad-based rally across the major cryptocurrencies… Tens of thousands of people filed an online petition, asking the presidential office to stop the clampdown against cryptocurrency trading. South Korea is home to one of the world’s biggest private bitcoin exchanges, with more than 2 million people estimated to own some of the best-known digital currency.

Read more …

Stand up comedian minister: “..a balanced perspective is necessary because blockchain technology has high relevance with many industries such as security and logistics.”

South Korea Is Talking Down The Idea Of A Cryptocurrency Trading Ban (CNBC)

South Korea’s finance minister on Friday said that relevant officials need to hold more consultations over the justice ministry’s plan to ban cryptocurrency exchanges in the country. “All government ministries agree on the need for a government response to an overheating in cryptocurrency speculation and for a degree of regulation,” Minister Kim Dong-yeon told reporters, according to news agency Yonhap. “The issue of banning exchanges that the justice minister talked about yesterday is a proposal by the Justice Ministry and it needs more coordination among ministries,” Kim added. He also said that discussion was under way on how the government could reasonably regulate cryptocurrency trading that’s overheating with irrational and speculative behavior, Yonhap reported.

Kim said “a balanced perspective is necessary because blockchain technology has high relevance with many industries such as security and logistics.” Kim’s comments followed news that the country’s justice ministry appeared to have softened its stance after remarks from its chief on Thursday saw billions wiped off the global cryptocurrency market. The justice ministry explained, according to Yonhap, that the ban was not a done deal in a text message to reporters on Thursday. “The ministry has been preparing a special law to shut down all cryptocurrency exchanges, but we will push for it after careful consideration with related government agencies,” the justice ministry said.

[..] “Justice Minister Park Sang-ki’s remarks regarding the shutdown of cryptocurrency exchanges is one of the measures that have been prepared by the Justice Ministry, but it is not a finalized decision and will be finalized through discussion and a coordination process with each government ministry,” the chief press secretary to President Moon Jae-in said in a statement reported by Yonhap. Even if a bill aiming to ban all cryptocurrency trading is drafted, it will require a majority vote in the country’s National Assembly before it can be enacted into law. That process could take months — or even years.

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This must worry Xi. China sets itself up for a strong reaction. And then? Withdraw back into its own cocoon? Not an option for an export-dependent economy. The shift to domestic consumption has so far failed miserably.

China’s Trade Surplus With The US Hit A Record High In 2017 (CNBC)

China’s 2017 trade surplus with the U.S. was $275.81 billion, the country’s customs data showed Friday, according to Reuters. By that data, last year’s surplus is a record high, the wire service reported. For comparison, the previous record was a surplus of $260.8 billion in 2015. The world’s second-largest economy had a surplus of $25.55 billion in December, data showed, compared to $27.87 billion in November. Trade with China is politically sensitive as the world’s second-largest economy runs surpluses against many of its trading partners. President Donald Trump has repeatedly signaled tougher action on what he calls unfair practices that have lead to a massive trade deficit with China. Overall, China’s trade balance for 2017 was a surplus of $422.5 billion

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Stocking up on oil and gas instead of Treasuries, just in case Trump launches a trade war.

China Sets New Records for Gobbling Up the World’s Commodities (BBG)

China continues to gobble up the world’s commodities, setting new records for consumption of everything from crude oil to soybeans. In a year of flux marked by industrial capacity cuts, environmental curbs and financial deleveraging, demand for raw materials has continued to grow in the world’s biggest consumer, helping drive a second annual gain in global commodity returns. As President Xi Jinping consolidates power behind an economy that may have posted its first full-year acceleration since 2010, there are few signs of the Chinese commodity juggernaut slowing as it rolls into 2018. “China’s economic expansion has been beating expectations since the second half of last year, boosting demand for all kinds of commodities,” Guo Chaohui at China International Capital, said by phone. “We are expecting continued strength in economic growth in 2018 which will keep up the nation’s import appetite.”

Inbound shipments from across the globe – Russia to Saudi Arabia and Venezuela – jumped about 10% to average 8.43 million barrels a day in 2017, data from China’s General Administration of Customs showed on Friday. The unprecedented purchases may be bettered in 2018, if import quotas granted by the government to China’s independent refiners are a signal. The first batch of allocations was 75% higher than for 2017. The world’s second-biggest economy is also realizing that the key to winning its war on smog may lie overseas. Record amounts of less-polluting grades of iron ore – typically not available within China – are being pulled in to feed the nation’s mammoth steel industry, with imports rising 5% to 1.07 billion metric tons in 2017.

Purchases of less-polluting ore is only one tactic in China’s war against pollution. Another is curbing coal use and encouraging the use of cleaner natural gas instead. Imports of the fuel via both sea and pipeline surged almost 27% to 68.57 million tons in 2017.

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Coherent.

Household Debt Boom Sows The Seeds For A Bust (CBR)

What causes the ebbs and flows of the business cycle? In the first of two videos, Chicago Booth’s Amir Sufi argues that one key factor is the financial sector and its willingness to lend. As credit becomes more and more available, the economy booms—but when household debt becomes unsustainable, it sows the seeds for a bust.

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Financial stress at a record low. There’s no stronger stress indicator.

Markets Still Blow Off the Fed, Dudley Gets Nervous, Fires Warning Shot (WS)

“So, what am I worried about?” New York Fed President William Dudley, who is considered a dove, asked rhetorically during a speech on Thursday at the Securities Industry and Financial Markets Association in New York City. “Two macroeconomic concerns warrant mention,” he continued. And they are: One: “The risk of economic overheating.” He went through some of the mixed data points, including “low” inflation, “an economy that is growing at an above-trend pace,” a labor market that is “already quite tight,” and the “extra boost in 2018 and 2019 from the recently enacted tax legislation.” Two: The markets are blowing off the Fed. He didn’t use those words. He used Fed-speak: “Even though the FOMC has raised its target range for the federal funds rate by 125 basis points over the past two years, financial conditions today are easier than when we started to remove monetary policy accommodation.”

When the Fed raises rates, its explicit intention is to tighten “financial conditions,” meaning that borrowing gets a little harder and more costly at all levels, that investors and banks become more risk-averse and circumspect, and that borrowers become more prudent or at least less reckless – in other words, that the credit bonanza cools off and gets back to some sort of normal. To get there, the Fed wants to see declining bond prices and therefor rising yields, cooling equities, rising risk premiums, widening yield spreads, and the like. These together make up the “financial conditions.” There are various methods to measure whether “financial conditions” are getting “easier” or tighter. Among them is the weekly St. Louis Fed Financial Stress Index, whose latest results were published on Thursday.

The Financial Stress Index had dropped to a historic low of -1.6 on November 3, meaning that financial stress in the markets had never been this low in the data series going back to 1994. Things were really loosey-goosey. On Thursday, the index came in at -1.57, barely above the record low, despite another rate hike and the Fed’s “balance-sheet normalization. And this rock-bottom financial stress in the markets is occurring even as short-term interest rates have rocketed higher in response to the Fed’s rate hikes, with the two-year Treasury yield on Thursday closing at 1.96% for the third day in a row, the highest since September 2008.

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Nomi doesn’t really clarify what is radical about events.

We’re Going To See A Radically Changing World In 2018 – (Nomi Prins)

In last year’s roadmap, I forecast that 2017 would end with gold prices up and the dollar index down, both of which happened. I underestimated the number of Fed hikes by one hike, but globally, average short term rates have remained around zero. That will be a core pattern throughout 2018. Central banks may tweak a few rates here and there, announce some tapering due to “economic growth”, or deflect attention to fiscal policy, but the entire financial and capital markets system rests on the strategies, co-dependencies and cheap money policies of central banks. The bond markets will feel the heat of any tightening shift or fears of one, while the stock market will continue to rush ahead on the reality of cheap money supply until debt problems tug at the equity markets and take them down.

Central bankers are well aware of this. They have no exit plan for their decade of collusion. But a weak hope that it’ll all work out. They have no dedicated agenda to remove themselves from their money supplier role, nor any desire to do so. Truth be told, they couldn’t map out an exit route from cheap money even if they wanted to. The total books of global central banks (that hold the spoils of QE) have ballooned by $2 Trillion in assets (read: debt) over 2017. That brings the amount of global central banks holdings to more than $21.7 trillion in assets. And growing. Teasers about tapering have been released into the atmosphere, but numbers don’t lie.

That’s a hefty cushion for international speculation. Every bond a central bank buys or holds, gets a price-lift. Trillions of dollars of such buys have artificially lifted all bond prices, and stocks because of the secondary-lift effect and rapacious search for self-perpetuating returns. Financial bubbles pervade the world. Central bank leaders may wax hawkish –manifested in strong words but tepid actions. Yet, overall, policies will remain consistent with those of the past decade to combat this looming crisis. US nationalistic trade policies will push other nations to embrace agreements with each other that exclude the US and shun the US dollar.

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Jean-Michel Paul, founder and Chief Executive of Acheron Capital in London, says: “..one that has received too little attention up to now is the prospect that we are heading toward a growing asset bubble that will result in a pronounced crash.. “. Well, not in my circles, which talk ONLY about that.

Why We Have to Talk About a Bubble (BBG)

Back in November, former Fed chief Janet Yellen described the current low level of inflation as a “mystery.” Despite a small pickup in prices, Europe has the same mystery to solve: Economic confidence in the euro area is at its highest point for a decade, according to the European Commission’s measure, released this week. But there’s no sign of the inflation that you’d normally expect with that kind of economic upsurge. The ECB minutes from December, released Thursday, show some in the ECB are similarly baffled by what they call a “disconnect” between the real economy and prices. With QE having multiplied the amount of fiat money issued by central banks in just a few years, it’s fair to wonder: How come it didn’t trigger much higher levels of inflation than what we now see?

The technical answer is that the money created has ended up full circle – on the books of the central banks. The more fundamental answer is that QE resulted in a wealth increase for the richest, who consume relatively little of their revenue, while the middle class and the neediest largely failed to reap any benefit. Having not gained from QE, their consumption has not risen, leaving prices pretty much flat. There are many problems with this, from growing inequality to pressures on social cohesion. But one that has received too little attention up to now is the prospect that we are heading toward a growing asset bubble that will result in a pronounced crash, as Jeremy Grantham, co-founder of the investment firm GMO, argued in a note last week. He predicts a “melt-up” – where investors pile into assets as prices rise – followed by a significant decline “of some 50%.”

[..] central bankers are still using inflation as a measure to gauge how much more QE they should proceed with. The ECB has repeatedly justified QE expansion because its goal of 2 percent consumer inflation remains unmet. [..] British journalist Ambrose Evans-Pritchard, commenting on the Grantham thesis recently in the Daily Telegraph, put the challenge now in the starkest possible terms, as a threat not simply to the recovery but to democracy: “The central banks themselves entered into a Faustian Pact from the mid-Nineties onwards, falsely thinking it safe to drive real interest rates ever lower with each cycle, until they became ensnared in what the Bank for International Settlements calls a policy “debt trap”. This has gone on so long, and pushed debt ratios so high, that the system is now inherently fragile. The incentive to let bubbles run their course has become ever greater.”

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Can’t decide if this is hard to believe, or entirely normal by now.

Uber’s Secret Tool for Keeping the Cops in the Dark (BBG)

In May 2015 about 10 investigators for the Quebec tax authority burst into Uber Technologies Inc.’s office in Montreal. The authorities believed Uber had violated tax laws and had a warrant to collect evidence. Managers on-site knew what to do, say people with knowledge of the event. Like managers at Uber’s hundreds of offices abroad, they’d been trained to page a number that alerted specially trained staff at company headquarters in San Francisco. When the call came in, staffers quickly remotely logged off every computer in the Montreal office, making it practically impossible for the authorities to retrieve the company records they’d obtained a warrant to collect. The investigators left without any evidence.

Most tech companies don’t expect police to regularly raid their offices, but Uber isn’t most companies. The ride-hailing startup’s reputation for flouting local labor laws and taxi rules has made it a favorite target for law enforcement agencies around the world. That’s where this remote system, called Ripley, comes in. From spring 2015 until late 2016, Uber routinely used Ripley to thwart police raids in foreign countries, say three people with knowledge of the system. Allusions to its nature can be found in a smattering of court filings, but its details, scope, and origin haven’t been previously reported. The Uber HQ team overseeing Ripley could remotely change passwords and otherwise lock up data on company-owned smartphones, laptops, and desktops as well as shut down the devices.

This routine was initially called the unexpected visitor protocol. Employees aware of its existence eventually took to calling it Ripley, after Sigourney Weaver’s flamethrower-wielding hero in the Alien movies. The nickname was inspired by a Ripley line in Aliens, after the acid-blooded extraterrestrials easily best a squad of ground troops. “Nuke the entire site from orbit. It’s the only way to be sure.” [..] Uber deployed Ripley routinely as recently as late 2016, including during government raids in Amsterdam, Brussels, Hong Kong, and Paris, say the people with knowledge of the matter. The tool was developed in coordination with Uber’s security and legal departments, the people say. The heads of both departments, Joe Sullivan and Salle Yoo, left the company last year.

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Monsanto wants a monopoly on all the world’s food. If you don’t stop them now, it’ll soon be too late.

Monsanto Seeks To Cash In On The Organic Food Market (CP)

At the recent Codex meeting in Berlin, there was an attempt to define genetically engineered (GE) food ingredients as ‘biofortified’ and therefore mislead consumers. This contravened the original Codex mandate for defining biofortification. That definition is based on improving the nutritional quality of food crops through conventional plant breeding (not genetic engineering) with the aim of making the nutrients bioavailable after digestion. The attempt was thwarted thanks to various interventions, not least by the National Health Federation (NHF), a prominent health-freedom international non-governmental organization and the only health-freedom INGO represented at Codex. But the battle is far from over.

The Codex Alimentarius Commission’s Codex Committee on Nutrition and Foods for Special Dietary Uses (CCNFSDU) convened in Berlin during early December and drafts provisions on nutritional aspects for all foods. It also develops international guidelines and standards for foods for special dietary uses that will be used to facilitate standardized world trade. Based upon previous meetings, the initial intention of the Committee was to craft a definition for biofortification that could then be used uniformly around the World. Biofortification originally referred to increasing certain vitamin and mineral content of basic food crops by way of cross-breeding, not genetic engineering, for example by increasing the vitamin or iron content of sweet potatoes so that malnourished populations would receive better nutrition.

However, according to president of the NHF, Scott Tips, Monsanto wants to redefine the definition to include GE ‘biofortified’ foods and it has seemingly influenced Codex delegates in that direction. Tips says, “I am sure that Monsanto would be thrilled to be able to market its synthetic products under a name that began with the word ‘bio’.” [..] Including GE foods within any definition of biofortification risks consumer confusion as to whether they are purchasing organic products or something else entirely. “Monsanto seeks to cash in on the organic market with the loaded word ‘bio’,” argues Scott Tips. At the Codex meeting in Berlin, Tips addressed the 300 delegates in the room. “Although NHF was an early supporter of biofortification, we have since come to see that the concept is in the process of being hijacked and converted from something good into something bad,” explained Tips.

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Luckily the CIA is still dividing the people in the Congo. And making money selling all sides weapons.

Electric Car Dreams Run Into Metal Crunch (BBG)

When BMW revealed it was designing electric versions of its X3 SUV and Mini, the going rate for 21 kilograms of cobalt—the amount of the metal needed to power typical car batteries—was under $600. Only 16 months later, the price tag is approaching $1,700 and climbing by the day. For carmakers vying to fill their fleets with electric vehicles, the spike has been a rude awakening as to how much their success is riding on the scarce silvery-blue mineral found predominantly in one of the world’s most corrupt and underdeveloped countries. “It’s gotten more hectic over the past year,” said Markus Duesmann, BMW’s head of procurement, who’s responsible for securing raw materials used in lithium-ion batteries, such as cobalt, manganese and nickel. “We need to keep a close eye, especially on lithium and cobalt, because of the danger of supply scarcity.”

[..] Complicating the process is the fact that the cobalt trail inevitably leads to the Democratic Republic of the Congo, where corruption is entrenched in everyday business practices. The U.S. last month slapped sanctions on Glencore’s long-time partner in Congo, Israeli billionaire Dan Gertler, saying he used his close ties to Congolese President Joseph Kabila to secure mining deals. There’s also another ethical obstacle to negotiate. The African nation produces more than 60 percent of the world’s cobalt, a fifth of which is drawn out by artisanal miners who work with their hands — some of whom are children. The country is also planning to double its tax on the metal.

“There just isn’t enough cobalt to go around,” said George Heppel, a consultant at CRU. “The auto companies that’ll be the most successful in maintaining long-term stability in terms of raw materials will be the ones that purchase the cobalt and then supply that to their battery manufacturer.” To adjust to the new reality, some carmakers are recruiting geologists to learn more about the minerals that may someday be as important to transport as oil is now. Tesla Inc. just hired an engineer who supervised a nickel-cobalt refinery in New Caledonia for Vale to help with procurement. But after decades of dictating terms with suppliers of traditional engine parts, the industry is proving ill-prepared to confront what billionaire mining investor Robert Friedland dubbed “the revenge of the miner.”

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Never use Greece and Recovery in one sentence together. Because you’d be spouting nonsense.

Greece Is Now Worse Off Than When It Defaulted For The First Time (ZH)

According to the market, the situation in Greece has staged a tremendous recovery. So much so, in fact, that Greek 2Y bonds are now trading inside US 2Y Treasurys. Yes, according to the market, Greece is now a safer credit than the US. And yet, a quick peek inside the actual Greek economy, reveals that nothing has been fixed. In fact, one can argue that things are now worse than they were when Greece defaulted (for the first time), According to statistics from IAPR, unpaid taxes in Greece currently make up more than 55% of the country’s GDP due to – well – the inability of people to pay the rising taxes. Overdue debt to the state has reached nearly €100 billion with only €15 billion possible to be returned to the government’s coffers, as most are due to bankrupt businesses and deceased individuals.

The Greek tax authorities seized pensions, salaries, and assets of more than 180,000 taxpayers in 2017, meanwhile bad debt to the state treasury continue to grow. The Independent Authority for Public Revenue confiscated nearly €4 billion in the first 10 months of this year with forced measures to be reportedly taken against 1.7 million defaulters in 2018. Bad debt owed to the state in Greece has been growing at €1 billion a month since 2014, and nearly 4.17 million taxpayers currently owe money to the country, which means that every second Greek is directly indebted. Demonstrating the full extent of the economic mess, a recent report from Kathimerini revealed that Greek lenders are proposing huge haircuts, as high as 90%, for borrowers with debts from consumer loans, credit cards or small business loans without collateral.

In the context of the sale of a 2.5-billion-euro bad-loan portfolio named Venus, Alpha Bank is using the incentive of major haircuts in letters it has sent to some 156,000 debtors. The fact that this concerns some 240,000 bad loans means that some debtors may have two or three overdue loans. Another major local lender, Eurobank, is employing the same strategy for a set of loans adding up to 350 million euros. Most of them range between 5,000 and 7,000 euros each and have been overdue for over a decade. Yes, most Greek are unable to repay a few thousands euros and would rather default. This means that the banks are expecting to collect a small amount of those debts, coming to 250 million euros for Alpha and 35 million for Eurobank – whopping 90% haircuts – accepting that the rest of the debt is uncollectible.

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