Feb 272018
 
 February 27, 2018  Posted by at 11:02 am Finance Tagged with: , , , , , , , , ,  5 Responses »


Lewis Wickes Hine Mother and child, Ellis Island, New York 1907

Stock Market Rests Happily on Smoldering Powder Keg (WS)
China’s Bailouts Won’t End With Anbang (Balding)
US January New Home Sales Crash As Rates Spike (ZH)
US Gross National Debt Spikes $1 Trillion in Less Than 6 Months (WS)
Dark Money: The Secret Force Behind Today’s Rigged Markets (Nomi Prins)
Problem With Rising Rates: Corporate America Has Binged On Debt (CNN)
European Companies’ Alarming Leverage (BBG)
Central Banks Need To Stay Vigilant For Further Volatility – Lagarde (BBG)
US Will Overtake Russia As Top Oil Producer By 2019 (R.)
The Matrix? Alice In Wonderland? Praise For Corbyn From UK Business (Ind.)
Generational Battle Lines Harden Over Pensions (G.)
The Real Reason Behind The US Student Debt Problem (F.)
20 US States Sue Federal Government, Seeking End To Obamacare (R.)
US Supreme Court Rebuffs Trump, Won’t Hear Immigration Appeal (BBG)
And Now the Schiff Memo (Jim Kunstler)
East Ghouta: The Last Great Battle Of The Syrian War? (Duran)
Women ‘Sexually Exploited In Return For Aid’ in Syria (BBC)

 

 

The beauty of low rates.

Stock Market Rests Happily on Smoldering Powder Keg (WS)

There is nothing like a big shot of leverage to fire up the stock market. And that’s what the market got in 2017, when the S&P 500 surged 26%, and in January 2018, when the index soared another 7.5% through January 26 – until suddenly something happened. One measure of leverage in the stock market is margin debt – the amount individual and institutional investors borrow from their brokers against their portfolios – which surged $22.9 billion in January to a new record of $665.7 billion, according to FINRA (Financial Industry Regulatory Authority), which regulates member brokerage firms and exchange markets, and which has taken over margin-debt reporting from the NYSE.

For the 12-month period through January, margin debt soared $112.2 billion, among the largest 12-month gains in the history of the data series, behind only the 12-month periods ending in: • December 2013 ($123 billion) • July 2007 ($160 billion) • March 2000 ($133.7 billion) • November 1997 ($132 billion). But it’s not just the recent surge; it’s the length of the surge. With only a few noticeable down periods, margin debt has soared for nine years in a row and now exceeds the prior peak of July 2007 ($416 billion) by 60%. By comparison, over the same period, nominal GDP (not adjusted for inflation) has grown 32%, and the Consumer Price Index has grown 20%.

In other words, margin debt has ballooned twice as fast from peak to peak as GDP and three times as fast as the Consumer Price Index. The chart below shows margin debt based on the FINRA data, which includes margin debt from its own member firms and from NYSE Member firms, and is therefore more complete and larger than the NYSE data was. For example, NYSE margin debt in November 2017, the last month available, was $580.9 billion while FINRA’s data for November showed margin debt of $627.4 billion. And in January, FINRA warned about the levels of margin debt – marked in green on the chart. Note the spike that started in June 2016:

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Xi’s main problem: he can’t let these companies go belly-up. And there’s lots of them, some big, some smaller.

China’s Bailouts Won’t End With Anbang (Balding)

When the China Insurance Regulatory Commission announced last week that it was seizing Anbang, the only surprise was that it took so long. Last year, the company was told to sell its overseas assets, its founder was placed behind bars, and banks were ordered to stop offering its products. So what, if anything, does this latest incident tell us about China’s economy and its attempt to crack down on debt? Anbang is often referred to as an insurance company, but this is misleading. Although the company does offer some run-of-the-mill products, such as property and casualty insurance, what really drove its growth were unusually structured life-insurance products. At the end of 2016, shortly before regulators intervened, property and casualty premiums made up a mere 4% of the group’s revenue. Life insurance made up 96%.

The growth in this business stunned even China analysts accustomed to tales of fabulous growth. From 2010 to 2016, Anbang’s annual life-insurance premium revenue increased from 1 million yuan to 114.2 billion yuan, or total growth of 11 million %. Even during a period of rapid economic expansion, annualized growth of 593% is amazing. The problem was that the life-insurance products were actually high-yielding debt instruments; investors could opt out of the insurance portion in as little as two years. With some products yielding more than 5% in the first three years, this essentially made Anbang a highly leveraged investor taking on significant risks to cover its cost of capital. Customers were basically extending loans to Anbang that it used to overpay for assets. Regulators finally stepped in to prevent a collapse that could have led to significant instability – with some 35 million customers demanding their money back.

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Econ 101 redux: “..prices will be forced to adjust lower as affordability collapses..”

US January New Home Sales Crash As Rates Spike (ZH)

Following the significant disappointment of January’s existing home sales, hopes were high for a rebound in new home sales (+3.5% expected after December’s 9.3% plunge) but those hopes were crushed as January new home sales crashed 7.8% MoM. This is the lowest level since August, even as the supply of homes at current sales rate climbed to 6.1 months from 5.5 months.

This is the biggest two-month drop in new home sales SAAR since August 2013. The Median price dropped from $336,700 to $323,000 – the lowest since October…

16% of new homes sold in January cost more than $500,000, down from 22% last month. As sales in the Northeast collapsed: • Northeast -33.3%, from 36K to 24K • Midwest +15.4%, from 65K to 75K • South -14.2%, from 351K to 301K • West +1.0%, from 191K to 193K So we are sure NAR will blame ‘inclement’ weather – as opposed to soaring rates and plunging affordability. Just as we warned previously, the following chart shows, that surge in rates will have a direct impact on home sales (or prices will be forced to adjust lower) as affordability collapses… This won’t end well.

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When trapped by crazy, go crazier.

US Gross National Debt Spikes $1 Trillion in Less Than 6 Months (WS)

As of the latest reporting by the Treasury Department, the US gross national debt rose by $41.5 billion on Thursday, February 22, to a grand total of $20.8 trillion. Here’s the thing: On September 7, 2017, five-and-a-half months ago, just before Congress suspended the debt ceiling, the gross national debt stood at $19.8 trillion. At that time, I was holding my breath waiting for the gross national debt to take a huge leap in a single day – as it always does after the debt ceiling gets lifted or suspended – and jump to the next ignominious level. It sure did the next day, when it jumped $318 billion. And it continued. Over a period of 8 weeks, the gross national debt jumped by $640 billion.

Four weeks after that, it had ballooned by $723 billion, at which point Fed Chair Yellen – whose cheap-money policies had enabled Congress to do this for years – said that she was “very worried about the sustainability of the US debt trajectory.” Then Congress served up another debt ceiling – a regular charade lawmakers undertake to extort deals from each other, beat the White House into submission, and keep the rest of the world their on their toes. It goes like this: First they pass the spending bills, directing the Administration to spend specific amounts of money on a gazillion specific things spread around specific districts. Then they block the means to pay the credit card bill. That debt ceiling was suspended on February 8, at which point the gross national debt began to surge again, adding $960.4 billion, a 5% jump in the gross national debt in just 5.5 months:

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Dark money will end up killing everything.

Dark Money: The Secret Force Behind Today’s Rigged Markets (Nomi Prins)

Markets were up again big today and volatility was down. But we haven’t seen the last of rising volatility, nor of the central banks’ attempts to thwart it. This week, new Fed Chair Jerome Powell will be giving his first congressional testimony, and you can be sure that markets are waiting on his words with bated breath. Before his testimony, the Fed will be releasing its Monetary Policy Report, which will also give an indication to the direction of Fed policy. Because these will be his first official comments as Fed chair, Powell will want to both make a personal mark and make sure markets don’t panic over his remarks. I believe he will temper his comments to neutralize any negative market impact the report could have. Wall Street wants to hear that Powell’s not going to aggressively hike rates.

The risk is that, as an article from CNBC reports, “Powell may not clarify anything,” in which case, “traders could be stuck with the same dilemma that shook stocks and sent bond yields spiking [last] Wednesday after the release of the minutes from the Fed’s January meeting.” I think Powell will sound as dovish as he can to avoid that outcome. So even if he confirms rate hikes will be executed at the already forecast pace of three rates this year, he won’t indicate there could be more, which should keep markets calmer and bullish. In other words, I don’t believe that Powell will implement dramatically different monetary policy from his predecessors Janet Yellen or Ben Bernanke. The Fed will do whatever the markets need. Banks have grown accustomed to what I call “dark money” and don’t want Powell to rock the boat.

What is dark money? Dark money basically means money coming from central banks. In essence, central banks “print” money or electronically fabricate money by buying bonds or stocks. They use other tools like adjusting interest rate policy and currency agreements with other central banks to pump liquidity into the financial system. That dark money goes to the biggest private banks and financial institutions first. From there, it spreads out in seemingly infinite directions, affecting different financial assets in different ways. These dark money flows stretch around the world according to a pattern of power, influence and of course, wealth for select groups. Dark money is the No. 1 secret life force of today’s rigged financial markets. It drives whole markets up and down. It’s the reason for today’s financial bubbles.

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CNN wakes up.

Problem With Rising Rates: Corporate America Has Binged On Debt (CNN)

Corporate America, egged on by ridiculously-low borrowing costs, has built up more debt than any time since the end of the Great Recession. The credit binge has allowed companies to grow faster, invest in the future and reward shareholders with huge dividends and share buybacks. Yet elevated levels of debt will also make businesses vulnerable when the next recession strikes or if borrowing costs spike because of rising interest rates. Either outcome will make it harder for Corporate America to pay back the $4 trillion of debt coming due by 2022. This risk has been underlined by the recent surge in Treasury yields and rising concerns that inflation could force the Federal Reserve to consider aggressive rate hikes.

“Removing the easy money punch bowl could trigger the next default cycle,” S&P Global Ratings wrote in a recent report titled “Debt high, defaults low – something’s gotta give.” For nearly a decade, companies have taken advantage of extremely cheap money set by the Fed and foreign central banks trying to pump up sluggish growth. Excluding the highly leveraged financial sector, corporate debt relative to GDP matched an all-time high during the third quarter of 2017, according to an analysis of the most recent numbers by Informa Financial Intelligence. “It’s certainly a reason to be cautious, particularly when we are long into this growth cycle and the Fed is raising rates,” said David Ader, chief macro strategist at Informa Financial Intelligence. “Everything is fine and well – until it isn’t,” he said.

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US, China, Europe et al. Leverage is all that’s left.

European Companies’ Alarming Leverage (BBG)

Much has been written recently about whether companies are going to look overstretched as monetary policy is tightened and bond yields rise. Some excellent research on European non-financial corporates by our Bloomberg Intelligence colleagues Laurent Douillet and Tim Craighead shines more light on the subject. It’s a slightly worrying picture. First off, they looked at cumulative free cash flows over the five years between 2012 and 2016, and then compared them with shareholder payouts and M&A spending. In every sector, except telecoms, free cash flow was exceeded by combined dividends, buybacks and deal-making, as this chart shows:

Consumer companies, drugs makers and industrials have splurged the most on dividends and takeovers. When you take a first glance at leverage, this doesn’t appear to be the end of the world. When you look at the most recent period, net debt to Ebitda looks pretty undemanding, except for the utilities – which are something of a problem child in Europe generally. Even if you look at free cash flow as a proportion of total debt, utilities are probably the only real outlier. Yet if you take a stricter view of what makes up debt, and include pension deficits and operating lease obligations, things start to look less benign. Operating leases are something that Gadfly’s Chris Bryant has looked at before, as companies will have to include them as part of their assets and associated debts when the new IFRS 16 accounting rules come in next year. If you use an adjusted measure of debt by including pensions and leases, as our BI colleagues have done, you get this:

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Blah blah.

Central Banks Need To Stay Vigilant For Further Volatility – Lagarde (BBG)

Central banks need to stay vigilant as uncertainty remains over the impact of the normalization of monetary policies in advanced economies, IMF Managing Director Christine Lagarde said. “We have known for some time that this is coming, but it remains uncertain as to how exactly it will affect companies, jobs, and incomes,” Lagarde told a conference in Jakarta on Tuesday. “Clearly, policy makers need to stay vigilant about the likely effects on financial stability, including the prospect of volatile capital flows.” Stock markets from the U.S. to Asia were in turmoil in recent weeks on concerns that the U.S. could raise interests rates at a faster pace than previously thought. Investors are awaiting Jerome Powell’s first public comments in the role of Fed chairman on Tuesday.

The global economy is on a broad-based upswing, involving about two-thirds of the world, and it offers an opportunity to reform financial markets, upgrade labor laws, and lower barriers to entry in overly protected industries, Lagarde said. The IMF forecasts global economic growth of 3.9 percent this year and in 2019. “As I have been saying recently, the time to repair the roof is when the sun is shining,” Lagarde said. “Repairing the roof also means using fiscal reforms to generate higher public revenues, where needed, and improve spending. By boosting public finances, countries can increase infrastructure investment and development spending, especially on social safety nets for the most vulnerable.‘”

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Burn baby burn.

US Will Overtake Russia As Top Oil Producer By 2019 (R.)

The United States will overtake Russia as the world’s biggest oil producer by 2019 at the latest, the International Energy Agency (IEA) said on Tuesday, as the country’s shale oil boom continues to upend global markets. IEA Executive Director Fatih Birol said at an event in Tokyo the United States would overtake Russia as the biggest crude oil producer “definitely next year”, if not this year. “U.S. shale growth is very strong, the pace is very strong … The United States will become the No.1 oil producer sometime very soon,” he told Reuters separately. U.S. crude oil output rose above 10 million barrels per day (bpd) late last year for the first time since the 1970s, overtaking top oil exporter Saudi Arabia.

The U.S. Energy Information Administration said early this month that U.S. output would exceed 11 million bpd by late 2018. That would take it past top producer Russia, which pumps just below that mark. Birol said he did not see U.S. oil production peaking before 2020, and that he did not expect a decline in the next four to five years. The soaring U.S. production is upending global oil markets, coming at a time when other major producers — including Russia and members of the Middle East-dominated OPEC — have been withholding output to prop up prices. U.S. oil is also increasingly being exported, including to the world’s biggest and fastest growing markets in Asia, eating away at OPEC and Russian market share.

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Briatin’s much further down the rabbit hole than it wants to see.

The Matrix? Alice In Wonderland? Praise For Corbyn From UK Business (Ind.)

A Labour Party led by Jeremy Corbyn as the party of business? JC as the last, best hope for the business community? It’s the sort of thing that would make even one of those nutty internet conspiracy theorists who believe that contactless payments are a satanic plot scoff. Now? Now we’re in Terri May’s Brexit wonderland and the Cheshire Cat is pissing himself. Madness is part of everyday life and nothing seems strange anymore, not even the CBI’s director general Carlyn Fairbairn saying this: “The Labour leader’s commitment to a customs union will put jobs and living standards first by remaining in a close economic relationship with the EU. It will help grow trade without accepting freedom of movement or payments to the EU.”

Or Stephen Martin, the director general of the Institute of Directors, saying this: “Labour has widened the debate today on the UK’s relationship with the EU post-Brexit, and many businesses, particularly manufacturers, will be pleased to hear the Opposition’s proposal to keep a customs union on the table.” You remember the scene from the Wachowskis’ Matrix where Morpheus references Lewis Carroll’s most famous work? “You take the blue pill, you stay in your bed and believe whatever you want to believe. You take the red pill, you stay in wonderland and I show you how deep the rabbit hole goes.” With the Tory party having taken leave of its senses in favour of plunging us into a nightmare beyond anything either Carroll or the the brothers could have conceived, the red pill suddenly doesn’t seem quite as scary as it once did, not now the Tories’ mad ideologues are making merry. The Corbyn rabbit hole might actually be the better option.

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Prediction: no-one’s even going to try to control this, because it would mean having to admit that pensions are Ponzis.

Generational Battle Lines Harden Over Pensions (G.)

A report by the Intergenerational Foundation, a charity that funds research into issues that divide the generations, has found that far from losing out to younger people, baby boomers have proved themselves adept at ensuring they are the winners across many areas of public policy. Governments, say the authors, have been “tempted by short-term pressures to set rates that clearly disadvantage the young and favour the older generations” – compare university fees charged at an interest rate of 6.1% with the 2% the elderly are charged on loans to pay for residential care costs. Another example can be found in the rates of interest offered on state-sponsored savings bonds. The pensioner bond, which was launched by George Osborne and proved so popular it was credited with helping the Tories secure a majority in the 2015 general election, paid a 4% rate of interest.

National Savings bonds for everyone else pay a maximum 2.2%. Worst of all is the huge bill in store for younger people in 30 or 40 years’ time by virtue of the current calculations of future liabilities. Pension liabilities are top of the list, with public sector pensions in particular carrying a heavy cost. The foundation’s concern is that the government overestimates the state’s capacity to pay for future liabilities by exaggerating how fast the UK’s income will grow over time. If GDP growth is forecast at an absurdly high rate then the income will supposedly be in place to pay generous pension payments in 30 years. If that growth fails to materialise, those who are in their 20s and 30s today will need to find large sums of cash to fill the hole when they are in their 50s and 60s.

The debate centres on the discount rate, which is the calculation of a fund’s long-term growth, which is used to reflect how much money should be set aside today to pay for tomorrow. Downgrade the discount rate by 0.5% and the government will need to set aside additional pension contributions worth 3% of salaries, it says. “From this you can see very starkly why representatives of older workers have been lobbying strongly for higher discount rates. If they succeed in keeping discount rates 1% above what they should be, they have essentially transferred 6% of the total pension bill for each of these years from the old to the young, so the young will have to pay this bill,” the authors say.

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Failed education systems.

The Real Reason Behind The US Student Debt Problem (F.)

The New York Fed publishes the always-interesting Quarterly Report on Household Debt and Credit. The Q4 2017 version came out recently. In total, Americans carried $13.15 trillion in debt as of year-end 2017. Most of it is mortgage debt—about 71% of the total, if you include home equity loans. Much to our surprise, the next-largest category isn’t auto loans or credit cards. It’s student loans, which are now 10% of total debt. Their share has been growing steadily. This might be okay if the debt enhanced the student’s financial security, but for millions of Americans, that’s not what has happened. Borrowers don’t achieve the desired results but remain stuck with the debt anyway. While delinquency rates for other forms of debt fell after the recession, student loans didn’t. As of year-end 2017, about 11% of nearly $1.4 trillion in student debt was at least 90 days delinquent.

It’s actually worse than that. Roughly half of student debt is held by borrowers who aren’t required to make payments yet. That’s because they are still in school, unemployed, or otherwise excused. Much of that debt would likely be delinquent too. Also important: The delinquent loans tend to be small (less than $10,000) and held by borrowers who never earned degrees. These borrowers probably thought they were doing the right thing. They wanted decent jobs and saw that having a college degree was necessary to get one. So why is college the key to gainful employment? It hasn’t always been so. It’s because employers require a degree as a job qualification… and that’s partly the fault of IQ tests.

[..] College degrees are convenient, legal substitutes for the kind of testing employers haven’t been able to use since the 1970s. So apart from whatever you learn in college, merely having the credential became necessary to career success. As a result, everyone in the equation made certain choices. • Employers: demand a college degree even for jobs that don’t require college-level skills. • Workers: get a college degree even if you must take on debt. Colleges: Raise prices since so many students are begging for degrees.
This made college more expensive, forcing students to borrow more and more money.

Politicians jumped in to promote and guarantee those loans. And here we are.

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Thw two parties will have to come together to solve this. Just blaming the other won’t do it.

20 US States Sue Federal Government, Seeking End To Obamacare (R.)

A coalition of 20 U.S. states sued the federal government on Monday over Obamacare, claiming the law was no longer constitutional after the repeal last year of its requirement that people have health insurance or pay a fine. Led by Texas Attorney General Ken Paxton and Wisconsin Attorney General Brad Schimel, the lawsuit said that without the individual mandate, which was eliminated as part of the Republican tax law signed by President Donald Trump in December, Obamacare was unlawful. “The U.S. Supreme Court already admitted that an individual mandate without a tax penalty is unconstitutional,” Paxton said in a statement.

“With no remaining legitimate basis for the law, it is time that Americans are finally free from the stranglehold of Obamacare, once and for all,” he said. The U.S. Justice Department did not immediately respond to a request for comment on whether the Trump administration would defend the law in court. The individual mandate in Obamacare was meant to ensure a viable health insurance market by forcing younger and healthier Americans to buy coverage. Republicans have opposed the 2010 law formally known as the Affordable Care Act, the signature domestic policy achievement of Trump’s Democratic predecessor Barack Obama, since its inception.

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The Supreme Court is wise enough to keep its distance from executive and legislative branches.

US Supreme Court Rebuffs Trump, Won’t Hear Immigration Appeal (BBG)

The U.S. Supreme Court rejected a Trump administration appeal aimed at ending deportation protections for young undocumented immigrants, steering clear for now of the debate over the fate of hundreds of thousands of people. The justices, without published dissent, turned away the administration’s appeal of a ruling that has kept the Obama-era program in place. The rejection buys time for the so-called dreamers even as Congress has been unable to agree on legislation to give them permanent protection. The Senate earlier this month blocked three proposals that would have shielded the dreamers. The administration was asking the Supreme Court to take the unusual step of bypassing an appeals court and granting fast-track review of a federal trial judge’s decision.

The court’s rebuff leaves open the possibility that the justices could consider the case later, after a San Francisco-based federal appeals court hears it. “It is assumed that the Court of Appeals will proceed expeditiously to decide this case,” the Supreme Court said in its two-sentence order. The Deferred Action for Childhood Arrivals program “is clearly unlawful,” White House spokesman Raj Shah said in a statement. “We look forward to having this case expeditiously heard by the appeals court and, if necessary, the Supreme Court, where we fully expect to prevail,” he said. DACA, begun under President Barack Obama, protects undocumented immigrants who were brought to the U.S. as children. Applicants are shielded from deportation and allowed to apply for work permits.

The first group of DACA recipients had been set to lose their protected status in March before U.S. District Judge William H. Alsup’s Jan. 9 order. The Trump administration appeal argued that the judge’s order “requires the government to sanction indefinitely an ongoing violation of federal law being committed by nearly 700,000 aliens.” The administration resumed accepting DACA renewal applications after the order. Congress is at an impasse over legislation to protect the dreamers, as President Donald Trump and many Republicans insist that it must be combined with strict new limits on legal immigration. Even though the judge’s order means the prior March deadline isn’t in force, House Speaker Paul Ryan of Wisconsin said this month, “we want to operate on deadlines. We clearly need to address this issue in March.”

Alsup said the Department of Homeland Security based its decision to end the program on the “flawed legal premise” that Obama lacked the authority to set it up in the first place. In issuing his temporary order, which extends the protection while the lawsuit goes forward, Alsup said the “public interest” would be served by keeping the program in place. The judge pointed to Trump tweets that suggested he actually supported DACA. A September tweet read: “Does anybody really want to throw out good, educated and accomplished young people who have jobs, some serving in the military? Really! . . . .” Alsup wrote: “We seem to be in the unusual position wherein the ultimate authority over the agency, the chief executive, publicly favors the very program the agency has ended.”

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” Can I be alone in wondering how these agencies can mount massive prosecutions of nobodies like George Papadopoulos and Rick Gates while ignoring the much better documented intrigues?..”

And Now the Schiff Memo (Jim Kunstler)

The excruciating quandary President Trump presents to the nation is dragging the sad remnant of the thinking class ever-deeper into a netherworld of desperation, paranoia, and mendacity that may exceed even their own official fantasies about the enemy in the White House. Everything about the lumbering, blundering occupant of 1600 Pennsylvania Avenue drives his Dem/Prog opponents — or #Resistance, if you will — plumb batshit: his previous incarnations as a shady NYC real estate schmeikler, as a TV clown, as a business deadbeat, as a self-described pussy-grabber… his vulgar casinos, his mystifying hair-do, his baggy suits and dangling neckties, his arrant, childish, needless lying about trivialities, his intemperate tweets, his unappetizing associates, his loutish behavior in foreign lands, his fractured, tortured syntax, his obvious insincerity, his sneery facial contortions… and lots lots more — and of course that doesn’t even touch the actual policy positions he struggles to articulate.

In sum, Trump represents such a monumentally grotesque embarrassment to the permanent Washington establishment that they will pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the removal of this odious caitiff. And in the process abandon all reason and decency. To complicate matters, there really are policy differences that, despite Mr. Trump’s oafish profferings, must somehow be faced for the sake of the country’s future — two of the clearest, just for example, being whether we will have coherent, enforceable immigration laws and whether we will continue to allow the sale of tactical military rifles to the general public. These are matters, by the way, which people of sound mind and honorable intentions could actually resolve through open legislative debate.

[..] in creating this horror movie, the #Resistance is dangerously perverting institutions that may not recover from being written into the script. For instance, the Department of Justice, its subsidiary, the FBI, and sundry intel outfits whose highest officers have been enlisted as cast members. Can I be alone in wondering how these agencies can mount massive prosecutions of nobodies like George Papadopoulos and Rick Gates while ignoring the much better documented intrigues of officials such as Bruce Ohr, Andrew McCabe, Peter Strzok, Lisa Page, Sally Yates, James Comey, Loretta Lynch, John Brennan, Debbie Wasserman-Schultz, Hillary Clinton, and possibly even the sainted Barack Obama?

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All the west has left is fabricated narratives.

East Ghouta: The Last Great Battle Of The Syrian War? (Duran)

Just as was the case with the crisis in Aleppo in 2016, the crisis in east Ghouta today is the subject of much handwringing in the Western media. There are also – just as there were in 2016 – pleas to President Putin to “show mercy”. In 2016 these pleas came mainly from British Foreign Minister Boris Johnson. This time they are coming from German Chancellor Merkel and French President Macron. Meanwhile – as in 2016 – there is grandstanding against Russia at the UN Security Council by the US’s UN ambassador. In 2016 it was Samantha Power; this time it is Nikki Haley. Just as in 2016 we are now seeing overheated and hysterical demands for ‘military action’ to ‘bring the killing to a stop’, with all concerns about what that might lead to brushed aside.

To complete the truly extraordinary parallels, there has even been a US bombing raid on Syrian forces far away in eastern Syria in Deir Ezzor province, just as there was during the fighting in Aleppo in 2016. Moreover the Russian response to the US threats and to the US bombing raid appears to be the same as it was in 2016: the deployment of further powerful additional military forces to Syria and to Khmeimim air base. In 2016 it was S-300VM Antey 2500 anti aircraft missiles; today it is additional S-400 anti aircraft missiles and (reportedly) SU-57 fighters. As to what is really behind the furious campaign to stop the attack on east Ghouta, it is the same as was the case with the furious campaign to stop the attack on eastern Aleppo in 2016: to prevent a Jihadi enclave which threatens one of Syria’s two great cities – Aleppo in 2016, Damascus today – from being destroyed.

As to what would actually happen if – or rather when – that Jihadi enclave is finally destroyed, I can do no better than quote Marcus Papadopoulos “Once East Ghouta is liberated from Al-Qaeda, the world will see the same response from its inhabitants as the world saw once East Aleppo was liberated: jubilation. And, like with East Aleppo, East Ghouta will serve as another testimony about the facade that is the White Helmets.” Why all these frantic attempts to save an Al-Qaeda controlled Jihadi enclave from being destroyed near Damascus? The short answer is that just as the destruction in 2016 of the Jihadi enclave in eastern Aleppo showed to the Western ‘democracy promotion’ lobby that their regime change war in Syria could not be won, so the destruction of the Jihadi enclave in east Ghouta near Damascus today would show to the Western ‘democracy promotion’ lobby that their regime change war in Syria is irretrievably lost.

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The UN is just as guilty as Oxfam etc.

Women ‘Sexually Exploited In Return For Aid’ By Charities In Syria (BBC)

Women in Syria have been sexually exploited by men delivering aid on behalf of the UN and international charities, the BBC has learned. Aid workers said the men would trade food and lifts for sexual favours. Despite warnings about the abuse three years ago, a new report shows it is continuing in the south of the country. UN agencies and charities said they had zero tolerance of exploitation and were not aware of any cases of abuse by partner organisations in the region. Aid workers told the BBC that the exploitation is so widespread that some Syrian women are refusing to go to distribution centres because people would assume they had offered their bodies for the aid they brought home. One worker claimed that some humanitarian agencies were turning a blind eye to the exploitation because using third parties and local officials was the only way of getting aid into dangerous parts of Syria that international staff could not access.

The United Nations Population Fund (UNFPA) conducted an assessment of gender based violence in the region last year and concluded that humanitarian assistance was being exchanged for sex in various governorates in Syria. The report, entitled “Voices from Syria 2018”, said: “Examples were given of women or girls marrying officials for a short period of time for ‘sexual services’ in order to receive meals; distributors asking for telephone numbers of women and girls; giving them lifts to their houses ‘to take something in return’ or obtaining distributions ‘in exchange for a visit to her home’ or ‘in exchange for services, such as spending a night with them’.” It added: “Women and girls ‘without male protectors’, such as widows and divorcees as well as female IDPs (Internally Displaced Persons), were regarded as particularly vulnerable to sexual exploitation.” Yet this exploitation was first reported three years ago.

Danielle Spencer, a humanitarian adviser working for a charity, heard about the allegations from a group of Syrian women in a refugee camp in Jordan in March 2015. [..] “I remember one woman crying in the room and she was very upset about what she had experienced. Women and girls need to be protected when they are trying to receive food and soap and basic items to live. The last thing you need is a man who you’re supposed to trust and supposed to be receiving aid from, then asking you to have sex with him and withholding aid from you.” She continued: “It was so endemic that they couldn’t actually go without being stigmatised. It was assumed that if you go to these distributions, that you will have performed some kind of sexual act in return for aid.”

Read more …

Dec 172017
 
 December 17, 2017  Posted by at 10:31 am Finance Tagged with: , , , , , , , ,  7 Responses »


Russell Lee Shasta Dam under construction. Shasta County, California 1942

 

Zombie Corporations: 10% Of Global Companies Depend On Cheap Money (Mish)
America’s Inequality Machine Is Sending the Dow Soaring (BBG)
“Dark Money” Runs the World (Nomi Prins)
‘There’s No Life Here’: A Journey Into Britain’s Precarious Future (O.)
Brexit: Britons Now Back Remain Over Leave By 10 Points (Ind.)
Call Off Brexit Bullies Or Face Defeat, Conservative Peers Tell May (G.)
Metlife Says It Failed To Pay Some Pensions, Flags Hit To Reserves (R.)
EU Banks Told to Get Crisis-Ready by Removing Wind-Down Hurdles (BBG)
Humans At Maximum Limits For Height, Lifespan And Physical Performance (SD)

 

 

Only 10? You sure?

Zombie Corporations: 10% Of Global Companies Depend On Cheap Money (Mish)

10% of corporations survive only because central banks have kept real interest rates negative. The BIS defines Zombie firms as those with a ratio of earnings before interest and taxes to interest expenses below one, with the firm aged 10 years or more. In simple terms, Zombies are those firms that could not survive without a flow of cheap financing. The chart shows the median share of zombie firms across AU, BE, CA, CH, DE, DK, ES, FR, GB, IT, JP, NL, SE and US. According to the BIS Quarterly Report one out of ten corporations in emerging and advanced countries is a “Zombie”. Let’s dive into the report for more details.

The inability to come to grips with the financial cycle has been a key reason for the unsatisfactory performance of the global economy and limited room for policy manoeuvre. Since 2007, productivity growth has slowed in both advanced economies and EMEs. One potential factor behind this decline is a persistent misallocation of capital and labour, as reflected by the growing share of unprofitable firms. Indeed, the share of zombie firms – whose interest expenses exceed earnings before interest and taxes – has increased significantly despite unusually low levels of interest rates. Over the past 10 years, there has been a close positive correlation between the growth of corporate credit and investment.

A build-up of corporate debt has financed investment in many economies, particularly in EMEs, including high investment rates in China. Turning financial cycles in these economies could therefore weigh on investment. As with consumption, the level of debt can affect investment. Rising interest rates would push up debt service burdens in countries with high corporate debt. Moreover, in EMEs with large shares of such debt in foreign currency, domestic currency depreciation could hurt investment. As mentioned before, an appreciation of funding currencies, mainly the US dollar, increases debt burdens where currency mismatches are present and tightens financial conditions (the exchange rate risktaking channel).

Empirical evidence suggests that a depreciation of EME currencies against the US dollar dampens investment significantly, offsetting to a large extent the positive impact of higher net exports. For the above reasons, I believe the end of the global recovery is at hand. And when the next bust happens, the last thing central banks will be doing is raising interest rates.

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How to define the Fed.

America’s Inequality Machine Is Sending the Dow Soaring (BBG)

The Great Recession is a speck in the rear-view mirror for America’s financial markets. They’ve advanced far beyond pre-crisis levels. In fact, Goldman Sachs says you can go back a century before 2008, and still not find a “bull market in everything” like today’s. If the real economy had roared back the same way, Donald Trump might not be president. Instead, it’s been a grind. While unemployment is near a two-decade low, wages have grown slowly by past standards. They’re nowhere near keeping pace with the asset-price surge. Elected on a promise of better jobs and pay, Trump is about to pull the most powerful lever any government has for firing up the economy: fiscal policy. By slashing taxes on corporate profits, its authors say, the Republican plan will unleash the animal spirits of American business – and everyone will benefit.

A rising tide does lift all boats – but nowadays, in the U.S., not equally. Under both parties, recoveries have become increasingly lopsided. The current one has helped millions of people find work; it’s also benefited asset-owners far more than people who trade their labor for a paycheck. Income distribution, already the most unequal in the developed world, is getting worse. And that’s starting to influence everything from America’s spending habits to its elections. “The story of our time is polarization – by party, by class and by income,” said Mark Spindel, founder and chief investment officer at Potomac River Capital in Washington, and co-author of a 2017 book about the Federal Reserve. “I don’t see anything in the tax bill to make that any better.’’

The Fed’s post-2008 toolkit included massive purchases of financial assets, which supported a liftoff on the markets but took time to trickle through to the real economy. Trump’s tax critics say his plan will have a similar effect, because companies will spend the windfall on share buybacks or dividends, instead of job-creating investments. Plenty of executives say that’s exactly what they’ll do. Bank of America’s most recent buyback program totals $18 billion. Chairman Brian Moynihan championed the tax proposal this month. “It’s good for corporate America, and it’s good for us,” he said.

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Same thing: inequality machine.

“Dark Money” Runs the World (Nomi Prins)

Dark money is the #1 secret life force of today’s rigged financial markets. It drives whole markets up and down. It’s the reason for today’s financial bubbles. On Wall Street, knowledge of and access to dark money means trillions of dollars per year flowing in and around global stock, bond and derivatives markets. I learned this firsthand from my career on Wall Street. My first full year working on Wall Street was in 1987. I wasn’t talking about “dark money” or central bank collusion back then. I was just starting out. Eventually, I would uncover how the dark money system works… how it has corrupted our financial system… and encouraged greed to the point of crisis like in 2008. When I moved abroad to create and run the analytics department at Bear Stearns London as senior managing director, I got my first look at how dark money flows and its effects cross borders.

The “dark money” comes from central banks. In essence, central banks “print” money or electronically fabricate money by buying bonds or stocks. They use other tools like adjusting interest rate policy and currency agreements with other central banks to pump liquidity into the financial system. That dark money goes to the biggest private banks and financial institutions first. From there, it spreads out in seemingly infinite directions affecting different financial assets in different ways. Yet these dark money flows stretch around the world according to a pattern of power, influence and, of course, wealth for select groups. To be a part of the dark money elite means to have control over many. How elite is a matter of degree. These is not built upon conspiracy theories. To the contrary, alliances make perfect sense and operate publicly.

Even better, their exclusive dealings and the consequences that follow are foreseeable — but only if you understand how the system works and follow the dark money flows. It’s easy to see how this dark money affects the stock market at a high level, because we can monitor its constant movement. Here’s the smoking gun:

The red line shows you how much “dark money” the Federal Reserve has printed since 2008. The gray line shows you the S&P 500. They move together — more dark money drives the market higher. Much higher. There are dark money charts from around the world, just like the one I showed you for the Federal Reserve and U.S. stock market. Look at this “dark money” chart from Japan, for example:

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Time for a change.

‘There’s No Life Here’: A Journey Into Britain’s Precarious Future (O.)

Ebbw Vale is the largest town in the county of Blaenau Gwent. This autumn the county was found to be the cheapest place to buy a home in England and Wales (averaging £777 per sq m in 2016, compared with £19,439 for the most expensive, London’s Kensington and Chelsea). It offers the second-lowest mean salary in Britain, and its GCSE results are the worst in Wales. Five food banks operate within an area of about 42 square miles. People here are struggling economically and physically. It’s a grim irony that an area encompassing the former constituency of Aneurin Bevan, architect of the National Health Service, should today be facing a quietly unfolding health crisis. Some 12% of working-age residents receive government support for disability or incapacity – twice the national average.

Life expectancy for both men and women is among the lowest in England and Wales. Out of a population of 60,000, one in every six adults is being prescribed an antidepressant, according to NHS data from 2013. “GPs haven’t got time to listen, to talk to people, to find out what’s going on. They’ve got that five- or 10-minute slot, somebody’s in tears, they’re saying they’re depressed,” Tara Johnstone tells me at the Phoenix Project, the publicly funded drop-in centre where she works in nearby Brynmawr. It’s run by a local charity, Torfaen and Blaenau Gwent Mind, and people come to chat about their problems: anxiety, depression, illness, bereavement. Most stories revolve around the same theme. “It’s lack of work,” explains Trish Richards, another Phoenix staff member. “I’ve had people come to me on zero-hours contracts. They don’t know where they are from one week to the next. Can’t plan. Can’t even plan to go to the dentist in case they get called in to work.”

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The shift is only just starting. Incompetence will rule 2018 in Britain.

Brexit: Britons Now Back Remain Over Leave By 10 Points (Ind.)

The British public has swung behind staying in the EU by its largest margin since the referendum, with those backing Remain outstripping Leavers by ten points, a new poll has revealed. The exclusive survey for The Independent by BMG Research showed 51% now back remaining in the union, while 41% want Brexit. Once “don’t knows” were encouraged to choose one way or the other, or excluded, the Remain lead rises to 11 points. Either way, it is the biggest gap since the June 2016 vote. It comes as leading political figures write in The Independent tomorrow about whether the country needs a further referendum to decide on Brexit, once terms of departure are known.

Michael Heseltine, Peter Mandelson, Gina Miller and Vince Cable call for a rethink, while Leave campaign mastermind Matthew Elliott and Conservatives James Cleverly and Suella Fernandes demand Brexit is seen through. Last week again underlined the difficulties of withdrawal, after the EU set out terms for a Brexit transition period that will likely be unacceptable to leading Conservative Eurosceptics. Theresa May also suffered a damaging defeat in the Commons while trying to pass her key piece of Brexit legislation, before being forced to make a major concession to avoid further embarrassment next week. Amid the furore, the latest poll indicates British voters have slowly but steadily been turning their backs on Brexit.

When a weighted sample of some 1,400 people were asked: “Should the United Kingdom remain a member of the European Union, or leave the European Union?” – 51% backed Remain, and 41% backed Leave. 7% said “don’t know” and 1% refused to answer. After “don’t knows” were either pushed for an answer or otherwise excluded, 55.5% backed Remain and 44.5 backed Leave. Polling since this time last year appears to demonstrate a clear trend; Leave enjoyed a lead last December which gradually shrank, before turning into a lead for Remain in the month of the general election, that has since grown.

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Pretty soon the only thing left will be dividing lines.

Call Off Brexit Bullies Or Face Defeat, Conservative Peers Tell May (G.)

Theresa May was warned on Sunday by Tory peers that she will face a string of parliamentary defeats over Europe in the House of Lords if she tries to “bully” members of the second chamber into backing an extreme form of Brexit. After 11 Conservative MPs joined opposition parties to inflict a humiliating loss on the government last week, Tory grandees are warning that the spirit of rebellion will spread to the Lords unless May shows she respects parliament and decisively rejects those with “extreme views” in her own party. Writing in the Observer, two Tory peers, the former pensions minister Ros Altmann and Patience Wheatcroft, a former editor of the Sunday Telegraph, say they are appalled at the insults heaped by hardline Brexiters on MPs who voted with their consciences, and at the “strong-arm” tactics of the Tory whips.

They say it is vital to democracy that parliamentarians be given the right to assess the Brexit deal on behalf of the British people without being threatened or bullied, and suggest that the aggression of Tory party managers has helped create a “toxic atmosphere”, not only in parliament but across the UK. Altmann and Wheatcroft write: “The resulting appalling insults from Brexiters, calls for expulsion from the party, and even death threats, are worrying symptoms of the toxic atmosphere which has been created in our country.” They add: “There are many moderate Conservatives in both Houses of Parliament who are deeply concerned that some in our party are so desperate to leave the EU, with or without a deal, that they believe any cost is justified to bring Brexit. They maintain ‘freedom is priceless’ but this extreme view does not reflect public opinion.”

The two peers say Conservative members of the House of Lords, in which there was a large pro-Remain majority, will not take kindly to being told by the Tory whips and the executive what to think about Brexit and how to vote. “Mindful of the monumental importance for future generations of getting Brexit right, the Lords is unlikely to be receptive to bullying over a restricted timetable or vigorous whipping to toe the party line,” they say. “The people voted to ‘take back control’ but that has to mean control by parliament, not a small group with extreme views or an executive that will brook no challenge. It is parliament that must have the final say on whether the deal that is negotiated for breaking away from the EU … is in the UK’s best interests.”

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The shape of things to come.

Metlife Says It Failed To Pay Some Pensions, Flags Hit To Reserves (R.)

Metlife failed to pay pensions to potentially tens of thousands of people and will have to strengthen its reserves because of the costs of finding and repaying them, the New York insurer said. Metlife said in a filing on Friday that it believed the group missing out on the payments represented less than 5 percent of about 600,000 people who receive benefits from the company via its retirement business. Those affected generally have average benefits of less than $150 a month, it said. When taken, however, the increase to reserves could be material to Metlife’s financial results. The insurer said it would provide further disclosure on its fourth-quarter earnings call and in its annual report for 2017. MetLife did not say how many years of missing income was owed. The people who missed out on the payments have changed jobs, relocated or are otherwise unreachable based on currently available information, the company said, adding that it was widening its search efforts and making better use of technology.

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Are we really to believe Europe will stand up against its most powerful banks?

EU Banks Told to Get Crisis-Ready by Removing Wind-Down Hurdles (BBG)

Big euro-area lenders face a choice; clean up the complicated corporate structures that make them difficult to wind down in a crisis, or watch Elke Koenig do it for them. Koenig, head of the Brussels-based Single Resolution Board, said in an interview that streamlining banks’ architecture and ensuring they can fund their own demise without taxpayers’ help will be priorities in the year ahead. “You have banks where you end with something that looks more like a spider web than a clean structure,” Koenig said. The message that those banks will receive is: “Please tidy up,” she said. The SRB is part of the EU’s efforts to end the problem of too-big-to-fail banks. In 2018, it will adopt resolution plans for nearly all of the 140-odd lenders within its remit, then start to identify “substantive impediments” to orderly wind-down.

Under EU law, when the SRB finds such obstacles, it sends a report to the bank, which must respond within four months on how it plans to fix the problem. If the SRB isn’t satisfied, it can instruct the supervisor to impose a range of measures on the bank, including issuing loss-absorbing liabilities, altering its legal or operational structures and selling assets. This task assumed greater importance earlier this year when the the European Commission withdrew a bill that could have forced major banks such as Deutsche Bank and BNP Paribas to split their trading and retail operations. Finance Watch, a public-interest watchdog, has said that without that bill, it’s “squarely” on authorities like the SRB to make sure systemically important banks can be wound down in an orderly manner.

Koenig accepts that the SRB is responsible for making sure banks have resolvable structures. “That’s clearly on us,” she said. “And it’s something that needs to be addressed swiftly.” “The ideal structure for me is one where you can with confidence isolate certain functions to keep them up and running in case something unforeseen happens,” Koenig said. “I would not try to differentiate between investment banking functions and retail banking functions, but think about it this way: If you need to separate businesses, are you producing a viable set of companies? Can you really separate them in a timely manner?”

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But we were going to implant robots into ourselves… When will we learn that it’s the limits that set us free?

Humans At Maximum Limits For Height, Lifespan And Physical Performance (SD)

Humans may have reached their maximum limits for height, lifespan and physical performance. A recent review suggests humans have biological limitations, and that anthropogenic impacts on the environment – including climate change – could have a deleterious effect on these limits. Published in Frontiers in Physiology, this review is the first of its kind spanning 120 years worth of historical information, while considering the effects of both genetic and environmental parameters. Despite stories that with each generation we will live longer and longer, this review suggests there may be a maximum threshold to our biological limits that we cannot exceed. A transdisciplinary research team from across France studied trends emerging from historical records, concluding that there appears to be a plateau in the maximum biological limits for humans’ height, age and physical abilities.

“These traits no longer increase, despite further continuous nutritional, medical, and scientific progress. This suggests that modern societies have allowed our species to reach its limits. We are the first generation to become aware of this” explains Professor Jean-François Toussaint from Paris Descartes University, France. Rather than continually improving, we will see a shift in the proportion of the population reaching the previously recorded maximum limits. Examples of the effects of these plateaus will be evidenced with increasingly less sport records being broken and more people reaching but not exceeding the present highest life expectancy. However, when researchers considered how environmental and genetic limitations combined may affect the ability for us to reach these upper limits, our effect on the environment was found to play a key role.

“This will be one of the biggest challenges of this century as the added pressure from anthropogenic activities will be responsible for damaging effects on human health and the environment.” Prof. Toussaint predicts. “The current declines in human capacities we can see today are a sign that environmental changes, including climate, are already contributing to the increasing constraints we now have to consider.” “Observing decreasing tendencies may provide an early signal that something has changed but not for the better. Human height has decreased in the last decade in some African countries; this suggests some societies are no longer able to provide sufficient nutrition for each of their children and maintain the health of their younger inhabitants,” Prof. Toussaint explains.

To avoid us being the cause of our own decline, the researchers hope their findings will encourage policymakers to focus on strategies for increasing quality of life and maximize the proportion of the population that can reach these maximum biological limits. “Now that we know the limits of the human species, this can act as a clear goal for nations to ensure that human capacities reach their highest possible values for most of the population. With escalating environmental constraints, this may cost increasingly more energy and investment in order to balance the rising ecosystem pressures. However, if successful, we then should observe an incremental rise in mean values of height, lifespan and most human biomarkers.” Prof. Toussaint warns however, “The utmost challenge is now to maintain these indices at high levels.”

Read more …

Oct 102014
 
 October 10, 2014  Posted by at 12:17 pm Finance Tagged with: , , , , , , ,  Comments Off on Debt Rattle October 10 2014


NPC Berberich shoe store window, Seventh Street, Washington, DC June 1920

Buckle-Up: Global Stocks In For Long Roller Coaster Ride (CNBC)
Fed Aim Off Target as Inflation Descends Near Danger Zone (Bloomberg)
Why The Strong Dollar May Sink Junk Bonds (CNBC)
Iran Matches Saudi Oil Discounts in Bear Market for Crude (Bloomberg)
OPEC: Milder Winter To Pressure Oil Price Further (CNBC)
US Shale Drillers Hugely Overestimate Reserves Before Investors (Bloomberg)
US Firms Could Make Billions From UK Via Secret TTIP Tribunals (Independent)
Draghi Clashes With Germany’s Schaeuble Over Steps for Europe (Bloomberg)
Is China’s Bubble the Next Financial Crisis? (Bloomberg)
Health Of Global Economy Is Worrying: Stiglitz (CNBC)
Bad Loans At Italy Banks Up 20% In August To Record High (Reuters)
Barcelona Stirs as Spain Warns of Separatist Tinderbox (Bloomberg)
UKIP: From ‘Clowns’ To Contenders (CNBC)
Dark Money Groups Set Record in 2014 US Midterm Elections (Bloomberg)
MH-17 Report False Flag Exposed (Zero Hedge)
The Amish Farmers Reinventing Organic Agriculture (Atlantic)
The Ominous Math Of The Ebola Epidemic (WaPo)
Ebola Is ‘Entrenched And Accelerating’ In West Africa (BBC)

“Overnight the mindlessly bullish JBTD (Just Buy the Dip) crowd felt the cold steel of Edward Scissorhands.”

Buckle-Up: Global Stocks In For Long Roller Coaster Ride (CNBC)

Whipsawing global markets scream fears about global growth conditions and unless data from the world’s major economies improve, a deeper correction is on the cards, say strategists. Asian markets tumbled on Friday, extending the sharp selloff in U.S. and European equities overnight as intensifying concerns over the health of the euro zone economy hit risk appetite. Australia’s benchmark S&P/ASX 200 index led losses, falling 1.8% in the morning session, while Japan’s Nikkei 225 and South Korea’s KOSPI were both off 1.2%. “There are a lot of questions at the moment and not a lot of answers in regards to Europe’s economy, the stability of China’s housing market and the timing of the Fed’s first rate hike,” Chris Weston, chief market strategist at IG told CNBC.

“The hallmarks are in place for a stock market correction – Brent crude prices are falling, long-end U.S. bonds are telling the story that markets are starting to look at low growth and low inflation for a long period of time,” he said. In order to arrest the volatile downtrend in stocks, there needs to be a good run of economic data out the world’s leading economies, Weston said. Nicholas Ferres, investment director, global asset allocation, Eastspring Investments say the bearish price action suggests a market correction is already underway. “Overnight the mindlessly bullish JBTD (Just Buy the Dip) crowd felt the cold steel of Edward Scissorhands. Failure of the market to extend the rebound from the prior day probably suggests that a deeper correction is likely underway,” he said. “From my perch, this reflects a genuine growth scare, evident in the macro news flow from Europe, China and Japan, rather than a direct fear of U.S. policy normalization,” he said.

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People are not spending. They’re broke. How can you raise inflation in those conditions?

Fed Aim Off Target as Inflation Descends Near Danger Zone (Bloomberg)

Federal Reserve officials are hunting for new tactics to raise price increases to their target as slowing global growth, cheaper commodities and flat wages sound warnings that inflation is descending toward the danger zone. The Fed needs a clear strategy for getting the inflation rate higher after falling short of its 2% target for 28 consecutive months. Now, as longer-run inflation expectations erode in financial markets, the Federal Open Market Committee is shifting its focus toward prices after putting its main emphasis on jobs for months. Several officials worried that “inflation might persist below” the committee’s target for “quite some time,” minutes from the Sept. 16-17 meeting said. Too-low inflation “is getting to be a real issue again,” said former Fed Governor Laurence Meyer. With inflation at 1.5% according to the Fed’s preferred index, Meyer said FOMC policy makers aren’t likely to raise interest rates, even if the economy approaches full employment, defined as a jobless rate of 5.2% to 5.5%.

Unemployment was 5.9% last month. “The timing of the first rate hike is all about inflation,” said Meyer, now a senior managing director at Macroeconomic Advisers LLC in Washington. Policy makers including regional Fed Presidents William Dudley of New York, Charles Evans of Chicago and Narayana Kocherlakota of Minneapolis have in recent days all mentioned below-target inflation as a risk that weighs against raising interest rates too soon. An inflation rate approaching zero is bad for the economy because of its impact on behavior by businesses and consumers. Companies’ inability to raise prices hurts profits, and they rarely compensate by cutting wages, so they fire workers instead. Consumers anticipating falling prices may postpone discretionary purchases. This can combine to create a vicious circle of less spending and further downward pressure on prices.

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Not just junk bonds.

Why The Strong Dollar May Sink Junk Bonds (CNBC)

A simmering mix of a strong U.S. dollar and weak commodity prices may be brewing up trouble for junk bond exchange-traded funds (ETFs) with a hefty weighting in materials companies. “If the U.S. dollar stays strong, that will exacerbate the impact of the weaker commodity prices” on miners’ cash flow and the ability to meet debt payments, said May Zhong, a credit analyst at Standard & Poor’s. Coal companies, especially U.S.-based ones competing in the export market, are a particular concern, she said. Faced with oversupply, thermal coal prices have fallen to near five-year lows, while the U.S. dollar index has risen as much as 8.3% so far this year. But Australian miners may also take a hit, she said. “The Australian dollar hasn’t fallen to the same extent as major commodity prices. It’s still relatively strong compared to the U.S. dollar,” she said.

“You do need a weak local currency to help those [B-rated] miners or shield them from weaker commodity prices,” Zhong said. That may have a knock-on effect on the high-yield bond ETFs, which in turn may weigh the entire junk-bond segment. Around 14.7% of the holdings of the iShares iBoxx high-yield ETF, which tracks the Markit iBoxx index, are in the oil and gas industries, while another 6.5% are in basic materials. The ETF has around $13.3 billion in net assets. While that’s a drop in the bucket compared with a total bond market estimated at around $38 trillion, some analysts consider bond ETFs a market risk as they are more susceptible to hot money flows, potentially affecting the trading liquidity of underlying bonds. Around 37% of U.S. corporate credit is held by households and funds, according to RBS data from August.

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Everything must go.

Iran Matches Saudi Oil Discounts in Bear Market for Crude (Bloomberg)

Iran will sell its oil to Asia in November at the biggest discount in almost six years, matching cuts by Saudi Arabia as global crude benchmarks slide deeper into a bear market. State-run National Iranian Oil Co. cut official selling prices of its crude to buyers in Asia for November, two people with knowledge of the pricing decision said yesterday. The decrease came a week after Saudi Arabia, the world’s largest oil exporter, reduced the price of Arab Light crude for Asia to the lowest since December 2008. Brent crude, the international benchmark, fell to the lowest in almost four years today. “The timing of Iran’s price cuts makes the price war more and more probable,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said by phone yesterday. “Iran is fully aware of the direction of and the mood in the market. Given that we’ve seen consecutive cuts, this would seem to be some kind of action and reaction.”

Middle Eastern oil producers are facing greater competition in Asia, their largest market. Cargoes from the U.S., Russia and Latin America are finding buyers there amid a surplus on international markets. The pace of demand growth is lower in the region as the economy slows in China, the world’s second-largest oil consumer. Futures for Brent and West Texas Intermediate, the U.S. benchmark, have both fallen more than 20% from their June peaks, meeting the common definition of a bear market. Front-month Brent traded as low as $88.11 a barrel today on the ICE Futures Europe exchange in London, the lowest since December 1, 2010. WTI dropped as low as $83.33 a barrel on the New York Mercantile Exchange, the lowest since July 3, 2012.

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WTI is looking at $80 today. $84 now.

OPEC: Milder Winter To Pressure Oil Price Further (CNBC)

The oil price could face further downward pressure as a warmer winter is expected to hit demand further, the supplier of about 40% of the world’s oil warned. Official forecasts expect heating degree days in the U.S. to be 12% lower than last winter, implying lower demand, the Organization of Petroleum Exporting Countries (OPEC) said in its monthly oil market report as Brent traded close to a four-year low. At the same time, OPEC said the weather has been less of a factor determining U.S. fuel consumption, as heating oil now contributes below 20% of the demand for “middle distillates” or medium weight refined oil products in the country.

Brent crude fell below $90 on Friday, as supply rises and markets digested more grim economic news, with analysts now slashing their oil price forecasts. The free fall in the oil price has increased pressure on OPEC members to take action to cut supply, which analysts said is unlikely before its meeting at the end of November. But Saudi Arabia has shown reluctance to cut production at the risk of losing market share to other countries.

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This is just too crazy. This is what business in America has come to.

US Shale Drillers Hugely Overestimate Reserves Before Investors (Bloomberg)

Lee Tillman, chief executive officer of Marathon Oil Corp., told investors last month that the company was potentially sitting on the equivalent of 4.3 billion barrels in its U.S. shale acreage. That number was 5.5 times higher than the proved reserves Marathon reported to federal regulators. Such discrepancies are rife in the U.S. shale industry. Drillers use bigger forecasts to sell the hydraulic fracturing boom to investors and to persuade lawmakers to lift the 39-year-old ban on crude exports. Sixty-two of 73 U.S. shale drillers reported one estimate in mandatory filings with the Securities and Exchange Commission while citing higher potential figures to the public, according to data compiled by Bloomberg. Pioneer’s estimate was 13 times higher. Goodrich’s was 19 times. For Rice Energy, it was almost 27-fold. “They’re running a great risk of litigation when they don’t end up producing anything like that,” said John Lee, a University of Houston petroleum engineering professor who helped write the SEC rules and has taught reserves evaluation to a generation of engineers.

“If I were an ambulance-chasing lawyer, I’d get into this.” Experienced investors know the difference between the two numbers, Scott Sheffield, chairman and CEO of Irving, Texas-based Pioneer, said in an interview. “Shareholders understand,” Sheffield said. “We’re owned 95% by institutions. Now the American public is going into the mutual funds, so they’re trusting what those institutions are doing in their homework.” Investors poured $16.3 billion in the first seven months of the year into mutual funds and exchange-traded funds focused on energy companies, including drillers that create fractures in rocks by injecting fluid into cracks to enable more oil and gas to flow out of the formation. That’s almost twice as much as in the same period last year, bringing total assets to $128.2 billion, according to New York-based Strategic Insight.

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The TTIP is a malignant tumor growing secretly underneath our skins.

US Firms Could Make Billions From UK Via Secret TTIP Tribunals (Independent)

Britain faces a real risk of being ordered to pay vast sums to US multinationals under the controversial TTIP trade deal being negotiated between Washington and the EU, an analysis of similar agreements has revealed. The Government has repeatedly played down concerns that secret tribunals established by TTIP will lead to large numbers of American corporations suing the UK in trade disputes. But United Nations figures uncovered by The Independent show that US companies have made billions of dollars by suing other governments nearly 130 times in the past 15 years under similar free-trade agreements. In one case alone the US oil company Occidental Petroleum successfully sued the government of Ecuador for $1.8bn. A separate case claiming $6bn has also be filed. The tribunals are used to rule on disputes between nation states and aggrieved companies.

Details of these cases are often kept secret, but notorious precedents include the tobacco giant Philip Morris suing Australia and Uruguay for restricting advertising and putting health warnings on packets. TTIP has provoked storms of protest from European campaign groups and largely left-leaning politicians. On Saturday, protesters will stage a “day of action” against the proposed deal in hundreds of cities across the UK and Europe. Critics say the tribunals, held under the so-called Investor-State Dispute Settlement (ISDS) system, subvert democratic justice, giving power over foreign citizens to big companies. Hearings are held in private, in international courts at the World Bank in Washington DC, bypassing the legal system of the country being sued, meaning details are often impossible to uncover. In some cases the very existence of the case is not made public.

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Draghi, Larry Summers, everyone has a go at Germany. Which is really bad timing gicen recent economic data coming from Berlin.

Draghi Clashes With Germany’s Schaeuble Over Steps for Europe (Bloomberg)

European Central Bank President Mario Draghi and German Finance Minister Wolfgang Schaeuble differed over what further steps to take if the euro-area economy keeps weakening as the region came under renewed foreign pressure to revive growth. As the International Monetary Fund’s annual meeting in Washington began, Draghi pledged anew to loosen monetary policy more if needed and called on those governments with the room to ease fiscal policy to do so. By contrast, Schaeuble warned against U.S.-style quantitative easing and urged continued budgetary discipline. The differences demonstrate the lack of a common front in euro-area policy making as its economy continues to deteriorate and the IMF estimates there is as much as a 40% risk of a third recession since 2008. Finance ministers and central bankers from the Group of 20 economies meet today, and Europe’s economic performance will be among the issues discussed, officials said.

“There is a concern about a deflationary spiral, we aren’t predicting it, but we want to preclude it,” Canadian Finance Minister Joe Oliver told reporters. “No one is saying it’s a piece of cake, far from it.” The euro-area has re-emerged as the main concern of officials worldwide after its economy stalled in the second quarter and inflation slowed to the weakest in almost five years. The IMF this week cut its euro-area growth forecasts to 0.8% for 2014 and 1.3% next year and said the ECB should consider buying government debt. “More, we hope, will be done,” IMF Managing Director Christine Lagarde told reporters. Speaking in Washington yesterday, Draghi reiterated his call on governments to overhaul their economies now and repeated the ECB is “ready to alter the size and/or the composition of our unconventional interventions, and therefore of our balance sheet, as required.”

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China is a danger first and foremost to itself, internal strife will rule the day. Its impact on the world will come after.

Is China’s Bubble the Next Financial Crisis? (Bloomberg)

Will China be the source of the next global financial disaster? The evidence increasingly offers reason for concern, though the nature of any calamity could be very different from what the world endured in 2008. At a time when consumers and governments in the U.S. and Europe have been trying – with limited success – to pare down or at least stabilize their debt burdens, China has been doing the opposite. Over the past five years, it has pumped more than $13 trillion of credit into its economy, in an effort to keep its growth rate up amid a weak global recovery. The Chinese credit boom has rapidly turned the country into one of the developing world’s most indebted, according to a new report from London’s Centre for Economic Policy Research. As of 2013, total private and government debt, excluding that of financial institutions, stood at 217% of gross domestic product, up from only 147% in 2008.

That’s more than in any major developing nation other than Hungary, though still significantly less than in advanced nations such as the U.S. or Japan. Such credit-fueled growth can’t be sustained for long without causing major distortions and setting the country up for a fall. The stimulus is already running into diminishing returns. Over the five years through 2013, government and private debt grew by about 3 yuan for each added yuan of economic activity, a level of credit intensity that the U.S. exceeded only in the years leading up to the 2008 crisis. As in the U.S., much of the money is going to borrowers with questionable ability to pay, fueling overbuilding and excess capacity.

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Nobel=clueless.

Health Of Global Economy Is Worrying: Stiglitz (CNBC)

The euro zone is “very much” at risk of a recession and U.S. continues to struggle with a mediocre recovery, said Nobel Prize-winning economist Joseph Stiglitz, sounding the alarm on the deteriorating global economy. If Europe were to enter a recession it would likely be “relatively minor,” but persistent stagnation puts the single-currency bloc “on target for a lost decade,” he said. “To me, the problem is not whether [euro zone countries] are growing a little positive or negative, the real point is they are not back to where they should be,” Stiglitz, a professor of economics at Columbia University, told CNBC on Friday. Austerity is the wrong prescription for repairing the euro zone economy and underlies economic stagnation, he said.

“European leaders have consistently overestimated where the economy was going. Unfortunately, the leaders of Europe, in particular Germany, don’t seem to recognize that austerity is one of the reasons Europe is doing so poorly,” Stiglitz said. There is a lot of slack in the U.S. economy, Stiglitz said. “The U.S. has been moving along in this very mediocre way. What’s remarkable is how low the growth is in spite of the fact that… we have some very strong positives,” he said, referring to the country’s huge discoveries of natural gas and thriving high-tech sector. Furthermore, a stronger U.S. dollar may prove to be a bane for the economy, putting the country’s exporters at a competitive disadvantage, he said. Asked whether the world’s largest economy will be strong enough to justify an interest rate hike by mid-2015, he said “almost surely no.”

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Get out of the EU, amici.

Bad Loans At Italy Banks Up 20% In August To Record High (Reuters)

The Bank of Italy said on Thursday bad loans in the country rose 20% year-on-year in August reaching a new record high as the third-largest economy in the euro zone struggles to recover from recession. The loans that are least likely to be repaid were worth €173.9 billion ($222 billion) in August, the highest level since the start of the current statistical series in 1998, central bank data showed. In July, non-performing loans rose 20.5% to €172.4 billion. At the same time, lending to companies and families continued to contract, with loans to households down 0.8% in August after falling 0.7% a month earlier. Credit to non-financial companies fell 3.8% after a contraction of 3.9% in July.

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There’d better be no blood flowing in Catalunya, or the world’s Hemingways may once again descend on Spain.

Barcelona Stirs as Spain Warns of Separatist Tinderbox (Bloomberg)

Tensions are rising in Barcelona. As Catalan President Artur Mas goads the Spanish courts, threatening to defy their suspension of a Nov. 9 vote on independence, Prime Minister Mariano Rajoy is preparing measures to ensure he can retain control of the police in Catalonia. Politicians and civic leaders in the region who want to remain part of Spain say they have been threatened by separatists. “There’s been a cat let out of the bag,” said James Amelang, a professor of Spanish history at the Autonomous University of Madrid. “I really think the politicians might have lost their capacity to put it back.” Mas’s independence drive has been propelled by a surge of support on the streets, with hundreds of thousands attending peaceful rallies in Barcelona last month. As the date of the proposed vote approaches, officials in Madrid are preparing for when the force of Catalan separatism crashes into the immovable object of the Spanish constitution.

Spanish Foreign Minister Jose Manuel Garcia-Margallo warned last week that events in Catalonia could be moving too fast for the regional leader to control. Mas “may see the political process shift away from the institutions, and particularly the regional government, and move onto the streets, which is extremely dangerous,’ Garcia-Margallo told state radio broadcaster RTVE. ‘‘When institutions lose control, we head down an unknown path.’’ Spain’s national police force put more officers on the streets of the Catalan capital this month to beef up security at government buildings, a government press officer said on Oct. 1. Europa Press reported reinforcements total about 300 policemen. The central government has also drafted a law that would give officers from the regional police, the Mossos d’Esquadra controlled by Mas’s government, the chance to transfer to the national police force commanded by Madrid.

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Ho much longer will Britain stay in the EU?

UKIP: From ‘Clowns’ To Contenders (CNBC)

Just last year, Conservative Party grandee Kenneth Clarke described them as a “collection of clowns” – yet now they represent the greatest electoral challenge to the three main U.K. political parties for decades. The U.K. Independence Party (UKIP) – the closest the U.K. has to the U.S. tea party – has emerged from the fringes to the limelight, winning its first seat in the U.K. parliament in a by-election on Thursday. UKIP candidate Douglas Carswell won a by-election in Clacton, south east England by a majority of 12,404 to become the party’s first member of parliament. The election was triggered by incumbent member of Parliament (MP) Douglas Carswell’s defection from the Conservative Party to UKIP. The party briefly had one MP in 2008, when then-Conservative MP Bob Spink defected. Clacton – with its working class, elderly, white and economically left-behind population – was already identified as one of the constituencies most likely to vote UKIP in May’s general election by Matthew Goodwin and Rob Ford, authors of “Revolt on the Right” and experts on the party.

A by-election further north may actually be more concerning for the main political parties. In Heywood and Middleton, a safe Labour seat to date, the death of the local MP has triggered a vote. Labour candidate Liz McInnes won the vote by a margin of 617 — a far cry from a 5,971 majority at the 2010 general election. The results suggest that UKIP has made significant inroads there and gone beyond attracting only right-wing Conservatives, but also left-wing voters, who feel threatened by cheap labor from immigrants. “UKIP supporters are very pessimistic on the economy,” John Curtice, professor of politics at the University of Strathclyde, told CNBC. “The improvement in the economy hasn’t trickled down to the older working-class, and that’s UKIP’s constituency.”

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The new way to spell democracy.

Dark Money Groups Set Record in 2014 US Midterm Elections (Bloomberg)

The Internal Revenue Service calls them “social welfare” groups – they don’t disclose their donors and so far this cycle they’ve spent $100 million trying to influence elections. Never before have these types of organizations spent so much, so soon in Congressional races, according to a new analysis by the Center for Responsive Politics. If the past is precedent, that means roughly $200 million in dark money will go toward influencing the 2014 elections, CRP estimates. The trend means it’s harder than ever to know who the big spenders are or which interest is taking which side in an election. The social welfare groups, organized under section 501(c)(4) of the tax code, raise and spend unlimited amounts of money. Their cousins, super PACs, also raise and spend unlimited cash, but must disclose contributors. Some of the election cycle’s mega-groups toggle between using dark money groups and super-PACs depending on need and donor preference.

The David and Charles Koch-backed political network stopped using their dark money group for TV ads in the final 60 days of the cycle, and are now funding election spots with their new super PAC. Generally, the nonprofits spend in multiple races — but there are a few examples this year of 501(c)(4)s dedicated to one candidate. The highest profile is the Kentucky Opportunity Coalition, a nonprofit that started running commercials this summer to support Senate Minority Leader Mitch McConnell. One hint as to who’s behind the group: The treasurer is listed as Caleb Crosby. He’s also the treasurer for Karl Rove’s American Crossroads – which just started running ads in Kentucky against McConnell’s Democratic opponent, Alison Lundergan Grimes. Democrats don’t tend to use dark money groups as much. They favor super PACs, and so far this year their super PACs are better funded than the Republicans’.

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It’s being reported as an unfortunate incident, but it says much more. The report by the Russian Union of Engineers has been totally silenced in the west.

MH-17 Report False Flag Exposed (Zero Hedge)

When exactly a month ago the supposedly objective, impartial Netherlands released its official, 34-page preliminary report of the MH-17 crash over Ukraine, presumably based on black box data, air traffic control records, and other “authentic, verified” information, there were precisely zero mentions of “oxygen”, “mask” or “oxygen mask.” Which is odd, because in what should become the biggest Freudian slip scandal in false-flag history, certainly since the Gulf of Tonkin, yesterday Dutch Foreign Minister Frans Timmermans accidentally revealed for the very first time ever, that one of the Australian passengers aboard the doomed airplane “appears to have donned an oxygen mask before the fatal crash, suggesting some on board might have been aware of their impending deaths, a Dutch official disclosed.”

Clearly a crucial aspect of the crash, as it points at the severity of the alleged explosion, yet one which was not noted until yesterday and which completely skipped the purvey of the official crash report for reasons unknown. Needless to say, this makes a complete mockery of the story that the plane had exploded upon impact with the “Russian” missile, and is why there was supposedly no trace of any impact on the flight’s black box recorder. Whether or not it also means that the alternative theory that a Ukraine jet had purposefully downed the Malaysian aircraft to serve as a pretext to implicate Russia, is unclear. But it also means that yet another conspiracy theory becomes fact: namely that whoever were the western powers who doctored and manipulated the “official” crash report of MH-17 to implicate Putin, not only lied but fabricated evidence.

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What happens when you don’t throw out in 1 generation the knowledge acquired in 1000.

The Amish Farmers Reinventing Organic Agriculture (Atlantic)

“In the Second World War,” Samuel Zook began, “my ancestors were conscientious objectors because we don’t believe in combat.” The Amish farmer paused a moment to inspect a mottled leaf on one of his tomato plants before continuing. “If you really stop and think about it, though, when we go out spraying our crops with pesticides, that’s really what we’re doing. It’s chemical warfare, bottom line.” Eight years ago, it was a war that Zook appeared to be losing. The crops on his 66-acre farm were riddled with funguses and pests that chemical treatments did little to reduce. The now-39-year-old talked haltingly about the despair he felt at the prospect of losing a homestead passed down through five generations of his family. Disillusioned by standard agriculture methods, Zook searched fervently for an alternative. He found what he was looking for in the writings of an 18-year-old Amish farmer from Ohio, a man named John Kempf. Kempf is the unlikely founder of Advancing Eco Agriculture, a consulting firm established in 2006 to promote science-intensive organic agriculture.

The entrepreneur’s story is almost identical to Zook’s. A series of crop failures on his own farm drove the 8th grade-educated Kempf to school himself in the sciences. For two years, he pored over research in biology, chemistry, and agronomy in pursuit of a way to save his fields. The breakthrough came from the study of plant immune systems which, in healthy plants, produce an array of compounds that are toxic to intruders. “The immune response in plants is dependent on well-balanced nutrition,” Kempf concluded, “in much the same way as our own immune system.” Modern agriculture uses fertilizer specifically to increase yields, he added, with little awareness of the nutritional needs of other organic functions. Through plant sap analysis, Kempf has been able to discover deficiencies in important trace minerals which he can then introduce into the soil. With plants able to defend themselves, pesticides can be avoided, allowing the natural predators of pests to flourish.

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Yes, the numbers keep getting worse.

The Ominous Math Of The Ebola Epidemic (WaPo)

When the experts describe the Ebola disaster, they do so with numbers. The statistics include not just the obvious ones, such as caseloads, deaths and the rate of infection, but also the ones that describe the speed of the global response. Right now, the math still favors the virus. Global health officials are looking closely at the “reproduction number,” which estimates how many people, on average, will catch the virus from each person stricken with Ebola. The epidemic will begin to decline when that number falls below one. A recent analysis estimated the number at 1.5 to 2. The number of Ebola cases in West Africa has been doubling about every three weeks. There is little evidence so far that the epidemic is losing momentum. “The speed at which things are moving on the ground, it’s hard for people to get their minds around. People don’t understand the concept of exponential growth,” said Tom Frieden, director of the U.S. Centers for Disease Control and Prevention.

“Exponential growth in the context of three weeks means: ‘If I know that X needs to be done, and I work my butt off and get it done in three weeks, it’s now half as good as it needs to be?’ Frieden warned Thursday that without immediate, concerted, bold action, the Ebola virus could become a global calamity on the scale of HIV. He spoke at a gathering of global health officials and government leaders at the World Bank headquarters in Washington. The president of Guinea was at the table, and the presidents of Liberia and Sierra Leone joined by video link. Amid much bureaucratic talk and table-thumping was an emerging theme: The virus is still outpacing the efforts to contain it. “The situation is worse than it was 12 days ago. It’s entrenched in the capitals. Seventy% of the people [who become infected] are definitely dying from this disease, and it is accelerating in almost all settings,” Bruce Aylward, assistant director general of the World Health Organization, told the group.

Aylward had come from West Africa only hours earlier. He offered three numbers: 70, 70 and 60. To bring the epidemic under control, officials should ensure that at least 70% of Ebola-victim burials are conducted safely, and that at least 70 percent of infected people are in treatment, within 60 days, he said. More numbers came from Ernest Bai Koroma, president of Sierra Leone: The country desperately needs 750 doctors, 3,000 nurses, 1,500 hygienists, counselors and nutritionists. The numbers in this crisis are notoriously squishy, however. Epidemiological data is sketchy at best. No one really knows exactly how big the epidemic is, in part because there are areas in Liberia, Sierra Leone and Guinea where disease detectives cannot venture because of safety concerns. The current assumption is that for every four known Ebola cases, about six more go unreported.

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There is very little out there that doesn’t signal a gross incompetence, lack of urgency and lack of understanding.

Ebola Is ‘Entrenched And Accelerating’ In West Africa (BBC)

The World Health Organization (WHO) has warned that Ebola is now entrenched in the capital cities of all three worst-affected countries and is accelerating in almost all settings. WHO deputy head Bruce Aylward warned that the world’s response was not keeping up with the disease in Guinea, Liberia and Sierra Leone. The three countries have appealed for more aid to help fight the disease. The outbreak has killed more than 3,860 people, mainly in West Africa. More than 200 health workers are among the victims. Speaking on Thursday, Mr Aylward said the situation was worse than it was 12 days ago. “The disease is entrenched in the capitals, 70% of the people affected are definitely dying from this disease, and it is accelerating in almost all of the settings,” he said. Meanwhile in Spain, seven more people are being monitored in hospital for Ebola. They include two hairdressers who came into contact with Teresa Romero, a Madrid nurse looked after an Ebola patient who had been repatriated from West Africa. She is now very ill and reported to be at serious risk of dying.

Elsewhere: The UK is investigating reports a Briton suspected of having the disease has died in Macedonia, though Macedonia’s health ministry says there are “high chances” this is not a case of the disease Britain is to begin enhanced screening for Ebola in people travelling from affected countries, the government announces. The US is introducing new security measures to screen passengers arriving from Ebola-affected countries in West Africa at five major US airports. In Texas, a county sheriff deputy was quarantined after visiting the home of the first person diagnosed with Ebola on US soil, who later died from the virus. The medical charity Medecins Sans Frontieres reported a sharp increase of Ebola cases in the Guinean capital, Conakry, dashing hopes that the disease was being stabilised there.

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