Jun 262018
 
 June 26, 2018  Posted by at 8:34 am Finance Tagged with: , , , , , , , , , , ,  


Jan van Eyck Crucifixion and Last Judgement 1430

 

A -Very- Bad Day to Be Long Wall Street’s ‘Synchronized Global Recovery’ (HE)
Fed’s Effort To Control The Rise Of Its Key Interest Rate Is Faltering (CNBC)
Russia, China And India Move To Prepare For Global Reset (Greyerz)
Trump Tariffs Force Companies To Rework Supply Chains (R.)
Trump Officials Send Mixed Signals On China Investment Curbs, Markets Sink (R.)
Pepe Escobar On Trump, ‘New York Aristocracy’ and the Deep State (ZH)
Britain Is Becoming A Stupid Country (G.)
Brexit Uncertainty Puts 860,000 Jobs At Risk, Warns Car Industry (G.)
Tesla’s “Preposterous” Model 3 Production Tent (ZH)
Accused Russian Company Says Mueller Was Unlawfully Appointed (R.)
How Comey Intervened To Kill Assange Immunity Deal (Hill)
Algeria Abandons 13,000 Migrants In The Sahara In Waves (AP)
Brazil Moves To Loosen Pesticide Laws (G.)
David Lynch on Trump (G.)

 

 

China slowdown.

A -Very- Bad Day to Be Long Wall Street’s ‘Synchronized Global Recovery’ (HE)

It’s a nasty day to be long Wall Street’s “synchronized global recovery.” Chinese stocks are down -20% from their January highs. Emerging Market equities, like Argentina and the Philippines, have been rocked by the one-two punch of a stronger dollar and slowing growth. Italian equities are down -12% since early May. Our read on global stagflation remains firmly intact. In other words, it’s not the threat of President Trump’s trade wars that continue to weigh on global equity markets, it’s slowing economic data. We don’t expect these trends to reverse anytime soon. The evidence of global growth slowing is everywhere.

The latest news out of China is that the PBoC lowered the reserve requirements for some Chinese banks, thereby releasing $108 billion in liquidity. The media quickly blamed President Trump’s “trade wars” for the move. However, the economic tea leaves suggest China’s ongoing growth slowdown is the culprit. The ripple effects of #ChinaSlowing are already being felt in Emerging Asia, like Philippine equities. (China is one of the Philippines’ primary trading partners. #ChinaSlowing = Not good.) We continue to forecast #EuropeSlowing, despite ECB head Mario Draghi’s claim that European “growth momentum” is alive and well. If the data is so good, why did Eurozone Industrial Production get more-or-less cut in half in April (1.7% YoY i! from 3.2%)?

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What control?

Fed’s Effort To Control The Rise Of Its Key Interest Rate Is Faltering (CNBC)

The Federal Reserve’s effort earlier this month to tamp down the rise of its benchmark interest rate already isn’t running as smoothly as officials might have anticipated. At its June 12-13 meeting, the Federal Open Market Committee hiked its target overnight funds rate 0.25 points to a range of 1.75 percent to 2 percent. At the same time, it raised the interest on excess reserves 0.2 points to 1.95 percent. The move was meant to contain the rise of the funds rate, which historically trails the IOER. In the weeks running up to the meeting, the funds rate closed within 5 basis points, or 0.05 percent, of the IOER, instead of staying within the midpoint of the target range as it has done since the Fed began hiking the funds rate in December 2015.

However, in the days since, the funds rate has moved even closer to the IOER. As of Friday trading, the funds rate has edged up to 1.92 percent — now just 3 basis points away from the IOER, though still 8 points away from the top of the trading range set at this month’s meeting. For the Fed, it’s a potential headache as the central bank sees to unwind the programs it initiated the pull the economy out of the financial crisis. The Fed kept interest rates at historically low levels and bought up nearly $4 trillion worth of Treasurys and mortgage-backed securities in an effort to keep rates anchored and maintain liquidity flow through the financial system. For investors, it means that continued upward pressure on the funds rate as the Fed unwinds the bonds on its balance sheet could keep the FOMC at bay in its stated intention to continue hiking interest rates.

“Here we are, and I think they will be lucky to get one more done this year, because whenever the curve flattens the market’s going to look at the Fed and say, ‘Really?’ and the Fed will have to blink,” said Christopher Whalen, head of Whalen Global Advisors, an investment bank consultancy. “They’re telling everyone there’s going to be a couple more rate increases, and that’s fanciful.”

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But when?

Russia, China And India Move To Prepare For Global Reset (Greyerz)

Egon von Greyerz: “While the US government worries about the military threat of Russia, and the trade deficit with China, they show no concern for the real problems. To understand what is really happening, all we need to do is to ‘Follow the Money.’ The flows of real money reveal where global economic power is moving. “The US has not had a real budget surplus for almost 60 years and has run balance of payment deficits every year since 1975. A country that lives above its means for over half a century is technically and economically bankrupt. Its debt should have zero value and so should its currency. But the US has skillfully avoided bankruptcy, so far, by having the reserve currency of the world and being the biggest military power.

Both Russia and China can see the writing on the wall. They understand that the world’s most indebted country cannot solve its debt problem by issuing more debt. That is why Russia and China, together with India, are buying most of the global gold production every year. In May Russia added another 600,000 oz or almost 20 tonnes to its gold reserves. Since January 2018, when Trump became president, US debt has increased by 6% or $1.1 trillion to $21.1 trillion, while Russia has added another 9 million oz of gold, and are now holding $80 billion of gold reserves. So while the US economy is taking the road to perdition, Russia knows that the only money that will survive is gold — just like it always has! For years the world has financed the US debt by buying US treasuries. But we are now seeing a marked change.

Many countries are currently liquidating US Treasuries. They know what will happen to US debt and are trying to get rid of their holdings in an orderly manner in order to avoid US Treasuries crashing together with the dollar. This is what will happen at some point in the next 1-3 years. Global investors will panic out of dollar denominated bonds, leading to a crash of both the US currency and dollar debt. The Chinese know this but their US Treasury holdings are so large that they need to sell slowly in order not to shoot themselves in the foot. In the end, China is likely to take a major loss on its dollar Treasury holdings but that is the price they have been willing to pay in order to build up their economy and manufacturing sector through financing US deficit spending.

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Multinationals and de-globalization.

Trump Tariffs Force Companies To Rework Supply Chains (R.)

From global manufacturers such as Harley-Davidson to small tech startups, companies are scrambling to rework supply chains built for an era of stable, open trade policy that is now under threat. As U.S. President Donald Trump pushes to upend the status quo of global trade, companies that initially took a wait-and-see stance are starting to take action to shield their businesses from shifting trade policy. On Monday, U.S. motorcycle maker Harley warned of higher costs because of retaliatory EU tariffs, and said it would shift production of bikes destined for the European Union out of the United States to factories it has built in India, Brazil and Thailand.

The decision of the Milwaukee, Wisconsin-based company, which Trump vowed to make great again when he took office, came less than a week after Mercedes-Benz maker Daimler cut its 2018 profit forecast, citing growing trade tensions. Its German rival BMW said it was considering “possible strategic options” in view of the rising trade tensions between China and the United States. Harley is the latest example of how companies are finding themselves in the crosshairs following “tit-for-tat” retaliations over Trump’s bid to rewrite global trade rules as part of his “America First” agenda. Office furniture maker Steelcase last week reported a 230 basis-point fall in the gross margins of its American business in the first quarter due to higher raw materials costs following Trump’s metal import tariffs.

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And still negotiating.

Trump Officials Send Mixed Signals On China Investment Curbs, Markets Sink (R.)

Conflicting signals from the Trump administration over proposed restrictions on foreign investment in U.S. technology companies, along with news that recently imposed import tariffs are starting to disrupt supply chains, sent global stock markets tumbling on Monday. Proposed restrictions on foreign investment in U.S. technology would not just be confined to China, according to U.S. Treasury Secretary Steven Mnuchin. The forthcoming restrictions would apply “to all countries that are trying to steal our technology,” he said. The U.S. Treasury is due to issue its recommendations on Chinese investment restrictions on Friday.

Late Monday White House trade and manufacturing adviser Peter Navarro sought to downplay Mnuchin’s remarks, telling CNBC television that the restrictions on investments in U.S. technology companies would just target China. Benchmark Wall Street stock indexes suffered their worst losses in two months on Monday, while safe haven Treasury debt yields fell. U.S. technology stocks were worst hit. Alphabet, the parent of Google, fell 2.6 percent, Apple lost 2.75 percent, and Amazon dropped 3.0 percent. The recent imposition of import tariffs by the U.S., and counter-measures by other countries, are also starting to affect global production and supply chains. Some U.S. steel and aluminium tariffs went into effect in April and additional tariffs begin in July.

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China has much more to lose than the US.

Pepe Escobar On Trump, ‘New York Aristocracy’ and the Deep State (ZH)

Trump, Escobar explains, wasn’t born into the Manhattan aristocracy. And though the “Masters of the Universe” – a group that includes the country’s top bankers along with the leaders of the military and intelligence communities – were initially reluctant to embrace him (as were many factions within the Republican Party), they eventually changed their minds once they understood that he would advocate for their interests. “He’s not born in lower Manhattan…and he’s not part of the New York aristocracy, the establishment that’s been there for some 150 to 200 years…he’s still regarded in New York as a wealthy outsider. But in the end, he was accepted by some sectors of the Republican Party – even though they initially didn’t want to accept him – Washington, some sectors of the Republican Party.”

He was the candidate of the establishment from the beginning, or he was a genuine candidate whose regime has now been disturbed by the Deep State. He was vetoed by the establishment – this is something that people who know how the Deep State works in DC they will tell you always the same thing: You don’t become a candidate for a President of the United States if you are not vetted…by the people who actually run the US.” Trump was vulnerable to this manipulation because he doesn’t have a nuanced enough understanding of geopolitics…which has forced him to rely on advisors whispering in his ear…advisors whose intentions aren’t always working in the best interest of the president, or the American people, for that matter.

One example is Trump’s insistence on instigating a trade war between China and the US. While China has many ways to retaliate against the US, as least when it comes to finding markets for their goods, US companies have more options than their Chinese peers. “Trump still doesn’t understand that the retaliation is going to be really huge from the Chinese and they have ways of hurting badly – they even have ways of ratcheting up taxes on products made in the Midwest. But they’re going to lose much more than we do. We have other markets. We export more to Asia, we export more to South America and we export more to Europe.”

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Been coming for a while now.

Britain Is Becoming A Stupid Country (G.)

Melvyn Bragg has said Britain is becoming a stupid country, in part because its university system is being destroyed. The broadcaster and Labour peer criticised the state of British higher education in an interview with the magazine Radio Times. “We have, per capita, the best university system in the world, but it’s being – carelessly and utterly stupidly – destroyed very slowly,” he said. “We used to be the clever country and now we’re clearly the stupid country. Except for certain highlights.”

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Wait till the bankers start to protest.

Brexit Uncertainty Puts 860,000 Jobs At Risk, Warns Car Industry (G.)

The car industry has warned Theresa May there is “no Brexit dividend” for the business, with 860,000 jobs being put at risk unless the government “rethinks” its red lines in negotiations. In the starkest warning yet from a single business sector, the car lobby has told the government that it needs “as a minimum” to remain in the customs union and a deal that delivers “single market benefits”. “There is no Brexit dividend for our industry,” Michael Hawes, chief executive of the Society of Motor Manufacturers and Traders, said. It said Brexit uncertainty was thwarting investment and repeated calls for the UK to stay in the customs partnership until the government came up with a “credible plan B”.

With investment slowing and time running out, negotiators must get on with the job of agreeing a deal that will put an end to uncertainty and prioritise the needs of the automotive sector, the SMMT said. The sector had grown for the eighth successive year with turnover at a record £82bn in 2017. However it said 2018 has showed a slowdown in output with investment earmarked for new models, equipments and facilities in the UK halving to around £347m. [..] “With decisions on new vehicle models in the UK due soon, government must take steps to boost investor confidence and safeguard the thousands of jobs that depend on the sector,” it said ahead of a key conference for the automotive industry.

The government had “no credible Plan B” for customs arrangements post-Brexit, it said, that would keep the Port of Dover flowing freely. Car manufacturers rely on what is known as “just in time” production whereby components, mostly from the EU, cross the channel just hours before they are needed on the assembly line. More than 1,000 trucks a day cross the channel with these components.

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Not even Onion.

Tesla’s “Preposterous” Model 3 Production Tent (ZH)

Bears and bulls alike following Tesla’s gripping nailbiter of a story – the company has until the end of the month to pumpt out 5,000 Model 3 sedans a week – both agree on one thing: the output of the company’s new “tent” structure which Musk erected recently to produce Model 3 vehicles is going to decide whether or not the company hits its production goal that it has touted over the last couple of months. The tent was erected in just a matter of weeks, and came online in early June, to help the company produce more vehicles at a time when they are under the microscope. Until recently, we didn’t know the details as to when it was erected, what the timing looked like and what it is expected to produce.

However, a Bloomberg article out today helped shed some light on the details of what is arguably the most important – if archaic – structure that Tesla has built yet. Not surprisingly, opinions extend the whole gamut, with some manufacturing experts claiming the tent is “basically nuts”: “Elon Musk has six days to make good on his pledge that Tesla will be pumping out 5,000 Model 3 sedans a week by the end of the month. If he succeeds, it may be thanks to the curious structure outside the company’s factory. It’s a tent the size of two football fields that Musk calls “pretty sweet” and that manufacturing experts deride as, basically, nuts. [..] Inside the tent in Fremont, California, is an assembly line Musk hastily pulled together for the Model 3. That’s the electric car that is supposed to vault Tesla from niche player for the wealthy to high-volume automaker, bringing a more affordable electric vehicle to the masses.”

Analysts at Bernstein are equally unimpressed. Here is a quote from Max Warburton who benchmarked auto assembly plants before his job as a financial analyst: “Words fail me. It’s insanity,” said Max Warburton, who benchmarked auto-assembly plants around the world before becoming a financial analyst. [..] What gives manufacturing experts pause about Tesla’s tent is that it was pitched to shelter an assembly line cobbled together with scraps lying around the brick-and-mortar plant. It smacks of a Hail Mary move after months of stopping and starting production to make on-the-fly fixes to automated equipment, which Musk himself has said was a mistake. “The existing line isn’t functional, it can’t build cars as planned and there isn’t room to get people into work stations to replace the non-functioning robots,” Warburton said. “So here we have it—build cars manually in the parking lot.”

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Surprising argument. They must think it has merit.

Accused Russian Company Says Mueller Was Unlawfully Appointed (R.)

A Russian company accused of helping fund a propaganda operation to sway the 2016 presidential election in Donald Trump’s favor asked a federal judge on Monday to dismiss charges brought by Special Counsel Robert Mueller, saying Mueller was unlawfully appointed and lacks prosecutorial authority. Concord Management and Consulting LLC, a firm that prosecutors say is controlled by a businessman dubbed by Russian media as “Putin’s cook,” argued in a filing in U.S. district court in Washington that Deputy Attorney General Rod Rosenstein violated the Appointments Clause of the U.S. Constitution when he hired Mueller in May 2017.

Concord is one of three entities, along with 13 Russian individuals, indicted by Special Counsel Robert Mueller’s office in February in an alleged criminal and espionage conspiracy to tamper with the U.S. race, boost Trump and disparage his Democratic opponent, Hillary Clinton. The indictment said Concord is controlled by Russian businessman Evgeny Prigozhin, who U.S. officials have said has extensive ties to Russia’s military and political establishment. In it, Concord is alleged to have controlled funding, recommended personnel and overseen the activities of the propaganda campaign. Concord is the only one of the defendants in the case to have formally responded to the charges in federal court. Earlier this year, it hired American lawyers to fight the indictment.

Under the Constitution’s Appointments Clause, principal officers such as cabinet secretaries are appointed by the president and confirmed by the United States Senate while “inferior officers” may be appointed by courts or department heads if permitted by Congress. Concord’s lawyers say that Mueller qualifies as an “officer” under the clause and not a routine federal employee under the law because of his vast prosecutorial authority. They say that no matter whether Mueller is deemed an “inferior” or “principal” officer, his appointment still violates the Constitution. As a principal officer, they say, he should have been appointed by the president and confirmed by the Senate.

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Behind the scenes.

How Comey Intervened To Kill Assange Immunity Deal (Hill)

One of the more devastating intelligence leaks in American history — the unmasking of the CIA’s arsenal of cyber warfare weapons last year — has an untold prelude worthy of a spy novel. Some of the characters are household names, thanks to the Russia scandal: James Comey, fired FBI director. Sen. Mark Warner (D-Va.), vice chairman of the Senate Intelligence Committee. Department of Justice (DOJ) official Bruce Ohr. Julian Assange, grand master of WikiLeaks. And American attorney Adam Waldman, who has a Forrest Gump-like penchant for showing up in major cases of intrigue. Each played a role in the early days of the Trump administration to try to get Assange to agree to “risk mitigation” — essentially, limiting some classified CIA information he might release in the future.

The effort resulted in the drafting of a limited immunity deal that might have temporarily freed the WikiLeaks founder from a London embassy where he has been exiled for years, according to interviews and a trove of internal DOJ documents turned over to Senate investigators. But an unexpected intervention by Comey — relayed through Warner — soured the negotiations, multiple sources tell me. Assange eventually unleashed a series of leaks that U.S. officials say damaged their cyber warfare capabilities for a long time to come. This yarn begins in January 2017 when Assange’s legal team approached Waldman — known for his government connections — to see if the new Trump administration would negotiate with the WikiLeaks founder, holed up in Ecuador’s London embassy.

[..] Ohr consulted his chain of command and the intelligence community about what appeared to be an extraordinary overture that raised hopes the government could negotiate what Assange would release and what he might redact, to protect the names of exposed U.S. officials. Assange made clear through the lawyer that he would never compromise his sources, or stop publishing information, but was willing to consider concessions like redactions. Although the intelligence community reviled Assange for the damage his past releases caused, officials “understood any visibility into his thinking, any opportunity to negotiate any redactions, was in the national security interest and worth taking,” says a senior official involved at the time.

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Unconscionable EU comment: “sovereign countries” can expel migrants as long as they comply with international law..”

Algeria Abandons 13,000 Migrants In The Sahara In Waves (AP)

Assamaka, Niger — From this isolated frontier post deep in the sands of the Sahara, the expelled migrants can be seen coming over the horizon by the hundreds. They look like specks in the distance, trudging miserably across some of the world’s most unforgiving terrain in the blistering sun. They are the ones who made it out alive. Here in the desert, Algeria has abandoned more than 13,000 people in the past 14 months, including pregnant women and children, stranding them without food or water and forcing them to walk, sometimes at gunpoint, under temperatures of up to 48ºC (118ºF). In Niger, where the majority head, the lucky ones limp across a desolate 15-kilometer (9-mile) no man’s land to Assamaka, less a town than a collection of unsteady buildings sinking into drifts of sand.

Others, disoriented and dehydrated, wander for days before a U.N. rescue squad can find them. Untold numbers perish along the way; nearly all the more than two dozen survivors interviewed by The Associated Press told of people in their groups who simply could not go on and vanished into the Sahara. [..] Algeria’s mass expulsions have picked up since October 2017, as the European Union renewed pressure on North African countries to head off migrants going north to Europe via the Mediterranean Sea or the barrier fences with Spain. These migrants from across sub-Saharan Africa — Mali, the Gambia, Guinea, Ivory Coast, Niger and more — are part of the mass migration toward Europe, some fleeing violence, others just hoping to make a living.

A European Union spokesperson said the EU was aware of what Algeria was doing, but that “sovereign countries” can expel migrants as long as they comply with international law. Unlike Niger, Algeria takes none of the EU money intended to help with the migration crisis, although it did receive $111.3 million in aid from Europe between 2014 and 2017. Algeria provides no figures for the expulsions. But the number of people crossing on foot to Niger has been rising steadily since the International Organization for Migration started counting in May 2017, when 135 people were dropped at the crossing, to as high as 2,888 in April 2018. In all, according to the IOM, a total of 11,276 men, women and children survived the march.

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Corrupt countries have no chance against Monsanto.

Brazil Moves To Loosen Pesticide Laws (G.)

A Brazilian Congress commission has approved a controversial bill to lift restrictions on pesticides despite fierce opposition from environmentalists, prosecutors, health and environment ministry bodies, and even United Nations special rapporteurs. Driven by a powerful agribusiness lobby, the bill now needs to be voted on in both houses of Congress and sanctioned by President Michel Temer before becoming law. Its proponents say it will free up bureaucracy and modernise dated legislation. But the bill has generated fierce opposition in Brazil, one of the world’s biggest food producers and biggest consumers of pesticides, even those banned in other countries.

Opponents dubbed it the “poison package” and said it would lead to the indiscriminate use of dangerous pesticides, while 250,000 signed an online petition against it. “The law will make us more permissive than we already are,” said Larissa Bombardi, a professor of geography and pesticides specialist at the University of São Paulo. “The economic interest will prevail over human and environmental health.” Of 121 pesticides permitted in Brazil for coffee production, 30 are already banned in the European Union, including the toxic herbicide paraquat, Bombardi reported in an extensive 2017 study. The bill overhauls existing legislation, allowing for pesticides to be given temporary register if the approval process has taken over two years and three countries in the OECD have already approved it.

[..] Under Brazil’s current legislation, pesticides with elements considered teratogenic, carcinogenic, mutagenic, endocrine disruptive, or posing risks to the reproductive system can’t be registered, they said. But under the bill, hazardous pesticides will only be prohibited when there is a “scientifically established unacceptable risk” – a definition too vague to be effective. Greenpeace attacked lawmakers for approving the bill in the face of such wide opposition. “They want a toxic product to look less threatening,” said Marcio Astrini, Greenpeace Brazil’s public policy coordinator. “The toxic garbage being banned in the rest of the planet will be sold here.”

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He’s not that wrong. He won’t be a great president, but the disruption is needed.

David Lynch on Trump (G.)

David Lynch on Trump: “He could go down as one of the greatest presidents in history because he has disrupted the thing so much. No one is able to counter this guy in an intelligent way.” While Trump may not be doing a good job himself, Lynch thinks, he is opening up a space where other outsiders might. “Our so-called leaders can’t take the country forward, can’t get anything done. Like children, they are. Trump has shown all this.”

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May 102018
 
 May 10, 2018  Posted by at 9:24 am Finance Tagged with: , , , , , , , , , , , ,  


Paul Gauguin Road in Tahiti 1891

 

Beware of the Coming Economic Debt Bomb (Tanous)
Argentina Looks To Be Headed For Another Economic Storm (CNBC)
At Last, A Reason To Celebrate: House Prices Are Falling (G.)
RBS Reaches $4.9 Billion Deal To Settle US Mortgage Bond Probe (R.)
The Deep State First (Stockman)
Turkey Detains Dozens Of Air Force Personnel Over Gulen Links (R.)
Did Putin Green-Light Tonight’s Massive Israeli Strikes On Syria? (ZH)
Trump Welcomes Home Three Americans Released By North Korea (G.)
Democrats’ Lead Is Slipping In Generic Ballot Poll (Hill)
Is Capitalism a Threat to Democracy?
Bullshit Jobs: Why They Exist And Why You Might Have One (Vox)

 

 

“..over half of all personal income taxes will be required just to service the national debt.”

Beware of the Coming Economic Debt Bomb (Tanous)

In 2009, the year President Obama took office, the national debt held by the public was $7.27 trillion. At the end of fiscal 2016, that had soared to approximately $14 trillion. Given that our marketable debt doubled from 2009 to 2016, it’s remarkable that the annual cost of the interest on the debt rose far less, from $185 billion to $223 billion. The long march of rising rates that began recently is a dramatic reversal after nearly 40-years of declining interest rates. The new trend portends a return to more historic rates. You may be asking: what are the historic rates? We calculate that the average rate paid on the federal debt over the last 30 years was close to 5%. The Congressional Budget Office (CBO) has just raised its estimate that debt held by the public will rise to $17.8 trillion in 2020.

Some economists believe that the figure will be much higher. For our exercise though, let’s stick with the CBO estimate. We are postulating that the interest rate on our national debt may return to the long-term, 30-year average of 5%. Note, too, that Treasury debt rolls over every 3 to 4 years so the maturing bonds at low interest rates will be refinanced at the then current higher rates. Let’s do the math together. Take the CBO estimate of debt held by the public of $17.8 trillion in 2020, a 5% average interest on that amount comes to annual debt service of $891 billion, an unfathomable amount. (In 2017, interest on the debt held by the public was $458.5 billion, itself a scary number.)

In its current report, the CBO added: “It also reflects significant growth in interest costs, which are projected to grow more quickly than any other major component of the budget.” Here’s the danger: • According to CBO, individual income taxes produced $1.6 trillion in revenue in fiscal year 2017. • Under this 2020 scenario, over half of all personal income taxes will be required just to service the national debt. • Annual debt service in 2020 will exceed our newly increased defense budget of $700 billion in FY 2018. • Annual debt service would exceed our Social Security obligations.

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[The IMF] “..admitted shortly after the intervention that its support to keep the peso’s peg against the dollar prolonged the crisis in the country.”

Argentina Looks To Be Headed For Another Economic Storm (CNBC)

Argentina has started talks with the IMF seeking financial rescue once again, as inflation soars and the currency sinks. Buenos Aires looks to be going through another economic nightmare, with prices rising rapidly while the Argentine peso drops. The central bank announced last week another increase in rates to 40% — as the 12-month inflation rate hit 25.4%, above its 15% target. At the same time, since the start of the year, the peso is down by more than 20% against the U.S. dollar. [..] Asking for help from the Fund is a contentious issue for the country. Back in 2001, Argentina defaulted on $132 billion of foreign debt. The Washington-based institution, which was helping the country at the time, admitted shortly after the intervention that its support to keep the peso’s peg against the dollar prolonged the crisis in the country.

Following Macri’s announcement Tuesday, several people protested against a new IMF intervention, still traumatized by the economic collapse at the start of the century, Reuters reported. “The IMF has a terrible reputation among Argentinians, and so this is a big political gamble for the government,” Fiona Mackie, regional director for Latin America at the Economist Intelligence Unit, told CNBC via email. “At present, though, (the government) clearly sees the need to regain the confidence of markets as more pressing, and is hoping that its program of adjustment gets back on track in time for the presidential election late next year,” she added.

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“The Germans are right. Ever-rising house prices are a curse. They are bad for social mobility. They are bad for young people. And they are bad for the economy. ”

At Last, A Reason To Celebrate: House Prices Are Falling (G.)

The housing market is dead. Britain’s biggest mortgage lender, the Halifax, says that prices fell in April by 3.1%, the biggest monthly drop in almost eight years. Newspapers bury this disastrous news way back in their editions for fear that it will spread gloom and despondency. We need to wean ourselves off this way of thinking. Falling house prices are not disastrous, and only in a country with such a perverted relationship with bricks and mortar could they be seen as such. In Germany, they scratch their heads in bemusement when they hear Britons boast of how the value of their house has soared. The Germans are right. Ever-rising house prices are a curse. They are bad for social mobility. They are bad for young people. And they are bad for the economy.

The billions that are spent pushing up property prices could be more productively invested elsewhere. Imagine for a second that the next time you went to the train station the rail operating company had unexpectedly cut fares by 5%. Or that when doing your weekly shop you discovered that the supermarket had slashed your normal bill by £10. Would you think this was an unwelcome development? Daft question. Of course you would be happy, because your money would go further. Conversely, you would be less than chuffed to find more of your pay being spent on getting to work or putting food on the table. That’s why there are no headlines in the papers screaming “Boom-boom Britain: joy for commuters as rail fares rise by 10% for third year in a row”, or “Good news for families as supermarkets add £10 a week to the average shop”.

The papers stand up for their readers when they think they are being gouged by train companies and supermarkets. They stick up for buyers rather than sellers. But different rules apply to property. If the average house price had risen rather than fallen by £7,000 in April, that would have been front-page news and hailed as a sign that all was well with the economy. The papers tend to side with owner-occupiers rather than the buyers of property getting the rough end of the deal. This fetishisation of rising house prices is relatively recent. For the first 25 years after the second world war, a combination of mass housebuilding and strict controls on credit meant that the cost of property rose only modestly.

But since 1970, financial deregulation, much lower levels of housebuilding and a tax system heavily weighted in favour of owner-occupation have meant demand for housing in parts of the country has tended to outstrip supply. There have been four big house-price booms – the early 1970s, the late 80s, the mid 00s and the mid 10s. None of them have ended well.

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No criminal charges.

RBS Reaches $4.9 Billion Deal To Settle US Mortgage Bond Probe (R.)

The British state-backed bank said that $3.46 billion of the proposed civil settlement will be covered by existing provisions and the bank will take a $1.44 billion incremental charge in 2018’s second quarter to cover the rest. The accord would resolve a major issue that has weighed on the company’s share price and complicated the UK government’s plan to sell down its more than 70 percent stake in the bank. RBS Chief Executive Ross McEwan called the deal a “milestone.” “Removing the uncertainty over the scale of this settlement means that the investment case for this bank is much clearer,” he said in a statement.

The U.S. Attorney’s Office in Massachusetts, which led the probe, confirmed it had reached an agreement in principle with RBS that would resolve potential civil claims related to mortgage-backed securities that were issued from 2005 to 2008. “Further details remain to be negotiated, however, before a formal agreement can be reached,” the office said. The implosion of markets for risky residential mortgage-backed securities and related derivatives contributed to the 2008 global financial crisis and prompted a series of investigations by authorities including the Justice Department. The U.S. Attorney’s Office in Massachusetts had also been conducting a criminal investigation into RBS and former employees who were involved in structuring and selling the securities.

But the settlement that RBS and the office disclosed on Thursday was only civil in nature, signaling no criminal charges were likely to result. RBS previously agreed in July 2017 to pay $5.5 billion to resolve a lawsuit by the Federal Housing Finance Agency, the conservator for Fannie Mae and Freddie Mac, claiming it misled the U.S. mortgage giants into buying mortgage-backed securities. It resolved similar claims by the National Credit Union Administration related to mortgage-backed securities RBS sold to credit unions that later failed for $1.1 billion in 2016.

Read more …

“The mere threat of a military attack from the White House is madness because it arises from blatant lies that have absolutely nothing to do with US national security..”

The Deep State First (Stockman)

At his so-called Cabinet meeting this morning, the Donald basically threatened Iran with annihilation if it does what 15 other signatories to the nuclear non-proliferation treaty (NPT) do every day: Namely, increase production of industrial grade nuclear fuel (3.5%-5.0% purity) at its enrichment plant at Natanz—which, in any event, is crawling with IAEA inspectors. Moreover, it really doesn’t matter whether Trump was play-acting in the style of Art of the Deal or that the JPAOC could be improved. The mere threat of a military attack from the White House is madness because it arises from blatant lies that have absolutely nothing to do with US national security. Nor, for that matter, the security of any other country in the region, including Saudi Arabia and Israel.

The real purpose of the Donald’s missile-rattling is nothing more than helping Bibi Netanyahu keep his coalition of right wing religious and settler parties (Likud, United Torah Judaism, Shas, Kulanu and the Jewish Home) together, thereby maintaining his slim 61-vote majority in the 120-seat Knesset. Netanyahu’s malefic political glue is the utterly false claim that Iran is an “existential threat” to Israel because it is hell-bent on getting the bomb. But that’s where the whopper comes in. It amounts to the ridiculous postulate that Iran is so fiendishly evil that if it is involved in the nuclear fuel cycle in any way, shape or form – presumably even just operating a uranium mine – it is only a matter of months before it will have a bomb.

As a matter of record, of course, Netanyahu has been saying this since the early 1990s and he has always been wrong because there were never any facts or logic to support his blatant fear-mongering.

Read more …

Madman,

Turkey Detains Dozens Of Air Force Personnel Over Gulen Links (R.)

Turkish police detained 65 suspects on Thursday in an operation targeting air force personnel accused of links to the U.S.-based preacher whom Ankara says orchestrated an attempted coup in 2016, state-run Anadolu news agency said. Prosecutors issued arrest warrants for a total 96 people, of which 91 were from the air force, and police were still seeking the remaining suspects in an operation focused on the western city of Izmir and spread across 15 provinces, it said. The suspects were said to have ties to the cleric Fethullah Gulen, whose network is accused of being behind the failed putsch in July 2016, during which 250 people were killed. Gulen has denied involvement.

In a separate operation, an Ankara prosecutor on Thursday issued detention warrants for 93 employees of a private tutoring center that was previously closed down on suspicion of links to Gulen’s network, Anadolu said. Turkish authorities have detained 160,000 people and dismissed nearly the same number of civil servants since the failed military intervention, the U.N. human rights office said in March. Among those detained, more than 50,000 have been formally charged and kept in jail during their trials.

Read more …

Hmmm…

Did Putin Green-Light Tonight’s Massive Israeli Strikes On Syria? (ZH)

Just off a 10-hour visit with Russian President Vladimir Putin in Moscow, and less than a day after Trump pulled out of the Iran nuclear deal, Israeli Prime Minister Benjamin Netanyahu said on Wednesday he doesn’t expect Russia to act against Israeli forces as they continue exchanging fire with Syria. It appears the meeting wrapped up at the very moments a major escalation began along the Golan Heights, with both Syria and Israel trading blame for an initial attack which quickly escalated into Israeli cruise missile launches and shelling on targets in southern Syria and notably, on Damascus itself. The question remains, did Putin give Netanyahu the green light for tonight’s events?

If it wasn’t clear over the past weeks and months of unprovoked Israeli strikes on Syria—ostensibly to roll back Iranian troop presence—then it should be very clear by now that Syria, Israel, and Iran are now in a state of war and all signs point to a continued intensification of the conflict. And crucially, there’s currently no sign that Russia came to the aid of its close ally as rockets rained down on Damascus overnight. Russia has routinely looked the other way while Israel has conducted, by its own admission, over one hundred major strikes on Syria—most of which have come after Russian intervention on behalf of Assad in 2015. As Reuters reported late in the day Wednesday, Netanyahu told reporters just before departing Moscow: “Given what is happening in Syria at this very moment, there is a need to ensure the continuation of military coordination between the Russian military and the Israel Defence Forces.”

The Russians and Israelis coordinate their actions through a direct military hotline intended to avoid accidental clashes which could lead to escalation between the two countries. A reportedly “upbeat” Netanyahu further said, “”In previous meetings, given statements that were putatively attributed to – or were made by – the Russian side, it was meant to have limited our freedom of action or harm other interests and that didn’t happen, and I have no basis to think that this time will be different.” Thus it appears Israel may have been given a green light by Putin to engage targets in Syria, however, at this point it is unclear what limitations or restrictions Putin may have issued, if any at all.

Read more …

Victory.

Trump Welcomes Home Three Americans Released By North Korea (G.)

Three Americans released by North Korea have landed in the US under cover of darkness, with Donald Trump waiting on the tarmac to greet their plane. The three men emerged from a US government plane, flashing peace signs high above their heads. A huge US flag hung between two fire trucks served as a backdrop against the night sky. “I want to thank Kim Jong-un,” Trump said. “I think he wants to do something and bring that country into the real world.” “We didn’t think this was going to happen, and it did. It was very important to all of us,” he said, referring to the prisoner release. “The true honour will be if we have a victory in getting rid of nuclear weapons.” The US secretary of state, Mike Pompeo, flew to Pyongyang for a surprise one-day visit on Wednesday, when he met the North Korean leader and secured the release of the three men.

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What do Democrats stand for?

Democrats’ Lead Is Slipping In Generic Ballot Poll (Hill)

The lead held by Democrats over Republicans on generic ballot polls ahead of the 2018 midterm elections is beginning to slip, a new CNN poll suggests. Overall, 31% of respondents in a poll released Wednesday told CNN that they believe the country would be better off with Democrats in control of Congress, while 30% said Republicans should hold the reins. However, the largest proportion of respondents, at 34%, said it makes no difference to them who is in charge. Among registered voters asked whether they would vote Democratic or Republican in their congressional district if the elections were held today, Democrats had a three-point advantage, at 44% to 41%, which is within the poll’s margin of error.

Democrats have seen a steady decline in their advantage over Republicans in recent months, according to CNN polling, falling from a 16-point advantage in February to a 6-point one in March, to just a 3-point lead this week, roughly six months away from the midterm elections. An ABC News/Washington Post poll similarly found last month that Democrats’ lead over Republicans among registered voters was only 4 points, at 47% to 43%, down from a 12-point lead the poll found Democrats held in January. Democrats still have an edge in enthusiasm, according to CNN. Among respondents who said they are excited to vote in November, more plan to vote Democratic than Republican, at 53% to 41%.

But enthusiasm does seem to be growing among GOP voters. According to the CNN poll, 44% of Republican and Republican-leaning registered voters said they were “very enthusiastic” about voting, which is a jump from 36% in March. [..] President Trump’s own job approval has increased recently, with his approval rating at 41% in the CNN poll and his approval over his handling of the economy at 52%.

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On Polanyi.

Is Capitalism a Threat to Democracy?

In a sweeping, angry new book, “Can Democracy Survive Global Capitalism?” (Norton), the journalist, editor, and Brandeis professor Robert Kuttner champions Polanyi as a neglected prophet. Like Polanyi, he believes that free markets can be crueller than citizens will tolerate, inflicting a distress that he thinks is making us newly vulnerable to the fascist solution. In Kuttner’s description, however, today’s political impasse is different from that of the nineteen-thirties. It is being caused not by a stalemate between leftist governments and a reactionary business sector but by leftists in government who have reneged on their principles.

Since the demise of the Soviet Union, Kuttner contends, America’s Democrats, Britain’s Labour Party, and many of Europe’s social democrats have consistently tacked rightward, relinquishing concern for ordinary workers and embracing the power of markets; they have sided with corporations and investors so many times that, by now, workers no longer feel represented by them. When strongmen arrived promising jobs and a shared sense of purpose, working-class voters were ready for the message.

[..] Polanyi starts “The Great Transformation” by giving capitalism its due. For all but eighteen months of the century prior to the First World War, he writes, a web of international trade and investment kept peace among Europe’s great powers. Money crossed borders easily, thanks to the gold standard, a promise by each nation’s central bank to sell gold at a fixed price in its own currency. This both harmonized trade between countries and stabilized relative currency values. If a nation started to sell more goods than it bought, gold streamed in, expanding the money supply, heating up the economy, and raising prices high enough to discourage foreign buyers—at which point, in a correction so smooth it almost seemed natural, exports sank back down to pre-boom levels.

The trouble was that the system could be gratuitously cruel. If a country went into a recession or its currency weakened, the only remedy was to attract foreign money by forcing prices down, cutting government spending, or raising interest rates—which, in effect, meant throwing people out of work. “No private suffering, no restriction of sovereignty, was deemed too great a sacrifice for the recovery of monetary integrity,” Polanyi wrote. The system was sustainable politically only as long as those whose lives it ruined didn’t have a say. But, in the late nineteenth and early twentieth centuries, the right to vote spread. In the twenties and thirties, governments began trying to protect citizens’ jobs from shifts in international prices by raising tariffs, so that, in the system’s final years, it hardened national borders instead of opening them, and engendered what Polanyi called a “new crustacean type of nation,” which turned away from international trade, making first one world war, and then another, inevitable.

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More Graeber. Most jobs are bullshit.

Bullshit Jobs: Why They Exist And Why You Might Have One (Vox)

Corporate lawyers. Most corporate lawyers secretly believe that if there were no longer any corporate lawyers, the world would probably be a better place. The same is true of public relations consultants, telemarketers, brand managers, and countless administrative specialists who are paid to sit around, answer phones, and pretend to be useful. A lot of bullshit jobs are just manufactured middle-management positions with no real utility in the world, but they exist anyway in order to justify the careers of the people performing them. But if they went away tomorrow, it would make no difference at all. And that’s how you know a job is bullshit: If we suddenly eliminated teachers or garbage collectors or construction workers or law enforcement or whatever, it would really matter. We’d notice the absence.

But if bullshit jobs go away, we’re no worse off. [..] We’re all taught that people want something for nothing, which makes it easy to shame poor people and denigrate the welfare system, because everyone is lazy at heart and just wants to mooch off other people. But the truth is that a lot of people are being handed a lot of money to do nothing. This is true for most of these middle-management positions I’m talking about, and the people doing these jobs are completely unhappy because they know their work is bullshit. I think most people really do want to believe that they’re contributing to the world in some way, and if you deny that to them, they go crazy or become quietly miserable.

[..] You expect this outcome with a Soviet-style system, where you have to have full employment so you make up jobs whether a need exists or not. But this shouldn’t happen in a free market system. I think one of the reasons is there’s huge political pressure to create jobs coming from all directions. We accept the idea that rich people are job creators, and the more jobs we have, the better. It doesn’t matter if those jobs do something useful; we just assume that more jobs is better no matter what. We’ve created a whole class of flunkies that essentially exist to improve the lives of actual rich people. Rich people throw money at people who are paid to sit around, add to their glory, and learn to see the world from the perspective of the executive class.

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Apr 302018
 
 April 30, 2018  Posted by at 12:40 pm Finance Tagged with: , , , , , , , , , , ,  


Gustav Klimt The Park 1909

 

 

Dr. D feels his own golden age coming on. It’s just a bit dark gold. Nothing a good polish can’t help, I’m sure. In the end, the spirit is familiar:

A man only begins to grasp the true meaning of life when he plants a tree under whose shade he knows he will never sit.

That is literally how he finishes this:

It’s going where it’s going, as I grow plants and make the bees happy, let the trees rest in the forests, as best I’m able when devoid of any help. They will survive. We are as perennial as grass, and will diminish someday. When we do, I will have left the trees, the seeds, the order, the patterns that will feed the generations that follow, as true men, not infants, should.

It’s spring.

 

 

Dr. D:

Ilargi —
 
Would rather work on a more positive article, something about life, nature, spring, gardens; however I find that they are so complicated as to be inexpressible.  So many, from Thoreau to Sand County Almanac spend entire books and barely scratch an overview of the complexity of nature.  It’s at once so obvious and, lacking personal experience, so inexplicable.  So I haven’t done that, but it’s been chilly and till the asparagus, start the plants (too early) and wait for the leaves.
 
Maybe it’s the case that once we understand how much there is, no thoughts can be put into a 1,000 word article.  Certainly that’s to the detriment of modern thinking and persuasion.  Maybe I just always use too many words to say things and draw in sidelines that are better neglected, however interesting and connected; for all things are really equally connected in mind just as in nature, and because of our linear minds we can’t look at them at once, but only one by one.
 
John Day is correct of the gestalt, however seldom that happens to humankind.  And what is it?  Does that not mean we partake of Jung’s mass consciousness, that we are in fact telepathic, like schools of fish and flocks of birds gyring in the sky?  The nation has gone insane, truly mad, I could not describe it to you.  80% of people believe whatever they think that minute is reality.  When CNN tells them the opposite of yesterday, or the beginning of the sentence is the opposite of the ending, it causes no distress. 

It’s truly Robespierre, cultural revolution, and it doesn’t end well, for the expression of all of it is Crowley’s “Do what thou will” with Ayn Rand’s “What’s best for me is best for all” so you have a system of plundering by power, whether by force or victimhood, where the reality – actually, earnestly, incontrovertibly believed – is whatever will get me the most in this moment.  Is it easier to fake medical paperwork, not check patients, and let them die rather than get out of a chair once an hour?  We do it. 

Call them on it and they’ll deny it, believing even to themselves.  Steal from your own work, your family, banish them on Facebook if they call you on it, then expect a minute later there should be no ill will, no consequences?  Certainly.  Look around and call on public opinion for the callous, selfish, murdering behavior, and 80% of them support you, they think it’s normal and fine, punishing the 20% who still have order, consequences, cause and effect, logos. 
 

 

I have no explanation for it, nor is there an end, but I greatly fear the only cure for it is for the good people to withdraw and leave the bad people starving in a ditch, their children and dogs included, for as adults, it is nearly impossible for them to change, and impossible for any good people to trust that change.  And how are you supposed to run a justice system, a society, in a world of truly pathological, lying, self-serving sociopaths?  How even will their children not end up the same, with only 20% left to throw a lifeline?  A lifeboat cannot save the ship, you know.  It can hardly save itself.
 
I was surprised at the comments today, for this open, transparent, appalling, illogical lies are still completely internalized, completely believed at the meta level.  Trump has an open war on the CIA and Deep State – I don’t know how it could possibly be more obvious or advertised – and any common level would tell you we have been antagonizing North Korea to justify keeping country-sized bases in Japan and SoKo because the men needed to contain China wouldn’t fit in Pearl Harbor and are too far away. And yet when Trump’s team openly undercuts the CIA and peace breaks out everywhere, it’s suddenly not him. 

It’s Kim Jong actually, I read yesterday, he beat the U.S., Trump lost (when Trump also wasn’t trying anything) and…I don’t know, NoKo is going to invade us and SoKo, after they nuke Miami and the moon with the CNN missiles that can hit anywhere on earth?  After Pompeo (and allegedly Trump) met with Kim Jong in the Forbidden City? Earlier, however, he WAS completely responsible for war and the 12M dead Wolf Blitzer and Rachel Maddow longed for.  So let me translate: all bad things forever in time and space are Trump, all good things forever in time and space, not Trump.  And that’s logic now.
 
Maybe it’s inappropriate to give the Nobel to a man when it’s often a team, maybe we shouldn’t give prizes for doing a normal, decent thing and simply not killing each other, but that’s not the tradition.  Personally, I wouldn’t give it to him because in my estimation all he did was STOP the CIA from holding Kim and NoKo hostage to his own Deep State Generals.  Kim is a Swiss-raised trust fund playboy: he doesn’t want war unless forced to it.  I can’t give a medal for simply stopping a war that never should have existed, and one they even now lie about and won’t admit. 

 

But that’s not the point.  The point is, our own readers, who are very smart and should be more than up to speed, seem to completely fall for CNN, Brian Williams, and an endless list of exposed, transparent liars for 20+ years, instead of you, for example, who’s been calling it out and they read every day. My God, what will it take?  It’s disheartening.  I believe that is part of the same Jungean mass-mind they have somehow hacked and it’s a struggle for even smart people to break through.
 
So apparently Kanye, following Professor Griff and a wide number of other immediately ignored and sidelined black artists, has woken up before our own readers.  Not that Trump is great or anything, because he’s a jerk, but that they’ve arranged the same system from 100 years ago where darkie has to think and vote the way master says, or else.  That’s the worst system of slavery ever devised.  You think your color, vote your color, dress your color, watch your color, apply for jobs according to your color, and not your free thinking, your talents, your politics, your soul. 

Yet again, that’s normal: that’s not racism to tell groups how they better vote, yet it IS racism to tell them to think for themselves.  All overwhelmingly racist countries easily elect and accept Black Presidents with Muslim names, have black leaders in both parties, black billionaires, black megastars.  That’s how we know they’re racist, right?  Reality doesn’t matter, evidence doesn’t matter, logic doesn’t matter, it hasn’t mattered my whole life, it will never matter ever again.
 
It strikes me that although pretty poor, whose mascot should be the rhino, Republicans are the party AGAINST slavery, AGAINST the southern Democrats, born AGAINST the KKK, who have black cabinet members, black presidential candidates going back decades as still today. 

Doesn’t matter.  Doesn’t have the slightest effect.  Then they are so racist, so bigoted, that when any member of a subgroup, be they Kanye, Milo, Janda, Diamond and Silk should cross the aisle, they are easily welcomed as party members and people, as thinkers, and not as races, skin colors, or issues – no backlash, no contention in the party. Doesn’t matter.  Hasn’t mattered in 100 years, doesn’t matter now.  It’s truly astonishing.
 

 

Like I said, I once thought, “if only people knew”, if only there were events that would remove the mask of lies, corruption, and abuse, but there are dozens daily, and as Churchill said, they pick themselves up and brush it off, continuing with the lie, no matter how continually debunked, for example, daily for two hysterical years.
 
So what are we supposed to do when that lie — which everyone knows is a lie, but they lie and claim it’s not a lie — can get us into a war ending life on earth?  I do not know.  I say stop lying, as Trump plays along, for all the good that does us.  People tell the truth constantly: big, high-profile journalists, stars, senators…doesn’t have the slightest effect.  They’re still crazy, and the Assad-gassed-his-people-because-he-likes-to-lose-although-we-sniffed-the-backpack-and-door-handle-and-found-nothing are still credible and rational. 

Nor do I trust the gestalt.  They have a bad habit of going where they’re going, and when driven by what are essentially insane people have a bad habit of going astray, meeting their karma, with all the bad consequences therein.  I can’t stop that, but I am an American, and it’s my duty to survive this madness and this civil conflict as did my ancestors before me.  And I’m sure I will, or well enough.  Where would I go to escape this karma anyway?  Britain?  Belgium?  China?  I don’t think so. 
 
It’s going where it’s going, as I grow plants and make the bees happy, let the trees rest in the forests, as best I’m able when devoid of any help.  They will survive.  We are as perennial as grass, and will diminish someday.  When we do, I will have left the trees, the seeds, the order, the patterns that will feed the generations that follow, as true men, not infants, should.

 

 

Apr 182018
 
 April 18, 2018  Posted by at 9:25 am Finance Tagged with: , , , , , , , , , , , ,  


Franco Fontana Prague 1967

 

Junk Bond Market Still in Total Denial, Fighting the Fed (WS)
World Trade System In Danger Of Being Torn Apart, Warns IMF (G.)
Eurozone Engine Sputters as German Downturn Risk Sharpens (BBG)
Bitcoin Tumbles After Mystery “Whale” Dumps $50 Million In One Trade (ZH)
Japan Asks Rusal To Stop Aluminum Shipments (ZH)
The Deep State And The Big Lie – Douma (Stockman)
Theresa May’s Husband Made A Killing From The Bombing Of Syria (EP)
Trump Tweets Support For American Pastor On Trial In Turkey (R.)
New Refugees In Greece Can Move Freely, Says Court (K.)
Recycling Is Not The Answer (G.)
30 KIlos Of Plastic Bags Killed Whale Washed Ashore On Santorini (KTG)

 

 

The wonderful world of junk.

Junk Bond Market Still in Total Denial, Fighting the Fed (WS)

The Fed’s efforts to raise interest rates across the spectrum have borne fruit only in limited fashion. In the Treasury market, yields of longer-dated securities have not risen (prices fall when yields rise) as sharply as they have with Treasuries of shorter maturities. The two-year yield has surged to 2.41% on Tuesday, the highest since July 2008. But the 10-year yield, at 2.82%, while double from two years ago, is only back where it had been in 2014. So the difference (the “spread”) between the two has narrowed to just 0.41 percentage points, the narrowest since before the Financial Crisis:

This disconnect is typical during the earlier stages of the rate-hike cycle because the Fed, through its market operations, targets the federal funds rate. Short-term Treasury yields follow with some will of their own. But the long end doesn’t rise at the same pace, or doesn’t rise at all because there is a lot of demand for these securities at those yields. Investors are “fighting the Fed”— doing the opposite of what the Fed wants them to do – and the difference between the shorter and longer maturities dwindles, and it dwindles, and it causes a lot of gray hairs, and it dwindles further, until it stops making sense to investors and they open their eyes and get out of the chase, and suddenly long-term yield surge higher, as bond prices drop sharply.

That’s why short sellers have taken record positions against the 10-year Treasury recently: they’re waiting for yields to spike to the next level. But this disconnect – this symptom of investors fighting the Fed – in the Treasury market is mild compared to the disconnect in the junk bond market. There, investors have completely blown off the Fed. At least in the Treasury market, 10-year yields have risen since the Fed started getting serious about rate increases in December 2016. In the junk bond market, yields have since fallen. In other words, despite the Fed’s tightening, the junk bond bubble has gotten bigger. And investors are not yet showing any signs of second thoughts.

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Because the IMF made sure it would be skewed towards the rich.

World Trade System In Danger Of Being Torn Apart, Warns IMF (G.)

The postwar global trading system risks being torn apart, the International Monetary Fund has warned, amid concern over the tariff showdown between the US and China. In a sign of its growing concern that protectionism is being stimulated by voter scepticism, the IMF used its half-yearly health check for the world economy to tell policymakers they needed to address the public’s concerns before a better-than-expected period of growth came to an end. Maurice Obstfeld, the IMF’s economic counsellor, said: “The first shots in a potential trade war have now been fired.” He said Donald Trump’s tax cuts would suck imports into the US and increase the size of the trade deficit 2019 by $150bn – a trend that could exacerbate trade tensions.

“The multilateral rules-based trade system that evolved after world war two and that nurtured unprecedented growth in the world economy needs strengthening. Instead, it is in danger of being torn apart.” Obstfeld said there was more of a “phoney war” between the US and China than a return to the widespread use of tariffs in the Great Depression, but that there were signs that even the threat of protectionism was already harming growth. “That major economies are flirting with trade war at a time of widespread economic expansion may seem paradoxical – especially when the expansion is so reliant on investment and trade,” Obstfeld added.

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Too much surplus?

Eurozone Engine Sputters as German Downturn Risk Sharpens (BBG)

The euro area’s economic expansion is standing on increasingly shaky ground after reports showed German investor confidence tumbling to its lowest level since late 2012 and the risk of a recession in the nation jumping. The sentiment gauge from ZEW showed more investors now see a worsening in Europe’s largest economy than forecast an improvement, a mood swing that ZEW President Achim Wambach blamed on the U.S. trade dispute combined with weak domestic retail and production numbers. The drop in confidence came as the Dusseldorf-based Macroeconomic Policy Institute (IMK) said the probability of a recession in Germany over the next three months has jumped to 32%.

While that outcome remains unlikely, the gauge is up sharply from 6.8% in March. It follows U.S. attempts to rewrite international trade rules by imposing import tariffs, triggering a tit-for-tat response by China. Even though the European Union has temporarily been exempted from the metal levies, risks of far-reaching retaliatory measures could still hurt Germany’s export-driven economy – feeding into signs that growth in the euro area is coming off its peak. At the IMK, the recession gauge, which uses data that have signaled downturns in the past is now orange – the middle of its traffic-light warning system – for the first time since March 2016. That was just as the German economy was entering a mild slowdown.

“Volatility in financial markets, which has been evident for several months, is now accompanied by a noticeable deterioration in sentiment and subdued production,” according to IMK. “This has recently become a typical constellation for the end phase of a cycle.”

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For now, still a casino.

Bitcoin Tumbles After Mystery “Whale” Dumps $50 Million In One Trade (ZH)

The price of several cryptocurrencies took a sudden hit Tuesday over the course of 20 minutes, which some suspect may be the result of a single Bitcoin whale who unloaded over $50 million worth of the digital currency in one Bitfinex trade. The drop comes one day after the third largest bitcoin wallet also unloaded around $50 million of the digital currency. As Marketwatch first noted , “the balance of wallet 3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r — an anonymous digital account which is valued at $1.49 billion — fell by 6,500 bitcoin Tuesday, with the average sale price sale being $8,146.70, a total value of just over $50 million, according to bitinfocharts.”

The sale comes a day after the third-largest wallet, which famously purchased over $400 million in bitcoin in February, let go of 6,600 bitcoin at an average price of $8,026. Combined, the two whales unloaded over $100 million of bitcoin within 24 hours. As there was no immediate news or catalyst, some attributed the sale to Tuesday’s report that New York Attorney General Eric Schneiderman had launched an investigation into 13 cryptocurrency exchanges including Coinbase, Gemini and Bit Trust. The probe seeks information on fees, volume data and procedures governing margin trading among other things. However, the news hit some 4 hours prior to the sale.

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Unintended sanctions consequences?! Aluminum much more expensive for US firms too.

Japan Asks Rusal To Stop Aluminum Shipments (ZH)

One week ago, when the Trump administration unveiled the most draconian Russian sanctions yet which among others targeted Putin-ally Oleg Deripaska and the Russian oligarch’s aluminum giant, Rusal, we said that aluminum prices are going higher, much higher, for one reason: excluding China’s zombie producers, Rusal is the world’s largest producer of aluminum. Well, prices have since surged, largely as expected, and one week later we also learned just how “radioactive’ Rusal’s products have become as a result of the US sanctions: overnight Reuters reported that major Japanese trading houses asked the Russian aluminum producer to stop shipping refined aluminum and other products in light of U.S. sanctions on the world’s No.2 producer and are scrambling to secure metal elsewhere, according to industry sources.

“We have requested Rusal stop shipments of aluminum for our term contracts as we can’t make payment in U.S. dollars and we don’t want to take the risk of becoming a secondary sanction target by the United States,” said a source at a trading house [..] It is unclear how and where Japan can find alternative sources of aluminum: Japan buys about 300,000 tonnes of refined aluminum from Russia, about 16% of the nation’s total import, according to the Japan Aluminium Association. “Everyone has been on a search for substitutes and that pushed local spot premiums to around $200-$250 per tonne by last Friday,” he said. That’s sharply higher than Japan term premiums for April-June quarter shipments at $129 per tonne.

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Pearson Sharp and Robert Fisk were both on the ground in Douma. Both say the same.

The Deep State And The Big Lie – Douma (Stockman)

The contra-narrative about Assad’s alleged gas attack is gaining traction as the evidence comes in. It increasingly seems probable that some folks suffocated or were overcome with smoke inhalation and hypoxia (oxygen deprivation) when buildings, tunnels and underground bunkers collapsed into clouds of dust during the final battle for Douma last Saturday. Then the desperate remnant of the jihadist Army of Islam (Jaysh al-Islam) holed up there piled the bodies in a basement, spread shaving cream on their lips and proceeded to videotape furiously. Thereafter, they charged into a nearby hospital (which was treating hypoxia victims) with their video cameras in hand, yelling “chemical attack” while water-hosing one and all, thereby setting off the pandemonium seen on social media around the world.

We haven’t gotten to Douma yet to check out this contra-narrative, but an intrepid young reporter named Pearson Sharp did. Along with his camera crew, he visited the site of the attack, the hospital and the nearby rebel weapons dump – and interviewed dozens of people in the immediate vicinity. According to Sharp, none of them witnessed the alleged gas attack or believed it happened, and several personnel at the Douma hospital corroborated the phony water-dousing melee. Indeed, the head surgeon insisted to him that no one had died at the hospital from chemical agents. And he also saw and videoed room after room stacked with rockets, mortars and other military gear and filmed the debris and dilapidated remnants of buildings in the town.

[..] Self-evidently, a visiting Martian might have an altogether different interpretation of which nation had ventured down the “dark path” and which one was a “force for stability and peace”. And that would especially be the case with just a few more reports like the new missive from veteran war correspondent, Robert Fisk of the Independent (UK). Unlike young Mr. Pearson Sharp, Fisk has been a war correspondent in the Middle East for four decades and has won endless awards for reporting from the front lines. But his chops were earned when he became one of the few reporters in history to conduct face-to-face interviews with Osama bin Laden on three separate occasions during the 1990s.

Fisk’s dispatch filed Monday night speaks for itself and merits quoting at length because it not only skewers Washington’s narrative about Assad’s gas attack, but also provides vivid context: Whatever happened last Saturday erupted in the fog of war and could not possibly have been instantly assessed objectively or correctly by officials 6,000 miles away, who admit to having no “assets” on the ground in Damascus.

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Yes, this is pretty crazy.

Theresa May’s Husband Made A Killing From The Bombing Of Syria (EP)

The fact that Philip May is both a Senior Executive of a hugely powerful investment firm, and privy to reams of insider information from the Prime Minister – knowledge which, when it becomes public, hugely affects the share prices of the companies his firm invests in – makes Mr May’s official employment a staggering conflict of interest for the husband of a sitting Prime Minister. However, aside from the ease at which he is able to glean insider information from his wife about potential decisions which could go on to make huge profits for his firm, there is a far darker conflict of interest that has so far gone undiscussed.

Philip May is a Senior Executive of Capital Group, an Investment Firm who buy shares in all sorts of companies across the globe – including thousands of shares in the world’s biggest Defence Firm, Lockheed Martin. According to Investopedia, Philip May’s Capital Group owned around 7.09% of Lockheed Martin in March 2018 – a stake said to be worth more than £7Bn at this time. Whilst other sources say Capital Group’s shareholding of Lockheed Martin may actually be closer to 10%. On the 14th April 2018, the Prime Minister Theresa May sanctioned British military action on Syria in response to an apparent chemical attack on the city of Douma – air strikes that saw the debut of a new type of Cruise Missile, the JASSM, produced exclusively by the Lockheed Martin Corporation.

The debut of this new – and incredibly expensive – weapon was exactly what US President Donald Trump was referring to when he tweeted that the weapons being fired on Syria would be “nice and new and ‘smart!’” Every single JASSM used in the recent bombing of Syria costs more than $1,000,000, and as a result of their widespread use during the recent bombing of Syria by Western forces, the share price of Lockheed Martin soared.

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Now let them tell Erdogan about it.

Trump Tweets Support For American Pastor On Trial In Turkey (R.)

U.S. President Donald Trump voiced his support on Tuesday for Pastor Andrew Brunson, who is on trial in Turkey on charges he was linked to a group accused of orchestrating a failed 2016 military coup, in a case that has compounded strains in U.S.-Turkish relations. “Pastor Andrew Brunson, a fine gentleman and Christian leader in the United States, is on trial and being persecuted in Turkey for no reason,” Trump tweeted. “They call him a spy, but I am more a spy than he is. Hopefully he will be allowed to come home to his beautiful family where he belongs!” Brunson, a Christian pastor from North Carolina who has lived in Turkey for more than two decades, was indicted on charges of helping the group that Ankara holds responsible for the failed 2016 coup against President Tayyip Erdogan.

He faces up to 35 years in prison. Brunson has been the pastor of Izmir Resurrection Church, serving a small Protestant congregation in Turkey’s third largest city. Brunson’s trial is one of several legal cases roiling U.S.-Turkish relations. The two countries are also at odds over U.S. support for a Kurdish militia in northern Syria that Turkey considers a terrorist organization. Washington has called for Brunson’s release while Erdogan suggested last year his fate could be linked to that of U.S.-based Muslim cleric Fethullah Gulen, whose extradition Ankara has repeatedly sought to face charges over the coup attempt.

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It’s the EU that demanded refugees would be confined to the islands.

New Refugees In Greece Can Move Freely, Says Court (K.)

New refugee and migrant arrivals in Greece will soon be able to move around the country freely without being restricted to the islands of the eastern Aegean where they arrive from neighboring Turkey, according to a Council of State ruling that emerged on Tuesday and upends a 2016 decision by the Greek asylum service that forced them to remain in so-called hotspots until their asylum application was processed. According to the leaked ruling by the country’s highest administrative court, there are no reasons of public interest or migration policy to justify their geographical restriction to the islands of Lesvos, Chios, Samos, Leros, Kos and Rhodes.

Migration Policy Minister Dimitris Vitsas said he would comment on the ruling once he is informed of it officially. Once the ruling is published, new refugees who apply for asylum will be allowed to reside in any part of the country they choose. The asylum service’s May 2016 decision restricting migrants to the Aegean islands was challenged by the Greek Council for Refugees, an NGO which filed an appeal for its cancellation. “The imposition of restrictions on movement blocked the distribution of those people throughout Greek territory and resulted in their unequal concentration in specific regions and the significant burdening and decline of those regions,” the court said in its reasoning.

However, taking into account the large number of arrivals, the court said the ruling does not have a retroactive effect, which means it will not relate to the refugees who are already languishing in reception centers. The so-called hotspots have been operating beyond capacity and the country is now witnessing a fresh spike in arrivals of often flimsy boats carrying desperate passengers from Turkey.

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Indeed. But plastics are a huge industry.

Recycling Is Not The Answer (G.)

We all know, in theory, that we ought to use less plastic. We’ve all been distressed by the sight of Blue Planet II’s hawksbill turtle entangled in a plastic sack, and felt chastened as we’ve totted up our weekly tally of disposable coffee cups. But still, UK annual plastic waste is now close to 5m tonnes, including enough single-use plastic to fill 1,000 Royal Albert Halls; the government’s planned elimination of “avoidable” plastic waste by 2042 seems a quite dazzling task. It was reported this week that scientists at the University of Portsmouth have accidentally developed a plastic-eating mutant enzyme, and while we wait to see if that will save us all, for one individual the realisation of just how much plastic we use has become an intensely personal matter.

One early evening in mid-2016, Daniel Webb, 36, took a run along the coast near his home in Margate. “It was one of those evenings where the current had brought in lots of debris,” he recalls, because as Webb looked down at the beach from his route along the promenade he noticed a mass of seaweed, tangled with many pieces of plastic. “Old toys, probably 20 years old, bottles that must have been from overseas because they had all kinds of different languages on them, bread tags, which I don’t think had been used for years …” he says. “It was very nostalgic, almost archaeological. And it made me think, as a mid-30s guy, is any of my plastic out there? Had I once dropped a toy in a stream near Wolverhampton, where I’m from, and now it was out in the sea?”

Webb decided that he would start a project to keep all the plastic he used in the course of an entire year. He would not modify his plastic consumption in that time (although he had already given up buying bottled water), and each item would be carefully washed and stored in his spare room.


Daniel Webb in front of his Mural-by-the-Sea. Photo: Ollie Harrop 2018/Everyday Plastic

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Where your plastic ends up. Never again can you say you didn’t know. From now on it’s you didn’t care.

30 Kilos Of Plastic Bags Killed Whale Washed Ashore On Santorini (KTG)

More than 30 kg of plastic, mainly plastic bags, were found in the stomach of the whale that was washed out on the island of Santorini last week. The conducted autopsy showed that the huge mammal died of a gastric shock. The whale was unable to digest or excrete the rubbish through its digestive system. The problem caused peritonitis inflammation in its intestines that led to the animal’s death, local media report. The dead whale brings back to the spotlight the problem of tonnes of plastic landing into the waters, polluting the environment and leading to death of marine life. The body of the 9-meter long sperm whale – or Physeter macrocephalus as the scientific name is – was washed ashore on Akrotiri area on the island of Santorini in the Aegean island group of Cyclades on April 10th. The body weighting more than 7 tones was in condition of advanced sepsis.

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Apr 142018
 


Pieter Bruegel the Elder The Fall of the Rebel Angels 1562

 

 

Lots of rants today, obviously, lots of -slightly- different angles.. Here’s Dr. D’s. He beat me to it…

 

 

Dr. D: Too annoyed to comment on the attack. But hey, really NOT attacking would be the change here.

There was a recent article, falsely saying:

“[H]is successful repression of the Chechen revolt…hardly endeared Putin to the Chechens.”

Oddly, this was from Russia Today. No, the Chechen war was a gruesome and unpopular war, however it was just part of the MacKinderesque plan of first lying, killing, then robbing Russia up front by lowering the price of Russia’s exports gold and oil (using Saudi oil and Canadian gold), starting an arms race, then collapsing the ruble and empowering every corrupt, criminal oligarch we could find using pallets of $100 bills. No joke, official record. Russia’s collapse and the Chechen war was no “accident”, no natural consequence of the socialism system or collapse, but a soup-to-nuts military operation. We had the nuts, and they were in the soup. The “accident” here was trusting anything the West says, ever. Haven’t they ever heard about the Indians?

Anyway, the 100-year-old plan of MacKinder, father of geopolitics, was believed by other tottering dinosaurs like Brzezinski in an age no longer run by the horse and cannon and that plan was to cut open the “long, soft underbelly” of Russia, which started with funding Islamic fighters (terrorists) out of Afghanistan (admitted and applauded), then move on through Islamic Chechens, Uzbeks, Kazaks, etc. Although completely crippled, Putin – who was put in power BY the west, BY Clinton – nevertheless stopped them in Chechnya, and was naturally savaged by the West for defending his nation in a proxy Civil War. For beyond hating men and families, they hate nations, for all these things restrain murderous self-serving psychopathy.

 

It’s a little more complicated than that as the USSR was broken up, there were cross-protectorate treaties, but that’s very typically 1,000-year Russian way. They don’t have ethnic and religious problems, or not in the western sense, because they do what America claims to do (with the States for example) and leave people alone, to be individual states, customs, religions, and people. They also don’t have a problem with Putin, as the Russian Way is really a sort of monarchism in the old sense, with a king and court and advisors, and always has been back through him, the Soviets, Stalin, Romanov, Peter, and back since they were Russian.

What’s my point? They don’t think about things the way we do. Not entirely. Chechnya was not “breaking away” and “fighting Russia” as reported, it was subverted by the West TO attack Russia. Chechens know this, but like all CIA ops, half of the target country were for and half were against. So when Putin wouldn’t stop sending the army in and leveled the country (like we’ve done in Afghanistan, Iraq, Syria, Libya, and everywhere else we’ve ever been) half the Chechen people were in support of Putin – or anyone! – to restore law, order, Chechen customs, and peace against the ISIS-like radical Wahhabists who were funded by Saudi Arabia as indeed he did, in the brutal respect-only-strength way they do things in that part of the world.

What? That’s crazy. Yes? So how do you explain that the present Chechen leader — a nation as sovereign as Canada — told Putin at the start of the Syrian war he would send any number of Chechen fighters to any place on the planet, and kill anybody Putin wanted, and consider it an personal honor. And these are deeply Islamic, hard-core militants. You see, despite also being hard-core Islamists and all around hard-bodies, they too hate Saudi Arabia, Wahhabists, and the intervention of the West that devastated their country. Killing millions of southern Russians for the goal of killing more northern Russians, as it were, every child growing up in rubble-filled war zone. What’s not to hate?

…But why would we report that? That we made a treaty with Russia, invaded on all sides anyway, then killed +2 million with Disaster Capitalism and +2 million more in the ‘Stans with the intent of wiping Russia off the map?

 

You see Reagan didn’t want to WIN the Cold War. He wanted to END it. The Cheney-Rumsfeld-Dr. Strangelove wing could never forgive that. His body wasn’t cold before they were back, this time behind Clinton, to finish the occupation of Russia as the last step to world domination. This is why the crazies back in the PNAC days were desperate to nuke the helpless Russia even then. They were right. If you didn’t nuke them, openly attack them, they would survive and escape, which would ultimamtely thwart the Neocon/Deep State plans to take over the world. And so they have.

But as we see today, they never give up. They’re still aching to start a world-wide nuclear exchange and openly agitating 24/7 on CNN to do so. No amount of bombing is enough, no number of bankrupted, shattered cities are too many just to get Russia out of the way, whose historic job, sadly but heroically, is to crush and utterly destroy the idiotic plans of meglomaniac warmongers from the West like Hitler and Napoleon, and dash them to pieces on the rocks of reality. Because the West never restrains its maniacs, it empowers them.

Being a country the size of Canada, Russia doesn’t escape this, but in the irrefutable monkey-hammering Russia gives, like say destroying 30 German divisions and 5 Million men with little more than hunting rifles and force of will – most of all the fighting in WWII – or killing 500,000 of Napoleon’s 650,000 and sending him back barefoot, well, even the western propaganda and passion for self-delusion can’t hide that…but it doesn’t help Russia any to get shot when finally facing down their violent, meth-addled neighbors. Russia knows this, and they will in fact bomb the West with iron resolve if we don’t cut it out, yet we show no signs of coming to our senses. We never have before. Russia is what stops them, going way back.

 

You’d think we’d learn something. Brzezinski did. Just before he died he said his life-long plan to destroy Russia, culminating in WWIII by cutting off the Ukraine with the New Charge of the Light Brigade was a complete failure. This is the 100 year plan of MacKinder, and these dinosaurs just won’t die. They won’t learn. They have no imagination, doing the same failed thing over and over, generation after generation. Maybe we’ll have to as well.

Maybe we — or rather the Deep State — won’t stop until Russia drops a Satan-II missile, a single one of which would destroy New England. Or a nuclear sub drone hits NY. Or their pop-up stealth pods level Charleston. Or they sink every U.S. surface ship on the planet in 5 minutes using the Sunburn missile. Easy as pushing a button. U.S. military power is leveled, the people set back 75 years, 120 Million dead. Is that what you want America? On behalf of whom? Dick Cheney, HSBC, the City of London?

But there is reason to hope, as core right figurehead Tucker Carlson recently gave a steely antiwar commentary to reach the dinosaur viewers of Fox News, Republicans-by-name. Although driven back to the darkest corners, what remains of the real Left is historically anti-war, although you’d never know it by the way 90% of the party acts. That’s seen in this far-left (or rather the People’s Left) far-left (or rather the People’s Left) Jimmy Dore video.

But if the Right and Left come together against collective bankruptcy and suicide, then they can only unite against the Deep State of Dr. Strangelove, and turn back to human priorities, against the God-knows-what priority of killing everyone on earth they can find, one by one, for any reason they can come up with. Doesn’t it sound like we should be against this? I am. Are you?

“Never fight a land war in Asia” — Princess Bride

 

 

Apr 122018
 


The marine and the kitten, Korean War, 1952

 

It’s Pure Math – We’re Headed for a Train Wreck (USAW)
Licence to Kill (Le Monde Diplomatique)
It’s No Longer Advertising – It’s Behaviour Modification (BBC)
Zuckerberg’s Answer To Facebook’s Problems: More Facebook (Ind.)
The Uncomfortable Question: Is Facebook A Monopoly? (MW)
UK Economic Growth Has Fallen By Half (G.)
More Than 100,000 British Households Set To Be Homeless By 2020 (Ind.)
US Interest Payments Will Outpace Military Spending by 2023 (BBG)
The Deep State Closes In On The Donald, Part 1 (Stockman)
James Comey Is About To ‘Shock The President And His Team’ (MW)
Warrant for Catalan Minister Details ‘Violent Revolt’ (BBC)
New Zealand Bans All New Offshore Oil Exploration (G.)
Climate Change Could Trigger Volcanic Eruptions Across The World (Ind.)
Cities Around The World Should Prepare For Running Out Of Water (CNBC)
Gulf Stream Current At Its Weakest In At Least 1,600 Years (G>)

 

 

”What happens when the world figures out that three billion ounces of physical silver cannot and will not be delivered to the buyers? ”

It’s Pure Math – We’re Headed for a Train Wreck (USAW)

Financial writer and gold expert Bill Holter says China has a lot of weapons to fight a trade war with the U.S. China could stop buying Treasury bonds (as it reportedly already has done). It could sell Treasury bonds. It could slash the value of the Yuan, or something much simpler could happen such as a failed delivery of physical precious metals. Holter says, “If what has happened so far in the first three months of the year were to continue for the full year, you would be over three billion ounces (of silver). That is not deliverable.”What happens when the world figures out that three billion ounces of physical silver cannot and will not be delivered to the buyers?

Holter explains, “That’s called an old fashion run on the banks. “It will be a run on the entire system. You would have a run on every metals exchange, and you would probably have runs on many physical commodities. Confidence throughout the whole system would break. You would basically show the western fractional reserve system is a fraud and has been for many, many years. . . . Can London deliver a billion ounces, or two billion ounces or three billion ounces of silver? The answer to that is no.” So, when does this all blow up? Holter says, “I think this whole thing has a very good chance of blowing this year.”

There are a variety of financial trip wires, according to Bill Holter, such as thousands of sealed criminal indictments that will be unsealed in 2018. Holter also points out the explosion of global debt. Holter charges, “It’s now $237 trillion. The amount of debt grew by $21 trillion globally over the last 12 months. That’s roughly 10 %. How much did global GDP grow? 2% or 3%, I mean that is totally unsustainable.” The biggest worry for Holter right now is escalating military action in Syria. Holter warns, “This is so, so dangerous. Obviously, you worry about a hot war because with the weapons you have today, you could have WWIII start in a heartbeat. But look at the market today. It’s up 400 or 500 points. You have talk of trade wars. You have talk of hot wars. It’s amazing the markets can hold together and ignore potential annihilation.”

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These people are all the same.

Licence to Kill (Le Monde Diplomatique)

British police say their investigation into the poisoning of former Russian army colonel Sergei Skripal in Salisbury may take many months, yet prime minister Theresa May has already identified the guilty party, claiming the order came from the Kremlin. Foreign secretary Boris Johnson, sees the incident as ‘part of a pattern of reckless behaviour by President Vladimir Putin,’ which is the ‘common thread that joins [the poisoning] with [Russia’s] annexation of Crimea, the cyberattacks in Ukraine, the hacking of Germany’s parliament … interference in foreign elections’ and ‘indulgence of Assad’s atrocities in Syria’. The reasoning goes: if Putin is capable of doing it, then he must be guilty.

From Leon Trotsky, killed with an ice pick in Mexico, to Alexander Litvinenko, poisoned with polonium in London, Russia’s security services have undoubtedly liquidated many opponents of the Kremlin living abroad. Other countries have resorted to such measures without triggering the same diplomatic uproar. France, Germany and the US have been involved in the kind of state-sponsored assassination that has so offended Johnson, yet this has not stopped them joining him and May in railing against Russia. Israel has taken great care to avoid commenting, perhaps because it is one of the countries that most frequently ‘carry out this kind of operation, known as an “extraterritorial elimination”’.

The list of Palestinians, including official representatives, killed by Israel’s secret service abroad makes the Russians look like amateurs: at least half a dozen in Paris alone, without serious consequences. Moroccan opposition leader Mehdi Ben Barka also disappeared in Paris; the African National Congress’s chief representative in France, Dulcie September, and more recently three Kurdish activists, were assassinated there. Across the Atlantic, Orlando Letelier, a minister under former Chilean president Salvador Allende, was killed in Washington DC by agents of Augusto Pinochet, which did not stop Ronald Reagan from feting Pinochet; and Margaret Thatcher was happy to drink tea (without polonium) with the dictator and present him with a silver dish.

‘Extraterritorial elimination’ is also a fitting term for the US practice of killing presumed terrorists abroad with drones. Barack Obama officially authorised more than 2,300 such killings during his presidency. For his part, François Hollande has admitted to ordering extrajudicial killings of ‘enemies of the state’ when he was president (an average of one a month during his term), though none of his political allies reproached him for it during the Socialist Party primaries in January 2017. François de Rugy, who has since become president of France’s National Assembly, even said at the time: ‘Yes, it is sometimes necessary.’

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Core: “..it can no longer be called advertising any more – it has turned into behaviour modification.”

It’s a moot discussion anyway. People pay for their phone + subscription. Why wouldn’t they pay for social media too? Few bucks a month?!

Point is, Facebook make their money off of ads AND added benefits (sell data). They don’t want to be an ad-less platform. That would take away the benefits.

It’s No Longer Advertising – It’s Behaviour Modification (BBC)

An influential tech evangelist has called at the TED 2018 conference for an overhaul of Facebook and Google’s business models. Jaron Lanier, who is often referred to as a “father of virtual reality”, told the Vancouver event that the two firms should let users pay for their services as an alternative to relying on ads. “These companies need to change,” he said. But on Tuesday, Facebook’s chief suggested this would not be popular. “A number of people suggest that we should offer a version where people can not have ads if they pay a monthly subscription, and certainly we consider ideas like that,” Mark Zuckerberg told a panel of senators in Washington.

“But overall, I think that the ads experience is going to be the best one. “I think in general, people like not having to pay for a service. A lot of people can’t afford to pay for a service around the world,” Mr Zuckerberg added. Mr Lanier was a frequent TED (Technology, Entertainment and Design) speaker during the 1980s. But, he said, even then he had realised that “the technology we needed and loved could also be our undoing”. “We made a very particular mistake in the 90s when early digital culture had this lefty, socialist mission, which meant that everything on the internet must be available for free,” he added. That decision led directly to the advertising model that allows Google and Facebook to flourish, he explained.

“In the beginning it was cute but as computers became more efficient and algorithms got better, it can no longer be called advertising any more – it has turned into behaviour modification.” It was, he said, a “tragic mistake” rather than a “wave of evil”, pointing out that he knew and loved many people working at the two tech empires. But, he explained, the advertising model had led to addictive social media platforms that rewarded people for sharing their information with “likes”. He also claimed that Google and Facebook had become as “hooked and trapped” on the advertising model as their users. “It is time to turn back the clock and remake that decision. Many people would pay for search and social networks,” Mr Lanier said.

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“..using data to target and shape behaviours is an integral part of social media.”

Zuckerberg’s Answer To Facebook’s Problems: More Facebook (Ind.)

As this hearing made painfully clear, using data to target and shape behaviours is an integral part of social media. It is the potential use of our data that is of real value. Data informed targeting is woven into Facebook’s DNA; the only way to change that is to change its structure and purpose. Under questioning Zuckerberg suggested that Facebook is going through a “broader philosophical shift”, taking them from simply producing tools for “empowering” people to the need now to take a “more proactive role” in “policing the ecosystem”. This implies that they seek an even more powerful position – both as producers and regulators – and a larger roll-out of their particular ideals and philosophies.

The answer to the problems of Facebook, it seemed to be suggested, is more Facebook and more of its current business model. The account was of a purer Facebook that gives you connectivity, voice and control of your information, untainted by any issues, missteps or unwanted players. An enhanced version of what we already have is what was being proposed as the solution. Putting the obvious problems to one side for the moment, the other question is whether we really share the ideals of Facebook.

The tone of this hearing was apologetic, but it leaves us to question if change is actually possible. We might trust Zuckerberg to be responsible, this doesn’t mean that we need to accept the ideals that are wrapped up in these media and the type of world that is being imagined. The problems clearly need attention, but we might also wonder about the ideals that will play such a powerful part in our collective future. The ideals and models of Facebook will continue to expand unless we think a little more about the future that we want to bring into existence.

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How is that a question?

The Uncomfortable Question: Is Facebook A Monopoly? (MW)

Asked by Graham if he felt Facebook had a monopoly, Zuckerberg replied, “It certainly doesn’t feel like that to me.” Senator Kamala Harris, the only Democrat to mention monopoly power during the hearing, noted later that Zuckerberg never really answered Graham’s question. “Every monopolist tries to enlarge the market definition such that his own share of it is insignificant,” said Marshall Steinbaum, the research director at the Roosevelt Institute, the nonprofit partner to the Franklin D. Roosevelt Presidential Library and Museum. “But the fact that he couldn’t name his competitors spoke volumes: Facebook controls the network over which information is proliferated, and it decides who sees what–always to its own benefit. That is a textbook monopolist and it is a company that in its current form cannot be allowed to exist.”

Sen. Ron Johnson, a Republican from Wisconsin, noted that Zuckerberg told Graham that he didn’t think Facebook was a monopoly. “You’re obviously a big player in the space. That might be an area for competition, correct, if somebody else wants to create a social platform that allows a user to monetize their own data?” Johnson asked. Yes, says Zuckerberg. Sen. Dan Sullivan, a Republican from Alaska, asked Zuckerberg if Facebook was too powerful. “All — really all over the world, the Facebook — 2 billion users, over 200 million Americans, 40 billion in revenue. I believe you and Google have almost 75% of the digital advertising in the U.S. Is — one of the key issues here, is Facebook too powerful? Are you too powerful? And do you think you’re too powerful?” asks Sullivan.

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Gee, what a surprise.

UK Economic Growth Has Fallen By Half (G.)

Economic growth in the UK is expected to have fallen by half in the opening months of the year, one of Britain’s leading forecasting bodies has said, amid renewed concerns for the health of the economy. The National Institute for Economic and Social Research (NIESR) said growth was set to fall to 0.2% in the first quarter of 2018 from 0.4% in the final three months of last year, when the economy enjoyed a mini-recovery despite an overall slowdown in 2017 triggered by the Brexit vote. Amit Kara, head of UK macroeconomic forecasting at the thinktank, said the main reason for the weakness was severe weather in March, dubbed the “beast from the east” in the media, which was likely to have disrupted activity in all major sectors of the economy.

The estimate, which comes ahead of official figures from the Office for National Statistics later this month, followed news that Britain’s factories recorded a surprise fall in production in February, in the first drop in activity in the sector for almost a year. Confirming fears of a slowdown in the UK economy so far this year, figures from the ONS showed manufacturing output declined by 0.2% in February, falling well behind economists’ expectations for growth of 0.2%. There was also a sharp drop in construction output, suggesting continued pain for the industry amid the fallout from the collapse of Carillion. Monthly output unexpectedly fell by 1.6% in February, as builders were hit by the snow at the end of the month.

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One might think May et al have bigger things on their minds than going to war.

More Than 100,000 British Households Set To Be Homeless By 2020 (Ind.)

Tens of thousands more families will be trapped in temporary accommodation across England over the next two years if current homelessness trends continue, a report has warned. More than 100,000 households will be living in B&Bs, hostels and other forms of temporary housing by 2020, as rising housing costs and insecure work continue to “lock” people into poverty, according to research commissioned by Crisis and the Joseph Rowntree Foundation (JRF). The annual Homelessness Monitor shows that 70% of local authorities in England are struggling to find any stable housing for homeless people in their area, while a striking 89% reported difficulties in finding private rented accommodation.

As a result, many councils have found themselves forced to place ever more homeless people in emergency housing, including B&Bs and hostels, leading to urgent calls for more permanent and genuinely affordable homes to be built. Government figures published last month revealed almost 79,000 families were staying in temporary housing in the last three months of last year because they didn’t have a permanent home, compared with 48,010 in the same period eight years before. There had been a significant reduction in families living in such conditions before the coalition government came into power, with the number having fallen by 52% between 2004 and 2010 under the Labour government.

But the figure has crept up in each of the past seven years, from 69,140 in the last quarter of 2015, to 75,740 in the same period in 2016 and 78,930 at the end of last year. The new report warns that if current trends continue, with housing supply “dwindling” and rents outstripping wages and benefits, more than 100,000 such households will fall into this trap by 2020.

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Unless they go to war.

US Interest Payments Will Outpace Military Spending by 2023 (BBG)

The head of the Congressional Budget Office warned lawmakers that the U.S. government is on track to pay more to its creditors than on its own military, as interest rates and debt levels continue to climb. CBO chief Keith Hall told the Senate Budget Committee Wednesday that America’s net interest payments will triple over the coming decade, outpacing military expenditures. He called the data point “one of my favorite figures” used to highlight the challenges posed by the country’s ballooning debt. His office’s budget and economic forecasts, published Monday, show net interest payments first outstripping defense outlays in fiscal 2023 and reaching $915 billion five years later.

The increase will come as debt held by the public almost doubles to $28.7 trillion in fiscal 2028 from this year, according to the CBO, a non-partisan arm of Congress. “My point is that the interest cost is just starting to swamp things like defense spending,” Hall said. “Whatever the fix is going to be, it needs to be something that’s pretty big.”

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“..when you consider the broader context and what the Russian side is now saying, it is just plain idiotic to own the S&P 500 at 24X.”

The Deep State Closes In On The Donald, Part 1 (Stockman)

Perhaps we have missed something: Like the possibility that the canyons of Wall Street are actually located on another planet several light years from earth! Otherwise, how can you explain the equipoise of a stock market sitting at the tippy-top of a nine-year bubble expansion and confronted with the potential outbreak of World War Three? Folks, like some alien abductors, the Deep State has taken the Donald hostage, and with ball-and-chain finality. Whatever pre-election predilection he had to challenge the Warfare State has apparently been completely liquidated. Trump’s early AM tweet today, in fact, embodies the words of a man who had more than a few screws loose when he took the oath, but under the relentless pounding of the Imperial City’s investigators, partisans, apparatchiks and lynch-mob media has now gone stark raving mad. To wit:

“….Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it! Yes, maybe Wall Street has figured out that the Donald is more bluster than bite. Yet when you consider the broader context and what the Russian side is now saying, it is just plain idiotic to own the S&P 500 at 24X. After all, earnings that have been going nowhere for the past three years (earnings per share have inched-up from $106 in September 2014 to $109 in December 2017), and now could be ambushed by a hot war accident in Syria that would rapidly escalate. Indeed, did the robo-machines and boys and girls down in the casino not ponder the meaning of this message from the Kremlin? It does not leave much to the imagination:

#Russian ambassador in beirut : “If there is a strike by the Americans on #Syria , then… the missiles will be downed and even the sources from which the missiles were fired,” Zasypkin told Hezbollah’s al-Manar TV, speaking in Arabic. Sure, the odds are quite high that the clever folks in the Pentagon will figure out how to keep the pending attack reasonably antiseptic. That is, they will bomb a whole bunch of places in Syria where the Russians and Iranians are not (after being warned); and also deploy stand-off submarine platforms to launch cruise missiles and high-flying stealth aircraft to drop smart bombs, thereby keeping American pilots and ships out of harm’s way. Then, after unleashing the Donald’s version of “shock and awe” they will claim that Assad has just received the spanking of his life and that the Russians and Iranians have been messaged with malice aforethought.

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How to sell a book.

James Comey Is About To ‘Shock The President And His Team’ (MW)

‘How strange is it for you to sit here and compare the president to a mob boss?’ That’s the question ABC’s George Stephanopoulos asked James Comey in a teaser for an interview set to air Sunday night at 10 p.m. as a “20/20” special. A source told Axios that what the former FBI director had to say during that interview is “going to shock the president and his team” and “certainly add more meat to the charges swirling around Trump.” The source added that the interview included information that’s never been divulged before and left people in the room “stunned.” Comey apparently answered every question. The five-hour interview was taped Monday at his Washington-area home ahead of the release of his book, “A Higher Loyalty,” which comes out Tuesday.

Comey is about to go on a promotional media blitz, according to Politico, including a live interview with CNN on April 19, a visit to MSNBC the same day, an interview on Fox News on April 26 and one with PBS NewsHour on April 30. The book, already topping Amazon’s best-seller list, is expected to reveal details about Trump pressuring Comey to shut down at least part of the FBI investigation into Russian interference in the election and other related issues. Separately, Dana Boente, the FBI’s general counsel who had led the Russia investigation in the early days of the Trump administration, has been asked to testify by Mueller, according to a letter obtained by MSNBC.

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A sick joke.

Warrant for Catalan Minister Details ‘Violent Revolt’ (BBC)

A former Catalan minister fighting extradition from Scotland to Spain faces charges of causing widespread violence against police. BBC Scotland has obtained a copy of the European arrest warrant for former education minister Clara Ponsatí. The St Andrews University professor is wanted in Spain on charges of rebellion and misappropriation of public funds. Ms Ponsati’s lawyer Aamer Anwar said: “My client Clara Ponsati utterly refutes the charges.” He added: “Clara is an esteemed University professor who has never committed a criminal act in her life.

As an education minister for just over two months along with her government she promoted a peaceful referendum, yet if extradited and convicted could face a sentence of up to 33 years, thus facing the real prospect of spending the rest of her natural life in prison. “We are instructed to submit that this warrant is a desperate and politically motivated prosecution by the Spanish authorities. Across Europe lawyers have already successfully challenged the credibility of the charges of violent rebellion. “Now in Scotland Clara is accused of orchestrating violence, yet the warrant fails in over 19 pages to ever specify a single act of violence or incitement attributable to her.” The warrant includes lengthy details of violent confrontations at polling stations across the region.

Prof Ponsatí is being pursued by the Spanish government over her involvement in last year’s Catalan independence referendum, which was ruled illegal by Spanish courts. She handed herself in to police in Edinburgh in March, and was subsequently released on bail following a preliminary hearing. The case is due to call in the Scottish courts again on Thursday. The arrest warrant says that the more serious crime of rebellion applies to those “who revolt violently and publicly” for purposes including “declaring the independence of a part of the national territory.”

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“Half the world’s whale and dolphin species visit or live in New Zealand waters..”

New Zealand Bans All New Offshore Oil Exploration (G.)

The New Zealand government will grant no new offshore oil exploration permits in a move that is being hailed by conservation and environmental groups as a historic victory in the battle against climate change. The ban will apply to new permits and won’t affect the existing 22, some of which have decades left on their exploration rights and cover an area of 100,000 sq km. The prime minister, Jacinda Ardern, said her government “has a plan to transition towards a carbon-neutral future, one that looks 30 years in advance”. “Transitions have to start somewhere and unless we make decisions today that will essentially take effect in 30 or more years’ time, we run the risk of acting too late and causing abrupt shocks to communities and our country.”

The Labour coalition government was elected last year and made tackling climate change one of the cornerstones of its policies, committing to transition to 100% of electricity generation from renewable sources by 2035 and making the economy carbon neutral by 2050. Greenpeace New Zealand said the government’s announcement was a “historic moment” for the country and “a huge win for our climate and people power”. Last month Ardern accepted a 50,000-strong Greenpeace petition calling for an end to offshore oil and gas exploration. “The tide has turned irreversibly against big oil in New Zealand,” said the Greenpeace New Zealand executive director, Russel Norman.

[..] the Forest & Bird conservation group said the ban was a “huge step forward” for the country and sent a message to the oil and gas industry that New Zealand waters were no longer “their playground”. “Half the world’s whale and dolphin species visit or live in New Zealand waters, from the critically endangered Maui’s dolphin to giant blue whales,” said the group’s chief executive, Kevin Hague.

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Instability.

Climate Change Could Trigger Volcanic Eruptions Across The World (Ind.)

Besides having a disastrous impact on sea levels and weather, a warming climate could also trigger catastrophic volcanic eruptions across the planet Volcanic eruptions alter the climate by spewing smoke and ash into the atmosphere, but scientists now also think the opposite might be true – changes in climate could actually cause volcanic eruptions. According to Gioachino Roberti, a PhD student at the University of Clermont Auvergne, glaciers can suppress volcanic eruptions by providing mountains with structural stability. As the climate becomes warmer, ice melting from these mountains removes support from their slopes, potentially leading to landslides and collapse.

“Imagine the ice like some sort of protective layer – when the ice melts away, the mountain is free to collapse,” said Mr Roberti. “If your mountain is a volcano you have another problem. “Volcanoes are a pressurised system and if you remove pressure by ice melting and landslide, you have a problem.” Presenting his work at the European Geosciences Union General Assembly, Mr Roberti explained a case study he and his collaborators had investigated in Canada. Though not famous for its volcanic activity, Canada is home to hundreds of potentially active volcanoes. The scientists chose to focus on Mount Meager, a glaciated volcano north of Vancouver.

Mount Meager’s last eruption was over 2000 years ago, but Mr Roberti chose to focus on Mount Meager for a more recent natural disaster that took place there. In summer 2010, the largest landslide in Canadian history occurred on the southern part of the volcano. “The glacier base of the slope retreated and during the hottest part of the summer, the slope catastrophically failed – the whole mountain started to move at a very high velocity,” said Mr Roberti. This was followed in 2016 by the formation of ice caves in the glacier as hot volcanic gases seeped out of the volcano. “This is the first time this has happened there – so the equilibrium of the mountain is changing,” said Mr Roberti.

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They won’t until it’s too late.

Cities Around The World Should Prepare For Running Out Of Water (CNBC)

It’s called “Day Zero”: when Cape Town, South Africa’s bustling port city, sees its water taps run dry, and its population thrust into a perilous situation. Originally projected for this year, the impending crisis has been delayed in part by severe measures — the city instituted restrictions that amount to less than one sixth of an average American’s water consumption. Yet despite that effort, “Day Zero” is still projected to arrive next year. And when it comes, the crisis will see the government switching off all the taps and rationing the resource through collection points. That future isn’t just Cape Town’s. It’s a scenario cities around the globe may face, experts say.

It may be hard to fathom just how cities could be at risk of a water scarcity crisis when approximately 70% of the world is made up of the resource. The stark reality, however, is that the percentage of fresh water probably only amounts to about 2.5 percent, according to often-cited assessments. Even then, a significant supply is locked up in ice and snow, which means just 1 percent of all fresh water is easily accessible to the global population. Inequality in access to water is also quickly becoming a problem. While the affluent can find ways to get access to water— through deliveries or in-built tanks — poorer populations are left to their own devices. That situation oftentimes leads to water theft — for profit, for survival, or for both.

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A longtime fear. Slowing of the thermohaline circulation will turn Western Europe into a very cold place.

Gulf Stream Current At Its Weakest In At Least 1,600 Years (G>)

The warm Atlantic current linked to severe and abrupt changes in the climate in the past is now at its weakest in at least 1,600 years, new research shows. The findings, based on multiple lines of scientific evidence, throw into question previous predictions that a catastrophic collapse of the Gulf Stream would take centuries to occur. Such a collapse would see western Europe suffer far more extreme winters, sea levels rise fast on the eastern seaboard of the US and would disrupt vital tropical rains. The new research shows the current is now 15% weaker than around 400AD, an exceptionally large deviation, and that human-caused global warming is responsible for at least a significant part of the weakening.

The current, known as the Atlantic Meridional Overturning Circulation (Amoc), carries warm water northwards towards the north pole. There it cools, becomes denser and sinks, and then flows back southwards. But global warming hampers the cooling of the water, while melting ice in the Arctic, particularly from Greenland, floods the area with less dense freshwater, weakening the Amoc current. Scientists know that Amoc has slowed since 2004, when instruments were deployed at sea to measure it. But now two new studies have provided comprehensive ocean-based evidence that the weakening is unprecedented in at least 1,600 years, which is as far back as the new research stretches.

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Mar 202018
 
 March 20, 2018  Posted by at 10:00 am Finance Tagged with: , , , , , , , , , ,  


Times Square at night 1954

 

Last Male Northern White Rhino Dies (Sky)
Alzheimer Care For Americans Alive Today Projected To Cost $47 Trillion (BBG)
The Stock Market Meltup Is Over: Morgan Stanley (MW)
It’s Not Just Tech. Credit Markets Give Fuel to Equity Rout (BBG)
How Economies Could Insure Themselves Against The Bad Times (Shiller)
US Expected To Impose Up To $60 Billion In China Tariffs By Friday (R.)
Facebook Stock Value Down $35 Billion On Cambridge Analytica Controversy (Ind.)
Former Obama Campaign Director: Facebook Was “On Our Side” (ZH)
How Facebook Made Its Data Crisis Worse (BBG)
Tech World Experiencing A Major ‘Trust Crisis’ – Futurist (CNBC)
If You Come to a Fork in the Road, Take It (Jim Kunstler)
Over 70% of US Citizens Believe America Is Controlled By A ‘Deep State’ (RT)
UK Tories Set To Slump To Record Low At Local Elections (G.)
Former French President Sarkozy In Custody Over Libya Funding Probe (F24)
Greece Undermining EU-Turkey Migrant Deal, German Report Says (K.)

 

 

Is there anything sadder in the world?

Last Male Northern White Rhino Dies (Sky)

The last male northern white rhino has died in Kenya, keepers have confirmed. The 45-year-old animal died from “age-related complications”, leaving only two females of his subspecies alive. In a statement, the Ol Pejeta Conservancy in Kenya said the rhino, called Sudan, was put down after his condition “worsened significantly” and he was unable to stand. Scientists have gathered his genetic material and are working on developing in-vitro fertilisation (IVF) to save his subspecies. In a statement, the zoo wrote: “Sudan will be remembered for his unusually memorable life. “In the 1970s, he escaped extinction of his kind in the wild when he was moved to Prague Zoo. Throughout his existence, he significantly contributed to survival of his species as he sired two females.

“Additionally, his genetic material was collected yesterday and provides a hope for future attempts at reproduction of northern white rhinos through advanced cellular technologies. “During his final years, Sudan came back to Africa and stole the heart of many with his dignity and strength.” Richard Vigne, Ol Pejeta’s CEO, said: “We on Ol Pejeta are all saddened by Sudan’s death. “He was a great ambassador for his species and will be remembered for the work he did to raise awareness globally of the plight facing not only rhinos, but also the many thousands of other species facing extinction as a result of unsustainable human activity. “One day, his demise will hopefully be seen as a seminal moment for conservationists worldwide.”

The northern white rhino population in Uganda, Sudan, Chad and Central African Republic was largely wiped out by poachers in the 1970s and 1980s, fuelled by a demand for rhino horn in traditional Chinese medicine and dagger handles in Yemen. Four fertile northern white rhinos, two male and two female, were moved from a zoo in the Czech Republic to Ol Pejeta with high hopes they would breed in an environment similar to their native habitat. Although they were seen mating, there were no successful pregnancies.

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To be fair, we’re killing our own species too. Where is the US going to find the $47 trillion?

Alzheimer Care For Americans Alive Today Projected To Cost $47 Trillion (BBG)

Alzheimer’s disease is among the most expensive illnesses in the U.S. There’s no cure, no effective treatment and no easy fix for the skyrocketing financial cost of caring for an aging population. Spending on care for people alive in the U.S. right now who will develop the affliction is projected to cost $47 trillion over the course of their lives, a report issued Tuesday by the Alzheimer’s Association found. The U.S. is projected to spend $277 billion on Alzheimer’s or other dementia care in 2018 alone, with an aging cohort of baby boomers pushing that number to $1.1 trillion by 2050. Research so far has been stymied by clinical failures. By one count, at least 190 human trials of Alzheimer’s drugs have ended in failure.

No company has successfully marketed a drug to treat it, though many big pharmaceutical companies, including Merck and Pfizer, have tried. Biogen, a company based in Cambridge, MA, saw its shares dive last month after it said it was expanding the number of participants in its trial for the drug aducanumab. However, significant cost savings can be achieved, according to the new report, by the simple act of early diagnosis. Currently, individuals are typically diagnosed in the dementia stage, rather than when they have developed only mild cognitive impairment [MCI]. Identifying the disease early can allow it to be better managed, in part with existing drugs that treat its symptoms. In doing so, the study postulates, America could save $7.9 trillion over the lifetimes of everyone alive right now.

The Alzheimer’s Association commissioned researchers at Precision Health Economics to study the potential savings of obtaining an earlier diagnosis. It used data from the Health and Retirement Study, a “nationally representative sample of adults age 50 and older,” run by the University of Michigan and supported by the National Institute on Aging and the Social Security Administration. The $7.9 trillion in savings was derived from a scenario in which all adults who develop Alzheimer’s receive an early diagnosis in the MCI stage. The cumulative cost in such a circumstance is projected at $39.2 trillion—far below the $47.1 trillion that would be spent under current diagnostic patterns.

[..] There are now an estimated 5.5 million Americans aged 65 or older with Alzheimer’s. In 2025, that number is projected to be 7.1 million. By 2050, it could reach 13.8 million. Along with the increasing costs, the report also found Alzheimer’s to be increasingly lethal. It’ss currently the sixth-leading cause of death in the U.S., and deaths attributed to it jumped by 123% between 2000 to 2015, the report found.

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What stock market?

The Stock Market Meltup Is Over: Morgan Stanley (MW)

The stock market meltup is over. At least, that’s the prognosis of one prominent Wall Street strategist who believes the torrid January rally that gave way to a correction may have been the market’s short-term apex. The S&P 500 jumped 7.5% between the end of 2017 and Jan. 26, when it notched the last in a string of record closes at 2,872.87. “We think January was the top for sentiment, if not prices, for the year. With volatility moving higher we think it will be difficult for institutional clients to gross up to or beyond the January peaks,” said Michael Wilson, chief U.S. equity strategist at Morgan Stanley Institutional Securities, in his weekly note on Monday. “Retail sentiment indicators also look to have peaked in January and we do not see anything on the horizon to get retail investors more bullish than they were following a tax cut.”

As a result, the much-anticipated meltup in stocks that numerous strategists had been forecasting since last year won’t likely happen in 2018, he said. A meltup is an unexpected rise in asset prices as investors surge into the market on fear of missing out. “When we look at our internal data combined with industry flows and sentiment, we think there is a strong case that January was the melt-up, or at least the culmination of it,” Wilson added. One key point in Wilson’s thesis is that gross leverage by Morgan Stanley’s hedge fund clients hit an all-time high in January. Gross leverage, according to the strategist, is a good measure of investor willingness to assume risk.

The record was also set right before the early February “volatility shock” forced investors to scale back their exposure to risk and Wilson does not expect gross leverage to return to January levels any time in the near future.

Going forward, Wilson expects U.S. stock returns to be mostly driven by increase in earnings estimates. “If we just roll forward the current bottom-up estimates, the forward earnings per share would be $166 and $170 by June 30 and September 30, respectively. That is approximately 3% and 5% higher than today’s $161. Not exciting, but not very bad either,” he said. “However, those numbers might need to come down if we start to see some evidence of lower margins since consensus forecasts assume no operating margin degradation. That is another reason why we think the S&P 500 makes its highs for the year this summer. It’s also a wild card that has big idiosyncratic risk at the stock level in our view.”

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The many faces of debt.

It’s Not Just Tech. Credit Markets Give Fuel to Equity Rout (BBG)

Equity investors grappling with a technology selloff, trade tensions and hawkish monetary chatter have a new foe to contend with: growing angst in credit markets. After resisting the full force of the gales that swept through markets earlier this year, corporate bonds are sending ominous messages. Traders are jumping out of the asset class as investment-grade spreads sit near their widest in six months and yields rise to the highest in more than six years – just as stock investors seek to recover from the first S&P 500 correction in two years. “If credit spreads widen, the equities with bad balance sheets will underperform,” said Louis de Fels at Raymond James Asset Management. “We’re quite cautious on the quality of the assets.”

Corporate bonds held by smart money have historically proven a leading indicator for the direction of stocks. That may spell disappointment for investors heeding Wall Street advice to shift towards equity, a late-cycle outperformer. “Credit leads equities and will underperform,” said Andrew Brenner at Natalliance Securities in New York, citing Federal Reserve hikes, signs of softer U.S. output and corporate sales of short-term U.S. debt. “We expect equities to catch up on the downside.” For now, stock investors appear sanguine. U.S. equity funds took in a record $34.5 billion in the week to March 14, compared to just $2.4 billion for bonds, according to Stanford C Bernstein. That brings the quarterly total for debt funds to $37.3 billion, the slimmest quarterly addition since the three months ending in December 2016, the data show.

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But in the end it’s just another form of debt.

How Economies Could Insure Themselves Against The Bad Times (Shiller)

The time has come for national governments around the world to start issuing their debt in a new form, linked to their countries’ resources. GDP-linked bonds, with coupons and principal that rise and fall in proportion to the issuing country’s GDP, promise to solve many fundamental problems that governments face when their countries’ economies falter. And, once GDP-linked bonds are issued by a variety of countries, investors will be attracted by the prospect of high returns when some of these countries do very well. This new debt instrument is especially exciting because of its monumental size. Although issues may start out small, they will be very important from the outset. The capitalised value of total global GDP is worth far more than the world’s stock markets and could be valued today in the quadrillions of US dollars.

[..] I have been advocating something like GDP-linked bonds for 25 years. In my 1993 book Macro Markets, I described the world’s GDPs as the “mother of all markets” and emphasised a form of debt called “perpetual claims”. But I did not work out a real plan of implementation and advocacy. [The book] ‘Sovereign GDP-Linked Bonds’ does just that. The basic idea is simple enough. Governments issue GDP-linked bonds to raise funds, just as corporations issue shares. By issuing such bonds, governments pledge to pay in proportion to the resources they have, measured by their countries’ GDP. The price-to-GDP ratio of GDP-linked bonds is essentially analogous to the price-to-earnings ratio of corporate shares. The difference is that GDP is an order of magnitude larger than corporate profits represented by the stock market.

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Well, it won’t be boring.

US Expected To Impose Up To $60 Billion In China Tariffs By Friday (R.)

The Trump administration is expected to unveil up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property, two officials briefed on the matter said Monday. One business source, who has discussed the issue with the administration, said that the China tariffs may be subject to a public comment period, which would delay their effective date and allow industry groups and companies to lodge objections. This would be considerably different from the quick implementation of the steel and aluminum tariffs, which are set to go into effect on March 23, just 15 days after President Donald Trump signed the proclamations.

A delayed approach could allow time for negotiations with Beijing to try to resolve trade issues related to the administration’s “Section 301” probe into China’s intellectual property practices before tariffs take effect. The White House declined to comment Monday. China has vowed to take retaliatory measures in response. A source who had direct knowledge of the administration’s thinking told Reuters last week that the tariffs, authorized under the 1974 U.S. Trade Act, would be chiefly targeted at information technology, consumer electronics and telecoms and other products benefiting from U.S. intellectual property. But they could be much broader and hit consumer products such as clothing and footwear, with a list eventually running to 100 products, this person said.

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But Zuckerberg sold just in time.

Facebook Stock Value Down $35 Billion On Cambridge Analytica Controversy (Ind.)

Facebook stock dropped $35bn (£25bn) by close of trading on Wall Street, as the company deals with questions over its privacy rules in the wake of a scandal involving data firm Cambridge Analytica harvesting a vast repository of user information. The social media giant’s stock value declined by around 7%, paralleling losses throughout the technology industry and raising questions about the controversy inflicting lasting damage to Facebook’s bottom line. It amounted to the largest single-day%age decline for Facebook stock since 2014, with the drop outpacing broader declines across Wall Street.

The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all shed more than a percentage point in value by market’s close. Prominent tech companies like Apple, Microsoft and Alphabet all saw declines as political pressure on Facebook intensified, building on months of deepening scrutiny of the tech sector by elected officials.

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Six degrees of Facebook.

Former Obama Campaign Director: Facebook Was “On Our Side” (ZH)

The recent controversy and escalating scandal over Facebook’s decision to ban Trump-linked political data firm Cambridge Analytica over the use of data harvested through a personality app under the guise of academic research has opened a veritable Pandora’s box of scandal for the Silicon Valley social media giant. Carol Davidsen, who served as Obama’s director of integration and media analytics during his 2012 campaign (in her LinkedIn profile she says she was responsible for “The Optimizer” & “Narwhal” big data analytics platforms), claims – with evidence, that Facebook found out about a massive data-mining operation they were conducting to “suck out the whole social graph” in order to target potential voters.

After Facebook found out, they knowingly allowed them to continue doing it because they were supportive of the campaign. “[M]ore than 1 million Obama backers who signed up for the [Facebook-based app] gave the campaign permission to look at their Facebook friend lists. In an instant, the campaign had a way to see the hidden young voters. Roughly 85% of those without a listed phone number could be found in the uploaded friend lists. What’s more, Facebook offered an ideal way to reach them,” reads an article Davidsen posted as a prelude to her postings.

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I doubt that it can make it worse. We haven’t seen the beginning of it.

How Facebook Made Its Data Crisis Worse (BBG)

Facebook tried to get ahead of its latest media firestorm. Instead, it helped create one. The company knew ahead of time that on Saturday, the New York Times and The Guardian’s Observer would issue bombshell reports that the data firm that helped Donald Trump win the presidency had accessed and retained information on 50 million Facebook users without their permission. Facebook did two things to protect itself: it sent letters to the media firms laying out its legal case for why this data leak didn’t constitute a “breach.” And then it scooped the reports using their information, with a Friday blog post on why it was suspending the ad firm, Cambridge Analytica, from its site. Both moves backfired.

On Friday, Facebook said it “received reports” that Cambridge Analytica hadn’t deleted the user data, and that it needed to suspend the firm. The statement gave the impression that Facebook had looked into the matter. In fact, the company’s decisions were stemming from information in the news reports set to publish the next day, and it had not independently verified those reports, according to a person with knowledge of the matter. By trying to look proactive, Facebook ended up adding weight to the news.

On Saturday, any good will the company earned by talking about the problem first was quickly undone when reporters revealed Facebook’s behind-the-scenes legal maneuvering. “Yesterday Facebook threatened to sue us. Today we publish this,” Carole Cadwalladr, the Observer reporter, wrote as she linked her story to Twitter, in a post shared almost 15,000 times. The Guardian said it had nothing to add to her statement. The Times confirmed that it too received a letter, but said it didn’t consider the correspondence a legal threat.

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You ain’t seen nothing yet.

Tech World Experiencing A Major ‘Trust Crisis’ – Futurist (CNBC)

Big brands have to reestablish trust with consumers on data safety, futurist Chris Riddell told CNBC at Credit Suisse’s annual Asian Investment Conference on Tuesday. Riddell, who describes his job title as “fundamentally seeing how technology is changing humanity,” said the world is currently experiencing a severe “trust crisis.” “People now are more willing to share data than ever before” but the of data breaches at major companies break “trust and confidence,” he stated.

Social media platform Facebook is currently under fire amid allegations that private data firm Cambridge Analytica lied about deleting user data it had improperly obtained from a Russian-American researcher in 2015. “We’re in an era of category killers, where one organization is dominating in an industry,” Riddell said, pointing to Facebook and Google as examples. The challenge for those businesses is to rebuild trust and use technology to create transparency, he continued.

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RussiaRussiaRussia

If You Come to a Fork in the Road, Take It (Jim Kunstler)

Various readers, fans, blog commenters, Facebook trolls, and auditors twanged on me all last week about my continuing interest in the RussiaRussiaRussia hysteria, though there is no particular consensus of complaint among them — except for a general “shut up, already” motif. For the record, I’m far more interested in the hysteria itself than the Russia-meddled-in the-election case, which I consider to be hardly any case at all beyond 13 Russian Facebook trolls.

The hysteria, on the other hand, ought to be a matter of grave concern, because it appears more and more to have been engineered by America’s own intel community, its handmaidens in the Dept of Justice, and the twilight’s last gleamings of the Obama White House, and now it has shoved this country in the direction of war at a time when civilian authority over the US military looks sketchy at best. This country faces manifold other problems that are certain to reduce the national standard of living and disrupt the operations of an excessively complex and dishonest economy, and the last thing America needs is a national war-dance over trumped-up grievances with Russia.

The RussiaRussiaRussia narrative has unspooled since Christmas and is blowing back badly through the FBI, now with the firing (for cause) of Deputy Director Andrew McCabe hours short of his official retirement (and inches from the golden ring of his pension). He was axed on the recommendation of his own colleagues in the FBI’s Office of Professional Responsibility, and they may have been influenced by the as-yet-unreleased report of the FBI Inspector General, Michael Horowitz, due out shortly.

The record of misbehavior and “collusion” between the highest ranks of the FBI, the Democratic Party, the Clinton campaign, several top political law firms, and a shady cast of international blackmail peddlars is a six-lane Beltway-scale evidence trail compared to the muddy mule track of Trump “collusion” with Russia. It will be amazing if a big wad of criminal cases are not dealt out of it, even as The New York Times sticks its fingers in its ears and goes, “La-la-la-la-la….” It now appears that Mr. McCabe’s statements post-firing tend to incriminate his former boss, FBI Director James Comey — who is about to embark, embarrassingly perhaps, on a tour for his self-exculpating book, A Higher Loyalty: Truth, Lies, and Leadership.

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Going mainstream doesn’t seem to fit the deep state’s preferences.

Over 70% of US Citizens Believe America Is Controlled By A ‘Deep State’ (RT)

Over 70% of US citizens in the Republican and Democratic parties believe America is controlled by a “deep state” of unelected government officials, according to a new poll. They also fear state surveillance, it reveals.
Although most Americans interviewed are not familiar with the term ‘deep state’, when they heard the definition as a cadre of unelected government and military officials who secretly influence government policies, a majority expressed belief in its ‘probable existence’ according to the Monmouth University poll released Monday.

Additionally six in 10 of those polled think that these unelected government figures wield too much power when it comes to shaping federal policy. “We usually expect opinions on the operation of government to shift depending on which party is in charge. But there’s an ominous feeling by Democrats and Republicans alike that a ‘deep state’ of unelected operatives are pulling the levers of power,” said Patrick Murray, director of the independent Monmouth University Polling Institute.

Donald Trump has popularized the term ‘deep state’ over the course of his presidency. In January he blasted the ‘deep state’ Department of Justice for allegedly shielding a Hillary Clinton aide who used a non-secure private email account while conducting government business. The poll also highlights widespread fears of state surveillance, with 80% of Americans believing that the US government currently spies on the activities of its citizens. “This is a worrisome finding. The strength of our government relies on public faith in protecting our freedoms, which is not particularly robust. And it’s not a Democratic or Republican issue. These concerns span the political spectrum,” Murray added.

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When incompetence shines through. They’re pitching anti-Corbyn attack ads on…Facebook.

UK Tories Set To Slump To Record Low At Local Elections (G.)

Conservative party support in London looks set to slump to a record low at the local elections on 3 May as the young, ethnically diverse electorate turns to Labour in increasing numbers. Projections from the Tory peer and psephologist Robert Hayward indicate the Conservatives will lose about 100 council seats. If they lose more than 93 – less than three seats in each of London’s boroughs – the Tories would fall below their previous low of 511 councillors in the capital. That came in 1994, just after the pound had fallen out of the exchange rate mechanism and Labour had begun the recovery that led to its 1997 general election landslide. “I’d be surprised if the Tories did not have an all-time low number of councillors,” Hayward said.

“Labour were very successful in London in the general election last year and I’d expect that to continue in 2018.” The Tories could even lose their two flagship boroughs of Wandsworth, which has been in Conservative control since 1978, and Westminster, which has been Tory since the last local government reorganisation in 1964. More likely, Barnet in north London might go Labour and the Liberal Democrats could triumph in Kingston in south-west London where they are also targeting the neighbouring council, Richmond. The most spectacular reverse would be the loss of Kensington and Chelsea, the Conservative heartland won by Labour with the narrowest of margins at last year’s general election, where the Tory council has come under fire for its mishandling of the Grenfell Tower fire.

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He took the money and then killed him.

Former French President Sarkozy In Custody Over Libya Funding Probe (F24)

Former French president Nicolas Sarkozy has been called in for questioning by investigators looking into suspected Libyan financing of his 2007 election campaign, an official in the French judiciary said Tuesday. Libyan officials from the Gaddafi era have claimed they helped finance Sarkozy’s election campaign. An investigation into the case has been underway since 2013. It is the first time Sarkozy has been questioned in the inquiry. The hearing comes several weeks after a former associate, Alexandre Djouhri, was arrested in London as part of the investigation and later released on bail. Investigators are examining claims that Gaddafi’s regime secretly gave Sarkozy €50 million overall for the 2007 campaign. Such a sum would be more than double the legal campaign funding limit at the time of €21 million.

In November 2016, French-Lebanese businessman Ziad Takieddine said he delivered three suitcases from Libya, containing five million euros in cash, to Sarkozy and his former chief of staff and campaign director, Claude Guéant, between 2006 and 2007. Sarkozy, who was president from 2007 to 2012, has always denied the allegations. A lawyer for the former French president could not be reached immediately for comment on Tuesday. Sarkozy had a complex relationship with Gaddafi. Soon after his election to the presidency, Sarkozy invited the Libyan leader to France for a state visit and welcomed him with high honors. But Sarkozy then put France in the forefront of NATO-led airstrikes against Gaddafi’s troops that helped rebel fighters topple his regime in 2011.

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In other news: war is peace.

Greece Undermining EU-Turkey Migrant Deal, German Report Says (K.)

Data published by the German newspaper Die Welt suggest that Greece has been undermining the European Union-Turkey deal signed two years ago to stem the flow of refugees and migrants to the continent. Citing unnamed officials in Berlin, Brussels and the EU’s border agency Frontex, the report alleges that the Greek government has moved a large number of asylum seekers from the Aegean islands to the mainland, effectively preventing their return to Turkey. The message is that any asylum seeker who manages to land on one of the Greek islands, he can then move on to central Europe, officials told the newspaper.

According to EU figures cited by the newspaper, between March 2016 and January 2018, 62,190 asylum seekers landed on the Aegean islands, of whom 27,635, or 45%, were subsequently transferred to mainland Greece. German officials told the newspaper that only a very small number of people whose asylum request had been turned down by authorities had been returned to Turkey. Greece, the same officials said, is effectively creating an incentive for migrants hoping to enter the continent which could lead to a spike in arrivals.

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Feb 192017
 
 February 19, 2017  Posted by at 10:23 am Finance Tagged with: , , , , , , , , ,  


John Vachon Beer signs on truck, Little Falls, Minnesota 1940

 

Fed: From Lender Of Last Resort To Destroyer Of American Wealth (DDMB)
“There’s Something Weird Going On”: The Global Dollar Shortage (ZH)
Merkel Suggests Euro Is Too Low For Germany (R.)
Empowering “Deep State” is Prescription for Destroying Democracy (Greenwald)
Sekulow: Obama Should Be “Held Accountable” For “Soft Coup” Against Trump (ZH)
Russia Calls For ‘Post-West’ World Order – Lavrov (R.)
Lavrov on US Election Hacking Claims: ‘Give Us Some Facts’ (BBG)
Nine People Flee US Border Patrol To Seek Asylum In Canada (R.)
GMO Crops Are Driving Genocide And Ecocide – Keep Them Out Of The EU! (Paul)
‘From Bad To Worse’: Greece Hurtles Towards A Final Reckoning (O.)
Greek Banks Worry Over Sudden Bad Loan Spike In January (K.)
Greeks Turn to the Black Market as Another Bailout Showdown Looms (NYT)
Tensions Escalate In Aegean As Turkish Boat Fires Shots in Greek Waters (K.)
Defend The Sacred (Bell)

 

 

Looks like a must read: [..] a special preview excerpt from FED UP: An Insider’s Take on Why The Federal Reserve is Bad for America by Danielle DiMartino Booth.

She agrees with me: “The one true growth industry? That would be all that high cotton harvested in high finance. Since 2007, world debt has grown by about $60 trillion, enriching legions of investment bankers one bond deal at a time.”

Fed: From Lender Of Last Resort To Destroyer Of American Wealth (DDMB)

Created in 1913 after the Panic of 1907, the Federal Reserve was founded to keep the public’s faith in the buying power of the U.S. dollar. After failing miserably in the 1930s, the Fed aimed to be more responsive. This led the institution to find discipline in the rising macroeconomic models championed by top monetary theorists. During the ensuing “Quiet Period” in American banking, deposit insurance prevented panics, the Fed controlled interest rates and manipulated the money supply, and though occasional disruptions flared, like the failure of Continental Illinois National Bank and Trust Company in 1984, no systemic risk erupted for seventy years. The Fed had tamed the volatile U.S. economy.

Until September 2008, when all hell broke loose in a worldwide panic that completely blindsided and, embarrassed the Federal Reserve. The Fed had used billions of dollars in taxpayer funds to bail out Wall Street fat cats. Everyone blamed the Fed. Just before 9 a.m., the door to the chairman’s office opened. Federal Reserve Chairman Ben Bernanke took his place in an armchair at the center of a massive oval table. The members of the FOMC found their designated places around the table; aides sat in chairs or couches against the wall. With staff, the room contained fifty or sixty people, far more than normal for this momentous occasion. In front of each FOMC member was a microphone to record their words for posterity. To a casual observer, the content of their conversation would be obscured by economic jargon.

This day, their essential task was to vote on whether to take the “fed funds” rate—the interest rate at which banks lent money to each other in the overnight market—to the zero bound. The history-making low rate would ripple throughout the economy, affecting the price to borrow for businesses and consumers alike. Bernanke was calm but insistent. His lifetime of study of the Great Depression indicated this was the only way. His sheer depth of knowledge about the Fed’s mishandling of that tragic period was undoubtedly intimidating. By the end of the meeting, the vote was unanimous. The FOMC officially adopted a zero-interest-rate policy in the hopes that companies teetering on the brink of insolvency would keep the lights on, keep employees on their payrolls, and keep consumers spending. It would even pay banks interest on deposits.

Free cash. We’ll even pay you to take it! As they gathered their belongings, everyone shook hands, all very collegial despite the sometimes vigorous discussion. They journeyed back to their nice homes in the toniest neighborhoods of America’s richest cities: New York, Boston, Philadelphia, Chicago, Dallas, San Francisco, Washington, DC. They returned to their lofty perches, some at the Eccles Building, others to the executive floors of Federal Reserve District Bank buildings, safely cushioned from the decision they had just made. Most of them were wealthy or had hefty defined benefit pensions. Their investments were socked away in blind trusts. They would feel no pain in their ivory towers.

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A Eurodollar is a dollar held anywhere outside the US.

“There’s Something Weird Going On”: The Global Dollar Shortage (ZH)

While we urge readers to listen to the full interview below, here are some of the highlights, starting with “why the Dollar shortage a symptom of an inherently unstable system.” As Snider explains, “the dollar shortage isn’t so much the shortage per se, it’s the fact that it’s a symptom of what is an inherently unstable system.” He notes that “the reason banks are withdrawing from the system is that it’s just is no longer tenable” and “so there has to be some kind of – whether you want to look at it like another Bretton Woods – conference, a global monetary system, a global monetary get together where people start to analyze solutions to the problem as they are rather than keep trying to apply band aids that are not going to work. ” But, he concludes, “step one of that task is to actually recognize the problem as it is and so doing more stimulus or doing more QE isn’t going to solve anything it isn’t do anything just like prior QEs and prior stimulus haven’t done anything either because the problem is an unstable system.”

Snider focuses on the Eurodollar system, which he defines as a problem of “decay and dysfunction” and explains that “nothing ever happens in a straight line even the Eurodollar problem has not been a singular event. It’s not been a decade long straight line of decay and dysfunction.” He goes on to say that the fact that after enough time these markets have adjusted to the fact that the economy’s going to be bad for a very long time until something actually changes and so true reflation is predicated on something actually changing rather than the hope that something might change.

Looking at history, Snider observes that “what happened in July 2008 obviously was the fact that everyone decided almost all at once that wasn’t the right interpretation of what the Fed was doing nor was it the right interpretation of the dollar system overall. So, that reflation ended in reality which was the dollar system was eroding and it was eroding in a very dangerous way and that’s why oil prices essentially crashed from July till I think January 2009.” An implication of the ongoing reserve currency funding shortage is that, according to Snider, despite the occasional blip (arguably funded by massive Chinese credit creation), “reflation is going to fail and there’s nothing the Fed can do about it.” He goes on to state that “until they fix the global dollar problem we’re not going to fix the global economy and so we’re kind of stuck gyrating between various levels of really bad. We go from the lack of recovery to what looks like a global recession to the lack of recovery and back again” as a result he thinks that “reflation is going to fail.”

[..] Snider summarizes by saying that “the fact that these markets realize that there’s a problem in Eurodollar system, there’s no banking to be had, no additional marginal banking capacity being added and without it none of these stuff really matters, none of these other stuff really matters. That’s the only thing that truly matters” and concludes gloomily that “the probability scenarios for economic and financial future are much darker now than they were three years ago.”

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It’s blowing the EU apart but its de facto leader says she has “no power to address this problem”. That’s just great.

Merkel Suggests Euro Is Too Low For Germany (R.)

German Chancellor Angela Merkel suggested on Saturday that the euro was too low for Germany but made clear that Berlin had no power to address this “problem” because monetary policy was set by the independent ECB. Merkel made her remarks at the Munich Security Conference as U.S. Vice President Mike Pence looked on. They seemed aimed at addressing recent criticism from a top trade adviser to President Donald Trump, who has accused Germany of profiting from a “grossly undervalued” euro. “We have at the moment in the euro zone of course a problem with the value of the euro,” Merkel said in an unusual foray into foreign exchange rate policy.

“The ECB has a monetary policy that is not geared to Germany, rather it is tailored (to countries) from Portugal to Slovenia or Slovakia. If we still had the (German) D-Mark it would surely have a different value than the euro does at the moment. But this is an independent monetary policy over which I have no influence as German chancellor.” The euro has fallen nearly 25% against the dollar over the past three years, touching a 14-year low of $1.034 in January. But it has since risen to roughly $1.061. In late January, Peter Navarro, the head of Trump’s new National Trade Council, said the euro’s low valuation was giving Germany an edge over the United States and its European Union partners. His comments came weeks after Trump himself said the dollar’s strength against the Chinese yuan “is killing us”, deepening concerns that his administration could pursue a more confrontational, protectionist approach to trade. Merkel and other German officials pushed back forcefully at the time.

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Lots of Deep State pieces these days. Greenwald provides some balance.

Empowering “Deep State” is Prescription for Destroying Democracy (Greenwald)

The deep state, although there’s no precise or scientific definition, generally refers to the agencies in Washington that are permanent power factions. They stay and exercise power even as presidents who are elected come and go. They typically exercise their power in secret, in the dark, and so they’re barely subject to democratic accountability, if they’re subject to it at all. It’s agencies like the CIA, the NSA and the other intelligence agencies, that are essentially designed to disseminate disinformation and deceit and propaganda, and have a long history of doing not only that, but also have a long history of the world’s worst war crimes, atrocities and death squads. This is who not just people like Bill Kristol, but lots of Democrats are placing their faith in, are trying to empower, are cheering for as they exert power separate and apart from—in fact, in opposition to—the political officials to whom they’re supposed to be subordinate.

And you go—this is not just about Russia. You go all the way back to the campaign, and what you saw was that leading members of the intelligence community, including Mike Morell, who was the acting CIA chief under President Obama, and Michael Hayden, who ran both the CIA and the NSA under George W. Bush, were very outspoken supporters of Hillary Clinton. In fact, Michael Morell went to The New York Times, and Michael Hayden went to The Washington Post, during the campaign to praise Hillary Clinton and to say that Donald Trump had become a recruit of Russia. The CIA and the intelligence community were vehemently in support of Clinton and vehemently opposed to Trump, from the beginning. And the reason was, was because they liked Hillary Clinton’s policies better than they liked Donald Trump’s.

One of the main priorities of the CIA for the last five years has been a proxy war in Syria, designed to achieve regime change with the Assad regime. Hillary Clinton was not only for that, she was critical of Obama for not allowing it to go further, and wanted to impose a no-fly zone in Syria and confront the Russians. Donald Trump took exactly the opposite view. He said we shouldn’t care who rules Syria; we should allow the Russians, and even help the Russians, kill ISIS and al-Qaeda and other people in Syria. So, Trump’s agenda that he ran on was completely antithetical to what the CIA wanted. Clinton’s was exactly what the CIA wanted, and so they were behind her. And so, they’ve been trying to undermine Trump for many months throughout the election. And now that he won, they are not just undermining him with leaks, but actively subverting him. There’s claims that they’re withholding information from him, on the grounds that they don’t think he should have it and can be trusted with it. They are empowering themselves to enact policy.

Now, I happen to think that the Trump presidency is extremely dangerous. You just listed off in your news—in your newscast that led the show, many reasons. They want to dismantle the environment. They want to eliminate the safety net. They want to empower billionaires. They want to enact bigoted policies against Muslims and immigrants and so many others. And it is important to resist them. And there are lots of really great ways to resist them, such as getting courts to restrain them, citizen activism and, most important of all, having the Democratic Party engage in self-critique to ask itself how it can be a more effective political force in the United States after it has collapsed on all levels. That isn’t what this resistance is now doing.

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The timing is indeed very peculiar.

Sekulow: Obama Should Be “Held Accountable” For “Soft Coup” Against Trump (ZH)

[..] what until recently was a trickle of private data captured about US individuals by the NSA with only a handful of people having full, immersive access, suddenly became a firehose with thousands of potential witnesses across 16 other agencies, each of whom suddenly became a potential source of leaks about ideological political opponents. And with the universe of potential “leaking” culprits suddenly exploding exponentially, good luck finding the responsible party. However, the implications are far more serious than just loss of privacy rights. According to civil right expert and prominent First Amendement Supreme Court lawyer, Jay Sekulow, what the agencies did by leaking the Trump Administration information was not only illegal but “almost becomes a soft coup”, one which was spurred by the last minute rule-change by Obama, who intentionally made it far easier for leaks to propagate, and next to impossible to catch those responsible for the leaks.

This is his explanation: “There was a sea-change here at the NSA with an order that came from president Obama 17 days before he left office where he allowed the NSA who used to control the data, it now goes to 16 other agencies and that just festered this whole leaking situation, and that happened on the way out, as the president was leaving the office. Why did the Obama administration wait until it had 17 days left in their administration to put this order in place if they thought it was so important. They had 8 years, they didn’t do it, number one. Number two, it changed the exiting rule which was an executive order dating back to Ronald Reagan, that has been in place until 17 days before the Obama administration was going to end, that said the NSA gets the raw data, and they determine dissemination.

Instead, this change that the president put in place, signed off by the way by James Clapper on December 15, 2016, signed off by Loretta Lynch the Attorney General January 3, 2017, they decide that now 16 agencies can get the raw data and what that does is almost creates a shadow government. You have all these people who are not agreeing with President Trump’s position, so it just festers more leaks. If they had a justification for this, wonderful, why didn’t they do it 8 years ago, 4 years ago, 3 years ago. Yet they wait until 17 days left. One potential answer: they knew they had a “smoking gun”, and were working to make it easier to enable the information to be “leaked” despite the clearly criminal consequences of such dissemination.

As this point Hannity correctly points out, “it makes it that much more difficult by spreading out the information among 16 other agencies, if they want to target or take away the privacy rights, and illegally tap the phones, in this case General Flynn, it’s going to be much harder to find the perpetrator. Sekulow confirms, noting that back when only the NSA had access to this kind of raw data, there would be a very small amount of people who have access to this kind of data. “But this change in the Obama Administration was so significant that they allowed dissemination to 16 other agencies, and we wonder why there’s leaks.” Sekulow’s conclusion: “President Obama, James Clapper, Loretta Lynch should be held accountable for this.”

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Russia’s no big fan of -unfetterred- globalization either: “I hope that (the world) will choose a democratic world order – a post-West one – in which each country is defined by its sovereignty.”

Russia Calls For ‘Post-West’ World Order – Lavrov (R.)

Russian Foreign Minister Sergei Lavrov called Saturday for an end to a world order dominated by the West and said Moscow wanted to establish a “pragmatic” relationship with the United States. Lavrov was speaking at the Munich Security Conference shortly after US Vice President Mike Pence told the audience Washington remained “unwavering” in its commitment to the US-led NATO military alliance as it faced a more assertive Russia. Lavrov said that the time when the West called the shots was over and, dismissing NATO as a relic of the Cold War, added: “I hope that (the world) will choose a democratic world order – a post-West one – in which each country is defined by its sovereignty.”

Lavrov said Moscow wanted to build relations with Washington which would be “pragmatic with mutual respect and acknowledgement of our responsibility for global stability.” The two countries had never been in direct conflict, he said, noting that they were actually close neighbours across the Baring Straits. Russia wanted to see a “common space of good neighbour relations from Vancouver to Vladivostok,” he added. Pence was in Europe along with Secretary of State Rex Tillerson and defence chief James Mattis as part of efforts to reassure allies rattled by President Donald Trump’s “America First” stance and his calls for improved ties with Russia despite the continuing crisis in Ukraine.

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“He said Russia had “many years ago” initiated work at the United Nations to discuss information security. “Our western partners evaded that work..”

Lavrov on US Election Hacking Claims: ‘Give Us Some Facts’ (BBG)

Foreign Minister Sergei Lavrov pushed back against accusations that Russian hackers meddled in last year’s U.S. presidential election, saying no one had put forward any proof and former President Barack Obama’s administration ignored repeated overtures to discuss cyber-security norms. “Somehow when we are blamed, no one asked for facts,” Lavrov said at the Munich Security Summit on Saturday. “Give us some facts.” In his remarks, made in response to an audience question about whether Russia interferes in other countries’ elections, Lavrov portrayed Russia as a leader in efforts to focus on information security. He said Russia had “many years ago” initiated work at the United Nations to discuss information security. “Our western partners evaded that work,” he said.

After Donald Trump won the election in November, the U.S. intelligence community issued an assessment that Russia sought to sway the election in his favor through the hacking of the Democratic National Committee and Hillary Clinton’s campaign staff. In the waning days of his administration, Obama imposed new sanctions on Russia’s military intelligence agency and the successor agency to the KGB, saying the actions had been directed “at the highest level” of the government. [..] “I have seen no facts, there were just some accusations that we tried to hack some Democratic party website; that’s happening in France, Germany, Italy,” Lavrov said. He went on to point blame at the U.S. and make a reference to recent leaks that the CIA may have spied on French political parties before the 2012 election there. WikiLeaks released e-mails making that claim this week.

Lavrov said he had suggested to the Obama administration in 2015 that the two countries discuss working together on cyber-security, and repeatedly asked former Secretary of State John Kerry about the proposal. “For a year we had no reaction from them,” he said. “Then in December last year they said let’s meet, and later they said now we have transitional administration let’s postpone it.”

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Not the first time in history people flee from the US to Canada.

Nine People Flee US Border Patrol To Seek Asylum In Canada (R.)

Nine asylum-seekers, including four children, barely made it across the Canadian border on Friday as a U.S. border patrol officer tried to stop them and a Reuters photographer captured the scene. As a U.S. Customs and Border Patrol officer seized their passports and questioned a man in the front passenger seat of a taxi that had pulled up to the border in Champlain, New York, four adults and four young children fled the cab and ran to Royal Canadian Mounted Police on the other side. One by one they scrambled across the snowy gully separating the two countries. RCMP officers watching from the other side helped them up, lifting the younger children and asking a woman, who leaned on her fellow passenger as she walked, if she needed medical care. The children looked back from where they had come as the U.S. officer held the first man, saying his papers needed to be verified.

The man turned to a pile of belongings and heaved pieces of luggage two at a time into the gully – enormous wheeled suitcases, plastic shopping bags, a black backpack. “Nobody cares about us,” he told journalists. He said they were all from Sudan and had been living and working in Delaware for two years. The RCMP declined on Friday to confirm the nationalities of the people. A Reuters photo showed that at least one of their passports was Sudanese. The man then appeared to grab their passports from the U.S. officer before making a run for the border. The officer yelled and gave chase but stopped at the border marker. Canadian police took hold of the man’s arm as he crossed. The border patrol officer told his counterpart that the man was in the United States illegally and that he would have detained him. Officers on both sides momentarily eyed the luggage strewn in the snow before the U.S. officer took it, and a walker left on the road, to the border line.

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Overview of the damage done across the world by GMO.

GMO Crops Are Driving Genocide And Ecocide – Keep Them Out Of The EU! (Paul)

We currently face a desperate, almost farcical push for GM crops in the UK and Europe, characterised by hyperbolic and inaccurate claims. So rather than taking those claims on trust, let’s look at the impacts of GM crops in countries that have adopted them. That means North and South America, where GM crops were first launched in 1996. The cultivation of herbicide tolerant crops in Argentina began in 1996 with GM soya and spread swiftly through the country. As Argentina’s Grupo Reflexion Rural (GRR) wrote to the Vatican in April 2013, “The model was based on the political decision that Argentina, which had once been the grain basket of the world and a producer of healthy and high-quality foods, would be transformed into a producer of animal forage, firstly, to provide fodder for European livestock, and then for livestock in China.”

At first, herbicide tolerant crops seemed to simplify the farming process, especially for larger mechanised farms. Instead of skillful weed management, farmers applied large quantities of the herbicide glyphosate, mainly from the air. Powerful groups of investors helped drive GM soya production. Small farmers could not compete and many have left or been driven off their land, often into urban slums. People who remain in the countryside and small towns find themselves bombarded from the air with increasingly complex mixtures of chemicals intended to combat the problem of increasing weed and pest resistance. Although GM crops were promoted as a means to reduce levels of pesticides used, pesticide use in Argentina has increased massively, “from nine million gallons (34 million litres) in 1990 to more than 84 million gallons (317 million litres) today”.

[..] Europe has been wise to resist the pressure to adopt GM crops for cultivation except for a GM maize mainly grown in Spain. In the face of the evidence from countries with experience of these crops, and their associated cocktails of agrotoxics, why should Europe be forced to consider another GM crop for cultivation? But Europe should go further. The soya boom is driven by markets for animal feed, in the form of soya meal or cake, and biodiesel from soya oil. Vast quantities of both are imported into Europe, making it a major driver of South America’s unfolding GM disaster. The EU should surely stop importing GM animal feeds and oils from North and South America.

Indeed Europe should change its whole approach to livestock and crop production to address human health impacts, biodiversity loss and climate change. Far from being a “museum of world farming” as the UK’s current environment minister, Owen Paterson, likes to claim, Europe could show the way to a rich and varied GM free agriculture that provides nutritious, healthy food and jobs. It would at the same time address the profound degradation of soils and accelerating biodiversity loss, caused to a great extent by the industrial model of agriculture to which genetically engineered crops belong.

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“All I know is that we are all being pushed,” he said, searching for the right words. “Pushed in the direction of somewhere very explosive, somewhere we do not want to be.”

‘From Bad To Worse’: Greece Hurtles Towards A Final Reckoning (O.)

The assumption is that the prime minister, Alexis Tsipras, will cave in, just as he did when the country came closest yet to leaving the euro at the height of the crisis in the summer of 2015. But the 41-year-old leader, like Syriza, has been pummelled in the polls. Persuading disaffected backbenchers to support more measures, and then selling them to a populace exhausted by repeated rounds of austerity, will be extremely difficult. Disappointment has increasingly given way to the death of hope – a sentiment reinforced by the realisation that Cyprus and other bailed-out countries, by contrast, are no longer under international supervision.

In his city centre office, the former finance minister Evangelos Venizelos pondered where Greece’s predicament was now. “[We are] at the same point we were several years ago,” he joked. “The only difference is that anti-European sentiment is growing. What was once a very friendly country towards Europe is becoming increasingly less so, and with that comes a lot of danger, a lot of risk.” When historians look back they, too, may conclude that Greece has expended a great deal of energy not moving forward at all.

The arc of crisis that has swept the country – coursing like a cancer through its body politic, devastating its public health system, shattering lives – has been an exercise in the absurd. The feat of pulling off the greatest fiscal adjustment in modern times has spawned a slump longer and deeper than the Great Depression, with the Greek economy shrinking more than 25% since the crisis began. Even if the latest impasse is broken and a deal is reached with creditors soon, few believe that in a country of weak governance and institutions it will be easy to enforce. Political turbulence will almost certainly beckon; the prospect of “Grexit” will grow.

“Grexit is the last thing we want, but we may arrive at a point of serious dilemmas,” said Venizelos. “Whatever deal is reached will be very difficult to implement, but that notwithstanding, it is not the memoranda [the bailout accords] that caused the crisis. The crisis was born in Greece long before.” Like every crisis government before it, Tsipras’s administration is acutely aware that salvation will come only when Greece can return to the markets and raise funds. What happens in the weeks ahead could determine if that is likely to happen at all. Back in Syntagma, Costopoulos the good-natured farmer ponders what lies ahead. Like every Greek, he stands to be deeply affected. “All I know is that we are all being pushed,” he said, searching for the right words. “Pushed in the direction of somewhere very explosive, somewhere we do not want to be.”

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Greek banks never recovered.

Greek Banks Worry Over Sudden Bad Loan Spike In January (K.)

Nonperforming loans last month posted a major spike of almost 1 billion euros, reversing the downward course set in the last few months of 2016. This has generated major concerns among local lenders regarding the achievement of targets for reducing bad loans, as agreed with the Single Supervisory Mechanism (SSM) of the ECB for the first quarter of this year. Bank sources say that after several months of stabilization and of a negative growth rate in new nonperforming exposure,the picture deteriorated rapidly in January, as new bad loans estimated at €800 million in total were created. This increase in a period of just one month is considered particularly high, and is a trend that appears to be continuing this month as well.

Bank officials attribute the phenomenon to uncertainty from the government’s inability to complete the second bailout review, fears for a rekindling of the crisis and mainly the expectations of borrowers for extrajudicial settlements of bad loans. Senior bank officials note that a large number of borrowers will not cooperate with their lenders in reaching an agreement for the restructuring of their debts, in the hope that the introduction by the government of the extrajudicial compromise could lead to better terms and possibly even to a debt haircut

Banks further observe that the issue of the extrajudicial settlement, along with the matter of the deferred tax assets for the tackling of banks’ losses from the write-off or sale of bad loans, are of major significance to the general issue of dealing with the NPL problem, so they have to be arranged rapidly. Even more important to the banking sector is the completion of the pending bailout review, as uncertainty and the re-emergence of fears over a possible Greek exit from the eurozone have frozen the market and encouraged many people to avoid paying their dues in anticipation of negotiations. This unexpected deterioration in the quality of loan portfolios in recent weeks has banks on edge, as NPLs will have to be reduced by €2.5 billion by end-March, which will be particularly difficult to achieve given the fresh addition of another €800 million.

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Forced out of work by Troika demands.

Greeks Turn to the Black Market as Another Bailout Showdown Looms (NYT)

During seven years of a grinding economic crisis, Dimitri Tsamopoulos has lost at least half the clients from his once bustling tax consultancy. But in the past few months, business has jumped, not because the Greek economy is finally recovering but because it is falling even deeper into the abyss. With the Greek government pushing through more tax increases to comply with austerity requirements, more than 21,000 self-employed workers and small firms have shut down in the past two months, with many seeking help from accountants like Mr. Tsamopoulos to close their books. Yet many are not actually closing their businesses. “Most of these people will keep working,” Mr. Tsamopoulous said, arching an eyebrow from behind his desk as clients waited in a smoky room outside. “But now, they’ll do it on the black market. They’re saying they need a way to survive.”

Greece is the crisis that never quite goes away for the EU, and with another tense negotiation with creditors scheduled for this coming week, the country is struggling to recover from the longest downturn in the eurozone. The budget-slashing policies and reform medicine required by creditors have done little to revive growth, leaving Greece even more dependent on the three international bailouts the country has received since 2010. Few problems are more ingrained, or harder to combat, than the shadow economy, which appears to be growing again as new austerity measures compel once law-abiding Greeks to go off the books. Greece’s black market is estimated at 20 to 25% of the gross domestic product, as more people have stopped reporting their income to avoid paying taxes that, by some estimates, have risen to 70% of an individual’s gross income.

As of last month, unpaid taxes in Greece had soared to €95 billion, up from €76 billion two years ago. Most of that is considered uncollectable. “The heart of the matter for an ever-rising number of citizens and businesses is that they simply do not have the financial resources anymore to meet their rising tax obligations,” said Jens Bastian, an economist and a member of a team of European Union specialists that helped supervise the country’s earlier bailouts. Short on alternatives, he said, “many are falling back into the gray economy.”

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Again: US and EU need to be very careful about this. And act.

Tensions Escalate In Aegean As Turkish Boat Fires Shots in Greek Waters (K.)

Tension between Greece and Turkey escalated further on Friday after a Turkish coastal patrol boat fired live ammunition during a military exercise in Greek territorial waters in the eastern Aegean Sea. [..] a Greek diplomatic source described the incident in the area around the eastern Aegean island of Farmakonisi, as “a grave violation of international law.” “Turkey’s unacceptable act raises serious concerns about the potential consequences of its behavior on the stability of the wider region,” the same source said. Greek defense officials were reportedly preparing to lodge a demarche with Ankara and brief allies and international organizations on the incident.

According to the Defense Ministry, Turkish authorities issued a navigational telex, or Navtex, the day before informing of a military exercise with live ammunition within Greek territorial waters, east of Farmakonisi, on Friday [yesterday] morning between 7 and 9 a.m. The Greek Defense Ministry responded by issuing a Navtex turning down the Turkish notification, saying it covered Greek territorial waters. Turkish authorities have previously issued similar notifications without executing them. The Greek gunboat Nikiforos was sent to the area to monitor the Turkish Kusadasi vessel, which fired a volley of shots from small caliber (up to 40mm) guns between 7.40 and 7.55 a.m., until it left the area just before 8 a.m.

[..] Friday’s incident occurred in the wake of repeated Turkish violations of Greek air space and increased tensions between Athens and Ankara, which were further fueled last month when Greece’s highest court blocked the extradition of eight Turkish officers to Turkey for their alleged involvement in July’s failed coup. Reacting to the development on Friday, Greece’s conservative opposition requested a meeting of the country’s National Council of Foreign Policy. “We are deeply concerned to witness Turkey’s insistence on provoking [Athens] and maintaining a climate of tension in the Aegean,” New Democracy shadow foreign minister Giorgos Koumoutsakos said in a letter to Foreign Minister Nikos Kotzias.

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“How do you capture Spirit?”

Defend The Sacred (Bell)

Defend The Sacred: Documentary from Kyle Bell on Vimeo.

Capturing the heart of a movement that is constantly evolving is difficult. How do you capture Spirit? “Defend The Sacred” is a short documentary that attempts to capture the spirit of Indigenous people at Standing Rock.

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Feb 182017
 
 February 18, 2017  Posted by at 10:40 am Finance Tagged with: , , , , , , , , , ,  


Unknown California State Automobile Association signage 1925

 

“That War You Ordered….” (Jim Kunstler)
US ‘Unwavering’ In NATO Support – Pence (BBC)
European Union President Rejects Trump Call For More NATO Spending (CNBC)
Four NATO Nations Would Pick Russia to Defend Them If Threatened (BBG)
Who Really Rules The United States? (FreeB)
Australia Headed For ‘Economic Armageddon’ (News.com.au)
China Is Going Broke (Jim Rickards)
Brexit Was A Revolt Against Snobs Like Tony Blair (Spec.)
Small Businesses Face Being ‘Driven Out Of London’ (Ind.)
Norway Central Bank Chief Warns Of Sharp Drop In Wealth Fund (BBG)
Only Germans Love the Euro These Days (BBG)
How Do You Say Deja Vu In Greek? (R.)
Can Tax Increases Bring Inflation To Greece? (KTG)
Greek Labor Minister Says Pensioners Can Barely Make Ends Meet (K.)

 

 

Hard to find any news articles these days that are not severely biased. So let’s go with Jim.

“That War You Ordered….” (Jim Kunstler)

The Russia paranoia frenzy is serious business because it indicates that a state-of-war exists between the permanent bureaucracy of government (a.k.a. the Deep State) and the new Trump administration. There are features of the struggle that ought to be much more disturbing than the dubious alleged monkey business about Russia hacking the election and the hoo-hah around a single intercepted phone call between Michael Flynn and the Russian ambassador, made to open a line-of-communication between high-ranking officials, strictly routine business in any other administration. Most disturbing are signs that the so-called intelligence community (IC) has gone rogue in collusion with forces aligned around Democratic Party functionaries up to and including former president Obama and Hillary Clinton, along with CNN, The Times, The Wash-Po, NBC News and a few other mouthpieces of the defeated establishment.

Obama and Hillary remain conspicuously sequestered from this maelstrom, but they must be working their phones like nobody’s business. (Is the IC monitoring them, too, one wonders?) Until his Queeg-on-steroids news conference late yesterday, Trump laid pretty low after General Flynn was thrown under the bus, but he must be plotting counter-moves, with Bannon and Steven Miller straining at their leashes, slavering for blood. Will some employees over at the CIA and the — what? — sixteen other IC outposts that stud the government like shipworms in a rotting hulk — be called on the carpet of the oval office, and possibly handed pink slips? How do you drain that swamp in Langley, VA? Perhaps with subpoenas? Surely Jeff Sessions over at the Department of Justice has got to be weighing action against the IC leakers. That shit is against the law.

The next disturbing element of the situation is all the war-drum beating by the same cast of characters: the IC, the Democratic Party, and major media. Why in hell are we antagonizing Russia? In the last month of Obama’s term — and for the first time in many years — NATO moved a bunch of tanks close to Russia’s border with the Baltic states. Do you really think Russia wants to reoccupy these countries for the pleasure of subsidizing them and draining the Russian treasury? In those twilight days of Obama, government officials made wild and unspecific charges about “Russian aggression,” and vague assertions about Russian plans to dominate the global scene. ajor what-the-fuck there. There’s the ugly situation in Ukraine, of course, but that was engineered by Obama’s state department.

Do you know why Russia annexed Crimea after that? It couldn’t have been for more transparently rational reasons. And what exactly is our beef with Russia in Syria? That they’re trying to prop up the Assad government because the last thing the Middle East needs is another failed state with no government whatsoever? What’s our plan for Syria, anyway? Same as Somalia, Iraq, and Libya? These stories about Russia’s intentions seem insane on their face. It’s amazing that readers of The New York Times swallow them whole. It must say something about the deterioration of the coastal gene pool. The story-mongers have a purpose though: to promote a state of permanent hostility, neo-cold-war style, to justify the grotesquely overgrown operations of the IC.

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Hollow words.

US ‘Unwavering’ In NATO Support – Pence (BBC)

The US will be “unwavering” in its support for Nato, vice-president Mike Pence told European leaders at the Munich Security Conference. In the first major foreign policy address for the Trump administration, Mr Pence said the US would “stand with Europe today and every day”. But he told the gathered leaders that European countries were “failing to pay their fair share” on defence. That failure “erodes the foundation of our alliance”, he said. Apart from the US, only four other nations had met a commitment to spend 2% of GDP on defence, “The time has come to do more,” he said.

President Donald Trump warned before taking office that the US might not uphold its commitment to come to the defence of Nato allies who were not perceived to have contributed enough financially. Mr Pence went on to say that the US would “continue to hold Russia accountable, even as we search for new common ground, which as you know, President Trump believes can be found”. Mr Pence said Russia must honour the Minsk peace accords on Ukraine and de-escalate its military operations in the east of the country.

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Juncker makes sense for a change.

European Union President Rejects Trump Call For More NATO Spending (CNBC)

European Commission President Jean-Claude Juncker has said Europe should resist U.S. pressure to spend more spending on defense. U.S. President Donald Trump has criticized the NATO defense alliance, suggesting he could withdraw support if European countries did not raise defense spending to at least 2% of their economic output.In a speech on the sidelines of the Munich Security Conference Thursday, Juncker, who heads the EU’s executive arm, suggested some resistance to Trump’s threat was in order. “It has been the American message for many, many years. I am very much against letting ourselves be pushed into this,” he said. Juncker also said the EU’s other spending commitments made up for any shortfalls in military funding. “Modern politics cannot just be about raising defense spending,” he said.

“If you look at what Europe is doing in defense, plus development aid, plus humanitarian aid, the comparison with the United States looks rather different,” he said. Juncker added that European nations should bundle their defense spending better and spend the money more efficiently. At a NATO meeting Wednesday, the U.S. Defense Secretary James Mattis reinforced Trump’s message, warning treaty allies they must boost their defense spending or America could “moderate its commitment.” “Americans cannot care more for your children’s future security than you do. I owe it to you to give you clarity on the political reality in the United States and to state the fair demand from my country’s people in concrete terms,” he said in a speech to NATO allies in the Belgian city of Brussels on Wednesday.

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Originally filed by reporter (see URL) as: “Melania Trump’s Slovenia Would Pick Russian Over US Protection”. Say no more.

Four NATO Nations Would Pick Russia to Defend Them If Threatened (BBG)

Who you gonna call? For the citizens of four NATO countries asked which military power they’d want fighting on their side if attacked, the answer was simple – Russia. That was among the findings of a multi-nation Gallup poll published just ahead of Friday’s annual gathering of the transatlantic security community in Germany that appeared to map out shifts in the post-Cold War security alliances which have come under renewed strain and scrutiny since Donald Trump’s election to the U.S. presidency. By far the largest number of countries polled by WIN/Gallup International chose the U.S. for their go-to defense partner, suggesting that it remains the world’s only military power with truly global reach and alliances. At the same time, however, China and Russia picked each other, war-torn Ukraine and Iraq split down the middle, while those four members of the U.S.-led North Atlantic Treaty Organization – Bulgaria, Greece, Slovenia and Turkey – plumped for Russia.

As U.S. Secretary of Defense James Mattis tours Europe delivering a message of tough love to NATO allies – increase spending or see the U.S. “moderate’’ its support – the poll shows the world’s gradual political reorganization around different security poles, according to Kancho Stoychev, vice president of WIN/Gallup International. “It isn’t surprising that Russians and Chinese chose each other, but it is new,’’ said Stoychev. “It shows us something very important – that U.S. policy over the last 20 years has driven Russia into the arms of China, which is quite strange because Russia is fundamentally a part of Europe.’’ At the same time, some of the results in European NATO countries showed how their fundamental security choices were moving beyond the alliance, he said. Bulgaria and Greece, for example, see their biggest security threat coming from Turkey.

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Right wing. As I said, very hard to find anything unbiased. All heels are dug in deeply.

Who Really Rules The United States? (FreeB)

Donald Trump was elected president last November by winning 306 electoral votes. He pledged to “drain the swamp” in Washington, D.C., to overturn the system of politics that had left the nation’s capital and major financial and tech centers flourishing but large swaths of the country mired in stagnation and decay. “What truly matters,” he said in his Inaugural Address, “is not which party controls our government, but whether our government is controlled by the people.” Is it? By any historical and constitutional standard, “the people” elected Donald Trump and endorsed his program of nation-state populist reform. Yet over the last few weeks America has been in the throes of an unprecedented revolt. Not of the people against the government—that happened last year—but of the government against the people. What this says about the state of American democracy, and what it portends for the future, is incredibly disturbing.

There is, of course, the case of Michael Flynn. He made a lot of enemies inside the government during his career, suffice it to say. And when he exposed himself as vulnerable those enemies pounced. But consider the means: anonymous and possibly illegal leaks of private conversations. Yes, the conversation in question was with a foreign national. And no one doubts we spy on ambassadors. But we aren’t supposed to spy on Americans without probable cause. And we most certainly are not supposed to disclose the results of our spying in the pages of the Washington Post because it suits a partisan or personal agenda. Here was a case of current and former national security officials using their position, their sources, and their methods to crush a political enemy. And no one but supporters of the president seems to be disturbed.

Why? Because we are meant to believe that the mysterious, elusive, nefarious, and to date unproven connection between Donald Trump and the Kremlin is more important than the norms of intelligence and the decisions of the voters. But why should we believe that? And who elected these officials to make this judgment for us? Nor is Flynn the only example of nameless bureaucrats working to undermine and ultimately overturn the results of last year’s election. According to the New York Times, civil servants at the EPA are lobbying Congress to reject Donald Trump’s nominee to run the agency. Is it because Scott Pruitt lacks qualifications? No. Is it because he is ethically compromised? Sorry. The reason for the opposition is that Pruitt is a critic of the way the EPA was run during the presidency of Barack Obama. He has a policy difference with the men and women who are soon to be his employees. Up until, oh, this month, the normal course of action was for civil servants to follow the direction of the political appointees who serve as proxies for the elected president.

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Personal debt.

Australia Headed For ‘Economic Armageddon’ (News.com.au)

Australia is headed for an “economic Armageddon”, with record household debt, record foreign debt and a massive housing bubble creating a perfect storm that could “wipe out” millions of families if there is a global shock. That is the apocalyptic warning of a former government economic advisor, who says the government needs to cut tax incentives such as negative gearing and welfare handouts and the RBA needs to increase interest rates in order to avoid a “devastating depression”. Corporate governance specialist John Adams, who was an economics and policy advisor to Senator Arthur Sinodinos and management consultant to a big four accounting firm, believes he has found seven disturbing signs that the global economy is primed for a major fall. Worse still, Australia is particularly vulnerable because of significant structural imbalances, including record levels of household debt not seen since the lead up to the last great depression in the 1920s.

“Australians should be concerned over the state of both the Australian and global economy,” Mr Adams told news.com.au. “The data clearly demonstrates that there are significant structural economic imbalances in the Australian economy. Significant expansion of the broad money supply and record low interest rates by the Reserve Bank of Australia as well as generous tax incentives and welfare provisions by the Federal Government have led Australians to amass record levels of personal debt which have fuelled the creation of asset bubbles, particularly in housing. “Millions of Australians are not only doing it tough through significant cost of living and debt serving pressures, but are at significant risk of being financially wiped out if an unanticipated adverse international economic shock were to hit Australia such as a new global financial crisis.”

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End of the year?

China Is Going Broke (Jim Rickards)

[..] of the 2.9 trillion, about one trillion of that is not liquid, meaning it’s wealth of some kind, it represents investment, but China wanted to improve their returns actually on their investments, so they invested in hedge funds, they invested in private equity funds, they made direct investments in gold mines in Zambia and so forth, so about a trillion of that is, it’s wealth, but it’s not liquid. It’s not money that you can use to pay your bills. So now, we’re down to 1.9 trillion liquid. Well, about another trillion is going to have to be held in what’s called a “precautionary reserve” to bail out the Chinese banking system.

When you look at the Chinese banking system, private estimates are that the bad debts are 25% of total assets. Banks usually run with 5, maybe 7-8% capital. Even if you said 10% capital, well, if 25% of your assets are bad, that completely wipes out your capital, so the Chinese banking system is technically insolvent, even though they don’t admit that. I mean, they cook the books, they take these bad loans. Let’s say I’m a bank and I have a loan to a state owned enterprise, a steel mill or something and the guy can’t pay me, can’t even come close to paying me and the loan’s due, I say, “Well, look, you owe me 300 million dollars. I’ll tell you what. I’ll give you a new loan for 400 million dollars, but I’ll take the money and pay myself back the old loan plus the interest, and then I’ll give the new loan to your maturity and I’ll see you in two years.”

So, if you did that in the U.S. banking system you’d go to jail. You’re not allowed to do that. You’re throwing good money after bad and you’re supposed to right off a loan that is clearly not performing or where the borrower is unable to pay. But in this case, it’s just extend to pretend, and so it’s still on the books, in my example, 400 million dollar good loan with a two year maturity, but in fact it’s a rotten loan that the guy couldn’t pay in the first place, and now he just can’t pay a bigger amount. He’s probably going to go bankrupt and I’ll have to write it off at the end of the day. So, with that as background for the Chinese banking system, people kind of shrug and say, “Well, can’t China just bail it out? They’ve got all this money.”

Well, the answer is they could, and they’ve done so before, and they can bail it out, but it’s going to trust a trillion dollars, so you’ve got to put a trillion dollars to one side, for when the time comes, to bail out the banking system. Well, now you’re down to 900 billion, right? Remember, we started with four trillion, 1.1 trillion’s out door, 1 trillion’s illiquid, 1 trillion you’ve got to hold to one side to bail out the banking system, well now you only have 900 billion of liquid assets to defend your currency, to prop up the Chinese yuan. But the problem is the reserves are going out the door at a rate of, it varies month to month, 30, 40, 50 billion dollars a month. Some months more, some months over 100 billion dollars.

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Blair getting involved will be a huge boon for Brexit.

Brexit Was A Revolt Against Snobs Like Tony Blair (Spec.)

The brass neck of Tony Blair. The Brexit vote was ‘based on imperfect knowledge’, says the man who unleashed barbarism across the Middle East on the basis of a student dissertation he printed off the internet. Who marched thousands into unimaginable horror on the basis of myth and spin. That NHS claim on the side of the Leave bus is small fry, infinitesimally small fry, in comparison with the guff this bloke came out with. It didn’t cause anyone to die, for one. For Blair to lecture the British people about truth is an affront to memory and decency and reason. No self-respecting citizen should put up with it. Blair made his comments about our ‘imperfect knowledge’ – dimwits that we are – in a speech for Open Britain, a cross-party pro-EU group, in London this morning.

The speech sums up the elitism and arrogance and contempt for democracy of those Remainers who just cannot accept that they lost. ‘The people voted without knowledge of the true terms of Brexit’, Blair haughtily declared. Rubbish. We all knew what it meant to tick the box saying ‘Leave the European Union’ — it meant leaving the European Union. It meant what it said — and we meant what we said. Blair and the connected, moneyed weepers for the EU who make up Open Britain can’t get their heads around this. They think we didn’t know what we were doing. And so they’ve come to enlighten us and make us think again. Remainers must ‘rise up’, says Blair, and turn the throng’s ‘imperfect knowledge’ into ‘informed knowledge’ by giving us ‘easy to understand’ information about how Brexit will ‘cause real damage to the country’.

Risen, brave, ‘informed’ Remainers must hold back the ‘rush over the cliff’s edge’, he said. The whole thing stinks to the heavens of paternalism. Blair is positioning himself and his switched-on mates as the possessors of information that we the imperfect plebs lack. Like lemmings we’re leaping off the cliff, and this good man must save us. He must impart to us his wisdom — in ‘easy to understand’ ways, of course, because we can’t handle anything too complex — and in the process fulfil the duty of the political leader to ‘give answers’ rather than ‘ride the anger’ of the public. He depicts Open Britain as cool and knowledgable, and Leavers as uninformed and angry. It’s positively aristocratic, with Open Britain fancying itself as the small but beautiful font of wisdom in a land of madness.

[..] Blair spoke in the language of revolution. Remainers must ‘rise up’. He talked about the need for a ‘revolt’, by ‘force of argument’, against the Leave vote. Excitable media outlets have gone even further, describing his speech as a call ‘for people to “rise up” against Brexit’, a plea that ‘Britain must rise up against Brexit’.

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How to kill a city, part 826.

Small Businesses Face Being ‘Driven Out Of London’ (Ind.)

An increase in business rates is one of biggest issues concerning small businesses in London, easily trumping fears around economic uncertainty and worries relating to recruiting the right talent. According to a survey by the Federation of Small Businesses (FSB) and trade body Camden Town Unlimited, the average micro business in the city, defined as a company with fewer than 10 employees, will be paying business rates of £17,000 as of April this year under a Government hike. “London is in serious danger of losing its vital support system of micro and small businesses,” the FSB’s chair for London, Sue Terpilowski, said in a statement. “We need to realise that the hard costs of operating a business in the capital are starting to outweigh the benefits which simply does not make economic sense – and so tacking these burdens at the spring Budget is critical,” Ms Terpilowski added.

Business rates – which are sometimes referred to as non-domestic rates – are levies that companies occupying commercial properties pay. That tax goes towards covering the cost of services provided by local authorities and the emergency services. The survey found that close to three quarters – 74% – of businesses consider rates to be one of the biggest issues affecting them, while 36% cited economic uncertainty, and, one third said that the difficulty around recruiting the right staff was their biggest concern. “The new business rates will drive firms out of London, force some businesses to cut staff or close down altogether,” said Simon Pitkeathley, the chief executive of Camden Town Unlimited.

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Fast and furious. Caught in the oil wars.

Norway Central Bank Chief Warns Of Sharp Drop In Wealth Fund (BBG)

Norway’s central bank governor sharpened his warning on rising spending of oil revenue as he drew up scenarios for a 50% loss of capital over the next 10 years for the world’s biggest sovereign wealth fund. Governor Oystein Olsen said that the continued rise in oil cash spending, which now accounts for about 20% of the budget and 8% of GDP, must now be halted to protect the $900 billion fund, the world’s largest sovereign pool of cash. “With a high level of oil revenue spending, there’s a risk of a sharp reduction in the fund’s capital,” Olsen said in the traditional Annual Address in Oslo Thursday. “This could, for example, happen if a global recession triggers both a decline in oil revenue and low or negative returns on the fund’s capital.” Government withdrawals from the fund are estimated to jump about 25% this year after an historic first outflow last year. The Conservative-led government was last year forced to dip into the oil fund for the first time to cover budget needs and protect the economy amid a plunge in oil prices.

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Why the euro is doomed.

Only Germans Love the Euro These Days (BBG)

French presidential candidate Marine Le Pen unsettled investors with her pledge to pull France out of the euro and re-denominate all French debt in newly minted francs. Polls suggest Le Pen won’t get the chance; she is expected to lose a second-round runoff. Even if polls are correct this time, that doesn’t mean the euro is safe. In fact, political support for the single currency has been waning – especially in Germany’s two largest euro-zone trading partners. In both France and Italy, there is now a plurality of support for candidates who advocate a withdrawal from the euro, with pro-euro candidates gathering less than 30% in polls. In France, anti-euro candidates – Le Pen and Socialist Jean-Luc Melanchon – together have nearly 40% support.

Of course, that doesn’t mean that all of Le Pen’s supporters, or Melanchon’s, oppose the euro. Most French voters still tell pollsters they favor the euro; but clearly that support waning, as the latest Eurobarometer poll showed. Anti-euro sentiment, once a blip on the fringes of public opinion, is now credible and has found its way onto political platforms. Respondents are asked whether they think the euro is a good or bad thing for their country. In Italy, the euro gets even less love than in France, with 47% saying the euro is a “bad” thing for their country. That is in stark contrast to Germany, where there is now a clear majority in favor of the euro. This chart shows how opinion has changed over time:

This is a dramatic reversal in opinion: A German population that was initially reluctant to give up the Deutsche mark is now firmly wedded to the euro, while support in France and Italy has declined (particularly sharply in Italy’s case). But this shift is the logical result of the euro’s structural deficiencies. German industry, whose productivity has been increasing more than its European counterparts, now dominates the continental economy. While German unemployment was decreasing and its economy recovering from the financial crisis, Italy was stagnant with rising unemployment. Already saddled with a very large public debt (now over 130% of gross domestic product), Italy could neither reflate its economy, nor bail out its banks, while whole segments of its industry, particularly in lower and medium-cost goods, have disappeared.

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Damning: 56% of Greeks make less than €8,600 a year. And the Troika wants to tax them more. “..the tax- free income threshold, now at about €8,600 per person per year, a number the IMF maintains lets some 56% of wage-earning Greeks escape paying income tax.”

How Do You Say Deja Vu In Greek? (R.)

[..] it would not be trite to say that another festering row with Greece is the last thing the euro zone needs when faced with a protectionist U.S. president, Britain leaving the European Union, and anti-euro politicians vying for power or presence in French, Dutch and German elections. So EU officials have been urging speed in finding agreement and calmly warning of instability ahead if none is found. “There is a common understanding that time lost in reaching an agreement will have a cost for everyone,” the European commissioner responsible for the euro, Valdis Dombrovskis, told Greek news portal Euro2day. The issue, however, is multi-layered and thus particularly complex. Part of it is about what kind of primary surplus – what is left in a surplus budget before debt obligations – Greece must reach and run for some time.

The bailout, signed by Greece and euro zone lenders, says 3.5% of GDP(which would be by far the highest in the euro zone). The IMF, the other major lender, says that is undoable without further Greek belt-tightening. It says 1.5% of GDP and some form of debt relaxation – for example, over what is paid when – would be more realistic and sustainable. The IMF, furthermore, says it won’t participate in any bailout that it does not believe to be viable. Germany and others say that the IMF must be a part of the bailout or there is no deal. Both lenders have told Greece they want about €3.6 billion in additional savings, including a reduction in the tax- free income threshold, now at about €8,600 per person per year, a number the IMF maintains lets some 56% of wage-earning Greeks escape paying income tax.

Greece says no. Its economy contracted again in the fourth quarter of 2016, nearly one in four Greeks is unemployed and its pensioners have already seen 11 cuts to income. So plenty of scope for crisis – if not quite yet.

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Good example of why rising prices do not equal inflation. Greece is deflating like mad. Money velocity has plummeted, making recovery impossible.

Can Tax Increases Bring Inflation To Greece? (KTG)

Special consumption fees imposed on fuel, coffee, tobacco products and telecommunications beginning of the year skyrocketed consumer prices and led to the inevitable: inflation. According to Greek Statistics Authority ELSTAT inflation reached 1.5% in January from 0.3% in December. ‘This is almost a five-year high and above market expectations that were forecasting a 0.4% for January,’ Reuters notes. I do not know how ‘markets’ make their forecasts, but real Greek life shows a different picture. The supermarkets had massive discount offers in a plethora of goods in December. The special fees imposed as of 1.1.2017 were not immediately seen in supermarket prices but in fuel and tobaccoo products and telecommunications. Super markets kept offering discounts until around January 20th. Then the “households party” was over.

On February 1st, the price for half a kilo filter coffee went up to €7.68 from €5.46. Apparently sales stagnated, the import company lowered the price by 1 euro. A week later, the discount offer was just 50 cents. Officially, the special fee was supposed to be €2-3 per kilo of roasted coffee. In real life, the increase is higher €2.12 for just half a kilo. Similarly, the price for 400-gr package for a cocoa drink of a well known international brand went up to €3.40 from €2.60. At the same time, the cheaper soft package disappeared from the supermarket shelves. Here to note that for year the hard package used to contain 500gr. Sometime in 2010, I was badly surprised to see the package was down to 400gr, while the price remained the same.

In real life, I have to spend a total of €9 to €10 more per supermarket visit once a week. This makes a nice sum of €40 more per month. And that’s alone for the supermarket. Add the increases in other sectors and start the calculation.

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As the EU keeps stressing the importance of unity, the Troika inches ever closer to causing a civil war in Greece. Unity is not just a word.

Greek Labor Minister Says Pensioners Can Barely Make Ends Meet (K.)

Greece’s Minister of Labor, Social Security and Social Solidarity Effie Achtsioglou insisted in a letter published Friday in the Financial Times that Greek pensioners have barely enough to live on and urged IMF chief Christine Lagarde to listen. “We cannot accept IMF insistence on further cuts in pensions. As minister for pensions I must answer, hoping that IMF managing director Christine Lagarde will listen,” she said, ahead of Monday’s Eurogroup, in a bid to explain why Greece cannot make any more pension cuts. “The narrative about Greek pensions is driven by demands of its creditors. They argue that the pension system is overgenerous and a drain on the economy,” she said, adding that it is based on the crude statistic that pensions require annual transfers from the state budget of around 11% of GDP in Greece compared with the eurozone average of 2.25%.

This comparison, she said, is misleading. “Following the implementation of the new pension law last year, total state financing of pensions is projected at less than 9% of GDP,” she explained. “The bottom line is that Greece’s old people are much worse off than elsewhere in Europe because they do not have access to other benefits. Per capita income for individuals aged over 65 is about €9,000, compared with €20,000 in the eurozone.” she added, asking “how could the major problem confronting Greece be overgenerous pensions, when 43% of pensioners receive less than €660 a month?.”

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PRESS CONFERENCE

searching
inside his cranium

trying to find
a brain to rack,

he found the word
”uranium”

and launched
an unclear attack

Brian Bilston

Jan 182017
 
 January 18, 2017  Posted by at 3:31 pm Finance Tagged with: , , , , , , , , ,  


René Magritte The Art of Conversation 1963

Sometimes you best fight fire with fire. This knowledge goes back to the advent of agriculture. Australian aboriginees have used it since as long as their stories of dream time can remember. For Native Americans it was an essential part of their lives. These days, we need Trump to fight the fire of an elite class world power that is a threat to all of us.

Be stirring as the time; be fire with fire;
Threaten the threatener and outface the brow
Of bragging horror

Shapespeare: King John, 1595

Been greatly enjoying Donald Trump’s pair of interviews with the European press this weekend, in the shape of German scandal paper Bild’s chief, very-right Kai Diekmann, and disgraced Brexiteer Michael Gove for the Sunday Times. What a pair of choices, by the way, what’s next, a Russian interview conducted by Zhirinovsky?. Who picked those clowns? Let’s just hope it was the Trump campaign.

Enjoying it not in the least because Trump is right in just about everything he says. At least, as per what we at the Automatic Earth have been saying about some of the topics involved all along. And we’re not Trump fans, we just think the others are more wrong than he is, and that it’s high time to abolish the EU, and NATO, and sure, the CIA too.

Speaking of which: Chuck Shumer has made it all the way to Senate leader for the Democrats, right? And then he says about Trump’s criticism of US intel and the Steele ‘report’:

“Let me tell you: You take on the intelligence community, they have six ways from Sunday at getting back at you. For a practical, supposedly hard-nosed businessman, he’s being really dumb to do this.”

Want to take any of that back, Chuck? While you still can? Because, you know, threatening the president-elect with the might of the CIA, what does that say about your view of who actually rules the country, Charlie? That’s not a gaffe, that’s what would in America’s better days have been a career buster, buster. But your own rudderless party won’t call you on it, and Trump would love for you to keep your seat; one less worry. Still, c’mon, you just can’t say sh*t like that. It’s beyond any pale. Or, you know, it once was.

What did Trump get right? Here’s what. First, NATO should not exist anymore, since as we’ve said 1000 times, and Ron Paul said 10 times more, it’s merely a hammer looking for a nail, having turned for the purpose, since the dissolution of the Soviet Union, from a defensive collaboration into the planet’s worst aggressor. The 1000s of additional US troops gathered at or close to the Russian border recently are more than plenty evidence of that.

Trump wants far fewer nukes on the planet, and proposes to negotiate a deal with Russia to achieve that goal. Ergo, 30 years after Reagan met Gorbachev in Reykjavik to accomplish just that, Trump must meet Putin in that same spot to do it all over again?! That’s the legacy of NATO. It would be mighty symbolic, though we might want to remember the 1972 Spasski-Bobby Fisher chess ‘world cup’ there, and the American’s paranoia at the time. Not a good example. But they’ll meet someplace, for sure.

Second, Trump likes Brexit. So do we. Beautiful Brexit. Because it is a preliminary step towards the dissolution of the EU, which, as Trump very correctly remarks, has degenerated into a “vehicle for Germany” to compete with the US as a global trading force.

And of course Germany would deny this. After all, didn’t the notorious FinMin Schäuble say -again- just a few days ago that Europe’s problem is not Germany’s surplus, but the weakness of other nations? This week, German foreign ministry spokesman Martin Schäfer added:“For the German government, Europe has never been a means to an end, but a community of fate which, in times of collapsing old orders, is more important than ever.” A community of ‘fate’? An ‘old order’ vs a ‘new order’? Are we taking notes?

Anyway, this is cheap quatsch as long as a huge part of Germany’s surplus comes from its trade with co-EU nations. Because in that scenario, there’s only so much surplus to go around, and the rest will all of necessity run deficits. If that is hard to understand, let’s dive up these stats again, and close that discussion once and for all:

 

 

The EU very much IS a vehicle for Germany, and it eats people alive. That has nothing to do with Germany taking in immigrants, it has to do with economic and power policies, with the destruction of Greece and Italy. The structure of the EU makes it possible, inevitable even, that the strongest partner forces all the others to do its will. That really is all you need to know about why the EU is doomed to failure. All the rest is just about describing the process of how that failure unfolds.

Setting and keeping the euro at a rate that is beneficial to Germany condemns poorer EU nations to ever deeper poverty. That’s what those numbers say. And if anyone thinks Schäuble is not aware of either the numbers or the principle itself, get help. Merkel and Schäuble have been elected to represent Germans, but then they wind up making decisions for 400 million other people, who are the victims of the very policies that benefit Germany. There’s nothing difficult about it.

‘Community of Fate’.. Let’s just hope something was lost in translation there. Point is, Trump is right on the money, and he’s about the first person to put it as simply and poignantly as that. The EU is a vehicle for trade domination. It’s a means for Germany and Holland to acquire access to a huge market for their products, free of just about any trade restrictions. Promoted with the flogged dead horse of the ‘tide that lifts all boats’. It does no such thing.

Other than times of open warfare, for countries like Greece and Italy the EU is the worst thing that ever happened to them in a long time. Brussels stands for economic warfare labeled as a unifying force for peace. It’s a blatant lie wrapped in sheep’s clothing. And of course more nations will want to get out, they’d be crazy not to.

Which is what’s so painfully missing from all the Brexit talk in the UK: everyone goes with the idea that the EU will continue to exist as is, just without Britain. The chance of others leaving, and the effect that will have on the ‘Union’, is never discussed. Though it might put the exit from it in a whole different light, politically and especially economically.

German Vice-Chancellor en Economy Minister Sigmar Gabriel puts his foot in his mouth in much the same way Schumer does, in a reaction to Trump’s interviews. As Tyler Durden describes Gabriel’s ‘Trump shock’:

Responding to Trump’s comments that Merkel had made an “utterly catastrophic mistake by letting all these illegals into the country”, Gabriel said the increase in the number of people fleeing the Middle East to seek asylum in Europe had partially been a result of US-led wars destabilising the region.

Slamming US foreign policy – and thus the Obama regime, not to mention Angela Merkel’s close friend Hillary Clinton – as a culprit for the European refugee crisis, Gabriel said that “there is a link between America’s flawed interventionist policy, especially the Iraq war, and the refugee crisis, that’s why my advice would be that we shouldn’t tell each other what we have done right or wrong, but that we look into establishing peace in that region and do everything to make sure people can find a home there again,” Gabriel said.

First, if you are against America’s deeply flawed and ‘deeply deadly’ regime change policies of the last few decades, as Gabriel pretends to be, you should be pro-Trump, because the man who will be the next US president a little over 50 hours from now is not only of the same opinion, he will be in a position to do something about it. And while you’re at it, why not tell us of all the heroics Merkel has performed over the past decade of her reign, to make it stop?

And do yourself one better: describe in detail the role your EU partners France and Britain have played in these failures. In which untold trillions were spent and untold millions of lives lost, but in which the arms industries of these nations, and certainly Germany’s too, have made mind-boggling profits. Once you’ve done all that, Mr. Gabriel, feel free to criticize the 45th president of the United States.

“In that area Germany and Europe are already making enormous achievements – and that’s why I also thought it wasn’t right to talk about defence spending, where Mr Trump says we are spending too little to finance Nato. We are making gigantic financial contributions to refugee shelters in the region, and these are also the results of US interventionist policy.” Gabriel, who will likely run as the centre-left candidate against Merkel in Germany’s federal elections in September, said Trump’s election should encourage Europeans to stand up for themselves.

Here is where Gabriel’s foot enters his mouth:

“On the one hand, Trump is an elected president. When he is in office, we will have to work with him and his government – respect for a democratic election alone demands that,” Gabriel said. “On the other hand, you need to have enough self-confidence. This isn’t about making ourselves submissive.

What he says about trade issues, how he might treat German carmakers, the question about Nato, his view on the European Union – all these require a self-confident position, not just on behalf of us Germans but all Europeans. We are not inferior to him, we have something to bring to the table too. “Especially in this phase in which Europe is rather weak, we will have to pull ourselves together and act with self-confidence and stand up for our own interests.”

If that is your idea of exuding confidence, of being and/or appearing strong, Trump will have you for breakfast. “in this phase in which Europe is rather weak, we will have to pull ourselves together” , “you need to have enough self-confidence. This isn’t about making ourselves submissive.” Or how about some genuine pouting: “We are not inferior to him, we have something to bring to the table too.”

No, Mr. Gabriel is not the horse you want to place your bets on. He’s a left wing leader sitting in a government with right wing Merkel, in the kind of flawed consensus model that haunts both the EU and its member states, leaving large groups of people without anyone addressing their issues. This is where ‘populists’ are born. In the US, it gave us Trump.

Gabriel is just one of many who are all wedded to the broken Obama/Merkel/Hillary ideal, financed by a deep state class that profits greatly from the fake notion that what is good for the rich is also good for the poor. Should have given them bread and circuses, guys.