Jun 272022
 
 June 27, 2022  Posted by at 9:11 am Finance Tagged with: , , , , , , ,  41 Responses »


Henri Matisse Woman with a hat 1905

 

G-7 Unveils $600 Billion Plan to Counter China’s Belt and Road (R.)
Russia Defaults On Foreign Debt For First Time Since 1917 Revolution
Chomsky on the Root Causes of the Russia-Ukraine War (CD)
John Mearsheimer’s Ukraine Crystal Ball (ZH)
Herr Habeck Firehoses Oil & Gas (Vilches)
Pelosi Leads Democrats In Effort To Codify Roe v. Wade Into Law (JTN)
White House: Biden ‘Does Not Agree With’ Expanding The Supreme Court (JTN)
Top Republican Signals 2023 Investigation: Biden ‘Compromised’ By Son (JTN)
NYT Reports On Large CIA ‘Stealth Network’ Of Spies & Commandos In Ukraine (ZH)
Covid’s Infection Fatality Rate Now Same as Seasonal Flu (DS)
Taibbi Talks Reaction To Him Reviewing ‘What Is A Woman’ (DW)

 

 


“Pfizer regional sales leaders”

 

 

 

 

 

 

 

 

Too late.

G-7 Unveils $600 Billion Plan to Counter China’s Belt and Road (R.)

Group of Seven leaders (G-7) on Sunday pledged to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries and counter the Chinese regime’s Belt and Road project. U.S. President Joe Biden and other G-7 leaders relaunched the newly renamed “Partnership for Global Infrastructure and Investment,” at their annual gathering being held this year at Schloss Elmau in southern Germany. Biden said the United States would mobilize $200 billion in grants, federal funds, and private investment over five years to boost infrastructure development in lower- and middle-income nations. The United States says the G-7 backed effort promotes responsible investments that aim to benefit the communities they are made in.

“I want to be clear. This isn’t aid or charity. It’s an investment that will deliver returns for everyone,” Biden said, adding that it would allow countries to “see the concrete benefits of partnering with democracies.” Biden said hundreds of billions of additional dollars could come from multilateral development banks, development finance institutions, sovereign wealth funds, and others. Europe will mobilize 300 billion euros for the initiative over the same period to build up a sustainable alternative to the Chinese regime’s Belt and Road Initiative scheme, which Chinese leader Xi Jinping launched in 2013, European Commission President Ursula von der Leyen told the gathering.

The leaders of Italy, Canada and Japan also spoke about their plans, some of which have already been announced separately. French President Emmanuel Macron and British Prime Minister Boris Johnson were not present, but their countries are also participating. The Chinese communist regime’s Belt and Road scheme involves development and programs in over 100 countries.

Read more …

This is just too stupid. Richard Werner says it best:

“The US adopts yet another pro-Russia policy that strengthens Russia at the expense of the West: Russia is told it doesn’t have to service its debt. Normally the IMF enforces foreign debt to protect US investors, pushing foreign countries hard to pay up.”

Russia Defaults On Foreign Debt For First Time Since 1917 Revolution

Russia has defaulted on its foreign debt for the first time since the 1917 revolution, according to reports, further alienating the country from the global financial system after sanctions imposed over its war in Ukraine. The country missed a deadline of Sunday night to meet a 30-day grace period on interest payments of $100m on two Eurobonds originally due on 27 May, Bloomberg reported on Monday morning. Some Taiwanese holders of Russian Eurobonds said on Monday that they had not received interest payments due, two sources told Reuters. Official confirmation of the default was expected to come from international ratings agencies.


Russia’s efforts to avoid what would be its first major default on international bonds since the Bolshevik revolution more than a century ago hit a insurmountable roadblock in late May when the US treasury department’s office of foreign assets c (OFAC) effectively blocked Moscow from making payments. “Since March we thought that a Russian default is probably inevitable, and the question was just when,” Dennis Hranitzky, head of sovereign litigation at law firm Quinn Emanuel, told Reuters. “OFAC has intervened to answer that question for us, and the default is now upon us.” While a formal default would be largely symbolic given Russia cannot borrow internationally at the moment and doesn’t need to thanks to plentiful oil and gas export revenues, the stigma would probably raise its borrowing costs in future.

Read more …

“This is a level of hysteria that I have never seen, even during the Second World War, which I am old enough to remember very well.”

Chomsky on the Root Causes of the Russia-Ukraine War (CD)

Soon after the war, “the United States Department acknowledged that they had not taken Russian security concerns into consideration in any discussions with Russia. The question of NATO, they would not discuss. Well, all of that is provocation. Not a justification but a provocation and it’s quite interesting that in American discourse, it is almost obligatory to refer to the invasion as the ‘unprovoked invasion of Ukraine’. Look it up on Google, you will find hundreds of thousands of hits.” Chomsky continued, “Of course, it was provoked. Otherwise, they wouldn’t refer to it all the time as an unprovoked invasion. By now, censorship in the United States has reached such a level beyond anything in my lifetime. Such a level that you are not permitted to read the Russian position.

Literally. Americans are not allowed to know what the Russians are saying. Except, selected things. So, if Putin makes a speech to Russians with all kinds of outlandish claims about Peter the Great and so on, then, you see it on the front pages. If the Russians make an offer for a negotiation, you can’t find it. That’s suppressed. You’re not allowed to know what they are saying. I have never seen a level of censorship like this.” Regarding his views of the possible future scenarios, Chomsky said that “the war will end, either through diplomacy or not. That’s just logic. Well, if diplomacy has a meaning, it means both sides can tolerate it. They don’t like it, but they can tolerate it. They don’t get anything they want, they get something. That’s diplomacy.

If you reject diplomacy, you are saying: ‘Let the war go on with all of its horrors, with all the destruction of Ukraine, and let’s let it go on until we get what we want.'” By ‘we,’ Chomsky was referring to Washington, which simply wants to “harm Russia so severely that it will never be able to undertake actions like this again. Well, what does that mean? It’s impossible to achieve. So, it means, let’s continue the war until Ukraine is devastated. That’s US policy.” Most of this is not obvious to western audiences simply because rational voices are “not allowed to talk” and because “rationality is not permitted. This is a level of hysteria that I have never seen, even during the Second World War, which I am old enough to remember very well.”

Read more …

Consistent.

John Mearsheimer’s Ukraine Crystal Ball (ZH)

A new talk by Professor John J. Mearsheimer has recently been made public, wherein the famous author and political science theorist details the causes and consequences of the Ukraine war. Mearsheimer became more well-known, and “controversial” in establishment circles, after it emerged that he clearly predicted going back to 2014 the war which kicked off in Feb. 2022. He had said in a 2014 University of Chicago lecture, “The West is leading Ukraine down the primrose path and the end result is Ukraine is going to get wrecked.” This tragedy for the Ukrainian people is playing out now, with little hope that now totally defunct Russia-Ukraine ceasefire talks will halt the fighting. Other than efforts of France’s Macron, attempts at basic diplomacy and direct communications are all but dead.

As the lecture intro describes: Prof. Mearsheimer focused on both the origins of the war in Ukraine and some of its most important consequences. He argues that the crisis is largely the result of the West’s efforts to turn Ukraine into a Western bulwark on Russia’s border. Russian leaders viewed that outcome as an existential threat that had to be thwarted. While Vladimir Putin is certainly responsible for invading Ukraine and for Russia’s conduct in the war, Prof. Mearsheimer states that he does not believe he is an expansionist bent on creating a greater Russia.

Regarding the war’s consequences, the greatest danger is that the war will go on for months if not years, and that either NATO will get directly involved in the fighting or nuclear weapons will be used — or both. Furthermore, enormous damage has already been inflicted on Ukraine. A prolonged war is likely to wreak even more devastation on Ukraine. Mearsheimer calls the war an “unmitigated disaster” and with “no end in sight” – for which he lays chief blame on the West. Lately student groups at the University of Chicago, as well as some pundits within the mainstream media, have sought to censor his views and “cancel” him – despite that he’s been on record and consistent in his predictions and views for years.

Read more …

Oil refinery is a tricky business. Changes take time. Europe does not have time.

Herr Habeck Firehoses Oil & Gas (Vilches)

One way to begin to understand the problem is agreeing and accepting that European Commission President Ursula von der Leyden made a historical bad joke, by saying “ The EU will make sure to phase out Russian oil in an orderly fashion to allow us and our partners to secure alternative supply routes minimizing the impact on global markets”. Nope, you can´t do that in 6 months Ursula, if ever. So if you accept that´d be absolutely impossible then you are on the right track to understand the rest. Otherwise you´d be just playing games running around in circles. Hint: it´d be like trying to change the engine oil while cruising at 150 km/hr on a German autobahn. Of course, you can stop the car and change the oil, but in this case it would mean shutting down Europe for months. You cannot do that, can you ?


By any standards, there are definitely not enough adequate oil blends around to come close to satisfying European refinery requirements comparable to homogenous continuous over-abundant constant Russian high-quality Urals which the EU now has decided to ban. And also please accept once and for all that a specific oil blend is not just “any oil blend” to be plugged & played anywhere anytime. Oil blends are not fungible. A very specific refinery or processing plant tune-up needs to be specifically matched with an always constant high-quality homogenous oil blend in large enough quantities and for a given desired output such as diesel fuel, or whatever. No “open architecture” is possible here, that´s just for IT nerds, not for refineries. And definetly there are no vendors all lined up happily willing and able to sell you their oil blend in unlimited quantities already fully adapted to whatever plant you may have ´as-is´ for whichever desired production output you may need delivered just-in-time on-demand and only when you need it.

Read more …

How long has she been in DC? Last chance to use abortion to get votes, Nancy

Pelosi Leads Democrats In Effort To Codify Roe v. Wade Into Law (JTN)

House Speaker Nancy Pelosi is vowing to fight in Congress to codify Roe v. Wade after the Supreme Court overturned the landmark decision. “Democrats will keep fighting ferociously to enshrine Roe v. Wade into law of the land,” Pelosi said. “This cruel ruling is outrageous and heart wrenching.” The California Democrat called the decision a “slap in the face to women about using their own judgment to make their own decisions about their reproductive freedom.” Democrats have tried to codify Roe v. Wade into law in the past, but it has never passed Congress. In September, the Democrat-led House passed the Women’s Health Protection Act, but the bill didn’t move forward in the Senate.

After the draft opinion of the Supreme Court’s decision overturning Roe v. Wade leaked in May, Democrats in the Senate tried to pass legislation to codify Roe, but Republicans were able to block the measure. Realizing they lack the votes to codify a right to abortion into law in the 50-50 Senate, Democrats are calling on their base to mobilize and vote in November. “This fall, Roe is on the ballot,” President Biden said at the White House on Friday. “Personal freedoms are on the ballot. The right to privacy, liberty, equality they’re all on the ballot. Until then, I will do all in my power to protect a woman’s right in states where they will face the consequences of today’s decision.”

Pelosi also said Roe v. Wade is “on the ballot in November.” Senate Majority Leader Chuck Schumer said the decision to overturn Roe “makes crystal clear the contrast” between both parties as the November elections approach. “Elect more MAGA Republicans if you want nationwide abortion bans, the jailing of women and doctors and no exemptions for rape or incest,” Schumer said. “Or elect more pro-choice Democrats to save Roe and protect a woman’s right to make their own decisions about their body, not politicians.”

Read more …

Done.

White House: Biden ‘Does Not Agree With’ Expanding The Supreme Court (JTN)

The White House on Saturday confirmed that President Joe Biden has no desire to expand or pack the Supreme Court in the wake of the Court’s unprecedented repeal of Roe v. Wade earlier this week. Asked by reporters on Air Force One while en route to Munich about the possibility that Biden might move to add more justices to the Court amid the fallout from the ruling, White House Press Secretary Karine Jean-Pierre said on Saturday: “I was asked this question yesterday, and I’ve been asked it before…about expanding the Court. That is something that the President does not agree with.” “That is not something that he wants to do,” she added.


Progressives have argued that packing the Court with more justices could offer Democrats a remedy to the strong conservative majority the institution currently enjoys. President Donald Trump appointed three justices during his administration, all of whom are seen as reliably conservative votes on the bench. Though she said Biden has no plans to pursue such an agenda, Jean-Pierre on Saturday did take time to slam the court’s overturning of Roe v. Wade, which eliminated the half-century-old federalization of abortion rights first implemented in 1973. “It’s so out of step not only with this decision, but it’s also so out of step with the Constitution,” she argued.

Read more …

They’ll hit the ground running.

Top Republican Signals 2023 Investigation: Biden ‘Compromised’ By Son (JTN)

Some conservatives have fretted the four years it has taken federal prosecutors to investigate Hunter Biden’s business dealings. But make no mistake, the man most likely to run the main House investigative committee if Republicans win control of Congress next year is determined to document how President Joe Biden’s foreign policy has been compromised by his son’s infamous wheeling and dealing. “We feel that Hunter Biden is a national security threat,” Rep. James Comer (R-Ky.) told Just the News in a wide-ranging interview Friday laying out his priorities if he becomes chairman of the House Oversight and Reform Committee. “We’ve been poring over his financial records for many weeks now, and it’s troubling.

“So we’ve got a lot of questions about Hunter’s business dealings and questions for Biden administration officials to determine if thepresident is in fact compromised because of Hunter’s shady business dealings.” Comer was asked whether the evidence he has seen shows the president’s son ran “an influence peddling scheme” that sold access to his father to foreigners. “There’s no question,” he answered. “That was confirmed with the recent tape that emerged last week from the laptop that showed that Hunter Biden said that, you know, his dad would do anything he asked him to do,” said Comer. “I think that was the sales pitch that Hunter would make to the questionable shady figures in Russia who he received compensation from, the shady, questionable figures in communist China he would receive payments from, and those in Ukraine and Africa and everywhere else around the world.”

“No one would think that anyone wanted to do business with Hunter Biden because of his stellar resume or his record of achievement,” Comer added. “It was because his last name was Biden. And his father was the vice president of the United States.” Comer said the House oversight committee’s job wouldn’t be to focus on whether Hunter Biden evaded taxes, an issue already under investigation by federal prosecutors since late 2018, but rather on what government or policy favors countries and players got for paying the presidential son, including for a recent set of paintings.

Read more …

“..directing much of the vast amounts of intelligence the United States is sharing with Ukrainian forces..”

NYT Reports On Large CIA ‘Stealth Network’ Of Spies & Commandos In Ukraine (ZH)

A fresh New York Times report has confirmed what many already suspected – that the CIA is still very active inside Ukraine – especially with training as well coordinating weapons among its Ukrainian allies. The Times report details “a stealthy network of commandos and spies rushing to provide weapons, intelligence and training,” based on US and European intelligence officials with knowledge of the operations. The report says Ukrainian forces are reliant on this Western clandestine network “more than ever” while outgunned by the Russians. This comes months after investigative journalist Zach Dorfman’s bombshell expose in Yahoo News which detailed how a prior 8-year long CIA covert program to train Ukrainian fighters helped provoke the Russian invasion. The only question that remained after that March report was the extent to which the CIA was still active in the ongoing fight against the invading Russians.

The new Times reporting confirms that the US program is not only active and ongoing, but appears larger in scale than previously thought given the CIA’s close cooperation with the Ukrainians is happening both inside and outside the country, across multiple locations. “Much of this work happens outside Ukraine, at bases in Germany, France and Britain, for example. But even as the Biden administration has declared it will not deploy American troops to Ukraine, some C.I.A. personnel have continued to operate in the country secretly, mostly in the capital, Kyiv, directing much of the vast amounts of intelligence the United States is sharing with Ukrainian forces, according to current and former officials,” the report indicates.

It appears much the CIA’s work in Ukraine is centered on coordinating intelligence with local intel services and counterparts. “Few other details have emerged about what the C.I.A. personnel or the commandos are doing, but their presence in the country — on top of the diplomatic staff members who returned after Russia gave up its siege of Kyiv — hints at the scale of the secretive effort to assist Ukraine that is underway and the risks that Washington and its allies are taking,” NY Times continues. Over the weekend, Canada also has been reported to have special operations troops inside Ukraine. This was reported months ago, but with a separate NYT report offering further confirmation. “Both CTV and Global News reported in late January that Canadian special forces had been sent to Ukraine, but National Defence did not comment on that deployment,” Ottawa Citizen writes Sunday.

Read more …

“..the Government is right not to be concerned and has come to the conclusion that there is no need for restrictions.”

Covid’s Infection Fatality Rate Now Same as Seasonal Flu (DS)

Death rates from Covid are lower than ever, according to an analysis by Professor Carl Heneghan and Dr Jason Oke carried out for the Mail on Sunday. The IFR is now ~0.0333%, similar to seasonal influenza. “Experts say there is little need to fear a recent surge in cases as fewer than one in 3,000 infected people now dies from coronavirus – with the rate even lower for the vaccinated. The analysis of official data by Oxford University shows the ‘infection fatality rate’ has dropped about 30-fold since the pandemic began due to a combination of vaccine protection and naturally acquired infection.


Professor Carl Heneghan of Oxford’s Centre for Evidence Based Medicine, who carried out the analysis with statistician Jason Oke, said: “There have been an astonishing number of Covid infections so far this year, but deaths have come down. “Now we are looking at an infection fatality rate for Covid of around one in 3,000 which is comparable with seasonal influenza. That’s why the Government is right not to be concerned and has come to the conclusion that there is no need for restrictions.”

Read more …

“..as the Left radicalized, and Taibbi stayed the same, the journalist found himself in a new space.”

Taibbi Talks Reaction To Him Reviewing ‘What Is A Woman’ (DW)

Old-school liberal investigative journalist Matt Taibbi told Ben Shapiro on this week’s episode of “Sunday Special” that he “lost friends” for merely reviewing Matt Walsh and The Daily Wire’s groundbreaking documentary, “What is a Woman?” Taibbi was a star writer at “Rolling Stone” magazine and beloved by the elite liberal media, but as the Left radicalized, and Taibbi stayed the same, the journalist found himself in a new space. Like, for example, sitting down for a lengthy conversation with one of the most prominent conservative figures in American politics — and seeing a lot of agreement. “The response was unbelievable, just for reviewing the movie — forget about what I said about it,” Taibbi told Shapiro about his review.

“I lost friends over that. There were people who I’ve known for decades who basically said I’m a transphobe and I’m … out of their loop.” Taibbi explained that he first noticed an unwillingness from the Left even to discuss the transgender issue before he chose to review The Daily Wire documentary. “With the trans issue, there would be some people who would talk to me, and then there would be some people who were furious that you even called, would refuse to have any kind of discussion, would call you a transphobe for even asking certain kinds of questions — and this is before you even have a point of view on the subject,” he said, recalling a time he tried to gather quotes for a story. “I thought that was odd.”

Taibbi noted that this was a rehash of what he witnessed as a journalist in 2016 when reporting on former President Donald Trump. He recalled including a quote from a pro-union lifelong Democrat who said he voted Republican for the first time, for Trump, because he felt lied to about the North American Free Trade Agreement, or NAFTA. The pushback from the leftist media community told Taibbi he wasn’t allowed to report or say true things if they went against the greater narrative. Taibbi didn’t abide by the leftist media rules with Trump and didn’t with the trans issue, either. Though, he admitted, the trans issue pushback did give Taibbi a momentary pause. “I had kinda tried to stay away from the issue. It’s complicated, and I try to stay away from issues I don’t know a whole lot about,” he said.

Read more …

 

 

 

 

 

 

 

 

 

 

 

Support the Automatic Earth in virustime with Paypal, Bitcoin and Patreon.

 

 

 

Apr 242022
 


René Magritte The conquerer 1926

 

Top US Officials To Meet Zelensky On First Wartime Visit To Kyiv (F24)
A West-mandated Russian “Default”: Who Wins And Who Loses? (Vilches)
Urgent Briefing from the Russian MOD re new provocations (Saker)
Minsk II: Two Words You’ll Never Hear on Mainstream News (Antiwar)
Energy Rationing & The Pivot From Ukraine To Climate (OffG)
1788. China to Make Electric Tumbrils (Reed)
The Drive to Vaccinate the World Against Covid Is Losing Steam (NYT)
Have People Been Given the Wrong Vaccine? (Kulldorff)
Pfizer Docs: 3.7% Death Rate From Vaccine, Many More Serious Injuries (EV)
Dissecting Canada’s All-cause Mortality (Rebel)
Covid Vaccines Increase Risk of Severe Heart Inflammation Up to 120-Fold (DS)

 

 

 

 

Tucker Macgregor

 

 

Putin subservient
https://twitter.com/i/status/1517675055613767683

 

 

 

 

US food supply

 

 

The MSM spouts only Ukraine propaganda. They have very few people on the ground, so they just parrot whatever -extravagant- claims Zelensky et al make. Lazy? You bet. Journalism? Hell, no.

Top US Officials To Meet Zelensky On First Wartime Visit To Kyiv (F24)

The United States’ top diplomat and defence chief were Sunday set to make their first wartime visits to Kyiv since Russia invaded Ukraine two months ago, with fierce battles raging in the east of the country. The trip by Secretary of State Antony Blinken and Defense Secretary Lloyd Austin comes as the war enters its third month with thousands dead and millions displaced. A series of European leaders have already travelled to Kyiv to meet President Volodymyr Zelensky and underscore their support, but the United States – a leading donor of finance and weaponry – has yet to send any top officials. In his daily video address Saturday night, Zelensky said he was preparing for “tomorrow’s important talks with American partners”.

The State Department declined to comment on the highly sensitive trip by two of President Joe Biden’s top cabinet members. Their visit comes as Russian forces show no sign of easing their attacks and after a missile strike on the southern city of Odessa that Ukraine said killed eight people, including an infant. “Among those killed was a three-month-old baby girl. How did she threaten Russia? It seems that killing children is just a new national idea of the Russian Federation,” Zelensky said. He also accused Russia of being a terrorist state and of acting like Nazis in the shattered port city of Mariupol, which has been devastated by weeks of intense bombardment.

“New facts about the crimes of the occupiers against our Mariupol residents are being revealed. New graves of people killed by the occupiers are being found. We are talking about tens of thousands of dead Mariupol residents,” he said. The latest of many attempts to evacuate civilians from Mariupol failed Saturday, and an embattled unit of Ukrainian fighters holed up in tunnels under a sprawling steel mill there appeared in increasingly desperate straits. Zelensky also issued a new call Saturday for a meeting with his Russian counterpart Vladimir Putin “to end the war.”

“I think that whoever started this war will be able to end it,” Zelensky said, adding he was “not afraid” to meet the Russian leader, who attended an Orthodox Easter service in Moscow. But he again stressed that Kyiv would abandon talks with Moscow if its troops in Mariupol were killed. Zelensky also criticised a decision by UN Secretary General Antonio Guterres to visit Moscow on Tuesday, before heading to Kyiv. “There is no justice and no logic in this order,” he said. “The war is in Ukraine, there are no bodies in the streets of Moscow. It would be logical to go first to Ukraine, to see the people there, the consequences of the occupation,” he said.

Ukraine ‘absolutely sure’ it will win war against Russia

Read more …

The US and NATO are not the ‘global stage’.

A West-mandated Russian “Default”: Who Wins And Who Loses? (Vilches)

Russia is currently “defaulting” or — in the best of cases — on a very direct and firm path to an inevitable “default”. Or at least this seems to be what the Western press and international rating agencies are pushing and rooting for, same as specialized academia, think-tanks, the political-financial-military establishment… and pretty much the whole Western Hemisphere including the US and Europe + South Korea, Japan, Australia and New Zealand. And it can reasonably be assumed that the above is most probably due to the fact that Western governments have officially and unequivocally dictated that it is not only “fair” but also wise to

(1) freeze and/or eventually “arrest” Russia´s reserve currency stockpiles held in international banking accounts (2) force Russia to pay its international financial obligations from abundantly solvent banks within Russia (3) declare that Russian payments in rubles instead of US dollars or euros or yens or GBP are not valid (4) declare Russia to be “defaulting” on its obligations by not following the above mandates (5) in case of doubt, Western governments remind us that Russia’s mandated “default” will necessarily be contested in UK Courts… which of course will always decide fully against Russia… undoubtedly and conveniently leaving aside whatever could be left of the once-traditional British “fair play” of yore.

And the West does not beat around the bush regarding this official policy with US Treasury Secretary Janet Yellen and US Federal Reserve Chairman Jerome Powell walking out of the recent G-20 meeting as soon as the mike was switched over to the Russian representative. The staged move was also well coordinated with multiple “unfriendly” finance ministers and central bank governors while others present virtually shut off their cameras immediately after the Russian official uttered his first word. And leaving no room for any doubt, White House Press Secretary Jen Saki tweeted in no uncertain terms that “We support her (Janet Yellen´s) steps, and it’s an indication of the fact that President Putin and Russia have become pariahs on the global stage”. By the way, with some notable exceptions, for the same “Ukranian reasons” many of the above have openly proposed to kick Russia out of the G-20 group ASAP.

So, to make a long story short, for all practical purposes Russia will necessarily “default” soon enough per the Western strategy of “we won’t let you pay but you must pay”… or thereabouts.

Read more …

“The biological weapons programs in the USSR were completely phased out in 1972.”

“..the Russian Federation completely destroyed its chemical arsenal on September 27, 2017, which is confirmed by an OPCW certificate..”

Urgent Briefing from the Russian MOD re new provocations (Saker)

The Ministry of Defence of the Russian Federation held an urgent briefing, detailing a provocation against the Russian Federation prepared by the USA and NATO with the accusation of using nuclear, biological and chemical weapons. The Ministry of Defence of the Russian Federation possesses the information related to the preparation of provocations by the United States of America in order to accuse the Russian Armed Forces of using chemical, biological or tactical nuclear weapons.


There are three scenarios to be applied in order to accuse the Russian Federation.
The first one is a ‘staged incident under a false flag’ that is the most probable.
The second one refers to a ‘Maximally covert use of weapons of mass destruction in small volumes’ for neutralising the will power and the capacity to resist within the fulfilment of a particular operational task.
The third and the least probable one is the ‘overt use of weapons of mass destruction at a combat area’.

[..] We would like to recall that the Russian Federation completely destroyed its chemical arsenal on September 27, 2017, which is confirmed by an OPCW certificate. In turn, the United States, with its strong financial, economic and technical potential, is the only country party to the Chemical Weapons Convention that still possesses an impressive arsenal of chemical warfare agents (672.5 tons). CIA Director Burns’ statement about Russia’s possible use of tactical nuclear weapons is absurd. With the current level of technical equipment of the international nuclear test monitoring system, it is impossible to conceal the use of such weapons. If the CIA director does not understand this, then he is either unprofessional, or he is being misled. The biological weapons programs in the USSR were completely phased out in 1972. At the same time, the number of U.S. biological laboratories is incomparable to other countries. According to the Chinese Foreign Ministry, Washington controls 336 laboratories in 30 countries, which is of great concern.

Read more …

“Ukraine had an off ramp from civil war early on in the form of the Minsk and then the Minsk II agreements in 2014 and 2015..”

Minsk II: Two Words You’ll Never Hear on Mainstream News (Antiwar)

Minsk II was the 2015 agreement hammered out by Russia, Ukraine, France and Germany to end the civil war in Ukraine between the pro west, ultra nationalist government and the pro Russian Ukrainians in the eastern Donbas provinces of Lugansk and Donetsk. Why a civil war in Ukraine? Historically, Ukraine was cobbled together first by the Russian Empire, then the Soviet Union over 4 centuries, containing disparate peoples. The main ones were the Western leaning, Ukrainian speaking people in the north and west, and the Russian speaking in the east and south. Their relationship was always toxic, but under Soviet rule relative peace prevailed. Once freed from Soviet rule in 1999, the tension between the two disparate groups resurfaced.

Fifteen years on the U.S. essentially blew up whatever chance for peaceful resolution by aiding a coup which violently removed Russian leaning President Yanukovych, replacing him with an ultra nationalist government under Petro Poroshenko. Thus began the civil war in the Donbas that has killed over 14,000 Ukrainians in Kiev’s effort to subjugate and marginalize the hated Russian leaning Ukrainians. And leading the carnage for the past 3 years is current president Volodymyr Zelensky. Calling him the new Churchill doesn’t quite fit. But Ukraine had an off ramp from civil war early on in the form of the Minsk and then the Minsk II agreements in 2014 and 2015. The latter called for autonomy for the breakaway provinces Donetsk and Lugansk, amnesty to the combatants and representation in the Ukraine government.

But goaded by the US and the ultra nationalists with the real power, both post coup presidents Poroshenko and Zelensky opted to continue the civil war to both retake the breakaway provinces and recapture the Crimea, seized by Russia after the 2014 coup threatened their naval base at Sebastopol in the Crimea. In the months leading up to Russia’s criminal war, Ukraine, with the help of weaponry and training by Uncle Sam, dramatically increased its criminal shelling of the Donbas, even massing a hundred thousand troops for a possible invasion predicted for March. Did that, and the threat of NATO’s encroachment in Ukraine up to Russia’s borders make Russia’s invasion legal or necessary for Russia’s national defense? Of course not. But expecting Russia would sit back and do nothing made their invasion virtually inevitable.

Read more …

“It’s interesting that “operation thermostat” should be announced on April 22nd – Earth Day – despite having zero to do with climate change.”

Energy Rationing & The Pivot From Ukraine To Climate (OffG)

Italy is officially becoming the first country to start rationing energy after cutting their supply of Russian gas and oil. From next month, until at least March 2023, public buildings across the nation will be banned from running air conditioning at lower than 25 degrees, or heating higher than 19 degrees. The plan, termed “Operation Thermostat” in the press, is being sold as a way for ordinary people to show “solidarity” with the people of Ukraine, with Italian Prime Minister Mario Draghi saying: “Do we want to have peace or do we want to have the air conditioning on?” I’m not exactly sure how adjusting your thermostat is going to achieve ‘peace’, but hey we’re living in the age of sentimental manipulation over reason, so – just believe.

For example, the Guardian is illustrating the story with pro-peace artwork allegedly done by Italian schoolchildren (in English, for some reason). There’s no talk yet of this kind of energy-rationing rule extending to private businesses or homes, but a marker has been set down. Expect other nations to follow suit. After that of course will come the opinion pieces asking questions like “we rationed gas to fight Putin, why not climate change?”, and headlines saying that “Europe-wide gas rationing was good for the planet” or something similar. …Oh wait, it’s already happening. Honestly, when I originally wrote the above paragraph I had no idea the New Yorker had published this opinion piece for Earth Day, headlined: “This Earth Day, We Could Be Helping the Environment—and Ukraine”

It argues that rationing energy to fight Putin is just like digging for victory to fight Hitler, and – just as I predicted – would also be good for the planet: “During the Second World War, victory demanded more oil […] In the wars dominating the globe today — Putin’s land grab in Ukraine, and the global land grab caused by rising sea levels and spreading deserts — victory demands getting off fossil fuels as fast as we possibly can.” It even hints at a quasi-lockdown – this time for the sake of beating Putin and combating climate change: “Everyone who can work from home could continue to do so, at least on, say, Mondays, knocking a day off the national commute. Carpools could be organized, taking special advantage of the fact that there are now two million electric cars on the road. More bike paths could be made available, and, when air-conditioning season begins, Americans could turn their thermostats up a degree.”

Remember lockdowns were marketed as planet-saving almost from the moment they were put in place, despite it making almost zero sense. The agenda was pretty obvious right from the start. It’s interesting that “operation thermostat” should be announced on April 22nd – Earth Day – despite having zero to do with climate change. It’s also noteworthy that climate protests groups have piggy-backed on the idea to call for an EU-wide boycott of Russia’s fossil fuels.

Read more …

Left field?!

1788. China to Make Electric Tumbrils (Reed)

The media, a salt mine in which I once labored, are an embarrassment, utterly partisan, ranting and howling about Russia. OK, in war it is usual to cut the public off from information and to keep them stirred up with accounts of rape, human shield, “genocide,” chemical war, massacres, torture, a rule of television being to get a woman to cry and fill the frame. In Vietnam the media ran all over the country and actually reported what was happening, which eventually ended the war. This error is not being repeated. {what bothers me is the apparent lack of curiosity, of doubt of official sources. Contrary to belief in some quarters, reporters are not given orders to adopt a particular point of view, though they know better than to contradict the publication’s line. No scribbler at the Washington Post will discuss racial differences in intelligence. But they are herd animals.}

Violeta, whose cynicism toward government—anybody’s government—would peel paint from a wall, watched a video clip purportedly of a Russian tank crushing a car occupied by Ukrainians. She noticed after research that the Russian tank was black without markings, like Ukrainian tanks, instead of green with markings, like all other Russian tanks. OK, maybe it was an undercover Russian tank. She also noticed in some of the Russian-destruction video, street signs are blurred out. Uh…, why dat? Anyone want to guess? Why do reporters not pay attention? First, again, they are creatures of the pack. They live in the Beltway Terrarium, talk to each other, read each other, and so know they are right. Don’t their colleagues all say so?

Second, they are painfully ignorant of matters military, knowing chiefly the bureaucracies involved in policy, contracting, and so on. This includes those for the WaPo, whom I knew—Gerge Wilson, Molly Moore, etc. [..] Why did Russia attack? Anyone who can read a map can see that since 1991 the US has been trying, with considerable success, to encircle Russia militarily. Russia has said over and over that it was not going to have American missiles on its border in the Ukraine any more than America would allow Chinese missiles in Tijuana. I encountered no one in DC who had even heard of this, though it has been going on for years. This is journalism? Yes.

All things end, except those that don’t. On a cold rainy predawn morning we caught an Uber to Reagan National, returning to a country that has just left the Third World to one energetically returning to it. A stewardess aboard read the boilerplate about have a wonderful flight. She didn’t explain just how that laudable goal might be achieved. Remember, cometh the guillotine. Kachunk. Kachunk. Kachun.

Read more …

“Africa’s vaccination rate remain the most dismal. Fewer than 17 percent of Africans have received a primary Covid immunization.”

The Drive to Vaccinate the World Against Covid Is Losing Steam (NYT)

Countries in different parts of the world, including some in Eastern Europe and the Middle East, have seen their vaccination rates stagnate in recent months at a third or less of their populations. But Africa’s vaccination rate remain the most dismal. Fewer than 17 percent of Africans have received a primary Covid immunization. Nearly half of the vaccine doses delivered to the continent thus far have gone unused. Last month, the number of doses injected on the continent fell by 35 percent compared to February. W.H.O. officials attributed the drop to mass vaccination pushes being replaced by smaller-scale campaigns in several countries. Some global health experts say the world missed a prime opportunity last year to provide vaccines to lower-income countries, when the public was more fearful of Covid and motivated to get vaccinated.

“There was a time people were very desperate to get vaccinated, but the vaccines were not there. And then they realized that without the vaccination, they didn’t die,” said Dr. Adewole, who wants to see countries continue to pursue the 70 percent target. What momentum remains in the global vaccination campaign has been hindered by a shortfall in funding for the equipment, transportation and personnel needed to get shots into arms. In the United States, a key funder of the vaccination effort, lawmakers stripped $5 billion meant for global pandemic aid from the coronavirus response package that is expected to come up for a vote in the next few weeks. Biden administration officials have said that without the funds, they will be unable to provide support for vaccine delivery to more than 20 under-vaccinated countries.

Some public health experts point to reasons for optimism that the global vaccination campaign still has steam. Despite the drop off from the February peak, the number of Covid vaccinations being administered each day in Africa is still near a pandemic high. And Gavi earlier this month drew a significant new round of funding pledges, securing $4.8 billion in commitments, although it fell short of its $5.2 billion goal. There is also hope that a global Covid summit the White House plans to co-host next month could be an opportunity to generate momentum and funding. But the drop in public demand has led some health officials and experts to quietly, and in some cases outright, question whether the 70 percent vaccination target is feasible or even sensible.

WHO

Read more …

Should anyone at all have been given any hardly tested substances at all?

Have People Been Given the Wrong Vaccine? (Kulldorff)

Randomized controlled trials show all-cause mortality reduction from the Covid adenovirus-vector vaccines (RR=0.37, 95 percentCI: 0.19-0.70) but not from the mRNA vaccines (RR=1.03, 95 percentCI 0.63-1.71). That is the verdict from a new Danish study by Dr. Christine Benn and colleagues. Have people been given vaccines that don’t work (Pfizer/Moderna) instead of vaccines that do work (AstraZeneca/Johnson & Johnson)? Let’s put this study into context and then delve into the numbers. In medicine, the gold standard for evidence is randomized controlled trials (RCT), as they avoid study bias for or against the vaccine. Moreover, the key outcome is death. Do these vaccines save lives? Hence, the Danish study answers the right question with the right data. It is the first study to do so.

When the Pfizer and Moderna mRNA vaccines were approved by the U.S. Food and Drug Administration (FDA), that decision was based on RCTs. The RCTs submitted to the FDA showed that the vaccines reduce symptomatic Covid infections. By recruiting mostly younger and middle-aged adults, who are unlikely to die from Covid no matter what, the studies were not designed to determine whether the vaccines also reduce mortality. That was assumed as a corollary, although it may or may not be true. Neither were the RCTs designed to determine whether the vaccines reduce transmission, but that is a different story for another time. The vaccines were developed for Covid, but to properly evaluate a vaccine, we must look at non-Covid deaths as well.

Are there unintended adverse reactions leading to death? We do not want a vaccine that saves the lives of some people but kills an equal number of other people. There may also be unintended benefits, such as incidental protection against other infections. For a fair comparison, that should also be part of the equation. While each individual RCT was unable to determine whether the Covid vaccine reduced mortality, the RCTs recorded all deaths, and to increase sample size, the Danish study pooled multiple RCTs. There are two different types of Covid vaccines, adenovirus-vector vaccines (AstraZeneca, Johnson & Johnson, Sputnik) and mRNA vaccines (Pfizer and Moderna), and they did one pooled analysis for each type. Here are the results:

There is clear evidence that the adenovirus-vector vaccines reduced mortality. For every 100 deaths in the unvaccinated, there are only 37 deaths among the vaccinated, with a 95 percent confidence interval of 19 to 70 deaths. This result comes from five different RCTs for three different vaccines, but it is primarily driven by the AstraZeneca and Johnson & Johnson vaccines. For the mRNA vaccines, on the other hand, there was no evidence of a mortality reduction. For every 100 deaths among the unvaccinated, there are 103 deaths among the vaccinated, with a 95 percent confidence interval of 63 to 171 deaths. That is, the mRNA vaccines may reduce mortality a little bit, or they may increase it; we do not know. The Pfizer and Moderna vaccines contributed equally to this result, so there is no evidence that one is better or worse than the other.

Read more …

1 in 27 dies.

“..with 100M people vaccinated in the United States, there have been almost four million deaths and millions beset with life-altering injuries.”

Pfizer Docs: 3.7% Death Rate From Vaccine, Many More Serious Injuries (EV)

According to documents released through court order, 3.7% of the cases Pfizer looked at for ‘adverse events’ died, and Pfizer prevented all the data being released – so at this time it is impossible to tell the exact death rate – the bottom line is this is a mass murder event. Dr. Naomi Wolf has been going through the tens of thousands of pages of documents a Federal court forced Pfizer to release from its FDA submission for Covid-19 mRNA vaccine approval. She released the data on War Room Pandemic this morning.


Shockingly, the initial data showed a death rate of 3.7% with a much higher rate of serious injury. In other words, with 100M people vaccinated in the United States, there have been almost four million deaths and millions beset with life-altering injuries. The amount of vaccines shipped by Pfizer was redacted in the documents. This is the government, Pfizer, and the CCP working to commit mass murder against the America people. There is no denying this now.

Read more …

“In certain areas of the country almost twice as many people are dying than what we would expect in those young ages and it’s not COVID.“

Dissecting Canada’s All-cause Mortality (Rebel)

All-cause mortality data for 2021 is starting to trickle out in Canada and it’s showing some concerning trends. Accidental COVID data analyst and financial investor Kelly Brown has been a leader in analyzing official Government COVID data for the better part of two years. He began sounding the alarm bells on the post-vaccination myocarditis risk in young males and has continued this unpaid work ever since. After discovering loopholes in the government messaging and clear indications of harm using Governments’ own data, Kelly now finds himself doing deep dives into other statistical analyses. Using data published by Canada’s national statistics office, Statistics Canada, Kelly has dissected all-cause mortality and excess mortality. He notes that Alberta (AB) and British Columbia (BC) have the most robust data and it shows that the actual number of excess deaths exceeds the predicable baseline by nearly double!


Referring to this as a “tsunami of death” as deaths in BC and AB exceed expected levels by nearly 70%. Using historical averages, Kelly can only explain approximately 30-50% of these deaths by drug overdose. After a rapid acceleration in July 2021, the 0-44 age group saw a catastrophic 25% weekly excess death rate for approximately three months that “cannot be explained by suicides, overdoses, cancers, etc.” When referring to this chart that overlays daily doses (either 1st or 2nd) with excess mortality, Kelly asserts that it not up to us to investigate this looming safety signal, “there’s something at play here that Public Health needs to investigate. This is a real public health emergency. In certain areas of the country almost twice as many people are dying than what we would expect in those young ages and it’s not COVID.”

Read more …

These studies come far too late.

Covid Vaccines Increase Risk of Severe Heart Inflammation Up to 120-Fold (DS)

Covid vaccination increases the risk of severe heart inflammation up to 120-fold, a major study from Scandinavia published in the Journal of the American Medical Association (JAMA) has found. The study looked at over 23 million patient records covering the over-12s populations of Denmark, Finland, Norway and Sweden from the start of the vaccine rollout in December 2020 to October 5th 2021. For young males aged 16-24 years within 28 days of a second dose the study found severe myocarditis (requiring inpatient hospital admission) around five times more common after Pfizer and 14 times more common after Moderna.


This corresponded to six events per 100,000 people after Pfizer and 18 events per 100,000 after Moderna. A second dose of Moderna given after a first dose of Pfizer came with even higher risk: a 36-fold increased risk, corresponding to 27 events per 100,000 people. The Moderna vaccine has three times the dose of mRNA of the Pfizer vaccine, which the authors suggest lies behind the increased risk. One oddity is that the study can’t seem to decide how many severe myocarditis events there actually were in total. In Table 2 below, in the left hand column, it indicates there were 85 + 34 + 53 = 172 events following a second dose.

In the text, however, it says: “During the 28-day risk period, we observed 105 myocarditis cases following administration of the first dose of BNT162b2 [Pfizer] and 115 myocarditis cases following the second dose. We also observed 15 myocarditis cases following administration of the first dose of mRNA-1273 [Moderna] and 60 myocarditis cases following the second dose.” That gives 115 + 60 = 175 events following the second dose. Yet lower down we get a third figure: “Of the 213 myocarditis cases in the 28-day risk window after a second dose of SARS-CoV-2 mRNA vaccination, 135 events occurred within the first week.” So how many cases of severe myocarditis were there within 28 days of a second mRNA vaccine dose – 172, 175 or 213?


Using the larger figure, the authors observe that with 135 of 213 occurring within the first week – more than half – the risk in that week is greatly elevated. Among males aged 16 to 24 years, the risk was around 13-fold greater during the week after a second dose of Pfizer and 38-fold greater after a second dose of Moderna. For a second dose of Moderna where the first dose was Pfizer the risk was 120-fold greater.

Read more …

 

 

 

 

 

Ali

 

 

 

 

 

 

Philantrophy


Support the Automatic Earth in virustime with Paypal, Bitcoin and Patreon.

 

 

 

Mar 142022
 


Alfred Eisenstaedt The kiss (V-J Day in Times Square) 1945

 

US Farmers Hit Hard By Price Increases, Fertilizer Costs (JTN)
“Media Isn’t Warning You” That US Careening Towards Food Crisis (ZH)
Russian Default On Debts No Longer ‘Improbable’, Says IMF Head (G.)
India Is Mulling Rupee-Ruble Payments System for Trade with Russia (Scofield)
The US Is Still Not Trying Diplomacy With Putin Over Ukraine (Antiwar)
Russia Seeking China’s Military Help In Ukraine, US “Sources” Say (ZH)
The West’s Cancel Culture Targets All Things Russian (JTN)
Responses to the Invasion of Ukraine (Pankaj Mishra)
Deaths Represent 1.3% Of Side Effects Reported For Covid Vaccines (JTN)
How Does It Feel To Be Vindicated? (Malone)
Drs. Walensky and Offit: It’s All in Good Fun (Harrington)
Julian Assange To Marry Fiancee Stella Moris In Belmarsh Prison March 23 (DM)

 

 

 

 

Some day we’ll assess this moment with clear heads
https://twitter.com/i/status/1503265313474977793

 

 

 

 

Veritas FDA
https://twitter.com/i/status/1503264527642775553

 

 

“The cost of fertilizer is up as much as 500% in some areas..”

“..we are not really going to see those impacts until this coming summer.”

US Farmers Hit Hard By Price Increases, Fertilizer Costs (JTN)

Goods and services around the country are becoming increasingly more expensive, but farmers may be among the hardest hit as inflation, supply chain issues, and Russia’s invasion of Ukraine are expected to send food prices soaring even higher. That impact is being felt by farmers around the country. “The cost of fertilizer is up as much as 500% in some areas,” said Indiana Farm Bureau President Randy Kron. “It would be unbelievable if I hadn’t seen it for myself as I priced fertilizer for our farm in southern Indiana. Fertilizer is a global commodity and can be influenced by multiple market factors, including the situation in Ukraine, and all of these are helping to drive up costs.” Ukraine is a significant supplier of both crops and fertilizer materials, adding to the concern that the invasion will likely lead to shortages and price increases.

Fertilizer prices for nitrogen, phosphorous and potassium, called NPK, have exploded since December 2020. “Because of the seasonal aspects of … this agriculture industry, it takes about six to nine months for the impacts felt in the impact market to really work its way through the supply chain and reach the consumer,” said Nathon Carson, head of supply chain operations for Chemical Dynamics, a multi-million dollar fertilizer supplier based in Florida servicing 12 states. “The crazy thing is, fertilizer prices for NPK, especially nitrogen, the most important nutrient, went up by about … doubled essentially in Q4 of 2021, which means we are not really going to see those impacts until this coming summer.” That fertilizer price increase is one of several factors expected to push food prices up even higher this year.

“Food prices are going to continue to go up dramatically,” Carson said. “I was expecting food prices to go up about 10% in the U.S. before midterms, so around August, another 5 or so percent to follow by the end of the year … You could see 20% food price inflation by the end of the year in the U.S. That is a possibility. You won’t see famine in the U.S. Our food system is very, very resilient, but you will see shortages. You won’t have the same product selection that you’re used to.” These food price issues have only been egged on by runaway federal spending, which has helped send inflation soaring in the past year. The Bureau of Labor Statistics reported last week that the Consumer Price index, a leading marker of inflation, rose 7.9% in the past 12 months. BLS said that the food price index rose 8.6% over the last 12 months, the largest 12-month spike since April 1981.

Read more …

”Buy a 2nd freezer, and stock it. Soon.”

“Media Isn’t Warning You” That US Careening Towards Food Crisis (ZH)

Two weeks after the Russia-Ukraine crisis began, the world is quickly moving toward a food crisis that could affect millions of people. A spillover of the crisis could soon spark agricultural mayhem in the US. The curtailment of agricultural exports from Russia and Ukraine will have dramatic knock-on effects on global food supplies. Both countries are known as the ‘breadbasket of the world’ and are responsible for a quarter of the international wheat trade, about a fifth of corn, and 12% of all calories traded globally. Another major problem is access to fertilizers, as Russia has banned exports of the nutrients. It’s not whether or not there will be a food crisis. It’s how big that crisis will be.

We’ve already noted a handful of emerging market countries to monitor as the Russian invasion is choking off grain exports to them and causing prices to rise, which may result in social unrest. Even in the Western world, agricultural markets have not been immune, and higher prices have stung consumers. A tweet from Douglas Karr, the founder of the businesses blog Martech Zone, made the point the “media isn’t even warning you” a food crisis in America is emerging. Karr said he spoke with numerous folks in the food industry who said farmers in the South and Midwest are having trouble procuring fertilizer to grow crops ahead of planting season. He said farmers in the “Midwest are switching,” likely referring to crops that need fewer nutrients because they “can’t get nitrogen nor fertilizer.”

Even before Russia invaded Ukraine, the global food system was strained. Snarled supply chains and adverse weather conditions in top growing regions of the world resulted in low crop yields and rising prices. The supply shock of Ukraine will amplify the crisis as the UN warned global food prices could jump 8%-20% from here (prices are already at record highs). Responding to Karr’s viral tweet, some people said they were buying a freezer to panic hoard food supplies as the worst food crisis has yet to come. “Likely getting a 2nd chest freezer soon and stuffing it with meats/frozen vegetables/etc. Also, it looks like “preppers” who were dismissed or made fun of last decade are about to be set on being right,” one person said. Another person said, “Read this and then understand why in the last 6 months several publications have been grooming us to accept eating bugs. All of this was planned. Buy a 2nd freezer, and stock it. Soon.”

Read more …

“Siluanov said on Sunday that it would be “absolutely fair” for Russia to make sovereign debt payments in roubles until its foreign exchange reserves were unfrozen..”

Russian Default On Debts No Longer ‘Improbable’, Says IMF Head (G.)

A Russian default on its debts after western sanctions over its invasion of Ukraine is no longer “improbable”, but would not trigger a global financial crisis, the head of the International Monetary Fund said on Sunday. The Washington-based fund’s managing director, Kristalina Georgieva, said the sanctions imposed by the United States and other nations were already having a “severe” impact on the Russian economy and would trigger a deep recession there this year. The war in Ukraine will also drive up food and energy prices, leading to hunger in Africa, she added. Georgieva told CBS’s Face the Nation programme: “In terms of servicing debt obligations, I can say that we no longer think of Russian default as an improbable event. Russia has the money to service its debt, but cannot access it.

“What I’m more concerned about is that there are consequences that go beyond Ukraine and Russia.” Last week, the World Bank’s chief economist, Carmen Reinhart, warned that Russia and its ally Belarus were “mightily close” to default. Asked whether a Russian default could trigger a financial crisis around the world, Georgieva said: “For now, no.” The total exposure of banks to Russia amounted to around $120bn, an amount that while not insignificant, was “not systematically relevant”, she said. Last week, she said the IMF would downgrade its previous forecast for 4.4% global economic growth in 2022 as a result of the war. Separately, Russia said on Sunday that it was counting on China to help it withstand the blow to its economy from sanctions, but the US has warned Beijing not to provide that support.

The Russian finance minister, Anton Siluanov, said Moscow was unable to access $300bn of its $640bn in gold and foreign exchange reserves, but still held part of its reserves in the Chinese currency, the yuan. “And we see what pressure is being exerted by western countries on China in order to limit mutual trade with China. Of course, there is pressure to limit access to those reserves,” he said. “But our partnership with China will still allow us to maintain the cooperation that we have achieved, and not only maintain, but also increase it in an environment where western markets are closing.” Russia is due to make two interest payments on 16 March. However, it will have a 30-day grace period to make the coupon payments. Siluanov said on Sunday that it would be “absolutely fair” for Russia to make sovereign debt payments in roubles until its foreign exchange reserves were unfrozen, according to Interfax.

Read more …

Can’t pay in rubles, IMF? Not so fast…

India Is Mulling Rupee-Ruble Payments System for Trade with Russia (Scofield)

India is discussing how to set up a rupee-ruble payment mechanism to enable it to trade with Russia, to circumvent the U.S. sanctions regime. India abstained from voting on the March United Nations (UN) General Assembly Resolution demanding an end to Russian offensive in Ukraine (General Assembly resolution demands end to Russian offensive in Ukraine). Since its Independence, India has tried to steer a neutral course between the U.S. and Russia (and previously, the USSR). During the 1950s, India’s first prime minister, Jawaharlal Nehru, was a prime architect behind the Non-Aligned Movement, under which developing countries tried to pursue their national interests without binding themselves to either the U.S. or Soviet bloc. India, Indonesia, and Yugoslavia were mainstays of that movement, which today includes 120 member states, 18 observer states, and 10 international organisations.

Following the collapse of the Soviet Union, India developed closer relations with the United States. Most recently, under prime minister Narendra Modi, India’s policy tilted even more decisively in a pro-U.S. direction. Modi and Trump shared a strong affinity, and Modi even travelled to the U.S, to host massive rallies intended to galvanize Indian Americans in support of Trump. See this BBC account for further details, What did the Trump-Modi ‘bromance’ achieve? During the last several months, several considerations have prompted the Modi government to rethink the wisdom of putting all its eggs in the U.S. basket. Instead, India is returning to a more balanced approach, assessing its national interests vis-a-vis those of other countries and acting accordingly.

Two developments this summer caused India to question the reliability and integrity of the U.S. as an ally. The first was the manner of the U.S. pullout from Afghanistan, which had External Affairs Minister S. Jaishankar wondering about the value of U.S. security guarantees. Washington’s Ukraine policy is only increasing those misgivings. The United States was willing to push Ukraine to take actions that many – including Henry Kissinger, George Kennan, and Noam Chomsky – warned Russia couldn’t abide. But then when the shooting started, the United States wasn’t willing to get in line of fire. And in the second, in September, the U.S. stunned many when it announced a new Australia/United Kingdom/United States security grouping (AUKUS), as part of which Australia would receive American nuclear submarines.

Read more …

They must be enjoying the situation…

The US Is Still Not Trying Diplomacy With Putin Over Ukraine (Antiwar)

As Russia’s invasion of Ukraine enters its third week, there is still no sign that the Biden administration is attempting high-level diplomacy with Moscow as a way to possibly end the fighting. The Washington Post reported on Thursday that the Biden administration doesn’t see the conflict ending anytime soon and that its current strategy is to impose economic pain on Russia and support Ukraine’s military “in its effort to inflict as many defeats on Russia as possible.” It’s clear at this point that the Western sanctions were factored into Russian President Vladimir Putin’s decision to attack Ukraine as they haven’t done anything to deter him. But US officials still say they are in no rush to engage directly with Putin.

Secretary of State Antony Blinken claimed that in the months leading up to the invasion, the US gave Putin “possible off-ramps.” But during the negotiations, the US ignored Putin’s key demands. Putin wanted a guarantee that Ukraine wouldn’t ever join NATO, and even though President Biden said Kyiv wouldn’t be joining the military alliance anytime soon, the US refused to make the promise. Now, Russia has said it will stop its assault if Ukraine declares neutrality, recognizes Crimea as Russian territory, and recognizes the independence of the breakaway Donbas republics. Instead of supporting negotiations on these terms that could lead to a potential ceasefire, the US is working with its NATO allies to flood weapons into Ukraine.

Blinken said on Wednesday that the Biden administration expects “a strategic defeat” of Russia in Ukraine despite Moscow’s “short-term” gains. “We’ll accomplish this by backing Ukrainians in their fight, by remaining united in holding Russia accountable through the devastating sanctions, the diplomatic isolation and other measures,” Blinken said. While Blinken says the US expects a Russian defeat in Ukraine, Biden officials told the Post that they don’t see a “clear end to the military phase of this conflict,” meaning the US expects a long, bloody insurgency in Ukraine, and is willing to support it.

Read more …

Russia attacks Yavoriv because of weapons deliveries. There are no US miilitary left there.

Russia Seeking China’s Military Help In Ukraine, US “Sources” Say (ZH)

According to Reuters, when asked about claims that Russia is requesting military help from China, the spokesperson for China’s embassy in Washington responded “I’ve never heard of that.” The spokesperson, Liu Pengyu, said China’s priority was to prevent the tense situation in Ukraine from getting out of control. “The current situation in Ukraine is indeed disconcerting,” he said in an emailed response to a query from Reuters, adding that “the high priority now is to prevent the tense situation from escalating or even getting out of control.” Earlier when commenting on what’s been reported as “significant progress” made in Russia-Ukraine talks, we noted that “It remains to be seen if this is the start of a peaceful resolution to the war or just another false dawn.”

Well, just a few hours later the false dawn has arrived via a bombshell FT report citing anonymous Biden administration officials who say that Russia has issued a formal request from China for military support in its invasion of Ukraine. This was followed minutes later with similar Washington Post and New York Times stories in what looks like a US “coordinated leak” effort to send a message and warning to China. “Russia has asked China for military equipment to support its invasion of Ukraine, according to [anonymous] US officials, sparking concern in the White House that Beijing may undermine western efforts to help Ukrainian forces defend their country,” FT writes.

[..] The fresh attack on Yavoriv is being taken also as a clear warning to Washington, again given it was a well-known site which previously housed US military trainers engaged in short-term missions to support Ukrainian national forces prior to the invasion began. Training was going on up until earlier in February. Setting the stage for a potential major escalation with Western and NATO powers, the Kremlin warned on Saturday that the Russian military is prepared to target Western arms shipments that are continuing to pour into Ukraine. Russia’s Deputy FM Sergei Ryabkov said on state TV that Washington had been informed in the last days that Moscow will see weapons supply convoys entering Ukraine as “legitimate targets”.

“We warned the United States that the orchestrated pumping of weapons from a number of countries is not just a dangerous move, it is a move that turns these convoys into legitimate targets,” Ryabkov said in the remarks, which served as a severe warning to the West.

Read more …

“There tends to be a lot of virtue signaling in how people behave these days, and to take it out on a business like this is unfortunate.”

The West’s Cancel Culture Targets All Things Russian (JTN)

In New York City, despite many owners of Russian restaurants opposing Putin’s invasion of Ukraine — or even being Ukrainian themselves — they have experienced canceled reservations, bad reviews and social media campaigns, unusually low turnout, and vandalism, The New York Times reported. Even as some restaurants have plastered signs in support of Ukraine on their doors, they are still dealing with backlash from customers. Some patrons, however, are showing support for the restaurants as they struggle to cope with the commercial fallout from the invasion, according to the Times. “We just thought Russian businesses are probably being unfairly treated, and it would be the right thing to do to have dinner here,” a customer at Russian Samovar told the Times last week. “There tends to be a lot of virtue signaling in how people behave these days, and to take it out on a business like this is unfortunate.”

[..] Daily Wire podcast host and bestselling author Matt Walsh compared the treatment of Russians to other forms of bigotry, tweeting on Monday: “There was so much concern about potential ‘Islamophobia’ after 9/11, and ‘anti-Asian’ backlash after China unleashed covid on the world, and yet it seems to be open season on Russians right now. It’s almost like bigotry is okay as long as the targets are perceived to be white.” [..] On Thursday, a Meta spokesperson confirmed that Facebook and Instagram would allow users in some countries to violate the company’s rules and call for violence against Russians and Russian soldiers with regard to the invasion of Ukraine, Reuters reported. “As a result of the Russian invasion of Ukraine,” a Meta spokesperson said in a statement, “we have temporarily made allowances for forms of political expression that would normally violate our rules like violent speech such as ‘death to the Russian invaders.’ We still won’t allow credible calls for violence against Russian civilians.”

Author and columnist Larry Taunton retweeted an article on the Meta announcement, saying, “And people wonder how we ended up with Japanese internment camps.” [..] American grocery stores Kroger, Publix, and Food Lion have all said they removed Russian vodka from their shelves, according to Business Insider. Some bar owners are also dumping out their Russian vodka. However, “[l]ess than 1% of vodka consumed in the United States is produced in Russia,” CNN reported, noting that more than half of all vodka in the U.S. is American-made. “If you’re posting the Ukrainian flag and boycotting Russian vodka but you’re still going to vote for Democrats and you still won’t support oil production in the United States,” Walsh tweeted, “kindly shut the hell up you ridiculous virtue signaling phony.”

Read more …

From London Review of Books. Many authors, Mishra is one.

“..while an infotainment media works up citizens into a state of paranoid patriotism, a service class of intellectuals talks up the American Revolution and the international liberal order.”

Responses to the Invasion of Ukraine (Pankaj Mishra)

Foreigners have long envied the way the American system, built by and for slave-owners and programmed to boost oligarchies and dynasties, secures mass consent: while an infotainment media works up citizens into a state of paranoid patriotism, a service class of intellectuals talks up the American Revolution and the international liberal order.

Hyper-patriotic media have emerged in India, China and Russia over the last decade, together with pseudo-thinkers who have upgraded national self-images by hailing the glories of Hindu civilisation, Russian empire and Confucian harmony. As the hacks, trolls and conspiracy theorists of digital media cemented these ideological ecosystems in place, dissent was condemned to impotence. Today, the news and analysis received by the vast majority of people in India and China as well as Russia is – in the words of the head of the Levada Centre, Russia’s independent public opinion research organisation – a compendium of ‘lies and hatred on a fantastical scale’. And so Modi’s brutalising of Kashmir, Putin’s annexation of Crimea and Xi’s herding of Uighur Muslims into concentration camps faced as little domestic challenge as America’s endless wars and killings in Asia and Africa.

Humiliation in Iraq and Afghanistan, and at home by Trump, demoralised the exporters of democracy and capitalism. But Putin’s atrocities in Ukraine have now given them an opportunity to make America seem great again. The Russian bear has long guaranteed, more reliably than ‘Islamofascism’ or China, income and identity to many in the military-industrial and intellectual-industrial complex. An ageing centrist establishment – battered by the far right, harangued by post-Occupy and post-BLM young leftists, frustrated by legislative stalemate in Washington – seems suddenly galvanised by the prospect of defining themselves through a new cold war.

As Russian troops attacked a nuclear reactor, George Packer wrote in the Atlantic that ‘for the first time in decades, an American president is showing that he, and only he, can lead the free world.’ The New York Times exulted over the new-found resolve of the free world: ‘Nato has been revitalised, the United States has reclaimed a mantle of leadership that some feared had vanished in Iraq and Afghanistan.’ Boris Johnson claimed that he had never seen such a stark ‘dividing line between right and wrong’. More remarkably, Hillary Clinton called on MSNBC for a rerun in Ukraine of the ‘very motivated’ and ‘armed insurgency’ that ‘basically drove the Russians out of Afghanistan’.

Read more …

CDC numbers.

Deaths Represent 1.3% Of Side Effects Reported For Covid Vaccines (JTN)

Deaths following mRNA vaccination against COVID-19 represented 13 out of every 1,000 reports (1.3%) to the federal government’s Vaccine Adverse Events Reporting System (VAERS), the CDC’s Atlanta-based researchers said Monday. Another 66 reports out of every 1,000 (6.6%) were categorized as “serious,” resulting in “inpatient hospitalisation, prolongation of hospitalisation, permanent disability, life-threatening illness, congenital anomaly or birth defect,” according to their study published in The Lancet, the U.K-based medical journal. VAERS is often dubbed a passive surveillance system because it accepts reports from anyone. The CDC previously told Just the News that most reports come from manufacturers or healthcare providers, who have mandatory reporting requirements.

But the researchers said they also consulted an “active” smartphone-based voluntary monitoring system, v-safe, created in 2020. The data show that “most reported adverse events were mild and short in duration,” with 18-49 year-olds representing a plurality (45%) and females a supermajority (75%). Mainstream media uncritically ran with the CDC’s framing, with USA Today touting researcher David Shay’s assurance that the death rate was expected given the elderly population studied. About a quarter of reports were from ages 65 and up. A large subset of young people was almost entirely excluded, however: minors. The study only reviewed the first six months of emergency use authorization (EUA) for the Pfizer and Moderna vaccines, covering 340,000 reports and 299 million doses.

That time period ends just a month after Pfizer’s vaccine was authorized for 12-15 year-olds and predates its EUA for children 5-11, while Moderna’s vaccine remains unauthorized for anyone under 18. The study’s youngest age range is 16-17, representing 2% of all reports. “Why the cut-off at six months? There are now data that extend for 14 months, and those data include children,” Robert Malone, the mRNA vaccine pioneer-turned-critic, wrote in his newsletter. Health authorities worldwide have recognized young people, particularly males, as having a higher risk for heart inflammation following mRNA vaccination, especially after the second dose. That was the FDA’s rationale to indefinitely pause consideration of Moderna’s vaccine for adolescents.

Read more …

The biomedical world that I thought I was living in has been revealed to be a sham.”

How Does It Feel To Be Vindicated? (Malone)

I have been getting the question “How does it feel to be vindicated?” Dr. Jill (Glasspool-Malone) keeps noodling me to write a piece describing my feelings on this topic. Personally, I dislike focusing on the psychology of how these last two years have impacted on me (and us). Much as I am very wary of the “cult of personality” aspect of my newfound fame. I have not spoken out because I sought attention, I have done this because it was the right thing to do, and I seemed to have a unique widow of opportunity to speak for those whose voices were so actively suppressed. But I certainly have had to take hits for it. The slander, defamation, gaslighting, and globally coordinated character assassination have been non-stop. But as time has gone by, and more and more has been revealed about the hidden hands that seek to manage what we are allowed to hear, see, and think, I have been transformed.


The biomedical world that I thought I was living in has been revealed to be a sham. The legitimacy of the industry and discipline that I have committed my entire professional life to is in shambles. I am now embarrassed to call myself a vaccines and biodefense expert, because the fundamental corruption inherent in those domains has been so clearly revealed. I cannot unsee what I have seen. I cannot recapture all of those years spent in a profoundly corrupt academic system, spent supporting a deeply compromised discipline which appears primarily driven by financial interests rather than by what I had naively believed was a commitment to saving lives. I chose to not pursue the careers of my father and father in law, which were spent building weapons of war. Only to find that I had inadvertently played a significant role in enabling one of the most tragic medical follies in the history of man.

Read more …

“And while she was exonerating herself, she made time to give the masses a little bitty sermon on the nature of science itself. Remember science?”

Drs. Walensky and Offit: It’s All in Good Fun (Harrington)

A few days back Rochelle Walensky was invited to give an interview at her alma mater, Washington University in St. Louis. The first part of the discussion pivoted around softball questions which allowed her to pontificate on her decidedly race-infused views of public health. It was more than halfway into the interview before her interlocutor finally got around to asking her about where she and the CDC might have gone wrong in their management of the Covid epidemic. Here is what followed. First, she told of how pleased she was when she heard (from a “CNN feed” no less) about the “95% effectiveness” of the vaccines because, like all of us, she just wanted to get the pandemic behind us. And then she expresses, between chuckles, her shock upon learning that the vaccines might diminish in effectiveness over time “Nobody said waning…Nobody said what if the next variant…what if it’s not as potent against the next variant?”

You see, even though a humanities professor like me with no scientific training knew —thanks to my readings of the Moderna, Pfizer and Janssen EUAs and from reading numerous scientific papers on vaccine effectiveness and safety and listening to people like Sucharit Bkahdi, Geert Vande Bossche and Michael Yeadon— by very early 2021 that the vaccines probably would not prevent transmission and might actually promote new resistant varieties of the virus, none of this was conceivable or knowable to the Director of the CDC. Like the human hologram she apparently is, we are led to believe that she was there, but she was not really there. She was responsible, but really someone else was. “No one could have known,” she exclaims, except, of course, the hundreds of thousands of us amateurs who did, in fact, know, and were censored and called science-hating anti-vaxxers for our troubles.

And of course, holograms don’t do guilt or responsibility. Did she express any sympathy for the people that were forced out of jobs over their refusal to take what we now know, and she admits, were largely ineffective vaccines? Nope, again even though she was in the chair, it was, of course, all beyond her control. And as a powerless spectator—cue the folksy music—just like you and me, she was disappointed and surprised. Mistakes were made. She meant well. Her only real faults, as she said in the same talk, were the clearly well-intentioned ones of having “too little caution and too much optimism.” And while she was exonerating herself, she made time to give the masses a little bitty sermon on the nature of science itself. Remember science?

Read more …

How happy can we afford to be for them?

Julian Assange To Marry Fiancee Stella Moris In Belmarsh Prison March 23 (DM)

Julian Assange’s fiancée has spoken of her joy at being allowed to marry the WikiLeaks founder despite restrictions being placed on their wedding. Stella Moris, 38, will marry the 50-year-old in Belmarsh Prison, south east London on March 23, just weeks before the third anniversary of his dramatic arrest when he was dragged out of the Ecuadorian embassy in the capital in April 2019. He has been held in the high-security jail ever since as he fights extradition to the United States, where he is wanted over an alleged conspiracy to obtain and disclose national defence information following WikiLeaks’ publication of hundreds of thousands of leaked documents relating to the Afghanistan and Iraq wars. He has always denied wrongdoing and has won support for his case from human rights organisations and journalist groups across the world.


Ms Moris said that just four guests and two witnesses will be allowed to attend the ceremony, as well as two security guards. Dame Vivienne Westwood is designing Ms Moris’s wedding dress, and a kilt for Assange, whose parents are of Scottish extraction. The guests will have to leave immediately after the event, even though it is being held during normal visiting hours. The couple are still waiting to hear if they will be allowed a photographer. Ms Moris said: ‘Obviously we are very excited, even though the circumstances are very restrictive. ‘There continues to be unjustified interference in our plans. Having a photographer for an hour is not an unreasonable request. [..] Julian is looking forward to the wedding because it is finally happening, many months after we first made the request.’

Read more …

 

 

 

 

 

Guardiola is a Catalan
https://twitter.com/i/status/1503007813873848333

 

 

Pelosi

 

 

 

 

It wasn’t me
https://twitter.com/i/status/1502234046809657355

 

 

22 years

 

 

Support the Automatic Earth in virustime with Paypal, Bitcoin and Patreon.

 

 

 

Jul 262020
 


Elaine de Kooning Fairfield Porter #1 1954

 

 

It won’t come as a surprise to anyone that the first half of 2020 has brought, among many other things, renewed calls for the demise of the US dollar. It’s been pretty much a non-stop call for over a decade now, and longer. But this time, like all previous ones, I’m thinking: I don’t see it. I guess my first question is always: please explain why the dollar would collapse before the euro does.

For one thing, the dollar would have to collapse/default against one or more “entities”. The dollar is not like one of those highrises that collapse upon themselves. It will have to default or collapse against something(s) else. Since it is the world reserve currency, that means there would have to be a replacement reserve currency. Yes, that could also be for example gold or SDR’s, or even a basket of currencies, and something like that may happen eventually, but it doesn’t appear in the cards in the short run.

There are really only two candidates for the role, and neither looks at all fit to play it. The euro may have some ambitions in that direction, but it has far too many problems still. The yuan/renminbi certainly has such ambitions, but the Communist party refuses to let it get on stage to show what it’s got. As I recently wrote:

 

The main sticking point for Beijing is a conundrum it cannot solve. The CCP wants to have BOTH a global currency AND total control over that currency. It will have to choose between the two, and cannot make up its mind. So it pretends it doesn’t have to choose. Sure, there has been some advancement for the yuan, but I bet most of that is on the back of the Belt and Road (BRI), and that will turn out to be one of the main victims of the coronavirus. The BRI is China’s very clever way of exporting its overproduction, but potential buyers have other things on their mind today.


Meanwhile, even with that, the yuan is used in only 1.8% of cross-currency payments. [..] The sudden, and rushed, take-over of Hong Kong with the new security law will not help China’s plans to be accepted internationally. [..] The world’s large investors will not put their money into something that Xi Jinping can declare devalued by 50% on a rainy morning when he sees fit. He will have to cede that kind of control.

The euro has made some gains vs the USD recently, going from 1.07 to 1.16 or so, but that means very little once you look at the broader picture. Moreover, the reason the financial press provides for -much of- those gains, which is that the EU supposedly showed “unity” in its recent Recovery Fund talks, is bollocks.

If it showed one thing, it was a lack of unity. That’s why these were the longest talks they ever had. And if this had not been Angela Merkel’s last hurrah, they might not have agreed at all. They paid off the Frugal Four to the tune of hundreds of millions, and that’s how they got a deal. Horse traders.

A simple screenshot from Bloomberg of the USD vs EUR over the last five years makes clear why the recent changes are no big deal. (All BBG screenshots are from July 24 just before 10 AM EDT and all cover a 5 year period.)

 

 

A reserve currency has two roles: being the currency that most international trade is conducted in, and -closely related- being the currency that countries hold most as foreign exchange (FX) reserves. After WWII, the US dollar became the most important currency for trade more or less by default, a position that it greatly strengthened with the petrodollar.

A 2015 SWIFT paper provides details about the US dollar’s share of international trade:

The US dollar prevails as the dominant international trade currency, with a 51.9% share of the value of international currency usage in 2014. The euro is second, with a 30.5% share of the total value. The British pound is third, with a 5.4% share of the total value, followed by Asian currencies such as the Japanese yen and the Chinese yuan.

That’s from five years ago, but things won’t have changed much. The system is complex and inert, it has a very strong resistance against large and sudden changes. (Do note that the euro’s share of international trade is substantially skewed because it includes payments between countries that use the euro as their currency, plus those EU countries that don’t -yet-). Single market, international trade.

And then there’s the dollar’s FX role.

In September 2019, Eswar Prasad at Brookings reported that the dollar’s share of global FX reserves remains around 65%.

The drop from 66 percent in 2015 to 62 percent in 2018, is probably a statistical artifact related to changes in the reporting of reserves. Compared with 2007, however, the dollar’s share of global FX reserves has declined by 2 percentage points while the euro’s share is down 6 percentage points. Over this period, the Japanese yen’s share has risen by 2 percentage points, while other less prominent reserve currencies have increased their total share by 4 percentage points. The renminbi, which was not an official reserve currency in 2007, now accounts for 2 percent of global FX reserves. [..] .. the euro has stumbled, the renminbi has stalled, and dollar supremacy remains unchallenged.

[..] In July 2019, China’s total official reserve assets amounted to just over $3.2 trillion, of which $3.1 trillion (97 percent of the total) was held in the form of FX reserves. Gold holdings amounted to about $89 billion [..] Coming amid rising trade tensions with the U.S., the 5 percent increase in China’s gold stock and the 24 percent increase in the value of its official gold holdings during 2019 have been interpreted as a sign of China’s attempting to diversify its reserve holdings away from U.S. dollars.

If this interpretation was indeed correct, China has a long way to go. Gold now accounts for 3 percent of China’s gross international reserves. From a global financial market perspective, and especially relative to its overall international reserves, the $18 billion increase in the value of China’s gold reserves during 2019 is trivial; it barely registers as a shift in the composition of China’s overall reserves.

Assuming that China still holds 58 percent of its FX reserves in dollar-denominated assets, the value of those assets in July 2019 was $1.8 trillion. So, the value of its gold reserves, $94 billion, is a mere one twentieth of that of China’s dollar-denominated reserves.

With the euro and yuan out of the way as potential reserve currency candidates, we can take a look at gold. Senior commenter Dr.D at the Automatic Earth recently wrote: “As advertised, the US$ is defaulting. What? Where? US$ has been cut in half compared to Silver in 3 months. US$ has been cut in half compared to BTC in 3 months. US$ has been cut in half compared to Gold in 4 years.

Like many people talking about a USD demise, perhaps that’s too much of a dollar-centric view and conclusion. Surely gold and silver can rise vs the USD without announcing an imminent collapse of the latter. And since precious metals tend to go up in times of uncertainty, and COVID has brought shovels full of just that, you would expect them to rise.

Therefore you would have to also look at how they do vs for example the euro, before concluding anything. Note: I didn’t include Bitcoin because it’s too new and volatile. Makes me think of the Lindy Effect, often cited by Nassim Taleb, the idea that the older something is, the longer it’s likely to be around in the future.

Here are a few more Bloomberg screenshots. And yes, gold has done well vs the USD in, say, the past two years, no doubt.

 

 

But gold has pretty much followed the exact same pattern vs the euro:

 

 

Silver has done even better, more recently, vs the USD, though compared to where it was in 2016 it’s not that big a step (barely more than 10%):

 

 

And the pattern of silver vs the euro is so similar it’s almost eery.

 

 

I don’t see anything there that would make me think the dollar is collapsing, no more than the euro is. What I see is gold and silver rising. People move into precious metals, perceived as safe havens; they always do when the world is in turmoil. And don’t forget there are trillions in additional recent central bank money sloshing around that have to move somewhere.

As for the changes of the USD vs the euro: we’ve already seen that they are not exceptional. Losing a few percent vs the euro will not collapse the dollar.

Also, there’s something missing in the discussion as far as I’ve seen: the option that it’s the US itself that wants a lower dollar at this point in time, and actively works to get it lower. A strong dollar works for a strong economy, but not for one weakened by a pandemic and an acrimonious political climate.

But the US has borrowed so much money!, you say. Yes, but so have Europe, and Japan, and China, everyone has who could.

 

A little more about gold, since some are clamoring for a return to the gold standard. Which is not likely, because too many parties would resist, either for ideological or practical reasons. But say you would consider it, then you would as one of the first things you do, look at gold reserves. Here are the top ten gold holding countries per March 2020, as assembled by TradingEconomics.com:

 

 

Note: Britain is not there, because “Between 1999 and 2002 the Treasury sold 401 tonnes of gold – out of its 715-tonne holding – at an average price of $275 an ounce, generating about $3.5bn during the period.” (BBC). Gold is at $1,900 today. Nuff said.

The US gold reserves are so large it would appear to give them an unfair advantage if a gold standard were considered. Same as they have in the current set-up. Then again, if you insert population numbers into the equation, Germany, Italy, Switzerland, even the Netherlands, have more in relative terms. Question is: where does that leave all the others?

Long story short: I don’t see a US dollar default or collapse in the near future. But by all means enlighten me.

 

 

 

 

We try to run the Automatic Earth on donations. Since ad revenue has collapsed, your support is now an integral part of the interaction you have with us.

Thank you.

 

 

It’s very bad luck to draw the line
On the night before the world ends
We can draw the line some other time

X – Some other time

 

 

Support the Automatic Earth in virustime.

 

Mar 012020
 


John Waterhouse Diogenes 1882

 

 

This is a new essay from Alexander Aston. He describes how once the world has passed through the -narrow- bottleneck of the coronavirus and its effects on our societies, which are long overdue for a redo, and on the central bank-engineered distortions of the markets that are -make that were- supposed to be the foundation that allowed us to flourish, there will be a better world waiting.

I’m all for it, and I have no rational issues with it either, but when I read“..these are the moments at which humans are the most creative and most inspiring”, my warped mind can’t NOT think: ..yes, we’re moving towards a better world, and we’re terribly sorry that you didn’t make the cut..”

Here’s Alexander:

 

 

Dear Raúl, I hope you are well. Things are all right on my side. Submitted my thesis, am being examined by the heads of Archaeology for both Cambridge and Oxford, which is a huge, albeit intimidating complement. Otherwise, just watching the world come unglued, so I wrote you something to put up if you like it. All the best – Alex

 

 

“A mighty space it was, with gigantic machines here and there within it, huge mounds of material and strange shelter places.


And scattered about it, some in their overturned warmachines, some in the now rigid handling-machines, and a dozen of them stark and silent and laid in a row, were the Martians—dead!—slain by the putrefactive and disease bacteria against which their systems were unprepared; slain as the red weed was being slain; slain, after all man’s devices had failed, by the humblest things that God, in His wisdom, has put upon this earth.”

– HG Wells

 

 

It took until the first two months of 2020 for the long Twentieth Century to finally come to an end. One thing now seems absolutely clear, this will be the decade that the majority finally come to understand that things are never going back to “normal.” To be sure, the complex entanglements of institutions, narratives, cultural practices, and economic relationships that emerged during the previous century have been under immense strain these past two decades. Enormous effort has been expended to maintain the inertia of the global system, from the immense violence of imperial politics and regime change wars, to the more subtle violence of economic dispossession by a privileged elite that control the mechanisms of power.

A few years of relative, but diminishing stability were bought at great expense. Authoritarianism, rentier feudalism, political corruption, regional instability, distrust, anger, and disbelief have wormed their way into every facet of our global society. The cost of refusing to adapt, for the benefit of a very select few, is immense systemic fragility. It is fitting that the hubris, intransigence and bankruptcy of imagination in our modern political economy shall finally be brought low by a microscopic organism.

Some will read this and misunderstand me and believe that I am being apocalyptic about the physical illness brought about by the coronavirus. The virus is serious, and will have dramatic consequences, but it is no black death. The virus is a catalyst, something beyond our agency to control which is triggering cascading changes in a system that has been rotting for some time. As an archaeologist, if I found evidence of intensive and intersecting energetic, ecological and economic disruptions in society, what I would expect to find at the end of those stratigraphic layers is a new cultural phase.

 

That is, I would expect a very different kind of society and culture, albeit causally linked, from that which preceded it. Another way to frame this is that periods of systemic collapse and reorganisation generate new forms of social psychology, new narratives, beliefs and practices. A new epoch is here, and we will all quickly learn that we are very different kinds of people than we thought we were. Soon, things will start looking radically different from what we have known to be the order of things. States, institutions, practices and beliefs that once seemed permanent fixtures of our world will be swept away.

This may seem extreme, the momentum of history has not fully tipped us over the edge yet, which allows psychological space for defaulting to normalcy bias. The problem is that causality is not linear, and it does not operate at singular scales. What we are experiencing has been building for decades, but the synergy of these causal processes, their true emergent effects are about to become fully apparent. The virus is a spark, not the cause, and it is breaking down the last reinforcing bonds holding the global system together. If the ruling class had not been debasing our societies and parasitizing their citizenries for decades, our social resiliency to this pandemic would be much higher. High energy production costs, low demand, and low consumption have been masked by systemic financial fraud.

Instead of innovation, we have spent decades investing in a Potemkin economy. We are about to find out that, despite all our mathematical abstractions and sorcery, the hardcore material basis of our economies rules supreme. Simply put, one cannot shut down countries like China for months on end without powerful material ramifications. Supply chains are going to be severely disrupted, and this is going to implode the illusion of the financialised economy along with our disastrously entwined energy systems. People are going to have difficulty accessing everything from car parts to asthma inhalers, and this is going to shake their fundamental understanding of how the world works. People will be scared, they will be angry, and their final vestiges of faith in the system will begin to collapse.

 

The problem goes deeper than mere economic implosion, it goes to basic principles of trust and belief. Human history is a story of an incredible capacity to self-organise and work collectively. However, this requires collective attention upon shared forms of value, narratives and cultural practices that raise levels of trust necessary for stable social relationships to be organised. Faith in the promise of our societies has been severely eroded on all sides these past few years. People still believe in their societies, but just barely, and usually based on the misapprehension that either they can undo the damage or that their chosen leaders will solve all the problems.

Our narratives have been fundamentally shaken and fractured, but soon they will start collapsing and it is going to be very difficult to rebuild trust once they finally give. Our collective faith in the system will break down completely with the loss of the shared forms of value through which we incorporate ourselves into our social relationships and ensure our well-being; those things that glue our collective narratives together. This is when we will be most vulnerable to social violence, because we won’t know whom to trust, and we will be desperate to survive the upheaval. This is also when radically new forms of organisation will begin to emerge, as people build coalitions and communities to meet new challenges. These relationships will become the bedrock for new cultural relationships.

It is hard to tell exactly what happens, but there are a few predictions that are within reason. Prolonged quarantines could result in cascading defaults from the bottom up while severe supply chain disruptions have the ability to trigger institutional defaults. Likewise, the slowdown in air travel could potentially send Boeing into a complete tailspin. Regardless, we are liable to see massive deflationary pressures in everything other than essential goods. What’s more, the virus will probably devastate countries weakened by imperialist intervention and sanctioning. Places such as Syria and Yemen are very likely to see truly horrific outbreaks due to their obliterated social infrastructure.

 

The virus could also potentially collapse the weakened Iranian state. Ironically, the zero-sum logics of Empire have created conditions through which the pandemic can entrench and project itself. This raises another horrifying possibility, that certain sociopaths will use the synergetic fears of refugees and contagion as political weapons. This will only lead to atrocities against the most vulnerable. Furthermore, the fact that the Coronavirus has established itself in Italy, the most fragile of Europe’s major economies, is a harsh twist of fate. The shutdown of the country is likely to lead to major financial contagion in the Eurozone and place pressures upon core principals such as freedom of movement. Either the European Union will break apart in this process or it will transform into something very different than it has been.

Another likely outcome is that the American health profiteering system will finally be shown for the utter social failure that it is. The infection is liable to spread in a country where people refuse treatment because they are afraid of bankruptcy. Finally, if the virus is not contained, it could very well affect the U.S. elections. The loss of political legitimacy could make the country ungovernable given the social antagonisms surrounding the candidates. At the end of the day, our cultural logics have fetishized competition and treated our societies as zero-sum games designed to provide luxury communism for billionaires and debt slavery for the rest of us. It is not surprising that it is greed, selfishness and entitlement that are undoing our societies, we have failed the prisoners dilemma and now we are being sentenced.

We live in a moment of radical historical change, but do not despair. Things will be difficult, but these are the moments at which humans are the most creative and most inspiring. We will see hard, sometimes brutal things, but we are also going to see new kinds of beauty brought into this world. We must hold on to that, we must hold on to a sense of vision and endeavour, that something better is still possible. More than anything, take care of each other. The future belongs to those who know how to cooperate best, how to share effectively, how to generate new forms of value, new narratives, new communities. We are at the end of the beginning and much will depend on our choices, our courage and our compassion in the coming years. I wish all of you luck and solidarity as we become Twenty-First Century people.

 

 

I know about Persia and Xenophon,
Egypt and the Sudan,
But I prefer to be caressed
By fresh mountain air.

I know the age old history
Of human grudges,
But I prefer the bees that fly
Among the bellflowers.

I know the songs that breezes sing
In the chattering branches;
Don’t tell me that I lie –
I do prefer them.

I know about the frightened buck
Returned to its pen, expiring;
I know that weary hearts die darkly
But free from anger.

– José Martí

 

 

If you read us, please support us. Donate on Paypal and Patreon.

 

Dec 032019
 
 December 3, 2019  Posted by at 9:51 am Finance Tagged with: , , , , , , , , , , ,  11 Responses »


Arthur Rothstein Texas Panhandle Dust Bowl Mar 1936

 

There Is No More Accurate Way To Describe All That Than As A Coup (Kunstler)
Republicans Issue 123-Page Defense Of Trump (G.)
Barr Disputes Major Horowitz Finding Based On Durham, CIA Evidence (ZH)
Leaked NHS Papers ‘Put Online By Posters Using Russian Methods’ (G.)
As Trump Heads To London For NATO Summit, Warnings On British Election (R.)
Japan Preparing $120-$230 Billion Stimulus Package As Recession Risks Grow (R.)
Third Bond Default By Chinese Electronics Firm Within A Month (SCMP)
Virginia Giuffre In Plea To Public Over Prince Andrew Scandal (G.)
EU Leaders To Push For Climate Neutrality By 2050 (R.)
Small American Farmers Are Nearing Extinction (Time)
At Least 135,000 Children In Britain Will Be Homeless At Christmas (G.)

 

 

The discussions are about to heat up, with different sides drawing entirely different conclusions from the same “facts”. It’ll be a spectacle.

Jim Kunstler is not about to let up.

There Is No More Accurate Way To Describe All That Than As A Coup (Kunstler)

Then there is the “Whistleblower,” this would-be pimpernel of perfidy hiding behind Adam Schiff’s apron under the false assertion that he is entitled to everlasting anonymity. What an idea under our system of jurisprudence! In fact, contrary to Mr. Schiff’s public pronouncements, there is no law that states what he claims — one of several things Mr. Schiff can be called to account for. And that is even if you accept the dishonest proposition that the fugitive who started this fiasco even was a whistleblower, rather than a rogue CIA officer acting on explicitly illegal political motives to interfere in the 2020 election. The CIA, you must know, is forbidden by charter and statute from operating against American citizens in-country, including the president of the United States. Under the circumstances, the so-called “Whistleblower” might fairly be accused of treason.


Has anyone failed to notice that one of the “Whistleblower’s” attorneys, Mark Zaid, tweeted notoriously on January 30, 2017 that “Coup has started. First of many steps. #rebellion. #impeachment will follow ultimately. #lawyers.” Mr. Zaid later explained, “I was referring to a completely lawful process.” Yeah, sure. I think he meant a completely Lawfare process. Of course, the engineered “Whistleblower” escapade was only the latest (perhaps the last) chapter in the annals of nefarious events and actions carried out far-and-wide by several government agencies for three years, and by many officials working within them, and not a few freelance rogues in their service. There is no more accurate way to describe all that except as a coup. The authorities looking into all that have not been heard from yet. The portentous silence is making a lot of people in Washington edgy.

Read more …

View from the anti-Trump camp.

Republicans Issue 123-Page Defense Of Trump (G.)

Donald Trump’s actions towards Ukraine were “entirely prudent” and involved “no quid pro quo, bribery, extortion, or abuse of power”, according to a draft Republican report on last month’s impeachment inquiry hearings. Designed as a pre-emptive strike on an imminent report from the Democratic majority, the GOP document underlines how evidence presented at the hearings failed to shatter Republicans’ united front. It also provides a blueprint for House Republicans to defend the US president at Wednesday’s judiciary committee hearing and for their Senate counterparts to acquit him in a trial.

Democrats accuse Trump of attempting to bribe the Ukrainian president, Volodymyr Zelenskiy, by making a White House meeting and nearly $400m in military aid conditional on Ukraine announcing two investigations that would boost Trump politically. The 123-page Republican report was prepared for Devin Nunes, Jim Jordan and Michael McCaul, the ranking members on the House intelligence, oversight and foreign affairs committees, respectively. It directly contradicts the testimony of career diplomats and makes little attempt to get to grips with the devastating evidence of Gordon Sondland, the US ambassador to the European Union, who spoke about the existence of a quid pro quo, or Fiona Hill, former top Russia expert at the White House, who warned against falling for Moscow’s propaganda about Ukraine’s role in the 2016 election.

Instead it spins the affair as a Democratic plot. Its executive summary begins with the premise that nearly 63 million Americans from around the country elected Trump in 2016 but now 231 House Democrats in Washington are “trying to undo the will of the American people”. It accuses the party of seeking to impeach the president from day one. “They are trying to impeach President Trump because some unelected bureaucrats chafed at an elected President’s ‘outside the beltway’ approach to diplomacy,” it says.

Read more …

Durham knows things that Horowitz doesn’t. Expect an anti-Barr campaign.

Barr Disputes Major Horowitz Finding Based On Durham, CIA Evidence (ZH)

Attorney General William Barr will dispute a fundamental finding in the upcoming Inspector General report – namely that the FBI was justified in launching an operation Crossfire Hurricane, the agency’s official covert counterintelligence investigation into links between the Trump campaign and Russian officials, according to the Washington Post. While IG Michael Horowitz is said to have concluded that the agency had enough information to launch the probe on July 31, 2016 after Trump campaign aide George Papadopoulos repeated a rumor that Russia had dirt on Hillary Clinton, Barr has reportedly told associates that Horowitz does not know about – or did not include – potentially exculpatory evidence held by other US agencies such as the CIA, which could alter his report’s conclusion.

In July, Fox News reported that exculpatory evidence existed which the FBI failed to include in surveillance warrant applications in which Papadopoulos denies having any contact with the Russians, when he was in fact told about the ‘Clinton dirt’ byJoseph Mifsud, a mysterious Maltese professor (and self-professed member of the Clinton foundation) who has ties to George Soros’ Open Society Foundation. Many believe Papadopoulos was the victim of an entrapment scheme, by which Mifsud would seed him with information that Australian diplomat would later extract from him in a London bar, which made its way to the FBI – officially leading to the launch of Operation Crossfire Hurricane. And the exculpatory evidence? Downer – a Clinton ally – likely recorded Papadopoulos saying he had no Russian contacts.

Barr’s information also comes from a concurrent, ongoing investigation into the Obama DOJ conducted by Connecticut US Attorney John Durham. Part of Barr’s reluctance to accept that finding is related to another investigation, one being conducted by Connecticut U.S. Attorney John Durham, into how intelligence agencies pursued allegations of Russian election tampering in 2016. Barr has traveled abroad to personally ask foreign officials to assist Durham in that work. Even as the inspector general’s review is ending, Durham’s investigation continues. -Washington Post

Barr, through Durham, has been investigating Mifsud – who told Italian media “I never got any money from the Russians: my conscience is clear,” adding “I am not a secret agent.” The Maltese professor is currently MIA. As the Post’s Devlin Barrett (who spoke with former FBI lawyer Lisa Page) notes, Barr’s disagreement with Horowitz not only sets the stage for a showdown within the DOJ, it will spark partisan outrage among Democrats who have already accused the AG of being Trump’s personal lawyer.

Read more …

The anti-Trump camp, are we surprised?, is also the anti-Corbyn camp. But this is quite the stretch. Putting Russia in the headline of an article that says there is no proof that Russia is involved.

Leaked NHS Papers ‘Put Online By Posters Using Russian Methods’ (G.)

Leaked documents said by Labour to prove that the NHS was “on the table” in trade talks with the US were initially disseminated online by anonymous posters operating in a way similar to a Russian information operation known as Secondary Infektion, according to a social media research firm. A 19-page report published on Monday by the consultancy Graphika said that while it could not conclusively prove a Russian origin to the leak, the early distribution of the cache of files via Reddit, three German-language websites and an anonymous Twitter account reflected a method of operation seen repeatedly over recent years.


There is no suggestion either that the NHS documents, produced by Jeremy Corbyn at a dramatic press conference last week, were fake, but the Graphika investigation highlights an intriguing series of efforts to get the leak picked up more widely at the end of October and beginning of November. Ben Nimmo, the head of investigations at Graphika, said: “What we are saying is that the initial efforts to amplify the NHS leak closely resembles techniques used by Secondary Infektion in the past, a known Russian operation. But we do not have all the data that allows us to make a final determination in this case.”

Read more …

Can Trump damage Boris?

As Trump Heads To London For NATO Summit, Warnings On British Election (R.)

U.S. President Donald Trump leaves on Monday for a NATO summit in London, where he is under pressure from British Prime Minister Boris Johnson to resist the temptation to wade into the looming British election. As a presidential candidate in 2016 and then as president since early 2017, Trump has shown no restraint in pushing for Britain’s exit from the European Union and critiquing the politicians involved in the country’s long-running Brexit debate. But with Johnson leading polls as he faces Dec. 12 elections, the prime minister who is hosting the London NATO summit wants Trump to mind the guard-rails, putting Trump in the unusual position of being asked to avoid his normal impulse to comment on whatever he wishes.


Trump waded into the election in October by saying opposition Labour Party leader Jeremy Corbyn would be “so bad” for Britain and that Johnson should agree on a pact with Brexit Party leader Nigel Farage. Johnson’s pressure prompted the White House to stress, as a senior administration official said, that Trump “is absolutely cognizant of not, again, wading into other country’s elections.” That strategy could be put to the test as Trump faces reporters a number of times on the trip, including at a news conference on Wednesday.

Read more …

Abenomics continues unabated.

Japan Preparing $120-$230 Billion Stimulus Package As Recession Risks Grow (R.)

Japan is preparing an economic stimulus package worth $120 billion to support fragile economic growth, two government officials with direct knowledge of the matter said on Tuesday, complicating government efforts to fix public finances. The spending would be earmarked in a supplementary budget for this fiscal year to next March and an annual budget for the coming fiscal year from April. Both budgets will be compiled later this month, the sources told Reuters, declining to be identified because the package has not been finalised. While the package would come to around 13 trillion yen ($120 billion), that would rise to 25 trillion yen ($230 billion) when private-sector and other spending are included.


However, the spending could strain the industrial world’s heaviest public debt burden, which tops more than twice the size of Japan’s $5 trillion economy. And despite the headline size of the stimulus, actual spending would be smaller in the current fiscal year, and economists are not expecting much of a boost. “We expect this fiscal year’s extra budget to total around 3-4 trillion yen. We should not expect it to substantially push up the GDP growth rate,” said Takuya Hoshino, senior economist at Dai-ichi Life Research Institute. The 13 trillion yen includes more than 3 trillion yen from fiscal investment and loan programmes, as the heavily indebted government seeks to take advantage of low borrowing costs under the Bank of Japan’s negative interest rate policy.

Read more …

Just 2 weeks ago they announced a plan to sell a majority stake to the local government. How did that work out?

Third Bond Default By Chinese Electronics Firm Within A Month (SCMP)

Tunghsu Optoelectronic Technology has failed to make good on a bond – its third in less than a month – as the struggles point to poor corporate governance among Chinese companies. The maker of electronic display panels, which reported ample cash holdings of more than 18 billion yuan as of September, missed an interest payment on its 1.7 billion yuan (US$241 million) onshore bond due on Monday, according to an exchange filing. The latest default has cast doubt on whether Tunghsu could meet its obligations on a US$44 million bond maturing in June 2020, after it defaulted two notes totalling 3 billion yuan on November 18.


Tunghsu is the latest in a growing list of Chinese defaulters this year, as banks have tightened their funding to private companies amid China’s slowest economic growth rate in nearly three decades. As of November 12, 45 Chinese corporate issuers had defaulted on interest or principal payments on bonds totalling 85.16 billion yuan, compared with 39 defaults on bonds worth 102.48 billion yuan for all of 2018, according to Reuters. Falling export orders as a result of the US-China trade war has strained the cash flow of manufacturers, while Beijing’s crackdown on shadow banking has also cut off alternative sources of capital for many small companies.

Read more …

Charles to the rescue?

Virginia Giuffre In Plea To Public Over Prince Andrew Scandal (G.)

A beleaguered Prince Andrew faced fresh embarrassment after his accuser Virginia Giuffre, who claims she was trafficked as a teenager to have sex with him, appeared on television to implore the British public to “not accept this as being OK”. In her first UK broadcast interview, Giuffre repeated allegations she had sex with the prince when she was aged 17 on the instructions of Ghislaine Maxwell, a socialite and close friend of the US financier and sex offender, Jeffrey Epstein, who killed himself in August. The prince, 59, whose relationship with Epstein has led to him standing down from public duties, has consistently and categorically denied the allegations, which Buckingham Palace said were “false and without foundation”.


BBC Panorama said it had uncovered a 2015 email from Andrew to Maxwell asking for help dealing with the allegations by Giuffre, previously Virginia Roberts. He wrote: “Let me know when we can talk. Got some specific questions to ask you about Virginia Roberts,” to which Maxwell replied: “Have some info. Call me when you have a moment.” In the interview that was broadcast on Monday, Giuffre said: “I implore the people in the UK to stand up beside me, to help me fight this fight, to not accept this as being OK. “This is not some sordid sex story. This is a story of being trafficked. This is a story of abuse and this is a story of your guy’s royalty.”

Read more …

When someone says 2050, ignore them.

EU Leaders To Push For Climate Neutrality By 2050 (R.)

European Union leaders meeting in Brussels next week will push to agree to put the bloc on net-zero greenhouse gas emissions by 2050, their draft joint statement showed on Monday, heralding a bitter fight looming at their gathering. The Dec. 12-13 summit of the bloc’s national leaders will aim to endorse “the objective of achieving a climate-neutral EU by 2050”, according to the document seen by Reuters. Previous attempts, however, were blocked by Poland, Hungary and the Czech Republic, who rely on highly polluting coal. They have previously said they oppose climate neutrality by 2050 for fear cutting greenhouse emissions will stifle their economies.


To convince the reluctant camp, the draft summit conclusions refer to “just and socially balanced transition”, the European Investment Bank’s announcement to unlock 1 trillion euros worth of green investment until 2030, the need to ensure energy security and competitiveness vis-à-vis foreign powers not pursuing such climate goals. The draft, prepared in advance of the leaders’ discussions, may still change. But it will eventually need unanimous backing of all EU national leaders for there to be agreement at the summit. The bloc’s new executive European Commission also aims to push for climate neutrality by mid-century and wants to make the EU’s 2030 climate targets more ambitious.

Read more …

You want your food good or cheap?

Small American Farmers Are Nearing Extinction (Time)

In the American imagination, at least, the family farm still exists as it does on holiday greeting cards: as a picturesque, modestly prosperous expanse that wholesomely fills the space between the urban centers where most of us live. But it has been declining for generations, and the closing days of 2019 find small farms pummeled from every side: a trade war, severe weather associated with climate change, tanking commodity prices related to globalization, political polarization, and corporate farming defined not by a silo and a red barn but technology and the efficiencies of scale. It is the worst crisis in decades. Chapter 12 farm bankruptcies were up 12 percent in the Midwest from July of 2018 to June of 2019; they’re up 50 percent in the Northwest. Tens of thousands have simply stopped farming, knowing that reorganization through bankruptcy won’t save them. The nation lost more than 100,000 farms between 2011 and 2018; 12,000 of those between 2017 and 2018 alone.


Farm debt, at $416 billion, is at an all-time high. More than half of all farmers have lost money every year since since 2013, and lost more than $1,644 this year. Farm loan delinquencies are rising. Suicides in farm communities are happening with alarming frequency. Farmers aren’t the only workers in the American economy being displaced by technology, but when they lose their jobs, they also ejected from their homes and the land that’s been in their family for generations. “It hits you so hard when you feel like you’re the one who is losing the legacy that your great-grandparents started,” said Randy Roecker, a Wisconsin dairy farmer who has struggled with depression and whose neighbor Leon Statz committed suicide last year after financial struggles forced him to sell his 50 dairy cows. Roecker estimates he’s losing $30,000 a month.

Read more …

Third world. Rich ruling class, and then the rest.

At Least 135,000 Children In Britain Will Be Homeless At Christmas (G.)

At least 135,000 children will be homeless and living in temporary accommodation across Britain on Christmas day – the highest number for 12 years – according to the housing charity Shelter. It estimates that a child loses their home every eight minutes – 183 children per day. At this rate, 1,647 children will become homeless between now and the general election on 12 December, and more than 4,000 by 25 December. London has the highest concentration of homeless youngsters, up 33% since 2014. About 88,000 children were homeless and in temporary accommodation in the capital at the beginning of 2019 – equivalent to one in every 24 children.


The capital has 26 of the 30 British local authorities with the highest rates of homeless children. Four councils – Haringey, Newham, Westminster and Kensington & Chelsea – had homeless rates of one in every 12 children. Outside London, the places worst affected were: Luton (one in 22 children); Brighton & Hove (one in 30); Manchester (one in 47); and Slough (one in 53). In Wales, one in 412 children are homeless, up 28% since 2015, while in Scotland one in 160 children were homeless, up 64% since 2014.

Read more …

 

 

 

 

 

Please support the Automatic Earth on Paypal and Patreon so we can continue to publish.

Top of the page, left and right sidebars. Thank you.

 

 

 

Nov 122018
 


Vincent van Gogh Burning weeds 1883

 

Macron: Nationalism Is A “Betrayal Of Patriotism” (Ind.)
Putin Says Had Good Conversation With Trump In Paris (AFP)
Eastern Ukraine Elects Separatist Leaders As West Rejects Polls (AFP)
May Says Britain Open To ‘Different Relationship’ With Russia (R.)
Boris Johnson Says Britain On Verge Of ‘Total Surrender’ In Brexit Talks (R.)
May Shelves Crunch Brexit Talks With Cabinet (Ind.)
Alibaba Has Record $30.8 Billion In Sales In 24 Hours On Singles Day (CNBC)
Foreign Capital Has Propped Up China’s Currency. What If It Leaves? (CFR)
What Plunging Oil Prices Tell Us About The Stock Market And Global Economy (MW)
A Worldwide Debt Default Is A Real Possibility (Mauldin)

 

 

As Macron nears record low approval rating for a French president, he lectures the world through a game of semantics. The ‘brilliance’ is that while not many could have told you the difference between nationalism and patriotism, Macron claims to have it down. Even if it has to be translated into dozens of languages, each of which may have slightly different interpretations of the -local- meaning of the words. Macron has good speech writers, but they don’t write in all the languages involved. So it’s merely semantics. The terms mean to everyone what they want them to mean.

The take-away: according to Macron, patriotism can exist along globalism, nationalism cannot. A jibe against Trump. Which also means that because Xi Jinping touts globalism all the time, we must accept, if we follow Macron, that he is not a nationalist, but a patriot.

Macron: Nationalism Is A “Betrayal Of Patriotism” (Ind.)

Emmanuel Macron has issued a hard-hitting warning about the dangers of nationalism and of countries that put their interests before the collective good – in front of Donald Trump and Vladimir Putin. The French president denounced those who evoke nationalist sentiment to disadvantage others, calling it a “betrayal of patriotism” and moral values. The US and Russian leaders listened in silence as Mr Macron took a swipe at the rising tide of populism in the US and Europe, warning: “The old demons are rising again, ready to complete their task of chaos and of death.” During a gathering of dozens of world leaders to mark 100 years since the end of the First World War, the French president went on: “Patriotism is the exact opposite of nationalism. Nationalism is a betrayal of patriotism.

“In saying, ‘Our interests first, whatever happens to the others’, you erase the most precious thing a nation can have, that which makes it live, that which causes it to be great and that which is most important: its moral values.” [..] In a speech lasting nearly 20 minutes, Mr Macron also called on fellow leaders to fight for peace. “Ruining this hope with a fascination for withdrawal, violence or domination would be a mistake for which future generations would rightly find us responsible,” he said. The French leader also defended the European Union and the United Nations, which he said guaranteed peace and enshrined “a spirit of cooperation to defend the common property of a world whose destiny is inextricably linked”.

Read more …

Okay, is Putin a nationalist or a patriot? He seems to like globalism, but he likes Russia better. And he’s been pushed out of globalism through sanctions and tall tales.

Putin Says Had Good Conversation With Trump In Paris (AFP)

Russian President Vladimir Putin said he had a brief but good conversation with US leader Donald Trump at World War I centenary events in Paris, Russian media reported. When journalists asked Putin whether he managed to speak to Trump on Sunday, he said: “Yes,” Russian state news agency RIA Novosti reported. Asked how it went, Putin said: “Well.” He did not provide further details, but the French presidency said the pair had a wide-ranging discussion during lunch after the commemoration. Host and French President Emmanuel Macron was there and German Chancellor Angela Merkel took part in some of the exchanges, the presidency said.

Subjects discussed included the situation in the Middle East, notably Syria, Iran and Saudi Arabia, and North Korea. White House spokeswoman Sarah Sanders said Trump had sat with world leaders including Putin, Macron and Merkel at lunch and the group had held “very good and productive discussions”. “The leaders discussed a variety of issues, including the INF (nuclear treaty), Syria, trade, the situation in Saudi Arabia, sanctions, Afghanistan, China, and North Korea,” she said. Expectations have been growing for a new Trump-Putin meeting as tensions pile up over the Cold War-era Intermediate-Range Nuclear Forces Treaty (INF) and US sanctions against Moscow.

Read more …

Macron and Merkel: “These so-called elections undermine the territorial integrity and sovereignty of Ukraine..”

Wasn’t it John McCain and Vcitoria Nuland who undermined it back in 2014 on Maidan Square?

Eastern Ukraine Elects Separatist Leaders As West Rejects Polls (AFP)

People in Russian-backed areas of eastern Ukraine re-elected separatist leaders at the weekend, according to results released Monday of polls condemned as illegal by Kiev and Western countries. Elections in the Donetsk and Lugansk “People’s Republics”, controlled by separatists since breaking away from Ukraine’s pro-Western government in 2014, took place after the killing of the rebel Donetsk “president” in a bomb attack in August. Security was tight for Sunday’s vote with gun-toting, camouflage-clad guards deployed to ensure order. Denis Pushilin, the 37-year-old acting Donetsk leader, was elected with 61 percent of the vote with almost all ballots counted, the local electoral commission said. Leonid Pasechnik, the acting Lugansk leader, took 68 percent of the vote.

French President Emmanuel Macron and German Chancellor Angela Merkel branded the vote “illegal and illegitimate” following a meeting with Ukraine President Petro Poroshenko on the sidelines of World War I commemorations also attended by Russian leader Vladimir Putin on Sunday. “These so-called elections undermine the territorial integrity and sovereignty of Ukraine,” the pair said in a joint statement. Washington and Brussels had asked Russia not to allow the polls to go ahead, arguing they would further hamper efforts to end a conflict that has killed more than 10,000 people since 2014. “The people in eastern Ukraine will be better off within a unified Ukraine at peace rather than in a second-rate police state run by crooks and thugs, all subsidized by Russian taxpayers,” tweeted Kurt Volker, the US special envoy to Ukraine, on the day of the polls.

Read more …

if only they confess to the narratives Britain has spouted without evidence.

May Says Britain Open To ‘Different Relationship’ With Russia (R.)

Prime Minister Theresa May will say on Monday Britain is “open to a different relationship” with Russia if Moscow takes a new path and stops “attacks” that undermine international treaties and security. Just a year ago, May used her annual speech at the Lord Mayor’s Banquet to accuse Moscow of military aggression and of meddling in elections, some of her strongest criticism even before the poisoning of a former Russian spy in Salisbury. This year, she will tell London’s financial center that the action taken since – including the largest ever coordinated expulsion of Russian intelligence officers – has deepened her belief in a “collective response” to such threats.

“We will continue to show our willingness to act, as a community of nations, to stand up for the rules around the world,” May will say, according to excerpts of her speech. Describing evolving threats, May will say the past year, including Salisbury, has “shown that while the challenge is real, so is the collective resolve of likeminded partners to defend our values, our democracies, and our people.” “But, as I also said a year ago, this is not the relationship with Russia that we want … We remain open to a different relationship – one where Russia desists from these attacks that undermine international treaties and international security,” she will say.

Read more …

Boris still wants to be King.

Boris Johnson Says Britain On Verge Of ‘Total Surrender’ In Brexit Talks (R.)

Former British foreign minister Boris Johnson accused Prime Minister Theresa May on Sunday of forcing through a deal that would keep the country locked in the European Union’s customs union after Brexit in what he described as a “total surrender”. “I really can’t believe it but this government seems to be on the verge of total surrender,” he wrote in his weekly column in the Telegraph newspaper. “I want you to savour the full horror of this capitulation … we are on the verge of signing up for something even worse than the current constitutional position. These are the terms that might be enforced on a colony.”

Read more …

Unsolved issues.

May Shelves Crunch Brexit Talks With Cabinet (Ind.)

Theresa May has been forced to abandon plans for an emergency cabinet meeting to approve a Brexit deal, after fresh opposition at home and abroad plunged her timetable into turmoil. The prime minister shelved the meeting, pencilled in for Monday, slamming on the brakes after fierce resistance in her cabinet and in Brussels threatened to derail the path to an agreement. A government source conceded that an outline deal might not be ready by Tuesday – making it increasingly unlikely that a special EU summit to sign it off can be held in November, as hoped.

That would leave the UK having to ramp up hugely expensive no-deal preparations and in danger of being unable to pass all necessary legislation before the Brexit deadline next March. At home, Ms May faced an open challenge to her plans from Andrea Leadsom, the Commons leader, who vowed the UK “cannot be held against its will” by the backstop plan for the Irish border. Ms Leadsom became the second cabinet minister to insist on a unilateral power to escape being bound in the EU customs union – something explicitly ruled out by Brussels.

Read more …

1.35 billion packages delivered.

Alibaba Has Record $30.8 Billion In Sales In 24 Hours On Singles Day (CNBC)

Alibaba on Sunday tore through last year’s Singles Day sales record, racking up more than $30.8 billion in the 24-hour shopping event. Gross merchandise value (GMV), a figure that shows sales across the Chinese e-commerce giant’s various shopping platforms, surpassed last year’s $25.3 billion record at around 5:34 p.m. SIN/HK (4:34 a.m. ET) on Sunday, and kept marching higher through the rest of the day. In Chinese currency terms, GMV totaled 213.5 billion yuan, easily beating last year’s figure of 168.2 billion yuan and representing a nearly 27 percent year-on-year rise. That was, however, smaller than the 39 percent year-on-year growth recorded in 2017.

Alibaba’s Singles Day GMV beat last year’s figure in yuan terms earlier than it toppled the dollar record. The Chinese currency is weaker against the greenback from a year ago, which means more sales in yuan are required to get the same dollar amount. It was the 10th edition of the annual Singles Day event, which is also called the Double 11 shopping festival because it falls on Nov. 11. During the 24-hour period, Alibaba offered huge discounts across its e-commerce sites such as Tmall. Alibaba’s Singles Day sales haul easily exceeded the spending by consumers during any single U.S. shopping holiday.

Read more …

Wait! Shadows?

Foreign Capital Has Propped Up China’s Currency. What If It Leaves? (CFR)

“I think China’s manipulating their currency, absolutely,” President Trump said back in August. Yet the People’s Bank of China (PBoC) was, and has been, intervening to keep the RMB up, and not to push it down, as Trump was alleging. And we believe such interventions are about to get much larger. Here is why. Over the past two years, as our left-hand figure below shows, foreign portfolio investors have piled prodigiously into Chinese assets, helping to support the RMB. But history suggests this trend is about to reverse. While inflows have been rising, Chinese stocks have been tumbling—they are down over 20 percent from their January peak. Dreadful performance like this typically drives funds out of emerging markets. We may be seeing the beginning of such outflows in China.

Repatriation of liquid foreign capital will make it far more challenging for China to keep its currency up. Of course, China could change course and let it fall, but that risks exacerbating the foreign-debt burden of its highly leveraged corporates. It could raise interest rates, but that would further slow a slowing economy. It could, to keep capital at home, demand higher returns on its foreign lending, but that would mean sacrificing its efforts to subsidize its companies operating abroad, as well those aimed at putting dollars to the service of geostrategic objectives—like Belt and Road. n short, then, there is every reason to expect that the PBoC will boost its support for the RMB by selling dollar reserves.

This is what it did back in 2015, when a plunging stock market scared away foreign capital. So in spite of President’s Trump’s repeated charges that China is manipulating its currency for competitive advantage in trade, all evidence suggests that it will continue to do the opposite. But if China were to sell reserves at the same pace as in 2015, its reserve levels would, by mid-2020, actually fall below the safety threshold implied by the IMF’s framework for reserve adequacy—as shown in the right-hand figure above.

Read more …

Not much for now. Oil rising this morning on Saudi cuts promised.

What Plunging Oil Prices Tell Us About The Stock Market And Global Economy (MW)

What the heck happened to oil prices? But more significantly, what does it mean for the broader stock market and the global economy? That is what has some Wall Street investors scratching their noggins, as crude futures and U.S. stocks staged a tandem tumble this week, just when investors thought the worst was over following a bruising October for risk assets. Now, oil futures are unraveling, down at least 20% after putting in a 52-week high early last month. And it isn’t so much the descent into bear-market territory—as the recent slump for crude can be characterized—as it is the celerity of the selloff that has market participants unsettled.

About five weeks: That’s all it took for bulls to pivot from cavalierly pondering if $100-a-barrel oil was a genuine possibility before the end of 2018 on the back of Iranian oil export sanctions imposed by the U.S. on Nov. 4, to wondering how ugly the current implosion in black gold could get before finding a bottom. On Friday, West Texas Intermediate crude for December delivery lost 48 cents, or 0.8%, to settle at $60.19 a barrel on the New York Mercantile Exchange, for the lowest front-month contract settlement since March 8, according to FactSet data. Prices lost 4.7% for the week, tallying their fifth straight weekly drop. The 10th session decline in a row matched the longest skid since 1984.

But beyond that, the most important question is this: What does oil’s decline really mean? That is the query that Yves Lamoureux, president of macroeconomic research firm Lamoureux & Co., posed to MarketWatch via email last week as the decline in oil was gaining steam. “Very large monthly down moves in crude oil has often heralded something more ominous,” he wrote on Nov. 1. “Most market observers think there is enough damage to see a bottom in stocks. Consensus therefore looks for new record highs or a solid bounce back. We strongly disagree with this perspective.”

Read more …

No doubt there. But it’ll start somewhere.

A Worldwide Debt Default Is A Real Possibility (Mauldin)

Is debt good or bad? The answer is “Yes.” Debt is future spending pulled forward in time. It lets you buy something now for which you otherwise don’t have cash yet. Whether it’s wise or not depends on what you buy. Debt to educate yourself so you can get a better job may be a good idea. Borrowing money to finance your vacation? Probably not. The problem is that many people, businesses, and governments borrow because they can. It’s been possible in the last decade only because central banks made it so cheap. It was rational in that respect. But it is growing less so as the central banks start to tighten. Earlier this year, I wrote a series of articles predicting a debt “train wreck” and eventual liquidation. I dubbed it “The Great Reset.”

I estimated we have another year or two before the crisis becomes evident. Now I’m having second thoughts. Recent events tell me the reckoning could be closer than I thought just a few months ago. Central banks enable debt because they think it will generate economic growth. Sometimes it does. The problem is they create debt with little regard for how it will be used. That’s how we get artificial booms and subsequent busts. We are told not to worry about absolute debt levels so long as the economy is growing in line with them. That makes sense. A country with a larger GDP can carry more debt. But that is increasingly not what is happening. Let me give you two data points.

Lacy Hunt tracks data that shows debt is losing its ability to stimulate growth. In 2017, one dollar of non-financial debt generated only 40 cents of GDP in the US. It’s even less elsewhere. This is down from more than four dollars of growth for each dollar of debt 50 years ago. This has seriously worsened over the last decade. China’s debt productivity dropped 42.9% between 2007 and 2017. That was the worst among major economies, but others lost ground, too. All the developed world is pushing on the same string and hoping for results. Now, if you are used to using debt to stimulate growth, and debt loses its capacity to do so, what happens next? You guessed it: The brilliant powers-that-be add even more debt.

Read more …

Aug 142018
 


Vincent van Gogh Vincent’s House in Arles (The Yellow House) 1888

 

Turkey Will Be The Largest EM Default Of All Time (Russell Napier)
‘What Happens In Turkey Won’t Stay In Turkey’ (CNBC)
Italy Expects Financial Market Attack In August (R.)
The Price of Cheap Dollar/Euro Debts: Local Currencies Come Unglued (WS)
Indian Rupee Drops To All-Time Low Against Dollar Over Turkish Crisis (Ind.)
Close Up and Long Shot (Kunstler)
Musk: “I Am Working With Silver Lake, Goldman On Taking Tesla Private” (ZH)
The Law As Weapon (Paul Craig Roberts)
Russia-Gate One Year After VIPS Showed a Leak, Not a Hack (CN)
Greek Fishermen Accuse Turkish Boats of Opening Fire off Leros Island (GR)
Turkish FM Accuses Greece Of Escalating Tensions In Aegean (K.)
Palm Oil A New Threat To Africa’s Primates (BBC)
Scotland’s Mountain Hare Population Is At Just 1% Of 1950s Level (G.)

 

 

Napier thinks Turkey will default on $500 billion in debt by imposing capital controls.

Turkey Will Be The Largest EM Default Of All Time (Russell Napier)

Regular readers of the Fortnightly will know that The Solid Ground has long forecast a major debt default in Turkey. More specifically, the forecast remains that the country will impose capital controls enforcing a near total loss of US$500bn of credit assets held by the global financial system. That is a large financial hole in a still highly leveraged system. That scale of loss will surpass the scale of loss suffered by the creditors of Bear Stearns and while Lehman’s did have liabilities of US$619bn, it has paid more than US$100bn to its unsecured creditors alone since its bankruptcy. It is the nature of EM lending that there is little in the way of liquid assets to realize; they are predominantly denominated in a currency different from the liability, and also title has to be pursued through the local legal system.

Turkey will almost certainly be the largest EM default of all time, should it resort to capital controls as your analyst expects, but it could also be the largest bankruptcy of all time given the difficulty of its creditors in recovering any assets. So the events of last Friday represent only the end of the beginning for Turkey. The true nature of the scale of its default and the global impacts of that default are very much still to come. Strong form capital controls produce a de facto debt moratorium, and very rapidly investors realize just how little their credit assets are worth. A de jure debt moratorium at the outbreak of The Great War in 1914 bankrupted almost the entire European banking system – it was saved by mass government intervention.

While the imposition of capital controls in recent years has hit selected investors hard, in Iceland, Cyprus, Greece and key emerging markets, there has been nothing of this size and it is to be fully borne by financial institutions who believe they hold not just valuable credit assets but actually liquid credit assets! The loss of hundreds of billions of assets recently considered liquid by global financial institutions, through the de facto debt moratorium of capital controls, will be a huge shock to the global financial system.

Read more …

Turkey=corporate debt. How do you bail that out?

‘What Happens In Turkey Won’t Stay In Turkey’ (CNBC)

The markets have seen much of this movie before: a heavily indebted country finds itself in crisis, the currency plunges and talk quickly turns to contagion and, ultimately, an expensive globally financed bailout. In Turkey’s case, the plot line is a little different, however. Where the other debt crises generally involved government borrowing, Turkey’s is mostly a corporate story, making the bailout mechanics more complicated and thus raising fears that what started in a small country with only marginal systemic importance on its face could quickly escalate. “How can a country where the entire market cap of Turkish equities traded on the Istanbul Stock exchange is less than the market cap of Netflix wreak such havoc? It is all about the direct and indirect impacts,” wrote Katie Nixon, chief investment officer for wealth management at Northern Trust.

“There are certain emerging market countries with relatively weak currencies and a heavy reliance on external (predominately dollar based) financing. The fear is that what happens in Turkey won’t stay in Turkey.” Nixon said that while the crisis does not appear to have major global implications, a strong U.S. dollar coupled with weakening emerging market currencies could fuel the problem. To date, the debt emergencies in Greece, Cyprus, Italy and other euro zone countries — not to mention Argentina, Malaysia and perhaps Pakistan before long — have had limited global spillovers. Several required bailout loans from the IMF, an organization that gets 17.5 percent of its funding from the U.S.

Read more …

Low market volumes in summer make an attack easier to execute.

Italy Expects Financial Market Attack In August (R.)

Speculators will probably attack Italian financial markets this month but the country has the resources to defend itself, a senior and highly influential government official said in a newspaper interview on Sunday. Giancarlo Giorgetti, undersecretary in the prime minister’s office and a leading light in the far-right League party, said thin summer trading volumes helped fuel market assaults. “I expect an attack (in August),” Giorgetti told Libero. “The markets are populated by hungry speculative funds that choose their prey and pounce … In the summer the market volumes are small, you can lay the groundwork for aggressive initiatives against countries. Look at Turkey.”

Turkish markets slumped last week on growing concerns over the country’s economy and political leadership. Italian assets have also come under strain in recent weeks, with investors concerned that the governing coalition, made up of the League and the anti-establishment 5-Star Movement, might tear up EU fiscal rules to pay for big-spending budget plans. “If the (market) storm comes, we will open our umbrella. Italy is a big country and has the resources to react, thanks in part to its large amount of private savings,” said Giorgetti, who is seen as a moderating force within the League. Quoting a report by bankers’ federation Fabi, Italian newspapers said on Sunday household savings in Italy totaled some 4.4 trillion euros against 2.2 trillion in 1998.

Read more …

The reason for all the trouble? Cheap central bank credit.

The Price of Cheap Dollar/Euro Debts: Local Currencies Come Unglued (WS)

Turkey has its own sets of problems and isn’t even seriously trying to prop up its currency. Now global bondholders are clamoring for the IMF to step in and calm the waters around the currency crisis in Turkey that has turned into a debt crisis that is now dragging some European banks through the dirt. Those global bondholders want the IMF to lend Turkey money to bail out Turkey’s bondholders to put an end to the turmoil and torture in emerging markets bonds that were so hot just eight months ago. In return for an IMF bailout of its bondholders, Turkey would have to follow the IMF’s program, slash its expenses, including social expenses, and curtail its crazy borrowing binge. But no go.

Instead of trying to address the problem, or beg the IMF for a bailout, the Turkish government has heaped scorn on the West. In return, the Turkish lira plunged another 8% against the dollar on Monday, to 7.04 lira to the dollar. Seen the other way around, as the chart below shows, the value of 1 lira has now dropped to 14.4 US cents, from 25 cents just four months ago, which, if nothing else, tells people to go figure out how to invest in gold and silver. Monday’s drop brings the grand collapse over the past three days to 24%, and over the past four months to 43%.

After nine years of experimental monetary policies in the US, Europe, Japan, and elsewhere, the Emerging Market economies have become addicted to this debt borrowed in a hard currency that they cannot inflate away. In Turkey, this cheap debt – cheap even for junk-rated issuers such as the government of Turkey – funded a construction boom in the property sector. This construction boom has been crucial to the economy – which is why the government is trying to ride this bull all the way. Turkey’s inflation is surging. In July, annual inflation reached 16%, the highest since January 2004. Inflation is what ultimately destroys a currency. But it’s not yet 30% as in Argentina, and perhaps the government thinks it still has some leeway.

Read more …

Are you calling New Zealand an emerging market?

Indian Rupee Drops To All-Time Low Against Dollar Over Turkish Crisis (Ind.)

The Indian currency has dropped to an all-time low against the dollar, while the New Zealand dollar has slumped to two-year lows as emerging markets feel the effects of the crisis in Turkey. Investors have instead moved towards safe haven currencies such as the yen, which surged to a six-week high, and the Swiss franc, which jumped close to a one-year high against the euro. The Indian central bank reportedly intervened to prevent a sharp drop in the rupee’s value, however, it did little to stem the decline, and the currency fell to 69.62 rupees per dollar. The New Zealand dollar has also felt the effects of the Turkish crisis, dropping below $0.66 for the first time in two years over the weekend. Meanwhile, the euro fell against the dollar to $1.14, as investors try to work out how badly European banks might be affected by the problems in Turkey, with the Spanish, French, and Italian in particular all hugely exposed to Turkish debt.

Read more …

“President Trump’s tariff monkeyshines are shoving the Chinese banking system up against a wall of utterly irresolvable insolvency problems..”

Close Up and Long Shot (Kunstler)

Who cares about the currency of a second-rate player in the global economy? A lot of SIFIs (“systemically important financial institutions”) otherwise known as Too-Big-To-Fail banks. That’s who. Deutsche Bank’s stock dropped over 6 percent when the Turkish Lira tanked on Friday. Turkey’s nickname since the collapse of the Ottoman Empire in the 1920s has been “the sick man of Europe” and Deutsche Bank in the post-2008-crash era is widely regarded as the sick man of SIFI banks. One analyst wag downgraded its status a year ago to “dead bank walking.” Its balance sheet was a Cave of Winds littered with the moldering skeletons of malinvestment.

If the European Central Bank (aka Germany) has to bail out DB, all bets are off for the Euro, which was showing serious signs of distress Friday. And who is going to bail out Turkey? If the IMF is your go-to vehicle, then you mean US taxpayers. Anyway, Turkey’s Lira is only one of several Emerging Market currencies whose hands have been called at the global poker table, where the four-flushers are getting flushed out. The Russian ruble was another one, ostensibly to the delight of America’s Destroy-Russia-at-All-Costs faction. China is also having to play a round of super Three Card Monte with its currency, the yuan.

President Trump’s tariff monkeyshines are shoving the Chinese banking system up against a wall of utterly irresolvable insolvency problems and threatening the stability of Xi Jinping’s one-party government. The Chinese export trade is at the heart of the world’s current economic arrangements. If you pull it out of the globalism machine, the machine will stop. It is going to stop one way or another anyway, but the gathering crisis of autumn 2018 will hasten that. All of this is happening because the whole world can’t handle the debts it has racked up, and the whole world knows it. And knowing it, they also know that their debt-based currencies are worthless. And knowing that, they also know that absolutely everybody else is broke and unable to meet their obligations. That is some dangerous knowledge.

Read more …

Will Musk get away with not following the rules?

Musk: “I Am Working With Silver Lake, Goldman On Taking Tesla Private” (ZH)

Update 2: And here things get bizarre because according to Reuters, Silver Lake is not currently discussing participating as an investor in Elon Musk’s proposed take-private deal for Tesla, citing an unidentified person. Reuters also adds that Silver Lake is offering assistance to Musk without compensation and hasn’t been hired as financial adviser in an official capacity.

Update: in a tweet sent out on Monday evening, Musk said the he was working with Silver Lake and Goldman Sachs as financial advisors, as well as Wachtell Lipton as legal advisors, on his “proposal” to take Tesla private.

It was not immediately clear why Silver Lake, an investor, is serving as a financial advisor, nor was it clear why Musk defined the “going private” transaction as merely a proposal when he previously classified it as a firm deal, with “secured funding.” The tweet followed a blog post by Musk in which he finally offered more details on his tweet that he had “funding secured” to take Tesla Inc. private, however as Bloomberg echoed our skepticism from earlier (see below) , “it’s unlikely to get U.S. regulators off his back.” Musk’s elaboration doesn’t wash away the investor confusion he triggered a week ago by failing to provide evidence that he had financing. Without more information, investors were left guessing at how far along negotiations on a bid had progressed.

Musk’s fresh disclosure might even help the Securities and Exchange Commission show that his initial tweet was misleading, lawyers said. Bloomberg quoted Keith Higgins, a Ropes & Gray lawyer who said that “a cautious lawyer would have said you shouldn’t have said ‘funding secured’ unless you had a commitment letter,” which Musk clearly did not have, and certainly not from the Saudi Wealth Fund which as Musk admitted, needed to do more due diligence and analysis and had yet to conduct an “internal review process for obtaining approvals.” John Coffee, director of the Center on Corporate Governance at Columbia Law School, agreed. He said Monday’s post indicates Musk was being overly bullish last week, potentially increasing his vulnerability in any SEC investigation. “He clearly had not secured funding at the time of his tweet – he concedes that obliquely,” Coffee said.

Read more …

How Mueller arrived at Manafort.

The Law As Weapon (Paul Craig Roberts)

Robert Mueller is supposed to be investigating Russiagate, which has been shown to be a hoax concocted by former CIA director John Brennan, former FBI director James Comey, and current deputy Attorney General Rod Rosenstein. As Russiagate is a hoax, Mueller has not been able to produce a shred of evidence of the alleged Trump/Putin plot to hack Hillary’s emails and influence the last presidential election. With his investigation unable to produce any evidence of the alleged Russiagate, Mueller concluded that he had to direct attention away from the failed hoax by bringing some sort of case against someone, knowing that the incompetent and corrupt US media and insouciant public would assume that the case had something to do with Russiagate.

Mueller chose Paul Manafort as a target, hoping that faced with fighting false charges, Manafort would make a deal and make up some lies about Trump and Putin in exchange for the case against him being dropped. But Manafort stood his ground, forcing Mueller to go forward with a false case. Manafort’s career is involved with Republican political campaigns. He is charged with such crimes as paying for NY Yankee baseball tickets with offshore funds not declared to tax authorities and with attempting to get bank loans on the basis of misrepresentation of his financial condition. In the prosecutors’ case, Manafort doesn’t have to have succeeded in getting a loan based on financial misrepresentation, only to be guilty of trying.

Two of the people testifying against him have been paid off with dropped charges. Mueller’s investigation is restricted to Russiagate. In other words, Mueller has no mandate to investigate or bring charges unrelated to Russiagate. In my opinion, Muller gets away with this only because the deputy Attorney General is in on the Russiagate plot against Trump. Mueller and Rosenstein know that they can count on the presstitutes to continue to deceive the public by presenting the Manafort trial as part of Russiagate.

Read more …

But people like Mueller still claim a hack, because otherwise they can’t involve Russia.

Russia-Gate One Year After VIPS Showed a Leak, Not a Hack (CN)

A year has passed since highly credentialed intelligence professionals produced the first hard evidence that allegations of mail theft and other crimes attributed to Russia rested on purposeful falsification and subterfuge. The initial reaction to these revelations—a firestorm of frantic denial—augured ill, and the time since has fulfilled one’s worst expectations. One year later we live within an institutionalized proscription of proven reality. Our discourse consists of a series of fence posts and taboos. By any detached measure, this lands us in deep, serious trouble. The sprawl of what we call “Russia-gate” now brings our republic and its institutions to a moment of great peril—the gravest since the McCarthy years and possibly since the Civil War. No, I do not consider this hyperbole.

Much has happened since Veteran Intelligence Professionals for Sanity published its report on intrusions into the Democratic Party’s mail servers on Consortium News on July 24 last year. Parts of the intelligence apparatus—by no means all or even most of it—have issued official “assessments” of Russian culpability. Media have produced countless multi-part “investigations,” “special reports,” and what-have-yous that amount to an orgy of faulty syllogisms. Robert Mueller’s special investigation has issued two sets of indictments that, on scrutiny, prove as wanting in evidence as the notoriously flimsy intelligence “assessment” of January 6, 2017. Indictments are not evidence and do not need to contain evidence. That is supposed to come out at trial, which is very unlikely to ever happen.

Nevertheless, the corporate media has treated the indictments as convictions. Numerous sets of sanctions against Russia, individual Russians, and Russian entities have been imposed on the basis of this great conjuring of assumption and presumption. The latest came last week, when the Trump administration announced measures in response to the alleged attempt to murder Sergei and Yulia Skripal, a former double agent and his daughter, in England last March. No evidence proving responsibility in the Skripal case has yet been produced. This amounts to our new standard. It prompted a reader with whom I am in regular contact to ask, “How far will we allow our government to escalate against others without proof of anything?” This is a very good question.

Read more …

I hinted at this in my article Sunday. Many Greek islands are off the Turkish coast, as per the 1923 Lausanne Treaty. If Erdogan wants to push nationalism -and he does-, this may be his best bet. In essence, the Treaty finally ended the Ottoman Empire, and a lot more territory was lost, but this part is what Turks will be receptive to. One other piece on the Treaty: Turkey ceded all claims to Cyprus. We know how that fared.

Greek Fishermen Accuse Turkish Boats of Opening Fire off Leros Island (GR)

Greek fishermen have reported that they were fired upon by Turkish fishing boats near Kalapodi islet, 300 meters off the coast of Leros island. Two Greek seamen, owners of fishing boats, spoke to Alpha television saying that the Turkish boats were inside Greece’s territorial waters on Sunday when their crews shot at them. They also said that, since July, Turkish fishing boats have repeatedly intruded upon Greek waters to fish in the area. The Greek fishermen said that usually they call the coast guard upon seeing the Turkish boats; the intruders are forced to exit Greek waters upon the arrival of coast guard ships. This time, however, Leros fisherman Kostas Tsiftis told Alpha, the crew of the Turkish boat fired gunshots at them. He also said that the gunfire was from an automatic weapon because some of the shots were repeated.

The Greek fishermen were forced to leave the area and called the Hellenic Coast Guard. Upon the arrival of two coast guard patrol vessels, the Turkish fishing boats moved towards international waters. The fishermen noted that even though they are used to provocative acts by Turkish fishermen, Sunday’s incident was unprecedented. “We heard six shots. The two of them, the third and the fourth, were repeated. The gun was neither a hunting rifle, nor a revolver,” said Lefteris Giannoukas, who was in one of the Greek boats. “The Turkish fishermen were about 200 meters away. This is the first time that the Turks shot at us. Of course we were afraid, we did not expect it,” Tsiftis said. The Greek fisherman noted that this is the first time the Turkish boats came this close.

Read more …

And there you go. For domestic consumption.

Turkish FM Accuses Greece Of Escalating Tensions In Aegean (K.)

Greece is responsible for escalating tension in Aegean and Mediterranean, even though Turkey has always stood by Greeks in their times of difficulty, Turkey’s foreign minister has told his country’s ambassadors. “In their difficult days, we are always at their side. But in the Aegean and the Mediterranean, they are again increasing tension. They do bizarre things, which are not acceptable. Don’t we all want the eastern Mediterranean to become a region of peace and prosperity?” Mevlut Cavusoglu told the 10th conference of Turkish ambassadors. He also called for a new process to resolve the Cyprus issue, blaming the Republic of Cyprus for the impasse. “In order to reach a solution in Cyprus, a new process must be launched. Greek Cypriots do not want to cooperate. And this we saw last year. We saw it in Geneva, we saw it in Crans-Montana,” Tsavousoglou said. And “Greece is no different,” he alleged.

Read more …

It’s devastated Borneo. Now it’s coming for Africa. Next up Amazon?

Palm Oil A New Threat To Africa’s Primates (BBC)

Endangered monkeys and apes will almost certainly face new risks if Africa becomes a big player in the palm oil industry. That is the message of a study looking at how large-scale expansion of the oil crop in Africa might affect the continent’s rich diversity of wildlife. Most areas suitable for growing palm oil are key habitats for primates, according to researchers. They say consumers can help by choosing sustainably-grown palm oil. Ultimately, this may mean paying more for food, cosmetics and cleaning products that contain the oil, or limiting their use. “If we are concerned about the environment, we have to pay for it,” said Serge Wich, professor of primate biology at Liverpool John Moores University, and leader of the study. “In the products that we buy, the cost to the environment has to be incorporated.”

[..] Many companies growing palm oil are looking to expand into Africa. This is a worry for conservationists, as potential plantation sites are in areas of rich biodiversity. They are particularly worried about Africa’s primates. Nearly 200 primate species are found in Africa, many of which are already under threat. Habitat destruction is one of the main reasons why all great apes are at the edge of extinction. The introduction of palm oil plantations to Africa is expected to accelerate the habitat loss. [..] The study found that while oil palm cultivation represents an important source of income for many tropical countries, there are few opportunities for compromise by growing palm oil in areas that are of low importance for primate conservation.

“We found that such areas of compromise are very rare throughout the continent (0.13 million hectares), and that large-scale expansion of oil palm cultivation in Africa will have unavoidable, negative effects on primates,” said the research team. To put that figure into context, 53 million hectares of land will be needed by 2050 to grow palm oil in order to meet global demand.

Read more …

An entire article without naming any numbers, only percentages. How many mountain hares are there in Scotland? 2, 20, 2 million?

Scotland’s Mountain Hare Population Is At Just 1% Of 1950s Level (G.)

The number of mountain hares on moorlands in the eastern Scottish Highlands has fallen to less than 1% of the level recorded more than 60 years ago, according to a long-term study. The Centre for Ecology & Hydrology and the RSPB teamed up to study counts of the animals over several decades on moorland managed for red grouse shooting and nearby mountain land. From 1954 to 1999, the mountain hare population on moorland sites decreased by almost 5% every year, the study found, saying the long-term decline was likely to be due to land use changes such as the loss of grouse moors to conifer forests. However, from 1999 to 2017 the scale of the “severe” moorland declines increased to over 30% every year, leading to counts last year of less than 1% of original levels in 1954, researchers said.

On higher, alpine sites, numbers of mountain hares fluctuated, but increased overall until 2007, and then declined, although not to the lows seen on the moorland sites, the study noted. The report stated: “The study found long-term declines in mountain hare densities on moorland, but not alpine, sites in the core area of UK mountain hare distribution in the eastern Highlands of Scotland. “These moorland declines were faster after 1999 at a time when hare culling by grouse moor managers with the specific aim of tick and LIV [Louping ill virus, which is spread by ticks] control has become more frequent.” Gamekeepers and estate managers claim culls limit the spread of ticks, protect trees and safeguard fragile environments, and a policy of voluntary restraint is in place. However, campaigners believe the practice is cruel and unnecessary.

Read more …

May 222018
 
 May 22, 2018  Posted by at 9:28 am Finance Tagged with: , , , , , , , , , , , ,  12 Responses »


Pablo Picasso Femme au Béret et à la Robe Quadrillée (Marie-Thérèse Walter) 1937

 

‘Who Are You?’ Iran Hits Back At US Demands (AlJ)
Trumpism Folds into Netanyahu-ism, or ‘Neo-Americanism’ (Alastair Crooke)
Swedes Told To Prepare For Conflict In Cold War-Style Booklet (R.)
Baltic States Ask the US for Bigger Military Presence on Their Soil (SCF)
Italy on Verge of Inducing a Fresh European Crisis (Cudmore)
Goldman Sachs: The Fiscal Outlook For The US ‘Is Not Good’ (CNBC)
The US is Shackled by Historic Debt (GT)
US Consumer Debt Set To Reach $4 Trillion By The End Of 2018 (CNBC)
Learning from America’s Forgotten Default (PS)
You Think It’s All About Guns? (Jim Kunstler)
Human Race Just 0.01% Of All Life But Eradicated Most Other Living Things (G.)

 

 

“The era of the US making decisions for the rest of the world is over”. That’s what Russia and China think, too.

‘Who Are You?’ Iran Hits Back At US Demands (AlJ)

Iranian President Hassan Rouhani has said the world would “not accept” US unilateralism just hours after Washington laid out a series of tough demands to be included in a potential new nuclear treaty with Iran. In remarks carried by Iran’s ILNA news agency on Monday, Rouhani said the era of the United States making decisions for the rest of the world was “over”. “Countries are independent … We will continue our path with the support of our nation,” Rouhani said. “Who are you to decide for Iran and the world?”

[..] In announcing the new US strategy towards Iran, Secretary of State Mike Pompeo on Monday warned that Washington “will apply unprecedented financial pressure on the Iranian regime” unless it complied with a list of 12 conditions, which must be met before any new deal can be reached. The demands include giving the International Atomic Energy Agency (IAEA) a full account of the country’s former nuclear military programme, withdrawing its forces from Syria and ending what Pompeo described as Iran’s “threatening behaviour” towards its neighbours.

Also responding to Pompeo, Iranian Foreign Minister Mohammed Javad Zarif accused the US of a “regression to old habits”, saying Washington’s diplomatic efforts were a “sham”. “It repeats the same wrong choices and will thus reap the same ill rewards. Iran, meanwhile, is working with partners for post-US JCPOA solutions,” Zarif said in a tweet on Monday.

Read more …

Regime change always leads to chaos.

Trumpism Folds into Netanyahu-ism, or ‘Neo-Americanism’ (Alastair Crooke)

The 8 May US Presidential declaration (on exiting JCPOA) requires of us fundamentally to revise our understanding of Trumpism. At the outset to his term of office, Trumpism was widely understood to be based on three key pillars: That the costs incurred by the US in upholding the full panoply of Empire (i.e. policing the American, rules-based, global order) were just too onerous and unfair (especially in the provision of the defence umbrella) – and that others must be coerced into sharing its cost. Secondly, that American jobs had been, as it were, stolen from America, and would have to be recovered through forced changes to the terms of trade. And thirdly, that these changes would be effected, through applying the tactics of the Art of the Deal.

That seemed, at least, to be clear, (if not necessarily a wholly feasible blueprint). But mostly we thought that the Art of the Deal was about threatening, blustering, and hiking leverage on ‘whatever the counterparty’ – raising tensions to explosive levels – before, at the very eleventh hour, at the very climax of crisis, offering ‘the deal’. And that was the point (then): Yes, Trump would toss verbal grenades intended to upend conventional expectations, take actions to force an issue – but the objective (as generally understood), was to get a deal: One that would tilt towards America’s mercantile and political interests, but a deal, nonetheless.

Maybe we misread Trump’s build-up of America’s already super-sized military. It seemed that it was about potential leverage: something to be offered (in terms of an umbrella to compliant states), or withdrawn from those who would not put their hand in their pocket deeply enough. But everything changed with Trump’s 8 May statement. It was not just an American ‘exit’ that was mooted, it was full court financial war that was declared against Iran (with ‘terms of surrender’ couched in terms of regime change, and total submission to the US). But this is no longer about how to reach a ‘fairer’, better deal for the US; how to make it more money. Rather the financial system was to be leveraged to destroy another state’s currency and economy. The US military are being super-sized further, to be used: to be able to rain down ‘fire and fury’ on non-compliant states.

Read more …

Sweden is no longer an independent country.

Swedes Told To Prepare For Conflict In Cold War-Style Booklet (R.)

Sweden will send out instructions to its citizens next week on how to cope with an outbreak of war, as the country faces an assertive Russia across the Baltic Sea. The 20-page pamphlet titled “If Crisis or War Comes” gives advice on getting clean water, spotting propaganda and finding a bomb shelter, in the first public awareness campaign of its kind since the days of the Cold War. It also tells Swedes they have a duty to act if their country is threatened. “If Sweden is attacked by another country, we will never give up,” the booklet says. “All information to the effect that resistance is to cease is false.” The leaflet’s publisher, the Swedish Civil Contingencies Agency, did not spell out where an attack might come from.

“Even if Sweden is safer than most countries, threats do exist,” agency head Dan Eliasson told journalists. But Sweden and other countries in the region have been on high alert since Russia’s annexation of Ukraine’s Crimea peninsula in March, 2014. They have also accused Russia of repeated violations of their airspace – assertions that Moscow has either dismissed or not responded to. The Kremlin has in the past insisted that it does not interfere in the domestic affairs of other countries and has accused Western powers of stoking “Russophobia”. Stockholm has repeatedly cited Russian aggression as the reason for a series of security measures including the reintroduction of conscription this year and the stationing of troops on the Baltic island of Gotland.

The Swedish government decided to start increasing military spending from 2016, reversing years of declines. The booklet on its way to Sweden’s 4.8 million households warns that supplies of food, medicine and gasoline could run short during a crisis. It also lists oat milk, tins of Bolognese sauce and salmon balls as examples of food that people should store in case of an emergency along with tortillas and sardines. The publication describes what an air raid warning sounds like in the first such publication handed out since 1961. Sweden has not been at war with anyone for more than 200 years, not since its war with Norway in 1814. It was officially neutral during World War Two.

Read more …

NATO.

Baltic States Ask the US for Bigger Military Presence on Their Soil (SCF)

The foreign ministers (FMs) of the Baltic states have wound up their May 16-18 visit to Washington. They asked National Security Adviser John Bolton to reinforce the NATO battalions that have been deployed to their countries with air and naval units. They also want their air-defense capability enhanced. Lithuanian FM Linas Linkevicius emphasized that it’s not just the numbers that are important, but also training exercises, visits, the distribution of equipment, and the establishment of new military facilities. [..] NATO is ratcheting up tensions by holding an increasing number of large-scale exercises right on Russia’s borders. This greatly elevates the risk of inadvertent escalation. For instance, three major exercises are scheduled to be held in the Baltic region this summer.

On June 3-15, the Saber Strike exercise organized by the US Army Europe will encompass the three Baltic states and Poland, involving over 18,000 troops from 19 countries. About 3,000 American soldiers and over 1,500 combat vehicles will travel from Germany to Latvia and Lithuania. Public roads will be used to move heavy equipment. On June 12-13, the soldiers of the US 2nd Cavalry Regiment will construct a bridge in order to cross the Neman River in Lithuania (in the Kaunas district). Their main mission is to ensure that the forces are ready to rapidly advance, not to merely defend their positions. Eight thousand American airborne troops will land in Latvia during the Swift Response exercise, in order to train alongside Lithuanian and Polish troops.

Namejs 2018 will be held from August 20 to September 2 and will involve over 9,200 Latvian forces, including the military, police, border guards, volunteer reservists, and other state institutions. They will be joined by 650 troops from the US, Lithuania, Estonia, Poland, and the Czech Republic. All these large-scale intensive training activities will take place in the background of the planning for Trident Juncture 2018, the largest NATO exercise involving about 40,000 troops, 70 ships, and about 130 aircraft from over 30 nations, which will be deployed to central and northern Norway in October for the live portion of the event. A command post phase will be conducted in Italy. Norway does not have a shoreline in the Baltic Sea but it is a member of the Council of the Baltic Sea States.

Read more …

“..while the policy platform doesn’t explicitly state an intention to leave the euro, the new government plan, if instituted as is, makes that the inevitable end-game…”

Italy on Verge of Inducing a Fresh European Crisis (Cudmore)

It may be time to move on from rising Treasury yields and trade wars. An Italian-led euro crisis is on the verge of becoming the dominant theme for markets. It turns out that the euro break-up trade isn’t dead — it’s just been hibernating and is likely to return with a vengeance in the months ahead if the populists get their way. Their proposed economic policies make no attempt at debt sustainability. Italy already has the largest absolute debt pile in the EU and the second-largest, after Greece, as a percentage of GDP, at 132%. The coalition’s plan sends the signal that it has no intention of ever paying back its debt. Things could spiral quickly because its fiscal promises will send BTP yields much higher, adding to refinancing costs and making the budgetary situation worse.

That creates a dilemma for the EU. Either fund Italy’s largesse at the expense of every other member country, or kick Italy out of the euro. The first option isn’t sustainable. This isn’t a relatively containable problem like Greece. Italy’s economy is almost ten times the size of Greece’s and the third-largest in the euro zone. The PIIGS — Portugal, Italy, Ireland, Greece and Spain — were only ever a problem as a group because of concerns that the contagion would infect Italy. And this isn’t just a sovereign debt problem. Italy’s banks have by far the most non-performing loans in the euro zone, more than a quarter of the total. A section of the plan makes it harder for banks to repossess collateral, further deteriorating the value of those loans.

So while the policy platform doesn’t explicitly state an intention to leave the euro, the new government plan, if instituted as is, makes that the inevitable end-game. Fortunately, the Italian constitution forbids an excessive budget deficit, so may act as a limiting force. However, the concern is whether they can circumvent those restrictions by selecting favorable economic projections. The proposal already seems to be stealthily planning for euro departure with a plan to issue short-term debt contracts to pay back arrears. As my colleague Ferdinando Giugliano suggested on Friday, that’s the first step toward a parallel currency. So Italy’s prospective rulers seem to be fully aware of the end-game and are already planning for it. Investors will soon need to catch up.

Read more …

“..debt could equal GDP within a decade..”

Goldman Sachs: The Fiscal Outlook For The US ‘Is Not Good’ (CNBC)

The fiscal outlook for the United States “is not good,” according to Goldman Sachs, and could pose a threat to the country’s economic security during the next recession. According to forecasts from the bank’s chief economist, the federal deficit will increase from $825 billion (or 4.1% of GDP) to $1.25 trillion (5.5% of GDP) by 2021. And by 2028, the bank expects the number to balloon to $2.05 trillion (7% of GDP). “An expanding deficit and debt level is likely to put upward pressure on interest rates, expanding the deficit further,” Jan Hatzius — Goldman’s chief economist — wrote Sunday. “While we do not believe that the U.S. faces a risk to its ability to borrow or repay, the rising debt level could nevertheless have three consequences long before debt sustainability becomes a major obstacle.”

Legislators passed a package of corporate and individual tax cuts in December, a two-year budget deal in February and a massive spending bill in March that boosted government expenditures on both domestic and military programs. In light of the big spending and easier tax burden, the Congressional Budget Office – Capitol Hill’s nonpartisan financial scorekeeper – in April projected that debt could equal GDP within a decade if Congress extends the tax cuts, a level not seen since World War II. Economic growth should jump above 3% in 2018 thanks to the stimuli, the CBO said, but the acceleration will likely prove brief, and debt held by the public will soar to $28.7 trillion by the end of fiscal 2028.

That could create a precarious situation for Congress if the economy faces an economic downturn in the near term, Hatzius wrote, hampering legislators’ ability provide additional fiscal stimulus. “Lawmakers might hesitate to approve fiscal stimulus in the next downturn in light of the already substantial budget deficit,” the economist said. “While we would expect some additional loosening of fiscal policy during the next downturn, there is a good chance in our view that it would be less aggressive than it was in the last few recessions.”

Read more …

“Is the Federal Reserve playing politics?”

The US is Shackled by Historic Debt (GT)

Do you feel as if you’re drowning in debt? It’s worse than you think. The U.S. government reached a new milestone when our country’s debt topped $21 trillion for the first time. The national debt grows by an average of $17,000 every second – more than some people earn in an entire year. That’s only an average, and During the past eight months, the national debt grew by $52,000 per second. And the trend toward bigger and higher spending is only getting worse. The ratio of national debt to GDP is at 105%, larger than the economy as a whole. In 1981, the national debt comprised a mere 31% of GDP. We are not moving in the right direction. The Treasury Department has plans to borrow $1 trillion this year, an 84% jump from last year.

When individuals borrow, they can use the money wisely to increase their wealth. That’s what happens when people make good investments. What does the government do with all this money? While some of it may be put to good use, the National Science Foundation’s spending $856,000 on having mountain lions run on treadmills can’t be termed prudent spending. Nor can the $2 billion spent on former President Obama’s healthcare website. In 2017, Brooklyn, NY spent $2 million on a 400 square feet restroom in a public park. Flushing money down the toilet?

Why is the government raising interest rates at a time consumer prices and wages are rising only marginally? During Obama’s administration, prices rose 14.6%, and the Federal Reserve kept interest rates low. Inflation is up by a mere 2.2% since Trump took office, and interests rates keep rising. Is the Federal Reserve playing politics? While the rate of inflation was somewhat higher during the Obama years, the Federal Reserve didn’t get aggressive in handling the problem until Trump came to office. If it’s politics, what game is being played?

Read more …

“Americans owe more than 26% of their annual income to this debt.”

US Consumer Debt Set To Reach $4 Trillion By The End Of 2018 (CNBC)

Americans are in a borrowing mood, and their total tab for consumer debt could reach a record $4 trillion by the end of 2018. That’s according to LendingTree, a loan comparison website, which analyzed data from the Federal Reserve on nonmortgage debts including credit cards, and auto, personal and student loans. Americans owe more than 26% of their annual income to this debt. That’s up from 22% in 2010. It’s also higher than debt levels during the mid-2000s when credit availability soared.

Debts on auto loans and credit cards are climbing by more than 7% annually, while housing debt is rising at a little more than 2%. Consumer credit has been rising by 5% to 6% for about two years. LendingTree projects total consumer debt will top $4 trillion by the end of 2018.

That kind of growth is not surprising, according to LendingTree chief economist Tendayi Kapfidze, and is in keeping with the growth of consumer debt that has been happening since 2012. At these levels, consumers are spending about 10% of their income paying these debts each month, Kapfidze said. From 2000 to 2008, that averaged about 12% to 13%, he said. Still, credit card delinquency rates, which are at 2.4%, are low.

Read more …

We’ve seen this movie before.

Learning from America’s Forgotten Default (PS)

One of the most pervasive myths about the United States is that the federal government has never defaulted on its debts. Every time the debt ceiling is debated in Congress, politicians and journalists dust off a common trope: the US doesn’t stiff its creditors. There’s just one problem: it’s not true. There was a time, decades ago, when the US behaved more like a “banana republic” than an advanced economy, restructuring debts unilaterally and retroactively. And, while few people remember this critical period in economic history, it holds valuable lessons for leaders today.

In April 1933, in an effort to help the US escape the Great Depression, President Franklin Roosevelt announced plans to take the US off the gold standard and devalue the dollar. But this would not be as easy as FDR calculated. Most debt contracts at the time included a “gold clause,” which stated that the debtor must pay in “gold coin” or “gold equivalent.” These clauses were introduced during the Civil War as a way to protect investors against a possible inflationary surge. For FDR, however, the gold clause was an obstacle to devaluation. If the currency were devalued without addressing the contractual issue, the dollar value of debts would automatically increase to offset the weaker exchange rate, resulting in massive bankruptcies and huge increases in public debt.

To solve this problem, Congress passed a joint resolution on June 5, 1933, annulling all gold clauses in past and future contracts. The door was opened for devaluation – and for a political fight. Republicans were dismayed that the country’s reputation was being put at risk, while the Roosevelt administration argued that the resolution didn’t amount to “a repudiation of contracts.” On January 30, 1934, the dollar was officially devalued. The price of gold went from $20.67 an ounce – a price in effect since 1834 – to $35 an ounce. Not surprisingly, those holding securities protected by the gold clause claimed that the abrogation was unconstitutional. Lawsuits were filed, and four of them eventually reached the Supreme Court; in January 1935, justices heard two cases that referred to private debts, and two concerning government obligations.

The underlying question in each case was essentially the same: did Congress have the authority to alter contracts retroactively? On February 18, 1935, the Supreme Court announced its decisions. In each case, justices ruled 5-4 in favor of the government – and against investors seeking compensation. According to the majority opinion, the Roosevelt administration could invoke “necessity” as a justification for annulling contracts if it would help free the economy from the Great Depression.

Read more …

“..a bewildering clown culture wrapped in a Potemkin economy..”

You Think It’s All About Guns? (Jim Kunstler)

Is it possible that we Americans only pretend not to notice the conditions that produce an epidemic of school shootings, or is the public just too dumbed-down to connect the dots? Look at the schools themselves. We called them “facilities” because they hardly qualify as buildings: sprawling, one-story, tilt-up, flat-roofed boxes isolated among the parking lagoons out on the six-lane highway strip, disconnected from anything civic, isolated archipelagoes where inchoate teenage emotion festers and rules while the few adults on the scene are regarded as impotent clowns representing a bewildering clown culture wrapped in a Potemkin economy that has nothing to offer young people except a lifetime of debt and “bullshit jobs” — to borrow a phrase from David Graeber.

The world of teens has been exquisitely engineered to steal every opportunity for colonizing the chemical reward centers of their brains to provoke endorphin hits, especially the cell-phone realm of social media, which is almost entirely about status competition, much of which revolves around the wild hormonal promptings of teen sexual development — at the same time they are bombarded with commercial messages designed to prey on their fantasies, longings, and perceived inadequacies. All of this produces immersive and incessant melodrama along with untold grievance, envy, frustration, confusion, and rage. And, of course, where the cell-phone universe leaves off, the world of video games begins, so that boys (especially) get to act-out in “play” the extermination of their competitors and foes.

Read more …

The planet is dying.

Human Race Just 0.01% Of All Life But Eradicated Most Other Living Things (G.)

Humankind is revealed as simultaneously insignificant and utterly dominant in the grand scheme of life on Earth by a groundbreaking new assessment of all life on the planet. The world’s 7.6 billion people represent just 0.01% of all living things, according to the study. Yet since the dawn of civilisation, humanity has caused the loss of 83% of all wild mammals and half of plants, while livestock kept by humans abounds. The new work is the first comprehensive estimate of the weight of every class of living creature and overturns some long-held assumptions. Bacteria are indeed a major life form – 13% of everything – but plants overshadow everything, representing 82% of all living matter. All other creatures, from insects to fungi, to fish and animals, make up just 5% of the world’s biomass.

Another surprise is that the teeming life revealed in the oceans by the recent BBC television series Blue Planet II turns out to represent just 1% of all biomass. The vast majority of life is land-based and a large chunk – an eighth – is bacteria buried deep below the surface. “I was shocked to find there wasn’t already a comprehensive, holistic estimate of all the different components of biomass,” said Prof Ron Milo, at the Weizmann Institute of Science in Israel, who led the work, published in the Proceedings of the National Academy of Sciences. “I would hope this gives people a perspective on the very dominant role that humanity now plays on Earth,” he said, adding that he now chooses to eat less meat due to the huge environmental impact of livestock.

[..] The transformation of the planet by human activity has led scientists to the brink of declaring a new geological era – the Anthropocene. One suggested marker for this change are the bones of the domestic chicken, now ubiquitous across the globe. The new work reveals that farmed poultry today makes up 70% of all birds on the planet, with just 30% being wild. The picture is even more stark for mammals – 60% of all mammals on Earth are livestock, mostly cattle and pigs, 36% are human and just 4% are wild animals.

Read more …

May 302017
 
 May 30, 2017  Posted by at 8:50 am Finance Tagged with: , , , , , , , , , , ,  5 Responses »


Inge Morath Paris 1954

 

Australia Hedge Fund Returns Cash To Clients Citing Looming Calamity (SMH)
Hong Kong Throngs of Thousands Defy Bid to Cool Home Market (BBG)
Saudi Foreign Reserves Dip Below $500 Billion in April (BBG)
The Great US Energy Debt Wall (SRSRocco)
Greece, Italy Tensions Hit Euro, Asian Stocks, Lift Yen, Gold (R.)
Draghi Rules Out Including Greece in ECB QE For Now (K.)
Greece Warns Recovery Threatened If Debt Deal Is Blocked At Next Talks (G.)
Deposits And Loans At Greek Banks Continue Slide (K.)
EU Moves To Crack Down On Carmakers In Wake Of VW Emissions Scandal (G.)
Painstaking Detail Of Brexit Process Revealed In EU Documents (G.)
May Battles Against Complacency as UK Election Lead Slips Away (BBG)
Russia Expects China To Help Resolve Syrian Crisis (DS)
Putin, Macron Have ‘Open, Frank Exchange Of Opinions’ (RT)
Let’s All Agree To Lock In This Russophobia For At Least 3.5 More Years (Saker)
The So-Called Resistance (Jim Kunstler)
Germany Steps Up Attack On Trump For ‘Weakening’ The West (G.)
Greece, Germany Agree To Slow Refugee Family Reunification (F24)

 

 

After having milked the bubble for all it’s worth…

Australia Hedge Fund Returns Cash To Clients Citing Looming Calamity (SMH)

Australian asset manager Altair Asset Management has made the extraordinary decision to liquidate its Australian shares funds and return “hundreds of millions” of dollars back to its clients, citing an impending property market “calamity” and the “overvalued and dangerous time in this cycle”. “Giving up management and performance fees and handing back cash from investments managed by us is a seminal decision, however preserving client’s assets is what all fund managers should put before their own interests,” Philip Parker, who serves as Altair’s chairman and chief investment officer, said in a statement on Monday. The 30-year veteran of funds management said that he had on May 15 advised all Altair clients that he planned to “sell all the underlying shares in the Altair unit trusts and to then hand back the cash to those same managed fund investors”.

Mr Parker said he had “disbanded the team for time being”, including his investment committee of chief economist Steve Roberts, senior healthcare analyst Sally Warneford and independent strategist Gerard Minack. “I would like to make clear this is not a winding up of Altair, but a decision to hand back client monies out of equities which I deem to be far too risky at this point,” Mr Parker’s statement said. “We think that there is too much risk in this market at the moment, we think it’s crazy,” Mr Parker said more candidly. “Valuations are stretched, property is massively overstretched and most of the companies that we follow are at our one-year rolling returns targets – and that’s after we’ve ticked them up over the past year.” “Now we are asking ‘is there any more juice in these companies valuations?’ and the answer is stridently, and with very few exceptions, ‘no there isn’t’.”

Mr Parker outlined a roll call of “the more obvious reasons to exit the riskier asset markets of shares and property”. They included: the Australian east-coast property market “bubble” and its “impending correction”; worries that issues around China’s hot property sector and escalating debt levels will blow up “later this year”; “oversized” geopolitical risks and an “unpredictable” US political environment; and the “overvalued” Aussie equity market. But it was the overheated local property market that was the clearest and most present danger, Mr Parker said. “When you speak to people candidly in the banks, they’ll tell you very specifically that they are extraordinarily worried about the over-leverage of the Australian population in general,” he said.

Read more …

More looming calamity.

Hong Kong Throngs of Thousands Defy Bid to Cool Home Market (BBG)

Snaking queues of thousands of prospective apartment buyers in Hong Kong signaled authorities have made no progress in cooling a red-hot property market, where prices are at records. People were lining up on Friday and over the weekend at Victoria Skye, a luxury project at the former airport site of Kai Tak, and at the Ocean Pride development by Cheung Kong Property and MTR. “Successive moves by the government in recent memory to cool the property market only resulted in it becoming crazier,” The Standard newspaper said in an editorial on Monday. “The result is a sea of madness.” The Hong Kong Monetary Authority has been tightening rules for lenders, including restricting levels of lending to developers, as it tries to limit financial risks and take some of the heat out of the market.

The Centaline Property Centa-City Leading Index of existing homes has advanced 23% in the past year, setting new price records week after week. At a Legislative Council meeting on Monday, HKMA Chief Executive Norman Chan said levels of demand were reminiscent of 20 years ago – before Hong Kong suffered a property bust – and he expressed concern that people with limited financial resources were buying just because they thought prices would only keep going up. [..] Developers sold 8,616 homes in the first five months of the year, already more than were sold in any first half since new purchasing rules were introduced in 2013, the Hong Kong Economic Times reported. K&K Property has offered an additional 200 units at Victoria Skye after it sold 306 flats on Saturday, Ming Pao newspaper reported. Cheung Kong will put another 346 up for grabs after selling 496 in a single day, May 26.

Read more …

Buying too many weapons. The House of Saud is nervous.

Saudi Foreign Reserves Dip Below $500 Billion in April (BBG)

Saudi Arabia’s net foreign assets dropped below $500 billion in April for the first time since 2011 even after the kingdom raised $9 billion from its first international sale of Islamic bonds. The Saudi Arabian Monetary Authority, as the central bank is known, said on Sunday its net foreign assets fell by $8.5 billion from the previous month to about $493 billion, the lowest level since 2011. That brings the decline this year to $36 billion. “Didn’t really see any major driver for such a huge drop, especially when accounting for the sukuk sale,” said Mohamed Abu Basha at EFG-Hermes, an investment bank. Even if the proceeds from the sale weren’t included, “the reserve decline remains huge,” he said.

Saudi Arabia’s foreign reserves have dropped from a peak of more than $730 billion in 2014 after the plunge in oil prices, prompting the IMF to warn that the kingdom may run out of financial assets needed to support spending within five years. Authorities have since embarked on an unprecedented plan to overhaul the economy and repair public finances. But the pace of the decline in reserves this year has puzzled economists who see little evidence of increased government spending, fueling speculation it’s triggered by capital flight and the costs of the kingdom’s war in Yemen. Finance Minister Mohammed Al-Jadaan said in April that the government didn’t withdraw from its central bank reserves during the first quarter. He said the decline could be attributed to local contractors paying overseas vendors after the government settled its arrears.

Read more …

It’s not (just) the shale companies, it’s their lenders who are in danger.

The Great US Energy Debt Wall (SRSRocco)

While the U.S. oil and gas industry struggles to stay alive as it produces energy at low prices, there’s another huge problem just waiting around the corner. Yes, it’s true… the worst is yet to come for an industry that was supposed to make the United States, energy independent. So, grab your popcorn and watch as the U.S. oil and gas industry gets ready to hit the GREAT ENERGY DEBT WALL. So, what is this “Debt Wall?” It’s the ever-increasing amount of debt that the U.S. oil and gas industry will need to pay back each year. Unfortunately, many misguided Americans thought these energy companies were making money hand over fist when the price of oil was above $100 from 2011 to the middle of 2014. They weren’t. Instead, they racked up a great deal of debt as they spent more money drilling for oil than the cash they received from operations.

As they continued to borrow more money than they made, the oil and gas companies pushed back the day of reckoning as far as they could. However, that day is approaching… and fast. According to the data by Bloomberg, the amount of bonds below investment grade the U.S. energy companies need to pay back each year will surge to approximately $70 billion in 2017, up from $30 billion in 2016. That’s just the beginning…. it gets even worse each passing year. As we can see, the outstanding debt (in bonds) will jump to $110 billion in 2018, $155 billion in 2019, and then skyrocket to $230 billion in 2020. This is extremely bad news because it takes oil profits to pay down debt. Right now, very few oil and gas companies are making decent profits or free cash flow. Those that are, have been cutting their capital expenditures substantially in order to turn negative free cash flow into positive.

Unfortunately, it still won’t be enough… not by a long-shot. If we use some simple math, we can plainly see the U.S. oil industry will never be able to pay back the majority of its debt: Shale Oil Production, Cost & Profit Estimates For 2018 • REVENUE = 5 million barrels per day shale oil production x 365 days x $50 a barrel = $91 billion. • EST. PROFIT = 5 million barrels per day shale oil production x 365 days x $10 a barrel = $18 billion. If these shale oil companies do actually produce 5 million barrels of oil per day in 2018, and were able to make a $10 profit (not likely), that would net them $18 billion. However, according to the Bloomberg data, these companies would need to pay back $110 billion in debt (bonds) in 2018. If they would use all their free cash flow profits to pay back this debt, they would still owe $92 billion.

Read more …

BILD says Greeks have mentioned defaulting on July payments.

Greece, Italy Tensions Hit Euro, Asian Stocks, Lift Yen, Gold (R.)

Concerns about a Greek bailout, early Italian elections and comments by the ECB chief about the need for continued stimulus all kept the euro under pressure on Tuesday. European geopolitical fears sapped risk appetite, weighing on Asian stocks and lifting safe havens including the yen and gold, though trading was thin with several markets closed for holidays. The euro slid 0.3% to $1.1129 in its fourth session of declines. James Woods at Rivkin Securities in Sydney attributed most of the currency’s decline on Tuesday to a German press report saying Athens may opt out of its next bailout payment if creditors cannot strike a debt relief deal. “The bailout payments are necessary to meet existing debt repayments due in July, so if Greece were to forgo this bailout payment the probability of a default would spike, reopening the discussion around a Grexit from the Euro zone,” Woods said.

However, he cautioned against reading “too much into it” without more details or confirmation, adding it was unlikely Greece would forego the bailout payment at this stage. Euro zone finance ministers failed to agree with the International Monetary Fund on Greek debt relief or to release new loans to Athens last week, but did come close enough to aim to do both at their June meeting. Comments by former Italian Prime Minister Matteo Renzi on Sunday in favour of holding an election at the same time as Germany’s in September also pulled the euro lower. So did a statement by ECB President Mario Draghi reiterating the need for “substantial” stimulus given subdued inflation.

Read more …

If he includes Greece, it becomes harder for Germany to plunder it. And they’re not done with that.

Draghi Rules Out Including Greece in ECB QE For Now (K.)

ECB chief Mario Draghi took the wind out of the government’s sails on Monday, telling the European Parliament that the ECB will not consider including Greece in its QE program before the conclusion of its bailout review and its debt is made sustainable. “First, let’s have an agreement, a full agreement, and let’s find measures that will make the debt sustainable through time,” Draghi told European lawmakers in Brussels, adding that he regretted that “a clear definition of the debt measures was not reached in the last Eurogroup.” Draghi also said that after creditors agree on what sort of debt relief measures Greece will get, the Governing Council of the ECB will carry out its own “fully independent” analysis to see if the debt would also be sustainable in adverse scenarios.

His comments came as Prime Minister Alexis Tsipras said that Greece was hoping that there will be an initiative in June for “a definitive settlement of the crisis through a clear solution of reducing the debt.” “Let there be a solution and let it come when it comes,” he said after his meeting in Athens with Estonian Prime Minister Juri Ratas, adding that the sooner the matter is solved the better. The tough road ahead for Greece was reflected in remarks yesterday by Finance Minister Euclid Tsakalotos, who said the country’s inclusion in QE is indeed “a difficult issue.” “The ECB, like our Lord, works in mysterious ways,” he told reporters. Draghi’s remarks were seen as another another blow, if not the killer, to the government’s narrative regarding the time frame it had laid out for the country to get on the road to economic recovery.

More specifically, Prime Minister Alexis Tsipras’s roadmap stipulated that after the second review of the country’s third bailout is wrapped up, creditors and the IMF would agree on how to make the country’s debt sustainable, and this would in turn allow Greece join the QE program, which would pave the way for the country’s return to international markets. But with the review all but concluded, and no definitive statements from the creditors on what sort of debt relief measures it can expect – or when – the best the government can hope for now is that the sequence of events outlined in the Tsipras roadmap will take place in the fall at the earliest, and definitely after the German national elections in September. The way things stand now, the most the government can expect from the June 15 Eurogroup is the release of the bailout tranche of more than €7 billion, but not the reassurance it wants in order to join the QE program.

Read more …

That’s exactly why these deals keep on being blocked. The EU doesn’t want a Greek recovery. Cart, horse.

Greece Warns Recovery Threatened If Debt Deal Is Blocked At Next Talks (G.)

Greece on Monday issued a panic warning that its recovery would be thrown into doubt if Brussels blocked a debt deal at the next meeting of euro area finance ministers. Fearing that Germany will insist on delays to an agreement until at least after elections in September, Athens’ finance minister hinted that the beleaguered nation could be plunged deeper into recession after seeing its economy contract by more than 25% since the start of its financial crisis. With £7.5bn in debt repayments due in July and lenders meeting on 15 June to try and reach an agreement after failing last month, Euclid Tsakalotos made an urgent appeal for clarity on Monday. “It is incumbent on all sides to find a solution,” he told foreign correspondents. “There is very little point in entering a [bailout] programme if the goal is not to leave the programme. And leaving the programme should be the responsibility not just of the debt country but the creditor country as well.”

Athens, Tsakalotos continued, had kept its side of the bargain, legislating highly unpopular reforms to produce savings of 2% of GDP, while the EU and IMF had not kept theirs. “We can’t accept a deal which is not what was on the table,” he said. “What was on the table was if Greece carried outs its reform package then creditors would ensure that there would be a clear runway through clarity for debt.” Instead, the IMF had refused to endorse the proposed solution – saying it fell far short of what was necessary to engender debt sustainability – with the result that Athens had been forced to reject it, Tsakalotos added. The Fund and Berlin – the biggest contributor of Greece’s three rescue programs – have long been in disagreement over how to reduce Greek debt.

Tsakalotos was addressing a hastily arranged press conference. Held in the dining room of the Athens’ mansion that houses the prime minister’s office, it appeared to highlight the mood of nervousness pervading the Greek government. With a debt mountain hovering around €314bn – or 180% of GDP – the Syriza-dominated coalition of Alexis Tsipras has long argued that debt relief is essential to foreign investment and economic recovery. [..] ..time, said Tsakalotos on Monday, was running out. “Our ask is … that everyone keeps their side of the bargain. The position [of creditors] is going to be very difficult to defend. What can they say? That the Greek government did everything but we will send it to the rocks.”

Read more …

Which will affect Greek banks, which will affect the state, etc etc. There never was another option.

Deposits And Loans At Greek Banks Continue Slide (K.)

Deposits in Greek banks declined by more than €2.4 billion in the first four months of the year, while credit contraction has continued in 2017 for an eighth consecutive year. Still, April was the second month of credit expansion. The sum of Greek deposits reached almost €118.9 billion at the end of last month, down from about €121.4 billion at end-December 2016, due to the uncertainty that has prevailed over the Greek economy this year. Bank of Greece data show a fresh €313.3 million drop in deposits from end-March to end-April – a result of the €665.3 million decline in the cash flow of corporations, from nearly €20.5 billion in March to almost €19.8 billion last month. In fact the picture of corporate deposits in April looks technically better than it would had it not been for the €620 million share capital increase by Fraport Greece and Sklavenitis’s €400 million bond.

The level of savings has practically reverted to what it was in 2001, when Greece was still using the drachma, and forecasts speak of a stable picture with few fluctuations expected in the rest of 2017. Senior bank officials say the next few months will be difficult despite the projections for more revenues from tourism: The tax obligations starting from July, with income tax and later Single Property Tax (ENFIA) deadlines, are expected to eat further into the savings of households and corporations’ cash flow. Meanwhile the difference between loans issued and old loans paid back has remained in negative territory in 2017, reaching a rate of -0.9% in the first four months. However, April showed a positive flow amounting to €659 million after an expansion of €307 million in March.

Read more …

Yeah, they’re going to risk bankrupting German and French carmakers, right?

EU Moves To Crack Down On Carmakers In Wake Of VW Emissions Scandal (G.)

The European Union has moved towards cracking down on carmakers who cheat emissions tests by giving the EU executive more powers to monitor testing and impose fines. The European council overcame initial objections from Germany and agreed to try to reform the system for approving vehicles in Europe in the wake of the Volkswagen emissions scandal. The draft now goes for negotiations with the European commission and the European parliament, where the car industry holds a strong influence. “Above all, the objective is building trust and credibility again in the European type-approval system,” said Chris Cardona, the economy minister of Malta, which holds the EU’s six-month rotating presidency.

The VW emissions scandal erupted in September 2015, with the carmaker admitting it had installed software defeat devices in 11m diesel cars worldwide, meaning the vehicles only cut their nitrogen oxide pollution during certification tests. The draft EU rules call for reducing the power of national authorities and empowering the European commission to test and inspect vehicles, to ensure compliance with emissions standards, and to respond to any irregularities. “This will increase the independence and quality of the EU type-approval system,” the council said in a statement. “The commission could also impose fines for infringements on manufacturers and importers of up to €30,000 [£26,000] per noncompliant vehicle.” Under the draft rules, every EU country will be required to check emissions in one in every 50,000 new vehicles based on real driving conditions.

Read more …

The EU comes prepared.

Painstaking Detail Of Brexit Process Revealed In EU Documents (G.)

Just 10 days before the general election, the EU published two documents that will affect every person living in Britain for years to come. Despite being dropped into the maelstrom of an election caused by Brexit, there was hardly a murmur. The documents were the most detailed positions yet from the EU’s chief negotiator, Michel Barnier, on the upcoming divorce talks with the UK. In two policy papers, the bloc has elaborated its stance on the Brexit bill and citizens’ rights. [..] The muted reaction can be explained partly by the fact that the texts were published with zero fanfare, when the country was still reeling from the terrorist atrocity in Manchester. Furthermore, the EU documents contain no surprises. The equivalent of dotting the Is and crossing the Ts, they are a reminder the EU has had 11 months to get ready for Brexit.

That is almost one year to assemble squadrons of specialists to pore over EU treaties and legal tomes to map the way ahead. The 10-page paper on the bill does not put a price on the divorce, but sets out in painstaking detail all EU bodies with a vested interest in the spoils – 40 agencies, eight joint projects on new technologies and a panoply of funds agreed by all countries, from aid for refugees in Turkey to supporting peace in Colombia. No detail is too small. Britain is even on the hook for funding teachers at the elite European schools that educate EU civil servants’ children. On citizens’ rights, the EU spells out in greater detail the protections it wants to secure for nearly 5 million people on the wrong side of Brexit – 3.5 million EU nationals in the UK and 1.2 million Britons on the continent.

Read more …

Fear is all they have left. Blunt lies about Corbyn.

May Battles Against Complacency as UK Election Lead Slips Away (BBG)

Theresa May began the U.K. election campaign warning that pollsters giving her a 20-point lead could be wrong. With her lead now slashed, she’s hoping they really are. A series of missteps by May and her advisers, along with a populist Labour campaign, have put the prime minister on the defensive. Activists no longer laugh when she raises the prospect of a Corbyn victory at her rallies and some have questioned the wisdom of building a campaign around her own personal brand, urging people to vote for “Theresa May and her team.” Investors have awoken to the fact that May’s promise of “strong and stable” government — never mind a landslide to match Tony Blair’s in 1997 — could be in jeopardy with the pound dipping after a specific poll showed May’s Conservative Party leading the Labour Party by just five points.

“The Tories are right to be worried if the momentum looks to be with Labour, but they can still turn it around,” Andrew Hawkins, chairman of pollsters ComRes, said in a telephone interview. With a nation still in shock over the Manchester bombing and June 8 elections round the corner, May got back to the campaign trail and reverted to her tested lines on Brexit: That Labour leader Jeremy Corbyn cannot be trusted to navigate Britain through two years of talks. “It’s important as people come closer to that vote – that’s only next week – that they focus on the choice that’s there before them,” the prime minister told activists at a rally in Twickenham, southwest London, on Monday. “If I lose just six seats my government loses its majority, that could mean in 10 days time a government in chaos with Jeremy Corbyn in Number 10.”

But gone was the confidence when she stunned Britain by calling a snap election on April 18. On the day of the announcement, an ICM/Guardian poll gave May’s Tories a lead over Labour of 21 points and surveys in the following weekend’s newspapers suggested leads of 24 and 25 points. Now, she is vulnerable to attack. Interviewer Jeremy Paxman quizzed May about her U-turns, in an interview on Sky News on Monday: “You have backed down over social care, and over national insurance. If I was in Brussels, I would think you are a blowhard who collapses at the first sign of gunfire.” Her rival on the other hand has grown more relaxed, holding his own against the same interviewer who has a reputation for being a rottweiler in his style of questioning. In one instance, Corbyn won a big round of applause when asked about whether he’d want to abolish monarchy: “Do you know what? I had a very nice chat with the Queen.”

Read more …

US room to move gets smaller fast.

Russia Expects China To Help Resolve Syrian Crisis (DS)

Moscow hopes for China’s help in solving the Syrian crisis and restoring the country, Russian Deputy Foreign Minister Igor Morgulov said Monday. “Our cooperation with China on Syria at various international venues is unprecedented. We blocked six attempts to pass anti-Syrian resolutions in the U.N. Security Council,” Morgulov said at “Russia and China: Taking on a New Quality of Bilateral Relations” international conference. The Russian deputy foreign minister added that Russia values Beijing’s position on the Syrian crisis, and hopes that, “the Chinese partners will continue their efforts to promote a political settlement.”

“Together we call for a peaceful and political-diplomatic solution to conflicts, without double standards, unilateral action or attempts at ousting regimes. Our approaches coincide, among other things, on the uncompromising fight against terrorism,” Morgulov said. Russia and China have repeatedly vetoed U.N. Security Council resolutions imposing sanctions against the Assad regime. Moscow has long-standing links to the Assad regime and is its key ally, while China has an established policy of non-intervention in other countries’ affairs.

Read more …

French interests in Russia are substantial. Macron going after RT and Sputnik is a weird way to not offend Merkel.

Putin, Macron Have ‘Open, Frank Exchange Of Opinions’ (RT)

Russian President Vladimir Putin and his French counterpart, Emmanuel Macron, had “difficult” but “frank” talks during their first meeting in Versailles. The two leaders vowed to improve relations and jointly address international problems. The first meeting of the Russian and French leaders lasted almost three hours, with Macron saying that “Franco-Russian friendship” was at the heart of the talks. The French president admitted, however, that he has “some disagreements” with his Russian counterpart, but said that the two leaders discussed them openly in a “frank exchange of views.” Putin also said that the two leaders have some differences, but said that they view many issues in a similar way, and that French-Russian relations could be “qualitatively” improved. “We sought … common ground [in dealing] with key issues of the international agenda. And I believe that we see it. We are able to … at least try to start resolving the key contemporary problems together,” Putin said.

The Russian leader went on to say that his talks with Macron helped the pair to find common points in dealing with major international problems, and the that two sides would try to further bring together their views on these issues. Putin also invited his French counterpart to Russia, saying: “I hope that he will be able to spend several weeks in Moscow.” French President Macron said that serious international problems cannot be resolved without Moscow, as he stressed the importance of the role Russia plays in the modern world. “No major problem in the world can be solved without Russia,” he told the press conference. Macron then said that France is interested in intensifying cooperation with Russia, particularly in resolving the Syrian crisis. The French leader went on to say that this issue demands “an inclusive political solution.”

Read more …

Pretty brilliant. Much more at the link.

Let’s All Agree To Lock In This Russophobia For At Least 3.5 More Years (Saker)

There I was again, flying first class on my shareholders’ dime from New York to San Francisco, when I was deeply saddened to read about the death of Zbigniew Brzezinski, National Security Adviser to Jimmy Carter. For a moment I thought: “Surely I can find some anti-Putin articles to read rather than this one?” Those always make me so happy! But then I remembered that Zbig was a man after my own heart, because he was one of the West’s greatest Russophobes. Even the New York Times talked of his “rigid hatred of the Soviet Union”. Zbig ended the détente led by Nixon as Carter, not Reagan, restarted good, old-fashioned, American Russophobia: Selling the Soviets computers with bugs for industrial sabotage, the propaganda effort of the 1980 Olympic Boycott, the US grain embargo to try and starve the Russian people, the arming of the Taliban’s forerunners to destabilize a left-wing government in Afghanistan and thus unleashing Islamic terrorism on the world, etc.

Just as American Democrats know for an undeniable fact that Jimmy Carter is our nation’s greatest living man of peace, I contend that Zbig’s anti-Russian stance makes him nearly as great a humanitarian, and certainly a model Democrat in 2017. And Zbig knew, as I and all good Democrats know, that the greatest fight of our generation is the fight against Vladimir Putin. Poverty, starvation, refugees, terrorism, climate change – everyone in America is realizing that if we can just get rid of Putin, everything else will surely fall into line. Surely! So I was pretty sad to read of Zbig’s passing, but that’s when it hit me: Just because he’s gone, it doesn’t mean we have to give up hating Russia! We’ve been hating Russia since November – more than 6 months now – and, frankly…it feels awesome! I don’t how long it takes to make a habit permanent, so let’s all agree to lock in this Russophobia for at least 3.5 more years, possibly 7.5!

It would be a fitting testament to a man whose prophetic Russophobia was misunderstood as “anti-communism”. Say it loud: It’s time for progressive Americans to unite behind hating Russians! Again! Let’s party like it’s 1979! Now, I’m as politically-correct a CEO as was ever made -my allegiance to Hillary proves that – but I can tell that some people think that I should equivocate by writing “hating the Russian government” instead of the “Russians”. Well, it’s bold, but being bold is why we CEOs deserve the big bucks and you deserve our crumbs. Not our table crumbs – those are too good for you – I mean the crumbs that fall around our fine, Italian shoes. Here’s the problem with the Russians: Putin’s approval rating is over 85%. It is a testament to the master of evil that he has duped nearly all 144 million Russian citizens. They said that 50 million Elvis fans can’t be wrong, but 124 million Putin fans clearly are. I don’t know anything about Russian domestic politics, but I don’t have to – that’s my right as an American.

Read more …

Hillary posing as the resistance says it all. They don’t even have a narrative left.

The So-Called Resistance (Jim Kunstler)

[..] what would a real resistance look like? First, it would oppose the aforementioned asset-stripping that the US economy has become, the transfer of capital in all its forms — monetary, political, cultural, social — from the dis-employed former middle classes to the tiny, select beneficiaries of financial manipulation. Note that the things being manipulated — markets, currencies, securities, and interest rates — are increasingly phantom entities that appear to maintain their value only because the high priests of financial authority say that they do. The shelf-life of that flim-flam approaches its endgame as it self-evidently immiserates the masses and their sheer faith in its recondite promises dwindles away to nothing.

A genuine resistance would begin to deconstruct this clerisy and its institutions, namely Too Big To Fail banks and the Federal Reserve. The best opportunity to accomplish that would have been the early months of Mr. Obama’s turn in the White House, the dark time of the previous financial crash when the damage was fresh and obvious. But the former president blew that under the influence of high priests Robert Rubin and Larry Summers. And the lower order clerics were allowed run their hoodoo machine flat out in the following eight years. Just look at the long chart of the Standard & Poors index. Tragically, this ever-upward arc is now taken to be the normal state of things, and when it fails the implosion will be orders of magnitude more violent than the last time.

One would think that a genuine resistance would also oppose the growing consolidation of power in the now-colossal spying apparatus of the nation — the often averred to “seventeen intel agencies” that show signs of being actively at war against other parts of the government and against citizens themselves. Hence, the non-stop murmur of allegation about “Russian interference in the election,” going back to the summer of 2016 without either any real evidence, or any clarification of what is actually alleged to have happened. Another tragic turn is that this fifth column of rogue intel agencies has recruited the major organs of the news to incessantly repeat its allegations until the public accepts the story as established fact rather than just the manufactured story it so far appears to be. Well, the lives of persons and societies founder on versions of the “reality” they fabricate for their own purposes. A genuine resistance would show foremost some fidelity to a reality beyond the spin-factories of self-delusion.

Read more …

Election coming up, perhaps?

Germany Steps Up Attack On Trump For ‘Weakening’ The West (G.)

Germany has unleashed a volley of criticism against Donald Trump, slamming his “short-sighted” policies that have “weakened the west” and hurt European interests. The sharp words from foreign minister Sigmar Gabriel came after the US president concluded his first official tour abroad taking in Saudi Arabia, Israel, Brussels and then Italy for a G7 summit. Angela Merkel warned on Sunday that the US and Britain may no longer be completely reliable partners. Germany’s exasperation was laid bare after the G7 summit, which wrapped up on Saturday with Trump refusing to affirm US support for the 2015 Paris climate accord. Days earlier, in Saudi Arabia, Trump presided over the single largest US arms deal in American history, worth $110bn over the next decade and including ships, tanks and anti-missile systems.

Gabriel said on Monday that “anyone who accelerates climate change by weakening environmental protection, who sells more weapons in conflict zones and who does not want to politically resolve religious conflicts is putting peace in Europe at risk”. “The short-sighted policies of the American government stand against the interests of the European Union,” he said, judging that “the west has become smaller, at least it has become weaker”. “We Europeans must fight for more climate protection, fewer weapons and against religious [fanaticism], otherwise the Middle East and Africa will be further destabilised,” Gabriel said. [..] The relationship between Merkel and Trump contrasts with the warm ties between herself and Barack Obama. The previous US president last week travelled to Berlin to attend a key Protestant conference. Obama’s participation in a forum with Merkel last Thursday came hours before her meeting with Trump in Brussels at the Nato summit.

Read more …

Right, election coming up. Which trumps human rights and international law.

Greece, Germany Agree To Slow Refugee Family Reunification (F24)

Greece and Germany have agreed to slow the reunification of refugee families divided between the two nations during their scramble to safety, according to a leaked letter published Monday. “Family reunification transfer to Germany will slow down as agreed,” Greek Migration Minister Yiannis Mouzalas wrote to German Interior Minister Thomas de Maiziere in a May 4 letter obtained by leftist daily Efimerida ton Syntakton. The Greek migration ministry declined to comment, but earlier this month Mouzalas said the slowdown was due to “technical difficulties.” In the letter, Mouzalas reportedly acknowledges that the move – enacted because of the sheer volume of asylum requests – will affect “more than two thousand people” while some “will have to wait for years” to reach Germany even though their requests have been approved.

Asylum seekers – mostly Syrian refugees in Greece’s case – are entitled to join family members elsewhere in the European Union within six months from the date their request is approved. In his letter, Mouzalas said Berlin and Athens had to agree on a “common line” to address “increasingly desperate and critical comments” so that Athens is not blamed for the delays. He then suggests a joint response: “We understand that asylum seekers are eager to meet with their family, but given that both Greece and Germany have very large asylum seeking populations, delays are inevitable.” Ulla Jelpke, a deputy of German far-left Party Die Linke, earlier this month said Berlin had capped the number of refugees eligible for reunification at 70 people per month. Accordingly, Efimerida ton Syntakton said there were just 70 transfers in April compared to 540 in March and 370 in February.

Read more …