May 222021
 


Paul Gauguin Road in Tahiti 1891

 

Science Has Become A Cartel (Unherd)
House Republicans Release COVID-19 Origins Report (ZH)
No Irish, No Blacks, No Dogs, No Unvaxxed (OffG)
The Government’s Emergency Powers Myth (Napolitano)
Risk Of Covid Is Now Very Low — It’s Time To Stop Living In Fear (Makary)
You Want Employees? Stop Being *******s (Denninger)
The Real-Life Victims of Democrats’ Irrational Deficit Paranoia (TNR)
Poor Economic Reports Raise Caution Flags For Massive Spending Plans (JTN)
Lurking in the Woodwork (Kunstler)
The Full Story of the Stunning RSA Hack Can Finally Be Told (Wired)

 

 

 

 

Lab leak is getting closer.

Science Has Become A Cartel (Unherd)

By now the reader will have heard of “gain of function” research and the hazards it poses. A large number of scientists came together in July 2014 as the Cambridge Working Group to urge that “Experiments involving the creation of potential pandemic pathogens should be curtailed until there has been a quantitative, objective and credible assessment of the risks, potential benefits, and opportunities for risk mitigation, as well as comparison against safer experimental approaches.” Later in 2014, the Obama administration issued a moratorium on this type of research, partly in response to some “bio-safety incidents” that occurred at federal research facilities.

But before the ban went into effect, the National Institute of Allergy and Infectious Diseases (NIAID) funded some gain-of-function research which, through an intermediary nonprofit and subcontracting arrangement, came to be conducted at the Wuhan Institute of Virology. The moratorium was lifted during the Trump administration, apparently at the urging of Anthony Fauci, and a 2019 renewal of the 2014 research grant did include gain-of-function research on bat coronaviruses. SARS-CoV-2 exhibits biological signatures consistent with the plan of research laid out in the grant. Doing such research requires extreme safety precautions, and these make it very cumbersome to do the work. You have to wear what is essentially a space suit, and every task is burdened with procedures that slow the work down dramatically. Meanwhile, scientists are competing with one another to publish first.

As Wade notes, researchers have an incentive to carry the work out under less restrictive safety standards, and therefore to downplay the risks when applying for grants. And indeed the work at Wuhan was not conducted at the highest safety standard. In this, there may have been a subtle form of collusion. There is no need to posit a conspiracy, one need only take note of the shared incentives. It is other members of the guild who conduct the review process that decides the allocation of research funds; they are unlikely to insist upon more stringent safety standards — which would have to apply to themselves as well. Research communities have internal competition, but also collective interests.

Wade points out that the “consensus” that Covid must have an entirely natural origin was established by two early pronouncements, one in The Lancet in February 2020 and the other in Nature Medicine in March 2020. These were op-eds, not scientific papers. Both spoke with certainty about matters which it was impossible to be certain about. Wade writes: “It later turned out that the Lancet letter had been organized and drafted by Peter Daszak, president of the EcoHealth Alliance of New York. Dr Daszak’s organisation funded coronavirus research at the Wuhan Institute of Virology. If the SARS2 virus had indeed escaped from research he funded, Dr. Daszak would be potentially culpable. This acute conflict of interest was not declared to the Lancet’s readers. To the contrary, the letter concluded, “We declare no competing interests.”

In other words, the guy who was orchestrating research on bat coronaviruses at the lab in Wuhan corralled other scientists, with similar professional interests, into making a declaration to the effect that anyone who mentions the (obvious) possibility that the pandemic (which started in Wuhan) might have a connection to this research could only be doing so with bad intentions. This seems a bit thuggish. The yawning gap between the actual state of knowledge at the time and the confidence displayed in the two letters should have been obvious to anyone in the field of virology. And indeed, there were scientists from outside the guild, but in fields adjacent enough to speak competently, who said as much. The Lancet and Nature Medicine letters were in fact anti-scientific in spirit and intent. Yet the pronouncements had the effect of shutting down inquiry that was not only legitimate, but urgently needed.

Read more …

And closer still.

House Republicans Release COVID-19 Origins Report (ZH)

Republicans on the House Intelligence Committee led by Devin Nunes (R-CA) say there is “significant circumstantial evidence” that COVID-19 originated from a lab leak at the Wuhan Institute of Virology, according to a Wednesday report released obtained by Fox News. According to the report, the federal government needs to put “more pressure on China” to allow a “full, credible investigation” into the source of the pandemic, adding that it’s “crucial for health experts and the U.S. government to understand how the COVID-19 virus originated” to prevent “or quickly mitigate future pandemics.” Hell has a greater chance of freezing over, but we digress.

“International efforts to discover the true source of the virus, however, have been stymied by a lack of cooperation from the People’s Republic of China,” wrote the Republicans. “Nevertheless, significant circumstantial evidence raises serious concerns that the COVID-19 outbreak may have been a leak from the Wuhan Institute of Virology.” Republicans pointed to China’s “history of research lab leaks resulting in infections,” and warnings from U.S. diplomats in China as early as 2017 that the Wuhan lab was conducting “dangerous research” on coronaviruses without following “necessary safety protocols, risking the accidental outbreak of a pandemic.”

Republicans also pointed to public reports that “several researchers in the Wuhan lab were sickened with COVID-19-like symptoms” in Fall 2019, and the Chinese military’s “involvement in the Wuhan Lab.” “By contrast, little circumstantial evidence has emerged to support the PRC’s claim that COVID-19 was a natural occurrence, having jumped from some other species to human,” they wrote, saying Chinese authorities “have failed to identify the original species that allegedly spread the virus to humans, which is critical to their zoonotic transfer theory.” -Fox News. Fauci has some explaining to do.

“THERE ARE MORE SECRETS HIDDEN IN THE VIRUS!”
https://twitter.com/i/status/1395914989156937730

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“And once the NHS App becomes your ticket to freedom on Monday, they will finally have means to weed out and punish dissidence while rewarding blind faith in authority..”

No Irish, No Blacks, No Dogs, No Unvaxxed (OffG)

The government is pressing ahead with its Vaccine Passport and plans for a two-tier society are afoot. The effrontery of those leading the charge beggar’s belief. When they said ‘there were no plans for ‘discriminatory’ Covid vaccine passports’, they were quietly funding at least eight different vaccine passport schemes since last year. And that’s just the half of it. We are midway through a Europe-wide feasibility study for the development of a common vaccine passport, launched by the European Commission in 2018. They would have you believe – they were caught with their trousers down, their policies are proportionate to the emergency as it unfolds, and at all times they operate according to a system of informed consent. But hang on a minute. Since the onset of SARS-CoV-2, they have played the most astonishing game of deception and manipulation.


Cooking the books and fiddling the tills. They have deliberately plunged society into two camps – skeptics and adherents, compliant and non-conformists. Last year established the mood for pettifogging anyone questioning the narrative, while those refusing to comply were branded narcissists and psychopaths or denounced as ‘Covid deniers’ – the modern-day equivalent of a Holocaust denier. This government has polarised the nation on a scale never before attempted, legitimising a particular brand of prejudice and enmity not seen in Europe since the days of the Third Reich. And once the NHS App becomes your ticket to freedom on Monday, they will finally have means to weed out and punish dissidence while rewarding blind faith in authority. No matter how injurious their compliance is to society at large, the silent majority have lost their moral compass.

But it must be understood – this principle of divide and rule is as old as the hills. It was not so long ago that signs hung in the windows of establishments in Britain that read: ‘No dogs, No Irish, No blacks’. The difference today is that it won’t be the colour of your skin, your class, gender or sexual orientation that will condemn you, it will be something far more virulent – your ideology. That this crucial point has been entirely missed by the chattering classes is astonishing. And despite the most flagrant attempts to marginalise large segments of society, identitarians, the woke brigade and other erstwhile defenders of the most marginalised remain largely unphased. Unless it is to flap their arms in the air over higher rates of vaccine hesitancy amongst ethnic minorities. But the rest of us can go to hell.

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“..individual natural rights, protected from government interference by the Ninth Amendment, trump the unconstitutional words of government officials and invalidate their efforts to enforce compliance.”

The Government’s Emergency Powers Myth (Napolitano)

Last week, the media in New Jersey began to ask Gov. Phil Murphy when he would surrender his emergency powers. He claimed emergency powers in March 2020, and he also claimed that those powers are not limited by the Constitution when he said on Fox that the Bill of Rights is above his pay grade. His reply to the media inquiries was that he will surrender them when he surrenders them! I am using the example of Murphy in order to address the concept of emergency powers, but there is no hyperbole here. Murphy quite literally issued executive orders barring folks from doing what the Constitution guarantees them the right to do, and he imposed criminal penalties for violating his orders, and he had folks who defied him arrested and prosecuted. Stated differently, he assumed the powers of the state legislature — which is to write the laws — and he violated his oath to uphold the Constitution.

He claimed that somehow he can interfere with the exercise of basic human freedoms — like going to church, going to work, shopping for food, operating a business, assembling and traveling — because he declared a state of emergency. If the government declares an emergency, can it thereby acquire the lawful power to interfere with constitutionally guaranteed freedoms? In a word: No. [..] no matter the exigency — war, floods, pandemic, fear, myth — individual natural rights, protected from government interference by the Ninth Amendment, trump the unconstitutional words of government officials and invalidate their efforts to enforce compliance. Murphy’s orders contain empty words because they do not have the force of law since they were not legislatively created and they directly contradict the Constitution and the Supreme Court’s most definitive interpretations of it.

When Murphy became the governor of New Jersey, he took an oath to enforce the Constitution. Whatever personal ignorance or mental reservations he may have had, the Constitution is the supreme law of the land, and every public official, federal and state, is bound by it. If government officials could declare an emergency whenever they wished and thereby be relieved of the obligation to defend the Constitution — and the rights it guarantees — then no liberty is safe.

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“At some point we have to live our lives. That time is now.”

Risk Of Covid Is Now Very Low — It’s Time To Stop Living In Fear (Makary)

COVID cases are collapsing in front of our eyes. Daily cases are now one-tenth the number of daily flu cases in the middle of a mild flu season, with a now-identical case fatality rate. That’s because the few Americans testing positive are often young, feel fine, and underwent testing as a screening requirement for playing sports or attending gatherings. The US positive rate is now at a record low, below 3%. Projections for the coming weeks and months are even more favorable. That’s because roughly 80% to 85% of adults are now immune — more than 6 in 10 adults are now vaccinated and more than half of unvaccinated adults have natural immunity from prior infection. In public health, when a virus has trouble jumping around because more than 8 in 10 adults in a community are blocking its transmission, we call that herd immunity.

Yet some people want the pandemic to stretch out longer, insisting on a futile goal of absolute risk eradication. Posturing to be on the side of science, they ignore the science on the effectiveness of vaccinated and natural immunity and dangle variant fears. They wear masks after being fully vaccinated even though there has never been a documented cases of a fully vaccinated person who is asymptomatic transmitting the virus. They’ve paralyzed the nation with fear. Some point to the Yankees as an example of the risk of a breakthrough infection. Indeed, one player of the 50 vaccinated players tested had COVID symptoms, representing the rare instance of a breakthrough infection. But his immune system worked. It resulted in the infection being very mild. Vaccines are highly efficacious in preventing the infection, and nearly perfect in preventing COVID death.

Of the other seven players who likely tested positive, none had symptoms. Their immune systems worked to ward off the virus when it landed on the mucosal membrane of their noses. Just because a PCR test, which can detect as few as 10 molecules of virus particles, reveals evidence of a remnant virus does not mean there is any health concern. Our battle is not against positive tests, it’s in preventing serious illness and death. San Francisco General Hospital now has zero COVID patients in the hospital and the city reported 2 new positive COVID tests Wednesday. Is San Francisco still in a state of emergency? If so, it may never end. Seasonal flu would trigger the same health emergency criteria in perpetuity. Mayor Bill de Blasio says New York City will “fully reopen” on July 1 — but why wait until summer is half over? At some point we have to live our lives. That time is now.

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“..the data is that if you’ve had the disease the shots are much more dangerous..”

You Want Employees? Stop Being *******s (Denninger)

It’s a year later. The mask mandates — and all the abuse heaped on the employees and the public did nothing. The places with them had the same epidemic curves as those that did not. The CDC is still lying and so are a whole bunch of other people, but the attitude has changed and people have figured it out. Oh sure, there are still plenty people very scared of Covid, but they’re not everyone and what’s worse is that those who are still scared are, to a large degree, now psychotic about it which means they’re the very last people who are going to be pleasant on the customer side of the counter whether employees are masked or not. People try to claim this divide is political, and maybe some of it is. But whether it is or not doesn’t really matter; do you want to******off not only half your customers but half your employees too?

Now you have companies claiming “take the shot or keep the masks on.” That’s stupid, and anyone with half a brain knows it. Not even the manufacturers claim that the shots keep you from getting or spreading Covid; there is simply no science on that. Their entire claim under the EUAs was that they stop you from going to the hospital and dying. That’s it. What’s that got to do with anyone else? Nothing! Never mind all the people who had Covid — there is exactly zero scientific reason for them to take the shots; they already have as good of immunity as they’re going to get and the data is that if you’ve had the disease the shots are much more dangerous. So why are employers telling those who don’t want the shot — even those who had Covid — to wear a mask? Punishment.

But wait — was that part of your negotiation when you took the job? I don’t think so. What if some governor or mayor mandates it? So what — is he or she paying you? And what about the dude who’s been tossing beer cans out his window next door for the entire the last year and the pile is now 6′ high, smoke still rolls out the window at 5:00 AM in the summer months too, while you had to go to work the entire time? I am hearing repeated reports from all over about people just saying “**** it” and not showing up to work, or quitting. I heard it again just recently at Kroger; the employee monitoring the self check-outs (all that was open, and only half of them) was asked directly by a customer why the other half and none of the manned checkouts were open. The answer: People just didn’t show up to work today, we don’t have the staff. There’s a Help Wanted sign on the door, like so many other places.

Oh wait — not like “so many” other places, like damn near everywhere I go!

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“The federal budget assumes the government will recover 96 cents of every dollar borrowers default on,” Mitchell wrote. This banker, Jeff Courtney, put that figure closer to just 51 to 63 cents.”

The Real-Life Victims of Democrats’ Irrational Deficit Paranoia (TNR)

Last week, The Wall Street Journal ran a story by reporter Josh Mitchell, with a headline asking an alarming question: “Is the U.S. Student Loan Program Facing a $500 Billion Hole? One Banker Thinks So.” That’s a large and worrisome number. Surely a hole that large is exactly the sort of thing we don’t want our government to be facing, and if a banker is concerned it must be very serious indeed. The banker in question, a former JPMorgan executive brought in by Donald Trump’s Secretary of Education Betsy DeVos, had examined the federal student loan program and determined that the government was making overly rosy assumptions about future repayment.

He found “a growing gap between what the books said and what the loans were actually worth, requiring cash infusions from the Treasury to the Education Department long after budgets had been approved and fiscal years had ended,” and warned that the department faced “potentially hundreds of billions in losses.” “The federal budget assumes the government will recover 96 cents of every dollar borrowers default on,” Mitchell wrote. This banker, Jeff Courtney, put that figure closer to just 51 to 63 cents. Now, for a private lender, like a bank, this projected shortfall would indeed be a ticking time bomb. The bank might be in danger of insolvency (unless, of course, it was rescued by a federal government that could give the bank an emergency cash infusion and take those bad loans off its hands).

But there’s no real danger of a federal Cabinet-level department becoming insolvent. The Treasury Department is already in the habit of making up the Education Department’s budgetary shortfalls. So what is the problem again? Typically for a news outlet like the Journal, the story describes this potential shortfall as what “taxpayers” would be “on the hook for,” but obviously, we all know that that is not how federal budgeting works. Taxes could rise for certain people for certain reasons, but no one will receive an itemized bill for this uncollected debt. And as for that large, catastrophic number ($500 billion!) that might never be paid back, it amounts to less than one year of a national defense budget that “taxpayers” are similarly “on the hook for.”

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“..the U.S. can really only afford to invest in necessary infrastructure — not spend trillions “building out the state.”

Poor Economic Reports Raise Caution Flags For Massive Spending Plans (JTN)

As problems for President Biden multiply at home and abroad, Bidenomics — the massive public spending that drives the president’s economic and domestic agenda — suddenly faces especially strong headwinds, as bad reports on jobs and inflation have raised giant yellow caution flags. The month of April produced an unexpectedly disappointing jobs report, followed by a sharp rise in inflation — at the grocery store and the gas pump — that is being felt alike in homes across the nation and in the financial markets, which were sent into a frenzy by the numbers. And Americans continue to line up for (expensive) gas all along the East Coast ahead of Memorial Day.

Chairman of the Federal Reserve Jerome Powell has counseled Americans not to worry overly about inflation, arguing that some increase was always an inevitable byproduct of economic recovery after the pandemic. It will subside, he says. Cecilia Rouse, the chairwoman of the White House Council of Economic Advisers, says the most recent jobs doesn’t account for several factors, including seasonal adjustments, holiday weekends, and the gap between receiving a vaccine and becoming fully immune. The White House is working to calm nerves surrounding the bad economic reports as it continues to push forward twin legislative packages that would amount to another $4 trillion in spending.

The U.S. can afford about one quarter of the spending that is currently being proposed by the administration, warns conservative economist Peter Morici. “We can afford a trillion-dollar program to improve infrastructure to make the semiconductor industry more competitive with the Chinese, to harden the supply chain and bring some industry back,” Morici told “Just the News AM” this week. “But we cannot afford massive increases in social services.” “[U]nless we want to have a lot of inflation, or tax companies to the point that they leave the country,” he warned, the U.S. can really only afford to invest in necessary infrastructure — not spend trillions “building out the state.”

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Soros.

Lurking in the Woodwork (Kunstler)

The worst thing about the Trump years was that he enabled his adversaries to get away with turning bad faith into the greatest virtue of all. That’s what you got in the connivance of the anti-Trump Deep Staters and The News bringing you three years of RussiaGate, Robert Mueller’s coverup operation for RussiaGate, and Rep. Adam Schiff lying his ass off without any penalty. And now you’re getting more of it courtesy of Attorney General Merrick Garland allowing political adventurers like Deputy AG Lisa Monaco to go fishing for charges against Rudy Giuliani for the express purpose of burying him in “the process” and leaving him bankrupt. The Justice Department is a broken institution now, and there isn’t enough good will or good faith around these days to put it back together.

The Woke hysteria, on the other hand, is lately revealed to be a patent hustle, and is finally inviting pushback in the schools as parents begin to loudly object to “white privilege” struggle sessions for eight-year-olds and workshopping sexual confusion with children who are not ready for any version of sex, real or fake. The Great Reset’s connection to Wokery can be seen in the efforts of George Soros to finance the elections of district attorneys around the country, and that game is unwinding as their blatant incompetence is revealed. Kim Gardner, installed in St. Louis, now faces losing her law license for the malicious prosecution of former Governor Eric Greitens. The Missouri Supreme Court is conducting the investigation.

A recall effort is underway to recall Soros-backed LA DA George Gascon, who doesn’t believe in prosecuting criminals. And the DA-equivalent, State’s Attorney, in Chicago (Cook County), Kim Foxx, another Soros installation, is on the rocks not just for covering up the Jussie Smollett hoax, but for allowing the county to become a free fire zone. What was Mr. Soros thinking?

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Great movie script.

The Full Story of the Stunning RSA Hack Can Finally Be Told (Wired)

Amid all the sleepless hours that Todd Leetham spent hunting ghosts inside his company’s network in early 2011, the experience that sticks with him most vividly all these years later is the moment he caught up with them. Or almost did. It was a spring evening, he says, three days—maybe four, time had become a blur—after he had first begun tracking the hackers who were rummaging through the computer systems of RSA, the corporate security giant where he worked. Leetham—a bald, bearded, and curmudgeonly analyst one coworker described to me as a “carbon-based hacker-finding machine”—had been glued to his laptop along with the rest of the company’s incident response team, assembled around the company’s glass-encased operations center in a nonstop, 24-hours-a-day hunt.

And with a growing sense of dread, Leetham had finally traced the intruders’ footprints to their final targets: the secret keys known as “seeds,” a collection of numbers that represented a foundational layer of the security promises RSA made to its customers, including tens of millions of users in government and military agencies, defense contractors, banks, and countless corporations around the world. RSA kept those seeds on a single, well-protected server, which the company called the “seed warehouse.” They served as a crucial ingredient in one of RSA’s core products: SecurID tokens—little fobs you carried in a pocket and pulled out to prove your identity by entering the six-digit codes that were constantly updated on the fob’s screen.

If someone could steal the seed values stored in that warehouse, they could potentially clone those SecurID tokens and silently break the two-factor authentication they offered, allowing hackers to instantly bypass that security system anywhere in the world, accessing anything from bank accounts to national security secrets. Now, staring at the network logs on his screen, it looked to Leetham like these keys to RSA’s global kingdom had already been stolen. Leetham saw with dismay that the hackers had spent nine hours methodically siphoning the seeds out of the warehouse server and sending them via file-transfer protocol to a hacked server hosted by Rackspace, a cloud-hosting provider. But then he spotted something that gave him a flash of hope: The logs included the stolen username and password for that hacked server. The thieves had left their hiding place wide open, in plain sight. Leetham connected to the faraway Rackspace machine and typed in the stolen credentials.

And there it was: The server’s directory still contained the entire pilfered seed collection as a compressed .rar file. Using hacked credentials to log into a server that belongs to another company and mess with the data stored there is, Leetham admits, an unorthodox move at best—and a violation of US hacking laws at worst. But looking at RSA’s stolen holiest of holies on that Rackspace server, he didn’t hesitate. “I was going to take the heat,” he says. “Either way, I’m saving our shit.” He typed in the command to delete the file and hit enter. Moments later, his computer’s command line came back with a response: “File not found.” He examined the Rackspace server’s contents again. It was empty. Leetham’s heart fell through the floor: The hackers had pulled the seed database off the server seconds before he was able to delete it.

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Steve Keen Arctic

 

 

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Oct 082019
 


Paul Gauguin Breton woman and goose by the water 1888

 

Trump Appears to Reverse Syria Decision (USNews)
Trump Vows To OBLITERATE Turkish Economy If It Does ‘Anything Off Limits’ (RT)
Joe, Hunter Biden Could Be Forced To Testify In Senate Impeachment Trial (WT)
A Hard Rain (Jim Kunstler)
US Federal Deficit Estimated At $984 Billion, Highest In Seven Years (Hill)
US Blacklists China Organisations Over Xinjiang ‘Uighur Abuse’ (BBC)
Court Rejects Latest Request To Force PM To Ask For Brexit Extension (G.)
Irish Border Is A Matter Of Life And Death, Not Technology (Fintan O’Toole)
Convicted Pedophile Gary Glitter To Earn Big From ‘Joker’ Movie (CNBC)
Twitter, Facebook Could Face Billions In Fines After Ireland Probes (CNBC)
Ecuadorians Revolt Against Moreno’s IMF-Imposed Neoliberal Policies (GZ)
Russian, US Visitors Targets For Spanish Firm That Spied On Assange (El Pais)

 

 

Less war? Condemnation on all sides of all aisles.

Trump Appears to Reverse Syria Decision (USNews)

A senior administration official on an organized call with reporters appeared to contradict President Donald Trump about Syria policy late Monday, refuting interpretations of his statements from earlier in the day that prompted broad outrage from supporters and opponents alike. The U.S. is not removing its forces from Syria in the face of a Turkish incursion, said the official, speaking on the condition of anonymity. Rather, the president ordered roughly 50 special operations troops in northern Syria to relocate to a different part of the country after he learned that Turkey has planned an offensive against U.S.-backed Kurdish forces in Syria. The official said that offensive had not yet begun.

The latest assertion, however, appears to conflict with a flurry of tweets the president issued Monday, further explaining a White House statement late Sunday that first announced the withdrawal, but offered few details. “It is time for us to get out of these ridiculous Endless Wars, many of them tribal, and bring our soldiers home,” Trump wrote in one tweet. The idea of the U.S. withdrawing any of its roughly 1,000 troops still in Syria – even just from the front lines where they operate with Kurdish allies – prompted widespread outrage on Capitol Hill, including from some of the president’s staunchest allies like Sen. Lindsay Graham and Senate Majority Leader Mitch McConnell. They feared that the decision amounted to abandoning the Kurds, who have been instrumental in defeating the Islamic State group, but which Turkey has labeled as terrorists and vowed to attack.

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Pleasing Erdogan is never a good idea.

Trump Vows To OBLITERATE Turkish Economy If It Does ‘Anything Off Limits’ (RT)

In a fairly blunt warning to the NATO ally, US President Donald Trump vowed to “obliterate” the Turkish economy if he thinks it’s stepped out of line in Syria. He then told Ankara to “watch over” ISIS fighters in the US’ absence. “If Turkey does anything that I, in my great and unmatched wisdom, consider to be off limits, I will totally destroy and obliterate the Economy of Turkey (I’ve done before!)” the president threatened via tweet on Monday – an odd turn of phrase for what otherwise seemed like a dire warning to a supposed ally. Trump called for Turkey to join “Europe and others” in “watch[ing] over the captured ISIS [Islamic State] fighters and families” just hours after announcing the US would finally pull out of northern Syria on Monday.


The announcement triggered howls of fury from hawks in Congress and the media, as well as sudden experts in Middle Eastern politics who cried that leaving Syria would abandon the Kurds to be torn apart by Turkey. The Pentagon “does not endorse a Turkish operation in Northern Syria,” a Pentagon statement issued on Monday clarified, stating “the US Armed Forces will not support, or be involved in any such operation.” While Turkey considers the Kurdish YPG militia an extension of the banned terrorist group PKK, the US has been arming and protecting the Kurds for years – and, as Trump pointed out in his earlier announcement, paying them “massive amounts of money and equipment.”

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Ukraine as Pandora’s box.

Joe, Hunter Biden Could Be Forced To Testify In Senate Impeachment Trial (WT)

Former Vice President Joseph R. Biden and his son Hunter could be forced to testify if the Senate ends up holding an impeachment trial of President Trump, say congressional aides who questioned whether Democrats have thought through the full implications of their impeachment drive. Not only could Mr. Biden be forced to be in D.C. at a critical moment in the presidential campaign, but so could many of his chief rivals — the half-dozen senators also vying for Democrats’ presidential nomination, impeachment experts said.


For that matter, if the House chooses to impeach Mr. Trump on charges stemming from the special counsel’s Russia investigation, aides said it could open the door to witnesses such as fired FBI Agent Peter Strzok or even major figures from the Obama administration. Mr. Trump could even be present for the entire spectacle. Experts said the Senate would have a hard time refusing him if he demanded to confront the witnesses against him.

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A lifelong liberal has had his fill.

A Hard Rain (Jim Kunstler)

A lot of readers (some of them former readers now) have been angrily twanging me by email for writing about the three-year Resistance effort to un-do the 2016 election. I did not vote for Mr. Trump (or Mrs. Clinton) but I resent the coup mounted to overthrow him. I object to the bad faith and dishonesty of the Resistance. I object to the criminal misconduct among the federal bureaucracy, and the mendacity of its partners in the news media, and the hysteria they continue to generate — at the expense of other matters that concern our future. The political disorder spooling out is the political expression of the long emergency that the nation faces as it finally encounters the limits to growth we were warned about decades ago.

The techno-industrial phase of history is ending, and we are left only with inadequate fantasies for coming to terms with it and moving forward. The dynamic relationship between affordable energy supplies and the operations of money roils at the core of this predicament. They are undoing each other and the result will be a contraction of human activity. The big question we refuse to face is how to cope with contraction. Beyond the ongoing orchestrated coup stands a reality-optional political Left consumed by serial hysterias, uninterested in truth, steeped in social despotism, and apparently willing to do anything to gain power. We should be very concerned with what they intend to do with that power.


As they attempt to redistribute wealth, they will make the unhappy discovery that the wealth itself is subject to the wholesale contraction underway. The overvalued “assets” representing “money” hoarded by the “wealthy” will turn out to be figments of a runaway debt crisis. We have already debased the operations of banking, and the tokens that banks issue — currencies and securities — levitate over an abyss. We already have plenty of evidence for what the Left will do to the principle of political liberty. Their shibboleths of “diversity” and “inclusion” really mean shutting down free speech and telling everybody how to think. They are less interested in “social justice” than in plain coercion, the pleasure they take in pushing people around. What’s worse is that they want to use government as the instrument for enforcing their will.

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Who’s counting anymore? The US will end up with only the rich and the desolate.

US Federal Deficit Estimated At $984 Billion, Highest In Seven Years (Hill)

The federal budget deficit for 2019 is estimated at $984 billion, a hefty 4.7 percent of GDP and the highest since 2012, the Congressional Budget Office (CBO) said on Monday. The difference between federal spending and revenue has only ever exceeded $1 trillion four times, in the period immediately following the global financial crisis. The deficit, which has grown every year since 2015, is $205 billion higher than it was in 2018, a jump of 26 percent. The CBO has warned that the nation’s debt is on an unsustainable path. Higher levels of debt increase borrowing costs, make it harder for the government to battle economic downturns and increase the share of future spending devoted to paying off interest costs.


Since President Trump took office, the GOP has passed a massive tax cut package that reduced revenue, while Democrats and Republicans have agreed to increase spending year after year. Budget watchers note that the main drivers of the deficit, however, come from automatic spending programs such as Social Security, Medicare and Medicaid. “Democrats and Republicans must be held responsible for the outrageous deficit reported today by the CBO,” said Jason Pye, vice president of legislative affairs at the conservative advocacy group FreedomWorks. “This unsustainable situation is only going to get worse,” he added.

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Always fun to see the US accuse others of its own signature practices.

US Blacklists China Organisations Over Xinjiang ‘Uighur Abuse’ (BBC)

The US has blacklisted 28 Chinese organisations for their alleged involvement in abuses against ethnic Uighurs in China’s Xinjiang province. The organisations are now on the so-called Entity List, which bars them from buying products from US companies without approval from Washington. The 28 targets include both government agencies and technology companies specialising in surveillance equipment. It is not the first time the US has put Chinese groups under a trade ban. In May, the Trump administration added telecommunications giant Huawei to the Entity List because of security fears over its products.


A Commerce Department filing said the organisations are “implicated in human rights violations and abuses”. Rights groups say Beijing is severely persecuting the mostly Muslim Uighurs in detention camps. China calls these “vocational training centres” to combat extremism. The Commerce Department said in its decision on Monday that these 28 entities are implicated in “China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups.” Xinjiang province’s Public Security Bureau is on the list, along with 19 other smaller government agencies.

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But ties him down in the process. The Court also has the power to write the extension request for the PM.

Court Rejects Latest Request To Force PM To Ask For Brexit Extension (G.)

Anti-Brexit campaigners have failed in an attempt to force Boris Johnson to ask for an extension to article 50 if he is unable to get a Brexit deal through parliament. Lord Pentland, sitting in the court of session in Edinburgh, rejected their request for a court order instructing the prime minister to seek an extension if he cannot get a deal passed by the Commons this month. Pentland said he had to take at face value pledges made by the UK government on Friday that Johnson would write the letter seeking an extension on 19 October as required under the so-called Benn act. Pentland said those assurances were unequivocal.


“I approach matters on the basis that it would be destructive of one of the core principles of constitutional propriety and of the mutual trust that is the bedrock of the relationship between the court and the crown for the prime minister or the government to renege on what they have assured the court that the prime minister intends to do,” the judge ruled. [..] Anti-Brexit campaigners are expected to appeal against the decision on Tuesday, when they will ask another Scottish court to write the article 50 extension letter if Johnson fails to do so. The campaigners – Dale Vince, a green energy entrepreneur, Jolyon Maugham QC, an anti-Brexit campaigner, and Joanna Cherry QC, a Scottish National party MP – want the inner house of the court of session to use its unique nobile officium powers to act on Johnson’s behalf. Those powers allow the court of session to take action in a situation where a remedy is needed, but this case is seen as highly unusual.

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“Essentially a technical discussion of the exact nature of future customs checks.”

Irish Border Is A Matter Of Life And Death, Not Technology (Fintan O’Toole)

Spaff some money on some geeks.” According to Chris Cook’s excellent account of Theresa May’s Brexit negotiations with Brussels, that was the instruction issued to the civil service by May’s enforcer Fiona Hill in late 2016. It had finally dawned on the British government that it had committed itself to two incompatible things. One was that under no circumstances would there be a return to a hard border between the UK and the Republic of Ireland. The other was that all of the UK was going to leave the EU’s customs union. May faced exactly the same problem that her successor Boris Johnson is struggling with: you can do one or other of these things but you cannot do both. If Northern Ireland leaves the customs union, there will be border controls.

And so May tried to do what Johnson is still proposing: throw money at nerds and hope that they can somehow transform a political problem into a technical issue. The old (superbly condescending) joke was that whenever the Irish question was about to be solved, the Irish would change the question. But the British government has been trying to solve the riddle of Brexit’s Irish question not just by changing the question, but by changing the entire conceptual framework. It has to be removed from a discourse of history and geography and memory and translated into the languages of technology and managerialism. That is how Johnson sought to define the problem in his speech to the Tory party conference last week: “Essentially a technical discussion of the exact nature of future customs checks.”


Previously, of course, he suggested that crossing the Irish border was similar to going from one borough of London to another, and that any problem it creates could be solved with the same technology used to operate the city’s congestion charge. This is a way of minimising and dismissing an inconvenient truth. But it also goes to the heart of the complete failure of Johnson’s proposals for a replacement of the backstop designed to keep the border invisible. Everybody in Ireland, north and south, knows that there are many technical questions thrown up by Brexit. But nobody – not even Johnson’s DUP allies – really believes that what Brexit does to John Bull’s Other Island is a matter for a “technical discussion”. In Ireland, it’s about lives – and deaths.

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Every single sports stadium in the US has played Rock and Roll Part 2 all the time for decades. He should be filthy rich already.

Convicted Pedophile Gary Glitter To Earn Big From ‘Joker’ Movie (CNBC)

The contentious inclusion of a song by convicted pedophile Gary Glitter in “Joker” has sparked a wave of criticism from moviegoers, with many concerned the disgraced former glam rock singer will be entitled to lucrative music royalties. The R-rated comic book movie smashed box office records over the weekend, with Warner Bros. hauling in $93.5 million in the U.S. alone. That marked the highest debut for a film released in October in cinematic history. “Joker” also garnered $140.5 million internationally, bringing the film’s total ticket sales to $234 million, Warner Bros. said Sunday. But, despite the film’s opening weekend success, the makers of the movie have stoked controversy for featuring Glitter’s 1972 hit “Rock and Roll Part 2” in a lengthy scene.


The song plays for approximately two minutes as Joaquin Phoenix, who has received rave reviews for his portrayal of the eponymous villain, dances down a long flight of steps outside his Gotham City apartment. Glitter, whose real name is Paul Gadd, is reportedly expected to receive a lump sum for allowing the recording to be used in “Joker.” He is also thought to be in line for music royalties depending on the success of movie theater ticket sales, DVD sales and film soundtrack sales. The 75-year-old was jailed for a total of 16 years in 2015 for attempted rape, four counts of indecent assault and one count of having sex with a girl under 13. All six offenses were committed in the 1970s and 1980s. He was first jailed in 1999 when he admitted to possessing images of child abuse.

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Let’s see it first.

Twitter, Facebook Could Face Billions In Fines After Ireland Probes (CNBC)

Ireland’s Data Protection Commission has concluded investigations into Facebook’s WhatsApp and Twitter over possible breaches of EU data privacy rules, a spokesperson for the agency revealed to CNBC Monday. The investigations will now move into the decision-making phase, according to Graham Doyle, head of communications for Ireland’s DPC. During this next phase, Ireland’s chief data regulator, Helen Dixon, will issue draft decisions, which are expected to come toward the end of the year. These would mark Ireland’s first decisions related to U.S. multinational companies since Europe’s privacy law called the General Data Protection Regulation (GDPR) went into effect on May 2018.


In her draft decisions, Dixon will determine the penalty, if any, that either company faces for breaching data privacy rules. Companies can be fined up to 4% of global annual revenues for breaching Europe’s data privacy law called GDPR. For Facebook, that could mean a fine of more than $2 billion based on its fiscal year 2018 revenue. Because many big tech companies have their EU headquarters in Ireland, the Irish DPC supervises the firms under GDPR. Ireland’s DPC has opened more than a dozen investigations into big tech companies including Facebook, Apple, Google and Twitter.

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Delivers Assange, gets loan, turns against his people, declares state of emerrgency, flees the capital and moves it elsewhere.

Ecuadorians Revolt Against Moreno’s IMF-Imposed Neoliberal Policies (GZ)

“Se acabó la zanganería” — “The zanganería is over.” With these words, uttered on October 4, Ecuador’s President Lenin Moreno proclaimed the end of a 40-year policy of fuel and petrol subsidies, which had traditionally benefited his country’s working-class population. [..] The decision to cut the government’s decades-old fuel subsidies was just one element in a package of neoliberal economic reforms presented by the Moreno government on October 1. The program was part of a bid to satisfy the demands of the IMF. This October, the reform package set off an explosion of mass protests across the nation. Moreno claimed the drastic new economic measures were necessary to reduce “wasteful” public spending and balance the government’s budget.


The most controversial measure of all has been the elimination of the petrol subsidies that had been in place since the 1970s. This removal led to a staggering 123 percent rise in the price of diesel, with similar increases in the price of other fuels. The package also introduced a 20 percent decrease in the salary of public employees, and initiated plans to privatize pensions and removed workplace security and job security safeguards. When he announced the wildly unpopular austerity package, President Lenin Moreno sensed that large protests against his government were inevitable. So he declared a national “state of emergency,” and immediately deployed both the police and the military against protesters in the capital of Quito and other areas around the country.

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The lawlessness is staggering.

“Employees of UCE Global took apart and photographed the cellphones of North American journalists who visited the founder of WikiLeaks..”

Russian, US Visitors Targets For Spanish Firm That Spied On Assange (El Pais)

David Morales, the director and owner of Undercover Global S. L., the Spanish defense and security company in charge of protecting the Ecuadorian embassy in London during Julian Assange’s long stay there, called on his team to catalogue “the Russian and American citizens” who visited the cyberactivist as a maximum priority, according to testimonies and documents to which EL PAÍS has had access. The company allegedly spied on the WikiLeaks founder for the US intelligence services, and in the wake of revelations published by this newspaper is being investigated by the Spanish High Court, the Audiencia Nacional. Morales gave written instructions to his employees in London for them to give advance warning of the priority targets from both countries.

All of the information collected about these and other visitors was sent to an FTP (File Transfer Protocol) server in Jerez de la Frontera, the headquarters of UCE Global S. L., in southern Spain. This kind of “big brother” was the place were all of the information collected was stored in an orderly fashion, including files from cellphones, profiles by nationality (Russians, North Americans, Germans, etc.), professions, and documents from attorneys, diplomats, journalists, doctors, and so on. Employees who worked for UCE Global S. L. have told this newspaper that the CIA had access to this server, and that Morales did not want to reveal the identity of “his American friends” when there were technical problems and there was a request for contact with the client.


The IP numbers registered come from the US and one of them corresponds to a company that provides security services for the FBI. A study of the reports that were created over a period of years by this company reveals that international current affairs and events surrounding the cyberactivist defined and modified the objectives of the company and its “North American clients.” [..] The monitoring of the dozens of people who visited Assange during the seven years he was in the embassy was comprehensive. But in the case of the priority targets – North Americans, Russians, attorneys and journalists – it was intensified as much as possible. Employees of UCE Global took apart and photographed the cellphones of North American journalists who visited the founder of WikiLeaks, according to testimony and graphic documents to which EL PAÍS has had access.

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How the top tax rate for highest incomes has changed in the US.

 

 

 

 

Oct 162018
 


M. C. Escher Doric columns 1945

 

Yemen On Brink Of ‘World’s Worst Famine In 100 Years’ (G.)
Humanity Is ‘Cutting Down The Tree Of Life’ (G.)
‘Hyperalarming’ Study Shows Massive Insect Loss (WaPo)
America’s Budget Deficit Jumps By 17% As Spending Surges (CNBC)
More Free Money: A Carry Trade in Liquidity (Mish)
Powell Has Lost His North Star, And The Fed Is Flying Blind (MW)
Facebook Paid £15.8 Million In UK Tax On £1.2 Billion In 2017 Revenues (BBC)
Ecuador To Assange: No Talking Politics, Pay Own Bills, Look After Cat (RT)
Brexit Deal Slipping To December Amid Deadlocked Talks (Ind.)
No-Deal Brexit Is ‘More Likely Than Ever Before’ – Tusk (Ind.)
Syria’s Chessboard (Hallinan)

 

 

As Stormy Daniels and Elizabeth Warren see their ‘cases’ blow up in their faces 3 weeks before the midterms, the best PR and legal teams that money can buy are framing a Khashoggi narrative nobody will be able to credibly deny. Or at least Erdogan is not showing his hand. But now that Pompeo’s in the region anyway, let’s put this on his agenda. 12 to 13 million at risk of starvation.

Yemen On Brink Of ‘World’s Worst Famine In 100 Years’ (G.)

Yemen could be facing the worst famine in 100 years if airstrikes by the Saudi-led coalition are not halted, the UN has warned. If war continues, famine could engulf the country in the next three months, with 12 to 13 million civilians at risk of starvation, according to Lise Grande, the agency’s humanitarian coordinator for Yemen. She told the BBC: “I think many of us felt as we went into the 21st century that it was unthinkable that we could see a famine like we saw in Ethiopia, that we saw in Bengal, that we saw in parts of the Soviet Union – that was just unacceptable. “Many of us had the confidence that would never happen again and yet the reality is that in Yemen that is precisely what we are looking at.”

Yemen has been in the grip of a bloody civil war for three years after Houthi rebels, backed by Iran, seized much of the country, including the capital, Sana’a. The Saudi-led coalition has been fighting the rebels since 2015 in support of the internationally recognised government. Thousands of civilians have been caught in the middle, trapped by minefields and barrages of mortars and airstrikes. The resulting humanitarian catastrophe has seen at least 10,000 people killed and millions displaced. Speaking on Sunday evening, Grande said: “There’s no question we should be ashamed, and we should, every day that we wake up, renew our commitment to do everything possible to help the people that are suffering and end the conflict.”

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And it’s not just people that we’re killing:

Humanity Is ‘Cutting Down The Tree Of Life’ (G.)

Humanity’s ongoing annihilation of wildlife is cutting down the tree of life, including the branch we are sitting on, according to a stark new analysis. More than 300 different mammal species have been eradicated by human activities. The new research calculates the total unique evolutionary history that has been lost as a result at a startling 2.5bn years. Furthermore, even if the destruction of wild areas, poaching and pollution were ended within 50 years and extinction rates fell back to natural levels, it would still take 5-7 million years for the natural world to recover. Many scientists think a sixth mass extinction of life on Earth has begun, propelled by human destruction of wildlife, and 83% of wild mammals have already gone.

The new work puts this in the context of the evolution and extinction of species that occurred for billions of years before modern humans arrived. “We are doing something that will last millions of years beyond us,” said Matt Davis at Aarhus University in Denmark, who led the new research. “It shows the severity of what we are in right now. We’re entering what could be an extinction on the scale of what killed the dinosaurs. “That is pretty scary. We are starting to cut down the whole tree [of life], including the branch we are sitting on right now.” Ecosystems around the world have already been significantly affected by the extermination of big animals such as mammoths, he said.

[..] Davis said each lost species had its own intrinsic value, but the loss of the most distinct creatures was most damaging: “Typically, if you have something that is off by itself, it does some job that no other species is doing.” The losses are already affecting ecosystems, he said, particularly the vanishing of “megafauna”. These huge creatures roamed much of Earth until humans arrived and included giant cats, deer, beavers and armadillos. “We are now living in a world without giants,” said Davis. “So the seeds of big fruit are not dispersed any more because we don’t have mammoths or gomphotheres or giant ground sloths eating those fruits.” Another example, he said, is the widespread loss of wolves. This means smaller predators like coyotes thrive and more birds are killed, radically changing food chains.

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“Between January 1977 and January 2013, the catch rate in the sticky ground traps fell 60-fold..”

“..our study indicates that climate warming is the driving force behind the collapse of the forest’s food web. ”

‘Hyperalarming’ Study Shows Massive Insect Loss (WaPo)

Insects around the world are in a crisis, according to a small but growing number of long-term studies showing dramatic declines in invertebrate populations. A new report suggests that the problem is more widespread than scientists realized. Huge numbers of bugs have been lost in a pristine national forest in Puerto Rico, the study found, and the forest’s insect-eating animals have gone missing, too. In 2014, an international team of biologists estimated that, in the past 35 years, the abundance of invertebrates such as beetles and bees had decreased by 45 percent. In places where long-term insect data are available, mainly in Europe, insect numbers are plummeting. A study last year showed a 76 percent decrease in flying insects in the past few decades in German nature preserves.

The latest report, published Monday in the Proceedings of the National Academy of Sciences, shows that this startling loss of insect abundance extends to the Americas. The study’s authors implicate climate change in the loss of tropical invertebrates. “This study in PNAS is a real wake-up call — a clarion call — that the phenomenon could be much, much bigger, and across many more ecosystems,” said David Wagner, an expert in invertebrate conservation at the University of Connecticut who was not involved with this research. He added: “This is one of the most disturbing articles I have ever read.”

[..] “We went down in ’76, ’77 expressly to measure the resources: the insects and the insectivores in the rain forest, the birds, the frogs, the lizards,” Lister said. He came back nearly 40 years later, with his colleague Andrés García, an ecologist at the National Autonomous University of Mexico. What the scientists did not see on their return troubled them. “Boy, it was immediately obvious when we went into that forest,” Lister said. Fewer birds flitted overhead. The butterflies, once abundant, had all but vanished. García and Lister once again measured the forest’s insects and other invertebrates, a group called arthropods that includes spiders and centipedes. The researchers trapped arthropods on the ground in plates covered in a sticky glue, and raised several more plates about three feet into the canopy.

The researchers also swept nets over the brush hundreds of times, collecting the critters that crawled through the vegetation. Each technique revealed the biomass (the dry weight of all the captured invertebrates) had significantly decreased from 1976 to the present day. The sweep sample biomass decreased to a fourth or an eighth of what it had been. Between January 1977 and January 2013, the catch rate in the sticky ground traps fell 60-fold. “Everything is dropping,” Lister said. The most common invertebrates in the rain forest — the moths, the butterflies, the grasshoppers, the spiders and others — are all far less abundant. “Holy crap,” Wagner said of the 60-fold loss.


Comparison of the average dry-weight biomass of arthropods caught per 12-h day in 10 ground (A) and canopy (B) traps within the same sampling area in the Luquillo rainforest.

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If there are no insects left, who cares about deficits? What’s the use?

America’s Budget Deficit Jumps By 17% As Spending Surges (CNBC)

The U.S. federal budget deficit rose in fiscal 2018 to the highest level in six years as spending climbed, the Trump administration said Monday. The deficit jumped to $779 billion, $113 billion or 17 percent higher than the previous fiscal period, according to a statement from Treasury Secretary Steven Mnuchin and Office of Management and Budget Director Mick Mulvaney. It was larger than any year since 2012, when it topped $1 trillion. The budget shortfall rose to 3.9 percent of U.S. GDP. The deficit increased by $70 billion less than anticipated in a report published in July, according to the two officials.

Federal revenue rose only slightly, by $14 billion after Republicans chopped tax rates for corporations and most individuals. Outlays climbed by $127 billion, or 3.2 percent. A spike in defense spending, as well as increases for Medicaid, Social Security and disaster relief, contributed to the increase.

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“If the goal was to bail out the banks at public expense (and it was) it’s clear Bernanke had a far better plan than the ECB.”

More Free Money: A Carry Trade in Liquidity (Mish)

Not only do banks earn free money on excess reserves, they can borrow money and make guaranteed free money on that.

The Federal Reserve Bank of St. Louis discusses the Carry Trade in Liquidity: “The IOER [interest on excess reserves] has been the effective ceiling of other short-term interest rates. The figure above compares the IOER with overnight rates on deposits and repos. As we can see, the IOER has mostly remained above these two rates, implying that (at least some) banks have been able to borrow funds overnight, deposit them at the Fed and earn a spread, in essence engaging in carry trade in liquidity markets.”

How Much Free Money?

While the Fed has been busy giving banks free money by paying interest on excess reserves, banks in the EU have suffered with negative interest rates, essentially taking money from banks and making them more insolvent. If the goal was to bail out the banks at public expense (and it was), it’s clear Bernanke had a far better plan than the ECB.

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The Fed’s been flying blind at least since Bernanke talked about ‘entering uncharted territory’. That’s what that means.

Powell Has Lost His North Star, And The Fed Is Flying Blind (MW)

Federal Reserve Chairman Jerome Powell is in an unenviable position. Folks expect him to fine-tune interest rates to keep the economy going and inflation tame but he can’t make things much better — only worse. Growth is nearly 3% and unemployment is at its lowest level since 1969. What inflation we have above the Fed target of 2% is driven largely by oil prices and those by forces beyond the influence of U.S. economic conditions — OPEC politics, U.S. sanctions on Iran, and dystopian political forces in Venezuela and a few other garden spots. When the current turbulence in oil markets recedes, we are likely in for a period of headline inflation below 2%, just as those forces are now driving prices higher now.

Overall, long-term inflation has settled in at the Fed target of about 2%. The Fed should not obsess about it but keep a watchful eye. Amid all this, Powell’s inflation compass has gone missing. The Phillips curve, as he puts it, may not be dead but just resting. To my thinking, it’s in a coma if it was ever alive at all. That contraption is a shorthand equation sitting atop a pyramid of more fundamental behavioral relationships. Those include the supply and demand for domestic workers and in turn, an historically large contingent labor force of healthy prime-age adults sitting on the sidelines, the shifting skill requirements of a workplace transformed by artificial intelligence and robotics, import prices influenced by weak growth in Europe and China, and immigration.

Of course, Mariner Powell has his North Star — what economists affectionately call R* (R-Star), but it is no longer at a fixed position in Powell’s sky. R* is the federal funds rate that neither encourages the economy to speed up or slow down. However, with businesses needing much less capital to get started or grow these days and for decades China and Germany—the second and fourth largest economies globally—racking up current account surpluses and savings to invest abroad, it is no wonder the forces of supply and demand have been driving R* down to historically low levels.

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They use what they don’t pay in taxes, to spy on you.

Facebook Paid £15.8 Million In UK Tax On £1.2 Billion In 2017 Revenues (BBC)

Facebook’s UK tax bill has tripled to £15.8m – but the social media giant will see an immediate cut because of a tax credit. The final bill comes to £7.4m, since Facebook will see tax relief of £8.4m after awarding shares to employees. In 2016, Facebook’s tax bill rose to £5.1m, following a major overhaul of the social media firm’s tax structure. However, the company’s profits only climbed by £4m year-on-year from £58.4m to £62.7m in 2017. The company’s UK office provides marketing services and sales and engineering support to the company. Facebook’s revenue rose by a third year-on-year to £1.2bn in 2017, because of increased revenues from inter-company and advertising reseller services in 2017.

“We have changed the way we report tax so that revenue from customers supported by our UK teams is recorded in the UK and any taxable profit is subject to UK corporation tax,” said Facebook’s Northern Europe vice-president, Steve Hatch. [..] The publication of Facebook’s 2017 tax accounts follows extensive criticism from policymakers and the media over the last 12 months of how much tax tech giants typically pay in Europe. Large technology companies have been condemned for moving sales through other countries and paying modest amounts of tax in the UK.

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Hard to gauge what exactly this means, time must tell. Seems good that they talk of medical help. but will he be able to get it?

Ecuador To Assange: No Talking Politics, Pay Own Bills, Look After Cat (RT)

WikiLeaks supporters were thrilled to hear that Ecuador would restore Julian Assange’s internet connection. But his hosts – who have in some ways become his jailers – reportedly imposed a long list of restrictions on his behavior. While stating that he is allowed to exercise his “right of communication and freedom of expression,” a nine-page document already leaked online forbids the journalist from engaging in political activity or doing anything to interfere in the affairs of other states. The document expressly states that Ecuador cannot be held liable for the content of Assange’s communications, but nevertheless prohibits him from engaging in activities that might damage the relationship between Ecuador and other states.

Assange’s communications were cut seven months ago, after he criticized Spanish authorities’ treatment of voters during the Catalan independence referendum. Assange must pay for his own WiFi. He must use only his own devices, absent written government permission, and provide the embassy with serial number, model number, and brand name for those devices. He must also pay for his own medical evaluations, with the option of transferring to a hospital in case of an emergency – an option repeatedly denied him by UK authorities, who refused to guarantee safe passage without arrest in the event of such a transfer. Assange’s health has been the subject of much concern during his six-year confinement in the Embassy.

Visitors are also slapped with new restrictions. They must submit visit requests in writing to the embassy chief, giving their name, nationality, profession and place of work, reason for visiting, email and social media accounts, and even the serial numbers for phones and other devices they wish to bring inside. The new rules even mandate the collection of IMEIs, unique identification numbers specific to a phone handset. While repeat visitors receive a less restrictive screening process, they can have their access revoked at any time without an explanation. All visitor data will be turned over to the Ecuadorian Ministry of Foreign Affairs and other unspecified parties.

The restrictions include a threat to use UK police to arrest visitors or seize communications equipment should the journalist violate the lengthy list of rules. Adding insult to injury, the embassy threatened to remove Assange’s cat to a shelter should they decide he is not cleaning up after the animal properly.

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They lost two years doing nothing but fight amongst themselves. That time was always badly needed.

Brexit Deal Slipping To December Amid Deadlocked Talks (Ind.)

A Brexit deal now looks unlikely until just before Christmas after Theresa May admitted “weeks” may be needed to break the deadlock in talks with Brussels. The delay was also signalled by Ireland’s prime minister who warned of log-jammed negotiations dragging into December, increasing concern that stalled talks could simply collapse into a “disaster” no-deal situation. In a veiled swipe at Brexiteers, European Council President Donald Tusk said solving the vexed issue of the Irish border had proved “more complicated than some may have expected” and said no deal is now “more likely than ever”.

A further sign of slippage came when the EU confirmed it would take a decision this week on whether a special summit once proposed for November to publicly seal a Brexit deal, will be needed given the state of talks. But despite the deadlock, Ms May again came under intense pressure from Conservative Eurosceptics to refuse anything resembling the EU’s proposals, amid signs she is diluting her stance to secure a deal. The October summit was once supposed to be the moment a withdrawal deal was locked in, with expectations already having slipped to a potential specially arranged meeting in November – even under those circumstances the outline would have had to have been agreed at this week’s meeting.

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More likely by the day.

No-Deal Brexit Is ‘More Likely Than Ever Before’ – Tusk (Ind.)

A no-deal Brexit is “more likely than ever before”, the president of the European Council has warned, ahead of a make-or-break summit of EU leaders in Brussels. Donald Tusk, who has described this week’s top-level meeting as “the moment of truth”, said Brexit had “proven to be more complicated than some may have expected”. But he said that “that we are preparing for a no-deal scenario must not, under any circumstances, lead us away from making every effort to reach the best agreement possible”.

Mr Tusk’s warning, made in a letter to EU leaders formally inviting them to the summit, comes a day after negotiations between the European Commission and UK Government hit a a wall over the question of how to prevent a hard border in Northern Ireland. Over dinner on Wednesday night the heads of state or government of the 27 remaining EU member states will decide whether there is any pointing holding a special Brexit summit in November – or whether the horse has already bolted. It is now confirmed that Theresa May will address the 27 leaders before the dinner in a last-ditch bid to win them over; though she will not be allowed into the main discussion itself.

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Russia and Assad delayed their final offensive to offer the jihadists a way out. But now these are refusing to leave.

Syria’s Chessboard (Hallinan)

The Syrian civil war has always been devilishly complex, with multiple actors following different scripts, but in the past few months it appeared to be winding down. The Damascus government now controls 60 percent of the country and the major population centers, the Islamic State has been routed, and the rebels opposed to Syrian President Bashar al-Assad are largely cornered in Idilb Province in the country’s northwest. But suddenly the Americans moved the goal posts—maybe—the Russians have fallen out with the Israelis, the Iranians are digging in their heels, and the Turks are trying to multi-task with a home front in disarray. So the devil is still very much at work in a war that has lasted more than seven years, claimed up to 500,000 lives, displaced millions of people, destabilized an already fragile Middle East, and is far from over.

There are at least three theaters in the Syrian war, each with its own complexities: Idilb in the north, the territory east of the Euphrates River, and the region that abuts the southern section of the Golan Heights. Just sorting out the antagonists is daunting. Turks, Iranians, Americans and Kurds are the key actors in the east. Russians, Turks, Kurds and Assad are in a temporary standoff in the north. And Iran, Assad and Israel are in a faceoff near Golan, a conflict that has suddenly drawn in Moscow. Assad’s goals are straightforward: reunite the country under the rule of Damascus and begin re-building Syria’s shattered cities. The major roadblock to this is Idilb, the last large concentration of anti-Assad groups, Jihadists linked with al-Qaeda, and a modest Turkish occupation force representing Operation Olive Branch. The province, which borders Turkey in the north, is mountainous and re-taking it promises to be difficult.

For the time being there is a stand down. The Russians cut a deal with Turkey to demilitarize the area around Idilb city, neutralize the jihadist groups, and re-open major roads. The agreement holds off a joint Assad-Russian assault on Idilb, which would have driven hundreds of thousands of refugees into Turkey and likely have resulted in large numbers of civilian casualties. But the agreement is temporary—about a month—because Russia is impatient to end the fighting and begin the reconstruction. However, it is hard to see how the Turks are going to get a handle on the bewildering number of groups packed into the province, some of which they have actively aided for years. Ankara could bring in more soldiers, but Turkey already has troops east of the Euphrates and is teetering on the edge of a major economic crisis.

Read more …

Oct 142018
 


René Magritte The song of love 1948

 

Companies Buying Their Own Shares Could Fuel The Next Market Rally (CNBC)
Market Crash? Another ‘Red Card’ For The Economy (Lacalle)
4 Lessons From Iceland On Dealing With A Financial Crisis (WEF)
‘Crazy’ That Current Account Deficits Are ‘A Sin:’ Singapore Deputy PM (CNBC)
Draghi to Rome: Don’t Expect An ECB Rescue If Budget Talks Fail (CNBC)
Canada ‘Concerned’ About Khashoggi But Will Sell Arms To Saudis – Trudeau (RT)
David Davis Calls For Cabinet Rebellion Over Brexit Plan (BBC)
Brexit Negotiators Poised To Miss Deal Deadline As UK Hardliners Rebel (ZH)
Internet Censorship Just Took An Unprecedented Leap Forward (CJ)
Professor Exposes Rigged Markets One Academic Paper At A Time (ZH)
Hammer Time (Jim Kunstler)
Who The Hell Cares What Old People Think About Climate Change? (Ol.)
What’s Another Way to Say ‘We’re F-cked’? (Goodell)
‘Not Everything Was Looted’: British Museum To Fight Critics (G.)

 

 

“.. in the last 12 months, the companies in the S&P 500 have purchased $646 billion of their own stock, 29 percent more than the previous 12 months..”

“..at least $350 billion of buybacks that have been planned for the year and are just waiting to be put to work.”

Companies Buying Their Own Shares Could Fuel The Next Market Rally (CNBC)

With stocks down significantly, corporate buybacks could help stabilize the market. Buybacks have been one of the big stories supporting the market this year. DataTrek estimates that in the last 12 months, the companies in the S&P 500 have purchased $646 billion of their own stock, 29 percent more than the previous 12 months. And there’s plenty of “dry powder” left. One firm estimates at least $350 billion of buybacks that have been planned for the year and are just waiting to be put to work. And no, it is not just Apple that is buying its own stock. More than 300 large-cap companies have active buyback programs.

Unfortunately, some traders are resurrecting an old chestnut to help explain the current market weakness. They say we are entering a “blackout” period, when corporations cannot buy their stock because they are about to report quarterly earnings. It’s a neat explanation, except there’s not a lot to it. “Buybacks do occur during blackout periods,” Ben Silverman at InsiderScore told me. “Buyback volume does often decline in the first month of the quarter due to some buyback blackouts,” but companies can, and do, continue to buy back stock, he told me. Another trader (who declined to be identified) confirmed Silverman’s point. Corporate buybacks decline in the month before earnings, but only marginally. He estimated the decline is 30 percent or less.

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“..disproportionate valuations…”

$20 trillion worth of them.

Market Crash? Another ‘Red Card’ For The Economy (Lacalle)

The first thing we must understand is that we are not facing a panic created by a black swan, that is, an unexpected event, but by three factors that few could deny were evident: 1) Excessive valuations after $20 trillion of monetary expansion inflated most financial assets. 2) Bond yields rising as the US 10-year reaches 3.2%. 3) The evidence of the Yuan devaluation, which is on its way to surpass 7 Yuan per US dollar. 4) Global growth estimates trimmed for the sixth time in as many months. Therefore, the US rate hikes – announced repeatedly and incessantly for years – are not the cause, nor the alleged trade war. These are just symptoms, excuses to disguise a much more worrying illness.

What we are experiencing is the evidence of the saturation of excesses built around central banks’ loose policies and the famous “bubble of everything”. And therein lies the problem. After twenty trillion dollars of reckless monetary expansion, risk assets, from the safest to the most volatile, from the most liquid to the unquoted, have skyrocketed with disproportionate valuations.

The cracks in the building always appear first with currencies. Countries that have become accustomed to the idea that “this time is different” and that debt does not matter, started to multiply their indebtedness in foreign currency. Debt in dollars from emerging countries soared to 41% of their total debt. In the first three months of 2018, global debt rose 11% to a record of 247 trillion dollars (according to the IIF), and that of emerging markets soared by 2.5 trillion to an all-time high of 58.5 trillion. . When the lowest risk bond, the United States 10-year, went to 3.1%, the synchronized growth and complacent veil lifted, and many assets showed how risky they truly are.

Markets woke up to a reality that we had decided to ignore. That rates do rise. And if the safest bond gives a return of 3.2% … Am I willing to buy bonds from much riskier countries with negligible spreads? Add to that “sobriety” effect, another one. The inevitable devaluation of the yuan , which soared to almost 7 against the dollar. Am I willing to buy emerging markets and commodities when China exports its imbalances sending disinflationary pressure to the rest of the world?

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Iceland took it serious. No-one else did.

4 Lessons From Iceland On Dealing With A Financial Crisis (WEF)

Days after the collapse of 97% of its banking industry, Icelandic authorities designed a comprehensive policy of accountability, based on two overlapping objectives: establishing the truth and punishing those responsible. An independent truth commission was mandated to document the causes of the meltdown, and the newly established Office of the Special Prosecutor was tasked to thoroughly investigate and prosecute those responsible for any crimes committed in the run up to the crisis. Both mechanisms have been remarkably successful.

Published in 2010, the truth commission’s 2,200-page report not only documented the manifold failings of the financial system in Iceland but also offered specific recommendations to protect state institutions from a future crisis. The report instantly became a bestseller, with copies sold in supermarkets. It was a popular gift – parents even gave it to their children to help them avoid making the same mistakes. The Office of the Special Prosecutor successfully prosecuted 40 bank executives. This is remarkable, especially given the small population of the island and the comparative experience of other European countries affected by the recession, such as Ireland, Cyprus, or the UK (table below).

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Not many people see is that way.

‘Crazy’ That Current Account Deficits Are ‘A Sin:’ Singapore Deputy PM (CNBC)

For decades, developing countries have relied on outside investments to boost their growth despite trade imbalances. But running a current account deficit has come to be regarded as “a sin,” according to Singapore’s deputy prime minister. Such a development is just “crazy,” Tharman Shanmugaratnam told CNBC on Friday during the annual meeting of the Institute of International Finance on the Indonesian island of Bali. Shanmugaratnam was referring to the widely held outlook that nations should seek to avoid current account deficits — which indicate they’re operating on borrowed means because the value of incoming goods, services and investments exceeds the amount leaving the country.

“How did the Singapores and Koreas of the world grow?” he said. “We grew by running current account deficits at an early stage of development so we could invest ahead for growth while our savings were being built up.” Singapore was able to rely on financing through foreign direct investments and long-term investors during its early years of growth, as the international financial system at that time had capital flowing to developing economies, Shanmugaratnam said. “Today, it’s a sin to run a current account deficit and that’s crazy,” said the minister, who is also the chairman of the Monetary Authority of Singapore, the country’s central bank and financial regulator. “I mean, it’s bad in economics, it’s bad in policy sense, and the whole world is going to suffer.”

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But Draghi’s still an Italian.

Draghi to Rome: Don’t Expect An ECB Rescue If Budget Talks Fail (CNBC)

European Central Bank President Mario Draghi is sending a warning to Rome ahead of its formal budget submission: Don’t expect the ECB to save the day. In a Saturday press conference at the IMF and World Bank meetings in Bali, Indonesia, Draghi said he was confident that a budget agreement would be reached and urged all parties to “calm down with the tone.” He also voiced relief that there has not been evidence of a wider spillover effect in European bond markets, even as Italian yields hit multi-year highs. “Everything that happened today is local to Italy.”

When asked whether an eventual realization of contagion or a further rise in Italian yields would force the ECB to scrap tightening plans by year end, Draghi told CNBC: “I don’t want to speculate on this. I just don’t want to conceive such a hypothesis. I’m confident that the authorities — and by the way all parties, not only Italy — all parties will in the end find a compromise solution, an agreement.” He went on to suggest that the situation had been “dramatized,” and that was “not the first time there are deviations from established rules in Europe.” But investors are worried that the Italian government may seize on that precedent and take a gamble that running foul of EU budget rules won’t incur serious penalties, and that, if things do turn worse for Italian financial markets, they”ll be able to lean on the ECB for support. Draghi, for his part, told CNBC that would not be a possibility.

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“..Saudi Arabia expelled the Canadian envoy. It then froze trade talks, cut academic ties, and suspended flights to Canada.”

But arms sales trump everything.

Canada ‘Concerned’ About Khashoggi But Will Sell Arms To Saudis – Trudeau (RT)

Ottawa will keep its $15bn arms deal with Riyadh despite concerns over Saudi involvement in the disappearance of dissident journalist Jamal Khashoggi and the diplomatic row over human rights, Prime Minister Trudeau said. “We respected that contract,” Canadian Prime Minister Justin Trudeau told reporters on Friday, adding that his cabinet has put forward measures to make the arms sales more transparent. “We are making sure Canadians’ expectations and laws are always being followed,” he said. The contract was signed in 2014 by the previous conservative government, and has since been upheld by Trudeau. The specifics of the sales were originally not disclosed by the parties.

According to documents obtained by CBC News last month, a Canadian company is to ship 742 LAV-6 light armored vehicles to Riyadh. The same outlet revealed in March that hundreds of the LAV-6s will be outfitted as “heavy assault” and “anti-tank” types. [..] Human rights campaigners and journalists have criticized Canada’s approach to Saudi Arabia as inconsistent. They point out that the government doesn’t mince words when attacking the kingdom’s human rights record, but at the same time never waivers in its willingness to ship military hardware to Riyadh. Media reports have also strongly suggested that the Saudis might be using Canadian-made LAVs against civilians in Yemen.

[..] Canada stuck to the arms deal even after becoming embroiled in a diplomatic spat with Riyadh in August. Foreign Minister Chrystia Freeland called on the kingdom to release two high-profile dissidents. In response, Saudi Arabia expelled the Canadian envoy. It then froze trade talks, cut academic ties, and suspended flights to Canada.

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She won’t have a cabinet left soon.

David Davis Calls For Cabinet Rebellion Over Brexit Plan (BBC)

Cabinet ministers should “exert their collective authority” and rebel against Theresa May’s proposed Brexit deal, ex-Brexit Secretary David Davis has said. The PM has suggested a temporary customs arrangement for the whole UK to remain in the customs union while the Irish border issue is resolved. Brexiteers suspect this could turn into a permanent situation, restricting the freedom to strike trade deals. Writing in the Sunday Times, Mr Davis said the plan was unacceptable. “This is one of the most fundamental decisions that government has taken in modern times,” he added.

The issue of the border between Northern Ireland and the Republic Ireland is one of the last remaining obstacles to achieving a divorce deal with Brussels, with wrangling continuing over the nature of a “backstop” to keep the frontier open if a wider UK-EU trade arrangement cannot resolve it. The EU’s version, which would see just Northern Ireland remain aligned with Brussels’ rules, has been called unacceptable by Mrs May and the DUP. Mr Davis said the government’s negotiating strategy had “fundamental flaws”, arising from the “unwise decision in December to accept the EU’s language on dealing with the Northern Ireland border”.

On Saturday evening, German newspaper Suddeutsche Zeitung reported a deal had already been reached between Mrs May and the EU, and would be announced on Monday. But a No 10 source told the BBC the report was “100%, categorically untrue” and negotiations were ongoing. The paper said it had seen a leaked memo from EU negotiators to EU ambassadors stating: “Deal made.”

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Too many people want too many too different things.

Brexit Negotiators Poised To Miss Deal Deadline As UK Hardliners Rebel (ZH)

[..] early Sunday in London, the Brexiteer hardliners published an open letter signed by 63 Conservative MPs, including David Davis, the former Brexit secretary, Jacob Rees-Mogg, the chairman of the European Research Group of Eurosceptic backbenchers and former Brexit minister Steve Baker, the former Brexit minister. At the same time, Anne-Marie Trevelyan, a pro-leave MP, published an editorial in the Sunday Telegraph demanding that any possibility that the UK could remain in a “temporary customs arrangement” after the Brexit transition period ends in December 2020 be stricken from the final agreement – because leaving open the possibility would be tantamount to ignoring the political will of the 17.4 million Britons who voted for Brexit.

Meanwhile, Davis demanded in an editorial in the Sunday Times that Cabinet ministers should “exert their collective authority” and rebel against Theresa May’s proposed Brexit deal. All of this is happening amid even more conflicting reports, citing sources from the EU and sources from No. 10 Downing Street, affirming and denying that a deal had been reached. Underscoring the hostility to a deal, the leader of Northern Ireland’s Democratic Unionist Party said Sunday that she would prefer a “no deal” Brexit to a “backstop” transition agreement that would require any borders between Northern Ireland and the UK, arguing that this would amount to the “annexation” of Northern Ireland by the EU, per CNBC.

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The Atlantic Council got going. Social media have become too big a threat to the narrative.

Internet Censorship Just Took An Unprecedented Leap Forward (CJ)

While most indie media was focused on debating the way people talk about Kanye West and the disappearance of Saudi journalist Jamal Khashoggi, an unprecedented escalation in internet censorship took place which threatens everything we all care about. It received frighteningly little attention. After a massive purge of hundreds of politically oriented pages and personal accounts for “inauthentic behavior”, Facebook rightly received a fair amount of criticism for the nebulous and hotly disputed basis for that action. What received relatively little attention was the far more ominous step which was taken next: within hours of being purged from Facebook, multiple anti-establishment alternative media sites had their accounts completely removed from Twitter as well.

As of this writing I am aware of three large alternative media outlets which were expelled from both platforms at almost the same time: Anti-Media, the Free Thought Project, and Police the Police, all of whom had millions of followers on Facebook. Both the Editor-in-Chief of Anti-Media and its Chief Creative Officer were also banned by Twitter, and are being kept from having any new accounts on that site as well.

“I unfortunately always felt the day would come when alternative media would be scrubbed from major social media sites,” Anti-Media’s Chief Creative Officer S.M. Gibson said in a statement to me. “Because of that I prepared by having backup accounts years ago. The fact that those accounts, as well as 3 accounts from individuals associated with Anti-Media were banned without warning and without any reason offered by either platform makes me believe this purge was certainly orchestrated by someone. Who that is I have no idea, but this attack on information was much more concise and methodical in silencing truth than most realize or is being reported.”

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Interesting man.

Professor Exposes Rigged Markets One Academic Paper At A Time (ZH)

Finance professor John Griffin, along with his doctoral student companion, Amin Shams, were the two academics that drew market-moving conclusions about bitcoin last year, while the digital currency was trading around $20,000. After sifting through 2 terabytes of trading data, they alleged that bitcoin was being manipulated by someone using the cryptocurrency Tether to purchase it. Tether remains a relatively little-known crypto, which is pegged to one US dollar. Part of its appeal is that it can “stand in” for dollars when necessary, according to Bloomberg. Griffin and Shams authored a paper in June, with the results of their findings ultimately catalyzing many digital assets to move lower, despite the fact that the CEO of Tether publicly denied that its currency was used to prop up bitcoin.

Griffin works at the University of Texas at Austin, and has become quite an unpopular figure on Wall Street for similar work he has done in the past on ratings companies, the VIX and investment banks. In most of his findings, he claims that these well-known financial instruments and players are, in one way or another, rigged. And the professor seems to enjoy exposing precisely that: rigged, manipulated markets and shady players. “I not only want to understand the world, but make it better,” he told Bloomberg. Griffin’s work has become popular reading within the DOJ and the Commodity Futures Trading Commission, according to Bloomberg.

These regulators – many of them low on resources, time and staff – welcome any additional help they can get (the SEC’s budget has forced it into a hiring freeze and the CFTC budget was cut by Congress in March of this year). John Reed Stark, a former attorney in the SEC’s enforcement division, stated: “It’s incredibly helpful to have an expert of Griffin’s caliber.”

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“..the threat to order might be so great that an unprecedented “emergency” has to be declared, with soldiers in the streets of Washington..”

Hammer Time (Jim Kunstler)

If I were President, I’d declare Oct 12 Greater Fool Day. (Nobody likes Christopher Columbus anymore, that genocidal monster of dead white male privilege.) The futures are zooming as I write, a last roundup for suckers at the OD corral, begging the question: who will show up on Monday. Nobody, I predict. And then what? The great false front of the financial markets resumes falling over into the November election. The rubble from all that buries whatever is left of the automobile business and the housing market. The smoldering aftermath will be described as the start of a long-overdue recession — but it will actually be something a lot worse, with no end in sight.

The Democratic Party might not be nimble enough to capitalize on the sudden disappearance of capital. Their only hope to date has been to capture the vote of every female in America, to otherwise augment their constituency of inflamed and aggrieved victims of unsubstantiated injustices. It’s been fun playing those cards, and the Party might not even know how to play a different game at this point. Democratic politicians may also be among the one-percenters who watch their net worth go up in a vapor in a market collapse, leaving them too numb to act. The last time something like this happened, in the fall of 2008, candidate Barack Obama barely knew what to say about the fall of Lehman Brothers and the ensuing cascade of misery — though unbeknownst to the voters, he was already a hostage of Wall Street.

Complicating matters this time will be the chaos unleashed in politics and governing when the long-running “Russia collusion” melodrama boomerangs into a raft of indictments against the cast of characters in the Intel Community and Department of Justice AND the Democratic National Committee, and perhaps even including the Party’s last standard bearer, HRC, for ginning up the Russia Collusion matter in the first place as an exercise in sedition. The wheels of the law turn slowly, but they’ll turn even while financial markets tumble. And the threat to order might be so great that an unprecedented “emergency” has to be declared, with soldiers in the streets of Washington, as was sadly the case in 1861, the first time the country turned itself upside down.

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Good angle.

Who The Hell Cares What Old People Think About Climate Change? (Ol.)

The loudest and most powerful voices when it comes to the future of the planet — the ones with their hands on the levers of power — have a strong tactical advantage: they will be dead before the shit really hits the fan. This fact curiously goes unspoken, for the most part. Popular arguments tend to be framed around a rosy vision preserving the planet for future generations, which gives our boomer aristocracy the most effective cover story imaginable. They don’t need to care about that, as nice as it sounds. Why would they? It’s all completely hypothetical to them. You may as well be talking about climate patterns in Narnia. Make no mistake: older generations living in the developed world are part of history’s most under-appreciated death cult.

This isn’t abstract psychoanalysis. There is a brutal calculus going on in the minds of everyone from your skeptic uncle to the bankrollers of squillion dollar think tanks whenever they think or talk about climate change. They know that they will never have to really answer for their opinions on this matter, because they’ll be six feet under (and loving it!) when the world’s arable land is rendered infertile and its coastal cities flooded by rising oceans. In some dark and venal corner of their minds, they’re thinking about that fact all the damn time. Despite the frightening predictions of the new IPCC report, they’ve still got plenty of wiggle room to keep denying until they’re dead – which will be sooner rather than later. With any luck they’ll even avoid being held accountable in any concrete way, which for the conservative commentariat is an even worse fate than the Mad Max hellworld towards which we are hurtling.

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One scary dude.

What’s Another Way to Say ‘We’re F-cked’? (Goodell)

[..] a scientist named Richard Alley in a Skype discussion with students at Bard College, as well as with Eban Goodstein, director of the Graduate Programs in Sustainability at Bard. It would be just another nerdy Skype chat except Alley is talking frankly about something that few scientists have the courage to say in public: As bad as you think climate change might be in the coming decades, reality could be far worse. Within the lifetime of the students he’s talking with, Alley says, there’s some risk — small but not as small as you might hope — that the seas could rise as much as 15-to-20 feet.

[..] Richard Alley is not a fringe character in the world of climate change. In fact, he is widely viewed as one of the greatest climate scientists of our time. If there is anyone who understands the full complexity of the risks we face from climate change, it’s Alley. And far from being alarmist, Alley is known for his careful, rigorous science. He has spent most of his adult life deconstructing past Earth climates from the information in ice cores and rocks and ocean sediments. And what he has learned about the past, he has used to better understand the future. For a scientist of Alley’s stature to say that he can’t rule out 15 or 20 feet of sea-level rise in the coming decades is mind-blowing.

And it is one of the clearest statements I’ve ever heard of just how much trouble we are in on our rapidly warming planet (and I’ve heard a lot — I wrote a book about sea-level rise). To judge how radical this is, compare Alley’s numbers to the latest report from the Intergovernmental Panel on Climate Change, which was released on Monday. That report basically argued that if we don’t get to zero carbon emissions by 2050, we have very little chance of avoiding 1.5 Celsius of warming, the threshold that would allow us to maintain a stable climate. The report projected that with 2 Celsius of warming, which is the target of the Paris Climate Agreement, the range of sea level rise we might see by the end of the century is between about one and three feet.

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Sure. But start giving back what was. Problem is, so much of it WAS looted that the museum would become a pretty empty place.

‘Not Everything Was Looted’: British Museum To Fight Critics (G.)

The British Museum is launching an initiative intended to counter the perception that its collections derive only from looted treasures. The monthly Collected Histories talks, which begin on Friday, will provide information on how certain artefacts entered the collection, with the museum saying it will offer a more nuanced take on these stories than is available elsewhere. The museum has long faced criticism for displaying – and refusing to return – looted treasures, including the Parthenon Marbles, Rosetta Stone, and the Gweagal shield.

Earlier this year, the art historian Alice Procter’s Uncomfortable Art Tours around London institutions, including the British Museum, made headlines for their attempts to expose the role of colonialism, with those on the tour given “Display It Like You Stole It” badges. Dr Sushma Jansari, the curator of the Asian ethnographic and South Asia collections at the British Museum, said she had devised Collected Histories in response to Procter’s tours. “There are a lot of partial histories and they tend to focus on the colonial aspect of the collecting so you have a bunch of people who tend to be quite angry and upset,” she said. “We’re trying to reset the balance a little bit. A lot of our collections are not from a colonial context; not everything here was acquired by Europeans by looting.”

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Sep 122018
 


Vincent van Gogh Mountainous Landscape Behind Saint-Rémy 1888

 

US Federal Deficit Soars 32% To $895 Billion (Hill)
The Fed’s Lost Opportunity to Return to Normal (Rickards)
China ‘National Team’ Bought Billions In Stocks in Q2 – Goldman (CNBC)
Putin Bashes Protectionism, ‘Sanctions, Bans And Political Bias’ (CNBC)
Skripal Poisoning Suspects Are Civilians, Not Criminals, Says Putin (G.)
UK Police Prepares For Disorder At Ports If UK Crashes Out Of EU (Ind.)
Barnier Confronts Raab Over Discovery Of Brexit No-Deal Letters To EU27 (G.)
Europe Is Voting On Controversial Internet Copyright Law (CNBC)
Americans Need Social Media Guided by the US Constitution (Krieger)
Internet Industry Group Backs ‘National’ Data Privacy Approach (R.)
Armageddon Rides In The Balance (PCR)
Tsipras Warns “Europe Has No Future If It Doesn’t Admit Mistakes” (KTG)
Monsanto-Bayer Merger Hurts Farmers and Consumers (CP)
‘Monster’ Hurricane Florence To Pummel US Southeast For Days (R.)

 

 

Steady as she goes.

US Federal Deficit Soars 32% To $895 Billion (Hill)

The federal deficit hit $895 billion in the first 11 months of fiscal 2018, an increase of $222 billion, or 32 percent, over the same period the previous year, according to the Congressional Budget Office (CBO). The nonpartisan CBO reported that the central drivers of the increasing deficit were the Republican tax law and the bipartisan agreement to increase spending. As a result, revenue only rose 1 percent, failing to keep up with a 7 percent surge in spending, it added. Revenue from individual and payroll taxes was up some $105 billion, or 4 percent, while corporate taxes fell $71 billion, or 30 percent.

The August statistics were somewhat inflated, however, due to a timing shift for certain payments, putting the deficit measure through August slightly out of sync with the previous year, the CBO noted. Had it not been for the timing shift, the deficit would have increased $154 billion instead of $222 billion. Earlier analysis from CBO projected that deficits would near $1 trillion in 2019 and surpass that amount the following year.

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With 10 years of such market manipulation that there is no market left, what exactly is normal?

The Fed’s Lost Opportunity to Return to Normal (Rickards)

Current Fed policy will push the U.S. economy to the brink of recession, possibly by later this year. When that happens, the Fed will have to reverse course and ease monetary policy. Meanwhile, the economic cheerleaders recite recent GDP figures and the stimulative effects of the Trump tax cuts. There’s one problem with the happy talk about 3–4% growth. We’ve seen this movie before. In 2009, almost every economic forecaster and commentator was talking about “green shoots.” In 2010, then-Secretary of the Treasury Tim Geithner forecast the “recovery summer.” In 2017, the global monetary elites were praising the arrival (at last) of “synchronized global growth.”

None of this wishful thinking panned out. The green shoots turned brown, the recovery summer never came and the synchronized global growth was over almost as soon as it began. Strong quarters have been followed by much weaker quarters within six months on six separate occasions in the past nine years. There’s no reason to believe this time will be any different. This expansion has been extraordinarily long — over 30% longer than average — indicating that a recession should be expected sooner rather than later. Into this mix of weak growth comes the Federal Reserve, which is tightening monetary policy, reducing the base money supply and supporting a strong dollar. All of these policies are associated with slower growth ahead and a high probability of recession.

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Plunge protection. Imitating ECB.

China ‘National Team’ Bought Billions In Stocks in Q2 – Goldman (CNBC)

As the mainland Chinese stock market dropped in the second quarter, groups with government ties bought shares, according to a Goldman Sachs analysis. The “national team” of entities related to or influenced by the state was formed in 2015 to help support stocks during that summer’s market turmoil. The Shanghai composite crashed more than 40 percent that year, and has struggled to recover since. The index’s losses accelerated in June, when it fell 20 percent from a recent high, or into a bear market. Beijing’s efforts to reduce the economy’s reliance on debt has led to tighter financial conditions, while rising U.S.-China trade tensions have added to pressure on growth. In all, the Shanghai composite lost 10 percent in the second quarter.

During that time, the national team bought an estimated net 116 billion yuan — or nearly $17 billion — worth of local stocks known as A shares, Goldman Sachs’ Chief China Equity Strategist Kinger Lau said in a Friday report.The second-quarter purchases account for about 0.2 percent of market capitalization and follow sales of 71 billion yuan in the first quarter, Lau said. Overall, his team estimated the national team holds 1.5 trillion yuan worth of A shares, or about 2.9 percent of the listed market capitalization. The findings are based on analysis of required quarterly disclosures of the top 10 shareholders in A share companies.


Source: Goldman Sachs Global Investment Research

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Trump unites China and Russia.

Putin Bashes Protectionism, ‘Sanctions, Bans And Political Bias’ (CNBC)

President Vladimir Putin appeared to take another thinly veiled swipe at Trump’s economic policies on Wednesday, a day after Russia and China vowed to stand together to fight protectionism. “The world and global economy are coming up against new forms of protectionism today with different kinds of barriers which are increasing,” Russian President Vladimir Putin told a plenary session at the Eastern Economic Forum (EEF) in Vladivostok, Russia. “Basic principles of trade — competition and mutual economic benefit — are depreciated and unfortunately undermined, they’re becoming hostages of ideological and fleeting political situations, in that we see a serious challenge for all of the global economy, especially for the dynamically-growing Asia-Pacific and its leadership,” he added.

Putin’s comments come as China and Russia appeared united on Tuesday after the leaders of both countries pledged to stand together to fight protectionism. The comments were seen as a thinly veiled attack on U.S. President Donald Trump who has implemented a massive package of tariffs on Chinese imports and threatened further sanctions on Moscow. [..] Putin said Wednesday that Russia and its eastern economic partners should work to keep trade free of barriers. “We’re convinced that in order for our region to continue to achieve high growth rates, and to remain a key participant in the global economy and trade, it should retain the spirit of economic freedom, to be the space of business initiative without sanctions, bans and political bias ,” Putin told delegates.

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With a whole series of CCTV images. Because Russian secret agents on murder missions are too stupid to avoid their photos being taken. There is even one where they take time to ‘pose’ by looking into a shop window with a camera, taken AFTER the ‘attack’.

Skripal Poisoning Suspects Are Civilians, Not Criminals, Says Putin (G.)

The two men accused by the UK of carrying out a nerve agent attack in Salisbury have been identified and are civilians, not criminals, Vladimir Putin has said. “We know who they are, we have found them,” Putin said at an economic forum in the eastern Russian city of Vladivostok, adding that the two men – named by the UK as Alexander Petrov and Ruslan Boshirov – might soon make appearances in the media to protest their innocence. “These are civilians,” Putin said in remarks reported by Russian news agencies. “There is nothing criminal here.” British officials have said the men were agents of Russian military intelligence dispatched to kill Sergei Skripal, a former Russian spy who had given information to British intelligence. He was imprisoned in Russia before being released in a spy swap in 2010.

Putin’s remarks appeared to be a denial that the men worked for Russia’s military intelligence service the Main Directorate, commonly called the GRU. British officials this month charged the two men in absentia with the attempted murder with novichok of Sergei Skripal, his daughter, Yulia, and a police officer who investigated the scene. Scotland Yard released CCTV images of the two suspects at Salisbury train station on the day of the attack. [..] Putin called on the two men to appear in the media to protest their innocence, saying he “wanted to address them directly”. The Russian’s president’s words marked a departure from his country’s earlier position, which was to disregard the evidence released by Scotland Yard as a fabrication.

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And the military too. And this is just what you’re allowed to know.

UK Police Prepares For Disorder At Ports If UK Crashes Out Of EU (Ind.)

Police are preparing for disorder at British ports in the event of a no-deal Brexit, Metropolitan Police Commissioner Cressida Dick has revealed. The head of Scotland Yard said her force was also bracing for the loss of key European data systems that are “very important” for keeping London safe. She said that the police were conducting careful, calm and sober contingency planning for eventualities, particularly relating to ports in Kent as well as in other parts of the UK. “Is there going to be protests, is there going to be disorder?” she asked, while addressing delegates at the Police Superintendents’ Association conference in Leicester. “At the moment in planning terms it’s a long-way off because there are so many uncertainties that could happen.”

Her comments came after a leaked document prepared by the National Police Coordination Centre revealed the “real possibility” of police calling on the military to help with civil disorder caused by a no-deal Brexit. It warned of traffic queues at ports and said concerns around medical supplies could “feed civil disorder”, while a rise in the price of goods could also lead to “widespread protest” and trigger crimes such as theft. Ms Dick raised additional concerns over the potential loss of access to EU systems including the European Arrest Warrant, Europol and databases containing information on criminals and terrorists entering the UK. “At any one time in my custody suites I will have 35, 40 per cent foreign nationals, over half EU citizens and a huge chunk would have travelled through Europe,” she explained.

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The UK still thinks they can make separate deals. It doesn’t understand the EU.

Barnier Confronts Raab Over Discovery Of Brexit No-Deal Letters To EU27 (G.)

Dominic Raab has been reprimanded by Michel Barnier after the EU’s chief negotiator discovered the British government had written to the 27 other member states asking for side negotiations on transport in the event of a no-deal Brexit. The Brexit secretary was confronted by Barnier during their most recent meeting in Brussels over correspondence sent in recent days to EU capitals by the Department for Transport. The letters had asked the member states to prepare to engage with the British government in side deals on aviation and haulage, to allow key trade flows to continue in the event of the UK and the EU failing to come to an agreement on leaving the union by 29 March 2019.

The transport secretary, Chris Grayling, had ordered the letters to be sent despite being told less than two weeks ago by the European commission’s most senior trade official, Violeta Bulc, that without a deal this autumn, there would be no other agreements made to protect the UK economy. Barnier is said to have reiterated that message to Raab, telling the cabinet minister: “If there is no deal, there is no trust.” The bruising exchange came on the same day that Theresa May told cabinet members the UK should remain “the EU’s closest ally” after Brexit, amid a growing belief in Downing Street that progress was gradually being made in the long-running divorce talks.

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A few of them may understand the issues, but the majority sure don’t.

Europe Is Voting On Controversial Internet Copyright Law (CNBC)

European parliamentarians are set to vote on a controversial copyright law that some critics believe could stop people from sharing memes and articles online. Lawmakers in Strasbourg, France, will cast their votes on the European Union’s new copyright directive on Wednesday. The result of that vote could determine whether large tech companies including Facebook, Twitter and Google are forced to use filtering systems that block copyrighted content. Two particular parts of the directive have attracted the most criticism from pro-internet freedom activists. One is Article 13. This section calls on internet giants to take “appropriate and proportionate” measures to prevent user-generated content that infringes a rightsholder’s copyright.

This part of the law has come under heavy criticism over concerns that tech giants could end up using automated content filtering systems. The law states that “effective content recognition systems” should be put in place by digital companies to prevent copyrighted materials from being distributed on their platforms. Campaigners have scrutinized this part of the legislation over concerns that it could amount to censorship, and argue that the use of copyright-protected material by way of commentary or parody should be permitted under the doctrine of “fair use.” Particular attention has been paid to the status of “memes,” which often rely on copyright protected images or pieces of video, and whether they could be censored as a result.

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Echoing a point I’ve been making.

Americans Need Social Media Guided by the US Constitution (Krieger)

This past Friday, Alex Jones was de-platformed from the last couple of third party tools he had been using to publicly communicate his message after Twitter and Apple permanently banned him and his website Infowars. This means an American citizen with a very large audience who played a meaningful role in the 2016 election, has been banned from all of the most widely used products of communication of our age: Twitter, Facebook, Google’s YouTube and Apple’s iTunes. You can point out he still has his radio show and website, and this is unquestionably true, but when it comes to the everyday tools most people interact with to receive information and communicate in 2018, Alex Jones has been thrown down the memory hole. Not because he was convicted of a crime or broke any laws, but because corporate executives decided he crossed an arbitrary line of their own creation.

It’s not against the law to be crazy or say crazy things in this country. It’s also not against the law to say hateful things. It’s pretty obvious the main reason Alex Jones was deleted from public discourse by Silicon Valley executives relates to his impact and popularity. [..] unabashed bigots like David Duke and Louis Farrakhan continue to have active presences across social media, and rightly so. The difference is neither David Duke nor Louis Farrakhan played a major role in the election of Donald Trump, whereas Alex Jones did. Jones and Infowars were having an outsized impact on the U.S. political discourse in a manner tech giant executives found threatening and offensive, so they collectively found excuses to silence him.

When the outrage mob consisting of politicians, corporate media outlets like CNN, and even his own employees, complained to Twitter’s Jack Dorsey on the issue of Alex Jones, he couldn’t hold the line on free speech because his company’s own policies are junk. Twitter, Facebook and YouTube should have a clear policy when it comes to speech, and it should be this: If it isn’t breaking the law – in other words, if it’s protected speech under the First Amendment – it stays up. Period. When you have corporate rules against “hate speech,” you’re relying on a concept that doesn’t really have any sort of legal standing when it comes to free speech in this country. There is no “hate speech” exception to the First Amendment of the U.S Constitution.

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They want to regulate themselves. Don’t let them.

Internet Industry Group Backs ‘National’ Data Privacy Approach (R.)

A group representing major internet companies including Facebook, Amazon.com and Alphabet said on Tuesday it backed modernizing U.S. data privacy rules but wants a national approach that would preempt California’s new regulations that take effect in 2020. The Internet Association, a group representing more than 40 major internet and technology firms including Netflix, Microsoft and Twitter, said “internet companies support an economy-wide, national approach to regulation that protects the privacy of all Americans.” The group said it backed principles that would ensure consumers should have “meaningful controls over how personal information they provide” is used and should be able to know who it is being shared with.

Consumers should also be able to seek deletion of data or request corrections or take personal information to another company that provides similar services and have reasonable access to the personal information they provide, it said. The group also told policymakers they should give companies flexibility in notifying individuals, set a “performance standard” on privacy and data security protections that avoids a prescriptive approach and set national data breach notification rules. Michael Beckerman, president and chief executive officer of the Internet Association, said in an interview the proposals were “very forward looking and very aggressive” and would push to ensure the new rules apply “economy wide.” He said the group “would be very active working with both the administration and Congress on putting pen to paper.”

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Leftwing and intelligence.

Armageddon Rides In The Balance (PCR)

For some time I have pointed out the paradox of the American liberal/progressive/left being allied with the CIA, FBI, military/security complex and deep state. Now leftist Ann Garrison has noticed the paradox of this alliance. She concludes that the left has lost its mind. Indeed, it has. Out of its hatred of Trump the left has united with the forces of evil and war that are leading to conflict with Russia. The left’s hatred of Trump shows that the American left has totally seperated from the interests of the working class, which elected Trump. The American left has abandoned the working class for the group victimizations and hatreds of Identity Politics. As Hillary put it, the working class comprises the “Trump deplorables.” The Democratic Party, like the Republicans, represents the ruling oligarchy.

I have explained that the leftwing lost its bearings when the Soviet Union collapsed and socialism gave way to neoliberal privatizations. The moral fury of the leftwing movement had to go somewhere, and it found its home in Identity Politics in which the white heterosexual male takes the place of the capitalist, and his victim groups—blacks, women, homosexuals, illegal immigrants—take the place of the working class. The consequences of the leftwing’s alliance with warmongers and liars is the leftwing’s loss of veracity. The left has endorsed a CIA orchestration—“Russiagate”—for which there is no known evidence, but which the left supports as proven truth. The purpose of “Russiagate” is to prevent President Trump from normalizing relations with Russia.

In these times when so many Americans are hard pressed, normal relations could adversely impact the budget and power of the military/security complex by reducing the “Russian threat.” If there is no real Russian threat, only an orchestrated perceived one, the question arises: why does the military/security complex have a taxpayer-supported annual budget of $1,000 billion dollars? The presstitutes have kept the truth from emerging that the “Russiagate” investigation has found no sign of a Trump/Putin plot to steal the 2016 presidential election from Hillary. Indeed, it has been proven beyond all questioning that the Hillary emails were not hacked but were downloaded on a thumb drive. This proof collapses the entire premise of “Russiagate.” Nevertheless, the hoax continues.

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He might as well be talking about himself.

Tsipras Warns “Europe Has No Future If It Doesn’t Admit Mistakes” (KTG)

Europe will have no future if the bloc does not admit mistakes in handling the financial and the migration crisis, Prime Minister warned the European Parliament on Tuesday. Alexis Tsipras said Europe could face an existential crisis over nationalism unless the bloc admits mistakes and its failure to handle a fiscal crisis and the deal with an influx of migrants effectively. The Greek Prime Minister said economic austerity pushed by European governments has fostered fear, racism and the emergence of the far right.“ The economic austerity pursued by European governments had fostered fear, racism and the emergence of the far right, he told lawmakers in the European parliament.

“The EU’s failure to give democratic and effective responses to modern challenges will lead irrevocably to the triumph of chauvinism and will rekindle nationalistic rivalry,” he said. “It will turn it into a fragmented continent, a continent without cohesion, without an international role, and without a future,” he said. Tsipras also criticised Europe’s handling of security and said this could have helped bolster support for far right parties. Several European countries including France and Belgium have seen attacks by Islamist militants in recent years. “The issue at stake is existential for Europe,” said Tsipras. “The handling so far of the financial crisis, the refugee crisis and a security crisis, has exposed huge deficiencies and contradictions.”

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“93% of farmers expressed concern that the merger will harm independent farmers and farming communities.”

Monsanto-Bayer Merger Hurts Farmers and Consumers (CP)

The U.S. Department of Justice issued a stern warning in its lawsuit against the conditionally-approved mega-merger between Bayer and Monsanto in June. The anti-competitive price effects of the merger would, according to the DOJ, “likely result in hundreds of millions of dollars per year in harm, raising costs to farmers and consumers.” The Justice Department warned that the combining of Bayer and Monsanto would reduce competition for vegetable seeds, likely driving up prices. Further, farmers might see prices for GMO cotton, canola, corn and soybean seeds increase, as well as price increases for herbicide and seed treatments. After imposing some limited divestments on Monsanto, the DOJ approved this merger, enabling Monsanto to hide its controversial name brand while giving Bayer anti-competitive control over seeds, pesticides, farmers and consumers worldwide.

But the harm to consumers and farmers will still exist. The DOJ is on the brink of essentially authorizing a monopoly. This is bad news for nearly everyone on the planet except Bayer and Monsanto executives and shareholders. Aside from a combined Bayer-Monsanto, only three other seed companies will be in the market manufacture and sell these products. Farmers overwhelmingly object to the merger. 93% of farmers expressed concern that the merger will harm independent farmers and farming communities. Farmers’ top three concerns were that Bayer/Monsanto “would use its dominance in one product to push sales of other products;” “control data about farm practices;” and that the merger will create “increased pressure for chemically dependent farming.”

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Meanwhile, super typhoon Mangkhut is heading straight for Hong Kong.

‘Monster’ Hurricane Florence To Pummel US Southeast For Days (R.)

Hurricane Florence, on track to become the first Category 4 storm to make a direct hit on North Carolina in six decades, howled closer to shore on Tuesday, threatening to unleash deadly pounding surf, days of torrential rain and severe flooding. Fierce winds and massive waves are expected to lash the coasts of North and South Carolina and Virginia even before Florence makes landfall by early Friday, bringing a storm surge as much as 13 feet (4 meters), the National Hurricane Center in Miami warned. Catastrophic floods could follow if the storm stalls inland, it said. Although Florence was still days from arrival, authorities took extraordinary measures to move people out of harm’s way. More than 1 million residents have been ordered to evacuate from the coastline of the three states, while university campuses, schools and factories were being shuttered.

The U.S. Coast Guard closed ports in Wilmington and Morehead City, North Carolina and Hampton Roads, Virginia to inbound vessels greater than 500 tons and was requiring vessels of that size to leave if they did not have permission to be in the ports. Packing maximum sustained winds of 140 miles per hour (225 km per hour), the storm ranked as a Category 4 on the five-step Saffir-Simpson hurricane scale and was expected to grow stronger and larger over the next few days, the NHC said. “This storm is a monster,” North Carolina Governor Roy Cooper said. “Even if you’ve ridden out storms before, this one is different. Don’t bet your life on riding out a monster.” He cited forecasts showing Florence was likely to stall over North Carolina, “bringing days and days of rain.”


Graph: weather.com

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Apr 132018
 
 April 13, 2018  Posted by at 8:38 am Finance Tagged with: , , , , , , , , , , ,  7 Responses »


Ezra Stoller Parking garage, New Haven, Connecticut 1963

 

Zombies In Our Midst (Felder)
After 10 Fat Years For Stock Investors A Lean Decade Is Looming (MW)
China Records Rare Trade Deficit In March As Exports Fall 2.7% (R.)
London House Prices Falling At Fastest Rate In Nine Years (G.)
Google Saves Manhattan Office Market. Chinese Buyers Vanish (WS)
The Deep State Closes In On The Donald: Mueller’s War, Part 2 (Stockman)
Bitcoin Surges 15%, Pushing Crypto Market Cap Above $300 Billion (MW)
The US Fading into Irrelevance – A Good Thing for the World (Pieraccini)
Interest Rate Hikes Are On The Way, But When And How Fast? (AFR)
Why Trade Wars Will Unleash Central Banks (Nomi Prins)
Global Warming Is a Central Bank Issue (BBG)
Decline In Bees Puts Supply Of Raw Materials For Global Business At Risk (Ind.)
No Plan To Protect Queensland’s Green-Haired Turtle From Extinction (G.)
Gulf Stream Slowdown ‘About A Century Ahead Of Schedule’ (TP)

 

 

Ponzi’s and zombies. Not Jesse Felder’s original title, but this one by DiMartino Booth is better.

Zombies In Our Midst (Felder)

To begin to understand the current situation in Minsky terms we must first understand the hypothesis: “The first theorem of the financial instability hypothesis is that the economy has financing regimes under which it is stable, and financing regimes in which it is unstable. The second theorem of the financial instability hypothesis is that over periods of prolonged prosperity, the economy transits from financial relations that make for a stable system to financial relations that make for an unstable system. In particular, over a protracted period of good times, capitalist economies tend to move from a financial structure dominated by hedge finance units to a structure in which there is large weight to units engaged in speculative and Ponzi finance.”

Next we need to understand what these financing units are: “Hedge financing units are those which can fulfill all oftheir contractual payment obligations by their cash flows… Speculative finance units are units that can meet their payment commitments on “income account” on their liabilities, even as they cannot repay the principle out of income cash flows… For Ponzi units, the cash flows from operations are not sufficient to fulfill either the repayment of principle or the interest due on outstanding debts by their cash flows from operations.”

And this is what reminded me of Minsky when I read the recent article in Grant’s with the accompanying chart below. It shows the percent of companies in the S&P 500 that would fall into Minsky’s “Ponzi unit” category. Specifically, Bianco Research defines these “zombies” as companies whose interest expense is greater than their 3-year average EBIT (earnings before interest and taxes). Currently, we face the greatest percentage of “Ponzi units” in at least 20 years.

This should be worrisome to investors and even more so to those managing monetary policy because it suggests that financial instability within the economy may be greater than any other time over the past couple of decades. Minsky again: “It can be shown that if hedge financing dominates, then the economy may well be an equilibrium seeking and containing system. In contrast, the greater the weight of speculative and Ponzi finance, the greater the likelihood that the economy is a deviation amplifying system.” Those last three words are critical. “A deviation amplifying system,” simply means an economy built on a virtuous cycle that risks evolving into a vicious one.

So long as interest rates remain low and investor risk appetites remain strong zombies will thrive and the economy will, as well, relatively speaking of course. However, should interest rates rise and risk appetites reverse course the risk of a self-reinforcing downturn grows. Minsky explains: “In particular… if an economy with a sizeable body of speculative financial units is in an inflationary state, and the authorities attempt to exorcise inflation by monetary constraint, then speculative units will become Ponzi units and the net worth of previously Ponzi units will quickly evaporate. Consequently, units with cash flow shortfalls will be forced to try to make position by selling out position. This is likely to lead to a collapse of asset values.”

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It won’t be like any of those previous decades.

After 10 Fat Years For Stock Investors A Lean Decade Is Looming (MW)

It’s a phrase that comes standard on Wall Street, but which may be taking on ominous undertones in the current market: Past performance is no guarantee of future returns. It should come as no surprise that U.S. equity-market investors have been handsomely rewarded thus far this decade, a period of time that roughly corresponds with the recovery from the financial crisis (the bottom came in March 2009, roughly 10 months before the start of the 2010s). The S&P 500 is up nearly 140% since the start of the decade, and more than 180% on a total-return basis. The Dow Jones Industrial Average is up more than 130% over the same period. Those are obviously strong gains, but even the biggest bulls on Wall Street may not appreciate just how strong this period has been relative to other decades.

“The 2010s have so far been one of the highest-returning and lowest-risk decades for U.S. stocks in the last 100 years,” wrote Howard Wang, co-founder of Convoy Investments. According to Convoy’s data, stocks averaged a total annualized return of 13.2% thus far this decade, comfortably above the long-term average of 9.6%. While this was below four other decades — the best decade was the 1950s, when the average was 18.8%, followed by the 18.6% gain in the 1990s — equities fared better in terms of their excess return above interest rates. By the excess-return measure, the 2010s have seen an average annual return of 12.7%, significantly above the 5.8% long-term average (going back to the 1920s).

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“Separately, China’s dollar-denominated trade surplus with the United States rose 19.4% in the first quarter…”

China Records Rare Trade Deficit In March As Exports Fall 2.7% (R.)

China’s March exports unexpected fell 2.7% from a year earlier, the first drop since February last year, while imports grew 14.4%, more than expected, customs data showed on Friday. That left the country with a rare trade deficit of $4.98 billion for the month, also the first since last February. Analysts polled by Reuters had expected March shipments from the world’s largest exporter to have risen 10.0%, slowing sharply from a 44.5% spike in the previous month which was believed to be heavily distorted by seasonal factors. Import growth had been expected to pick up to 10.0%, after slowing sharply to 6.3% in February.

Analysts expected China would record a trade surplus of $27.21 billion for last month, from February’s surplus of $33.75 billion. For the first quarter, exports rose 14.1%, and imports rose 18.9% on-year. China’s trade performance has got off to a strong start this year, following through on a solid rebound in 2017, thanks to sustained demand at home and abroad. But the export outlook is being clouded by an escalating trade dispute with the United States, which could disrupt China’s shipments and its supply chains, while a cooling property market may curb China’s demand for imported raw materials such as iron ore. Separately, China’s dollar-denominated trade surplus with the United States rose 19.4% in the first quarter.

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Ain’t seen nothing yet.

London House Prices Falling At Fastest Rate In Nine Years (G.)

House prices in London are falling at the fastest rate in nine years, according to Halifax, Britain’s biggest mortgage lender. Prices in the capital were down 3.2% between January and March compared with the previous quarter, the sharpest decline since the depths of the financial crisis, according to regional data collated by IHS Markit and published by Halifax, part of Lloyds Banking Group. London also recorded the sharpest fall in annual house prices since the start of 2011. Property values fell 3.8% in the first quarter from a year ago, following a 0.7% annual drop in the fourth quarter. London prices have been falling on a quarterly and annual basis since the third quarter of 2017.

There was a small annual increase of 0.3% in prices in the south-east of England at the start of the year, and a rise of 1.9% in the south-west. Prices grew strongly elsewhere in the country. The east Midlands and East Anglia recorded the fastest rates of annual price inflation, at 7.3% and 7.2% respectively, followed by Scotland at 6.7% and Yorkshire and the Humber at 6.1%. The standardised price of a home in London was £430,749 in the first quarter, the lowest since the end of 2015. Figures are standardised in order to track the price of a “typical house” by giving values to certain attributes of the properties and using them to calculate the price.

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The only game in town.

Google Saves Manhattan Office Market. Chinese Buyers Vanish (WS)

Chinese entities – such as the conglomerates – were once the dominant buyer in US trophy office markets, such as Manhattan. It ended with a big bang in the second quarter of 2017 when Chinese entities accounted for half of the commercial real estate volume in Manhattan, including its sixth largest transaction ever, the $2.2 billion purchase of 245 Park Avenue by the conglomerate HNA Group. It paid $1,282 per square foot, as it was called, “among the highest price per pound for this type of asset.” It was the last big Chinese property purchase in Manhattan.

But Google blew that deal out of the water, with its $2.4 billion acquisition of the iconic eight-story Chelsea Market at 75 Ninth Ave in Q1 this year. This was the second largest deal ever to close in Manhattan. And Google paid a breath-taking $2,181 per square foot. We will never again laugh about the inflated prices Chinese buyers were paying. [..] And here is what that Google deal did to the Manhattan office market: It more than doubled the total volume of sales! Without the Google deal, total transaction volume would have been $2.12 billion. With the Google deal, it jumped to $4.52 billion! [..] the dizzying price of $2,181 per square foot that Google forked over pushed the average price per square foot to a record $1,266, up 70% from Q1 last year:

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David is a great ranter.

The Deep State Closes In On The Donald: Mueller’s War, Part 2 (Stockman)

What is going on in the eastern Mediterranean and over the skies and on the ground in Syria is absolutely nuts; it’s also scary dangerous and utterly unnecessary, too. After all, the imminent Russian/American military clash is over the skeleton of an artificial backwater nation confected in 1916 by two swells in the British and French foreign offices. At length, what was never a nation anyway has finally been reduced to rubble, misery and sectarian fragments. So there is nothing to contest now, and, in fact, there never was. The sovereign government of Syria long ago invited the Russians in and Washington out. Period. Why, then, are commercial aircraft being warned to stay out of Syrian airspace, while the Russian fleet at Tartus scrambles into defensive redeployments?

Likewise, why is the Syrian air force being forced to hide its planes and helicopters in its own country, while Washington steams an armada of warships toward the Mediterranean that is larger and more lethal than the entire Navy of almost every other country in the world? The answer is simple and terrible: Washington has become the War Capital of the planet and now teems with a whole generation of war-obsessed bureaucrats, think-tankers, consultants, lobbyists, militarists, imperialists, neocon belligerents and the legions of military/industrial/spy complex racketeers who feed off a hideously bloated national security budget.

Of course, you also have thousands of politicians—both those now in office and those who hang-around afterwards and get prosperous by hanging-out a shingle to ply the business of operating Washington’s global empire. Among them are the brainwashed, the stupid, the larcenous, the sanctimonious, the venal, the flag-wavers, the sunshine patriots and the ideologues of American exceptionalism, responsibility-to-protect (R2P), democracy propagation and plain old imperial hegemony.

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Casino. Not for the faint of heart.

Bitcoin Surges 15%, Pushing Crypto Market Cap Above $300 Billion (MW)

After a period of low volatility, cryptocurrencies have broken out of their recent ranges, surging to multiweek highs on Thursday. The No. 1 digital currency, bitcoin rose to a two-week peak, trading above $8,000 to an intraday high of $8,055.20, adding as much as 16%. A single coin last changed hands at $7,705.21, up 11%. The intraday move is the largest since Feb. 6 when bitcoin traded down to $5,947.40 before closing at $7,700.39, a 29.4% move. The move comes after bitcoin spent the best part of two weeks in the $6,500 to $7,500 range. The tight sideways action created a so-called wedge formation, which can often presage significant swings in either direction once breached, according to market technicians “We have seen consolidation in a very small range,” said Naeem Aslam, chief market analyst with ThinkMarkets. “When the consolidation is in such a tight range the probability is that a move to the upside can be two to three times the size of the consolidation range.”

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Multipolar is the future.

The US Fading into Irrelevance – A Good Thing for the World (Pieraccini)

As demonstrated by the recent meeting between the defense ministers of Russia and China, the multipolar strategy is now wide-ranging, relegating Washington, Tel Aviv and Riyadh to further digging themselves into the hole they have already dug themselves into (see recent events in Syria with Israel launching 8 missiles and Trump beating the drums of war). As General Wei Fenghe stated, “We came to Moscow to let the Americans know about the close military ties between the armed forces of China and Russia.” When these two military and economic powers unite their efforts, involving regional powers and mediating over various conflicts, it becomes clear that the challenge to Washington’s hegemony is progressively leading away from an international reality consisting of one superpower to one consisting of three to four powers that maintain an international balance via diplomatic, economic and military means.

The phase in which we currently live is turbulent and is essentially caused by a single factor that has two very strong thrusts. The acceleration of the dwindling of the unipolar phase is directly connected with the strategic and tactical errors of the American deep state and its main sponsors, like Israel and Saudi Arabia. At the same time, the opposing push comes from the multipolar environment, which tends to consolidate its sphere of influence via diplomatic and military means. The goal for Moscow and Beijing is to present to the American and European elites a viable alternative that is shared among several actors. For the time being, the Euro-Atlantic establishment continues to consider itself capable of changing the course of events and preventing the drift towards multipolarity.

Whether the Western oligarchy is a victim to its own propaganda or whether it simply wishes to avoid facing reality and is using every means available to postpone an epochal change, is difficult to determine; and this makes the future uncertain, and is therefore highly dangerous.

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“The economy may only be operating on a single cylinder, but each time it’s an impressive one.”

Interest Rate Hikes Are On The Way, But When And How Fast? (AFR)

The Australian economy may not be booming, but it looks to have performed “the miracle pivot”. This is what Ardea Investment Management portfolio manager Tamar Hamlyn calls the economy’s remarkably smooth transition away from a once-in-a-generation mining investment boom without falling into recession. A massive uplift in residential construction activity has carried us through. The “next dance” is infrastructure investment, Hamlyn says. Now we await what feels like another miracle: an RBA rate hike. The economy may only be operating on a single cylinder, but each time it’s an impressive one. We don’t have a solid pick-up in consumption and “we are never going to have that really solid GDP growth until we get that,” Hamlyn says.

But what we are is far from the recessionary fears that were the original rationale for rates at such low levels. It makes sense, then, to think that in the absence of a nasty shock, it seems perfectly reasonable to bet, as RBA governor Philip Lowe flagged again this week, that the next move in rates will be up and not down. But when will that first hike be? And how far will they eventually go? And how quickly will they get there? Accepting that borrowing costs are more likely to get more rather than less expensive is one thing. But anybody trying to assess the potential risks and rewards of taking on a large and long-dated loan obligation, whether it be a mortgage or a business loan, needs to think beyond the next hike. Let’s start with when the RBA will act. Unfortunately, the experts and the market are telling a different story.

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Central banks are still supposed to save us. Sure.

Why Trade Wars Will Unleash Central Banks (Nomi Prins)

You can bet that deep within the halls of the Fed they are developing a game plan to keep the markets from crashing if trade wars escalate. This is another reason to believe that trade wars will be met with cheap money policy. You can look at this as a financial see-saw of sorts. Trade wars, or even media soundbites about them, will spark negative markets reactions. That is why the Fed and other central banks will combat this with cheap words and even cheaper money policies. If the U.S. does jump into a hot trade war it could find itself needing to make up for the costs. The logical place to turn is to the beacon of more money creation from the Fed or to issue more debt.

The Fed would be directly involved in order to keep the cost of debt from rising, again — which is why my analysis forecasts a return to Fed policies that keep rates low. Similarly, other major economies would also unleash their central bank money when needed. This type of tit-for-tat response is already playing out. Beijing has used its new wealth to attract friends, deter enemies, modernize its military, and aggressively assert its central bank into nearly any sector it believes requires assistance. This type of brinksmanship shows that it is only a matter of time before a trade war with China morphs into massive military build-up and competition.

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Oh yeah, sure, central bankers will save the planet.

Global Warming Is a Central Bank Issue (BBG)

Central bankers have been dubbed “masters of the universe” for the tools and powers they have acquired since the financial crisis. Some of them now want to play a more active role in the fight against climate change. Monetary authorities are right to be mindful of the way in which climate risk affects their mandate to ensure price stability and guard financial stability. But that is different from seeking to promote the shift to a “greener” economy, which is the role of government. Last week, central bank governors from the U.K., France and the Netherlands met in Amsterdam to discuss how to adapt regulation to the risks posed by climate change.

Together with five other institutions (from China, Germany, Mexico, Singapore and Sweden), these central banks have formed the “Network for Greening the Financial System” (NGFS). This group has two objectives: sharing and identifying best practices in the supervision of climate-related risks, and enhancing the role of the financial sector in mobilizing “green” financing. The first is entirely reasonable and consistent with the central banks’ traditional role. As Francois Villeroy de Galhau, governor of the Bank of France, said in a speech at the conference, “Climate stability is one of the determinants of financial stability.” It is only right that financial supervisors take an interest in what is going on.

The clearest example concerns the regulation of insurers: Climate change has made extreme weather events such as hurricanes more frequent. Regulators must ensure that the industry updates its models and sets aside enough capital to deal with these growing climate-related risks. To do so, central bankers may need to extend the supervisory horizon beyond their usual time span. Climate change may only pose a threat for the balance sheet some years down the road, but these risks should be assessed now. Villeroy de Galhau argued in his speech that the financial sector should move towards “a compulsory transparency requirement,” so that companies are forced to provide a snapshot of their climate-related risks. It’s an idea supervisors around the world should embrace.

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As long as we keep putting species extinction in terms of trade and profit, we are doomed.

Decline In Bees Puts Supply Of Raw Materials For Global Business At Risk (Ind.)

Businesses face a shortage of raw materials and a drop in the quality of crop as the number of bees decline worldwide, a new report warns. Approximately three quarters of crops around the world depend on pollination, all of which could soon be threatened as more than a third of wild bee and butterfly species face extinction, according to a joint study by the UN, the University of East Anglia and Cambridge University. Major businesses, including Asda, the Body Shop, Mars and Pepsico, say they are unable to take action largely because of uncertainty around which crops and regions are vulnerable to the decline in pollinators such as bees.

“The role pollinators play – be it tiny midges for cocoa or squirrels for coconut – is not well understood and can be taken for granted,” says Jos van Oostrum, director of sustainable solutions at chocolate and confectionary maker Mars. Cocoa, a vital ingredient in the production of chocolate, is at particular risk from a declining number of bees and other species that help spread pollen. The risks of a shortfall in raw materials not only prove a challenge for food production, but also the sourcing of ingredients for beauty products. “The importance of pollination for natural raw materials is increasingly a priority for us,” said the Body Shop’s sustainable sourcing manager Francesca Brkic.

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Everytime I make a new friend I find out they’re about to die. It’s making me terribly sad.

No Plan To Protect Queensland’s Green-Haired Turtle From Extinction (G.)

The Australian government does not have a plan to save an endangered Australian turtle species that received global attention on Thursday for its green mohawk and its ability to breathe through its genitals. The Mary river turtle, found only in that one river in Queensland, attracted worldwide headlines as one of the standout species on a new list of the most vulnerable reptile species compiled by the Zoological Society of London (ZSL). But despite this listing it does not have a national recovery plan to protect it from extinction and it is unclear whether any federal government funds have been specifically allocated for its protection. The turtle is 29th on ZSL’s Evolutionary Distinct and Globally Endangered (Edge) list for reptiles, which highlights the conservation needs of some of the world’s unique reptiles.

The turtle is not the only reptile species found in Australia to appear on the list, with eight species making the top 100, and seven of those appearing in the top 40. Among them are the critically endangered western swamp tortoise, which is number seven on the Edge list, the pig-nosed turtle, number 19 on the list, and the Gulbaru Gecko, a critically endangered Queensland species that was only discovered in 2001 and appears at 40 on the list. Conservationists say the list highlights the lack of conservation attention many Australian reptiles receive compared to more charismatic and iconic mammal and bird species. The federal government’s threatened species strategy specifically targets 20 mammals, 20 birds and 30 plants, but no reptiles.

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The climate on both sides of the Atlantic would change too much to imagine.

Gulf Stream Slowdown ‘About A Century Ahead Of Schedule’ (TP)

New research provides strong evidence that one of the long-predicted worst-case impacts of climate change — a severe slow-down of the Gulf Stream system — has already started. The system, also known as the Atlantic Meridional Overturning Circulation (AMOC), brings warmer water northward while pumping cooler water southward. “I think we’re close to a tipping point,” climatologist Michael Mann told ThinkProgress in an email. The AMOC slow down “is without precedent” in more than a millennium he said, adding, “It’s happening about a century ahead of schedule relative to what the models predict.”

The impacts of such a slowdown include much faster sea level rise — and much warmer sea surface temperatures — for much of the U.S. East Coast. Both of those effects are already being observed and together they make devastating storm surges of the kind we saw with Superstorm Sandy far more likely. The findings come in two new studies published this week. One study published in the journal Nature, titled “Observed fingerprint of a weakening Atlantic Ocean overturning circulation,” was led by the Potsdam Institute for Climate Impact Research. It finds that the AMOC has weakened “around 15 per cent” since the mid-twentieth century, bringing it to “a new record low.”

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Apr 102018
 
 April 10, 2018  Posted by at 8:51 am Finance Tagged with: , , , , , , , , , , , , ,  16 Responses »


Acme Storm over Manhattan 1950

 

Trump Blasts “Disgraceful” FBI Raid Of Lawyer’s Office (ZH)
Xi Vows To Further Open China Economy As US Trade Spat Simmers (AFP)
Global Debt Jumped to Record $237 Trillion Last Year
US Deficit to Surpass $1 Trillion Two Years Ahead of Estimates – CBO (BBG)
Global Trade Is Broken, And Trump Is Sparking The Crisis Needed (Morici)
Russian Firms And Rouble Hit Heavily By Trump Sanctions (G.)
Bitcoin, the Biggest Bubble in History, Is Popping – BofA (BBG)
Bots, Good Or Bad, Dominate Twitter Conversation (AFP)
Black Lives Matter Facebook Page With 700,000 Followers Exposed As Fake (G.)
10 New Zealanders Download App On Facebook, Expose 63,714 Friends (G.)
Your Facebook Data Is Only Worth $5.20 On The Dark Web (MW)
Jerome Is The New Janet: Same Old Keynesian Jabberwocky (Stockman)
Yulia Skripal Discharged From Hospital (G.)
No Trace Of Chemical Weapons In Douma, Photos Are Fake – Russia (RT)
“Weapons Of Mass Destruction,” And All (Kunstler)
In 2020, German Society Will Start Collapsing (GEFIRA)
Fishing Boat Caught With Illegal 18-Mile-Long Nets (Ind.)

 

 

“..the fact that the FBI likely seized privileged material between the president and his lawyer is certainly troubling.”

Or is it just a promotion campaign for Comey’s book tour?

Trump Blasts “Disgraceful” FBI Raid Of Lawyer’s Office (ZH)

Update II: As many probably suspected, Trump attorney Michael Cohen is under investigation for possible fraud and campaign finance violations, the Washington Post reported. The FBI has seized documents – including emails, tax documents and other records – related to Cohen’s $130,000 payment to adult film star Stormy Daniels. Meanwhile, President Trump has stepped up to defend his longtime personal attorney, calling the raid “a whole new level of unfairness” and going as far to say it was an “attack on our country, on what we stand for before heading into a meeting with top military leaders.” He also described the special counsel’s team as “the most conflicted group of people I’ve ever met” and said the raid was “a disgraceful situation.”

Trump added that the raid happened after Deputy AG Rod Rosenstein – who is supervising the Mueller probe – approved a referral that Mueller brought to the US Attorney for the Southern District of New York. Jeff Sessions also came under fire as the president bashed him once again for recusing himself from the Mueller probe. Trump also exclaimed that “no one is looking at the other side” referring to Clinton’s 30,000 missing emails. “I have this witch hunt constantly going on,” he said. Of course, Trump has every reason to defend Cohen. As Trump’s longtime lawyer, Cohen knows where the bodies are buried. And the fact that the FBI likely seized privileged material between the president and his lawyer is certainly troubling.

Update: Michael Cohen’s lawyer says the FBI seized privileged communications between Cohen and his clients – a group that notably includes President Trump. And thus, we have what could quite possibly be an ulterior motive for the search. While initial reports suggested the raid on Cohen’s home wasn’t related to the Mueller probe, CBS is reporting that it’s unclear whether the raid was in relation to Stormy Daniels, the Mueller probe or something else. The Wall Street Journal reported that Cohen’s office in Rockefeller Center was searched along with his home and hotel room. The search was executed by the Manhattan US Attorney’s Office which is carrying out an independent investigation in coordination with Mueller. Cohen has of course already turned over his emails to the special counsel.

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For now it’s just words. But his tone could have been different.

Xi Vows To Further Open China Economy As US Trade Spat Simmers (AFP)

Chinese President Xi Jinping pledged on Tuesday to lower car tariffs this year and take other steps to further open the world’s number two economy, indirectly addressing major complaints by the United States in a simmering trade row. Promising a “new phase of opening up”, Xi told an economic forum on the southern island of Hainan that Beijing “does not seek a trade surplus” and hopes to increase imports. He said China will take measures to liberalise automobile investment, significantly reduce tariffs on cars this year and protect intellectual property – all areas that have been high on the list of demands by Washington. “Economic globalisation is an irreversible trend of the time,” Xi told the Boao Forum for Asia.

“The door of China’s opening up will not close, it will only open wider and wider.” Xi pushed measures in areas that have been high on the list of US President Donald Trump’s ire at China. “When a car is sent to the United States from China, there is a Tariff to be paid of 2.5%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%,” Trump tweeted on Monday. “Does that sound like free or fair trade. No, it sounds like STUPID TRADE – going on for years!” Without directly responding to Trump, Xi promised China would lower import tariffs for vehicles and other products, but he gave no details or an exact date for taking the measures.

[..] Xi also pledged specific measures to address IP protection. “This year, we will reorganise the State Intellectual Property Office to strengthen law enforcement,” he told the forum, an Asian version of the World Economic Forum, which draws global leaders to its annual meeting in the Swiss ski resort of Davos. “We encourage Chinese and foreign companies to carry out normal technical exchanges and cooperation to protect the legitimate intellectual property rights of foreign-funded enterprises in China,” he said.

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This will be important: “Ireland and Italy are the only major countries where household debt as a percentage of GDP is below 50%.

Global Debt Jumped to Record $237 Trillion Last Year

Global debt rose to a record $237 trillion in the fourth quarter of 2017, more than $70 trillion higher from a decade earlier, according to an analysis by the Institute of International Finance. Among mature markets, household debt as a percentage of GDP hit all-time highs in Belgium, Canada, France, Luxembourg, Norway, Sweden and Switzerland. That’s a worrying signal, with interest rates beginning to rise globally. Ireland and Italy are the only major countries where household debt as a percentage of GDP is below 50%. Still, the ratio of global debt-to-GDP fell for the fifth consecutive quarter as the world’s economic growth accelerated. The ratio is now around 317.8% of GDP, or 4 percentage points below the high in the third quarter of 2016, according to the IIF. Among emerging markets, household debt to GDP is approaching parity in South Korea at 94.6%.

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And the Fed wants to raise rates?!

US Deficit to Surpass $1 Trillion Two Years Ahead of Estimates – CBO (BBG)

The U.S. budget deficit will surpass $1 trillion by 2020, two years sooner than previously estimated, as tax cuts and spending increases signed by President Donald Trump do little to boost long-term economic growth, according to the Congressional Budget Office. Spending will exceed revenue by $804 billion in the fiscal year through September, jumping from a projected $563 billion shortfall forecast in June, the non-partisan arm of Congress said in a report Monday. In fiscal 2019, the deficit will reach $981 billion, compared with an earlier projection of $689 billion. The nation’s budget gap was only set to surpass the trillion-dollar level in fiscal 2022 under CBO’s report last June.

Deficits are growing as the Trump administration enacted a tax overhaul this year that will lower federal revenue and Congress approved a roughly $300 billion spending increase. The fresh CBO estimates could heighten investor worries as they weigh the potential impact that tariff threats between the U.S. and China may have on the world economy. The report includes new projections for the effects of the tax legislation – saying it will increase the deficit by almost $1.9 trillion over the next 11 years, when accounting for its macroeconomic effects and increased debt-service costs. In December, Congress’s Joint Committee on Taxation had said the tax package would reduce federal revenue by almost $1.1 trillion over a 10-year period.

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The WTO and democracy.

Global Trade Is Broken, And Trump Is Sparking The Crisis Needed (Morici)

[..] It may be time to recognize that China is not a market economy — and is not likely to become one anytime soon. Over time, the WTO membership encompassed increasingly diverse nations. For example, Saudi Arabia joined in 2005, is not a democracy and hardly has a market economy. It’s a monarchy and dependent on oil, its government seeks to rig petroleum markets through OPEC. Nondemocratic, nonmarket economies were admitted on the premise that participation in the system would encourage reforms but as Saudi Arabia demonstrates — similar to Mexico in the 1980s — political and economic progress mostly happens when autocratic regimes are threatened by financial crisis.

For the oil kingdom, it took the U.S. shale boom and prospects of oil permanently depressed at about $65 a barrel to inspire House of Saud to select a progressive crown prince. China joined the WTO in 2002 but has hardly liberalized. Beijing is perfecting Orwellian mechanisms to monitor its citizens’ activities and squash political dissent. President Xi Jinping is enhancing the role of state-owned enterprises, extending state influence over private firms and foreign subsidiaries, and compelling the latter to form joint ventures with Chinese firms and embrace Beijing’s propaganda strategies.

China’s state capitalism clearly creates unfair advantages, imposes trade deficits and job losses on other nations, and has been the target of many unfair trade complaints in the WTO, but Beijing has invested in top flight U.S. lawyers — for example, Steptoe & Johnson. And the activities of its complex mix of state-owned and state-supported private enterprise have proven difficult to discipline under WTO rules, which were written to constrain governments operating in a market context.

From 2011 to 2017, the United States was frustrated in many dispute settlement processes covering nearly 50 industries. In 2016, the administration aides cited a long list of complaints in an effort to block the reappointment of a South Korean judge to the appellate body. Since then, Mr. Trump has been criticized — as he seems to be for every principled action — for continuing this policy by blocking the appointment of other judges to compel reform. It may be time to recognize that China is not a market economy — and is not likely to become one anytime soon. And it is not likely possible to rewrite the WTO rules just to suit its peculiar system.

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Talk is better.

Russian Firms And Rouble Hit Heavily By Trump Sanctions (G.)

The Trump administration’s new sanctions on Russian oligarchs and top government officials began to bite on Monday as the rouble suffered its biggest daily fall in more than three years, the main Russian stock index slumped and investors dumped shares in businesses controlled by Oleg Deripaska. Russia’s currency briefly dipped more than 4% before recovering slightly to trade at 60.42 to the dollar on Monday evening, down 3.8%, its biggest daily percentage fall since January 2015. The value of Deripaska’s aluminium producer Rusal halved in Hong Kong and more than 40% was wiped off the value of his London-listed EN+ as investors took fright at the potential impact.

Shares in Rusal and EN+ had already fallen sharply on Friday in response to the sanctions, which were announced towards the end of trading in London. The Russian stock market also fell heavily. The main RTS index dropped 11%, affecting companies not caught by the sanctions. The price of aluminium jumped as traders worried Rusal would be excluded from supplying the market. The firm, which produces almost 6% of the world’s aluminium, said the sanctions could cause technical defaults on bank loans and some credit obligations. Both Rusal and EN+, Deripaska’s holding company, said the sanctions could be “materially adverse to the business and prospects” of the companies.

Rusal and seven other companies linked to Deripaska were the main targets when the US imposed sanctions designed to punish Vladimir Putin’s inner circle for “malign activity”, including support for Bashar al-Assad’s government in Syria and interfering with the US election in 2016. Rusal sells more than 10% of its aluminium to the US.

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Not my words. But nice graph.

Bitcoin, the Biggest Bubble in History, Is Popping – BofA (BBG)

The greatest bubble in history is popping, according to Bank of America. The cryptocurrency is tracking the downfalls of the other massive asset-price bubbles in history less than one year out from its record, analysts lead by Chief Investment Strategist Michael Hartnett wrote in a note Sunday. The cryptocurrency has fallen more than 65% since peaking in December at $19,511. Bitcoin rose 2.2% to $6,750 on Monday.

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“..accounting for two-thirds of tweets linking to popular websites..”

Bots, Good Or Bad, Dominate Twitter Conversation (AFP)

Automated accounts or “bots” play a big role in disseminating information on Twitter, accounting for two-thirds of tweets linking to popular websites, a study showed Monday. The Pew Research Center report found bots were a major source for diffusing information on news, sports, entertainment and other topics. The researchers found that of all tweeted links to popular websites, 66% were shared by accounts that appeared to be automated rather than human users. While bots have gained attention due to concerns over Russian-sponsored manipulation of social media during the 2016 political campaign and for other hot-button topics, the researchers said they made no effort to distinguish between “good” or “bad” bots.

“The study does not find evidence that automated accounts currently have a liberal or conservative ‘political bias’ in their overall link-sharing behavior,” the researchers wrote. Twitter’s policy on automated accounts, last updated in November, allows bots to operate but with limitations. The policy allows for bots to “automatically broadcast helpful information” or “run creative campaigns that auto-reply to users.” But Twitter’s rules forbid automatic posts about trending topics or using automation “to attempt to influence or manipulate trending topics.” It also bans the use of multiple accounts to generate more activity.

“These findings illustrate the extent to which bots play a prominent and pervasive role in the social media environment,” says Pew researcher Aaron Smith. “Automated accounts are far from a niche phenomenon: They share a significant portion of tweeted links to even the most prominent and mainstream publications and online outlets. Since these accounts can impact the information people see on social media, it is important to have a sense their overall prevalence on social media.”

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“.. upwards of $100,000 in donations, at least some of which was directed to bank accounts registered in Australia.”

One thing: Facebook could have known this.

Black Lives Matter Facebook Page With 700,000 Followers Exposed As Fake (G.)

A high-ranking Australian union official has been suspended amid reports he ran a fake Black Lives Matter Facebook page that solicited donations from the movement’s supporters. CNN reports that Ian MacKay – an official with the National Union of Workers – helped set up and run a Facebook page called Black Lives Matter as well as other domain names linked to black rights. The page, which was removed by Facebook after CNN’s queries, had almost 700,000 followers – more than double the official Black Lives Matter page. MacKay – who is white – did not respond to calls or emails but denied running the page when contacted by CNN. A statement given to the Guardian by the NUW’s national secretary, Tim Kennedy, said the union had launched an investigation into the claims made in the CNN report.

He said the union had suspended “the relevant officials pending the outcome of an investigation”. “The NUW is not involved in and has not authorised any activities with reference to claims made in CNN’s story,” he said. The Guardian understands MacKay and one other NUW official has been suspended. In 2015 Mackay was appointed vice president of the NUW’s general branch and the union’s public office records state that he still holds the position. The investigation quoted sources who said the page may have garnered upwards of $100,000 in donations, at least some of which was directed to bank accounts registered in Australia.

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This happened 4 years ago! And only now Facebook is “..in the process of alerting New Zealanders..”?!

10 New Zealanders Download App On Facebook, Expose 63,714 Friends (G.)

Ten New Zealanders who downloaded an app on Facebook could have exposed up to 63,714 of their compatriots to the data mining tactics of Cambridge Analytica. Facebook has told the country’s privacy commissioner that it is in the process of alerting New Zealanders who were affected by the breach, which occurred when ten users downloaded a personality quiz app. “For New Zealand, we estimate a total of 63,724 people may have been impacted – 10 are estimated to have downloaded the quiz app with 63,714 friends possibly impacted,” said Antonia Sanda, head of communications for Facebook in Australia and New Zealand.

New Zealand’s privacy commissioner, John Edwards, said he was urgently seeking further information from Facebook on how New Zealanders data was used by Cambridge Analytica, and is working closely with his counterparts in the US, UK Australia and Canada to establish the severity and ramifications of the privacy beach. “I think we have some real information deficits that I hope my colleagues in the UK and the US will uncover … I am not sure New Zealanders were ‘targeted’ but I think there is a level of complacency [in New Zealand]. And when you say we’re so far away, we’re only one click away really,” Edwards said.

Edwards deleted his own Facebook account shortly after the revelations regarding Cambridge Analytica broke, and said New Zealanders should seriously consider doing the same and then resetting their profile. “I am actually quite concerned about the drip-feed of information [from Facebook]. These events occurred four years ago. There was knowledge about Cambridge Analytica targeting tactics a good two years ago, yet we are really only seeing Facebook confront this issue now,” Edwards said.

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This, too, is Facebook. Supply and demand.

Your Facebook Data Is Only Worth $5.20 On The Dark Web (MW)

Were you impacted by Cambridge Analytica’s misuse of Facebook data? An estimated 87 million Facebook users will find out Monday whether the group improperly used their data, the social-media company said. All 2.2 billion Facebook users will get see a message on Facebook called “Protecting Your Information,” that lays out which third-party apps have access to your individual Facebook profile. Whether or not you were impacted by the Cambridge Analytica incident, there’s a depressing aspect of many recent privacy violations: The most important parts of your identity can be sold online for just a few dollars.

Consumers have to spend hours of their time — and, sometimes, their own money — when they find out their driver’s license, Facebook “likes” or Social Security number have been exposed to hackers. But those who sell them are making only petty cash. That’s according to a new report from the content marketing agency Fractl, which analyzed all the fraud-related listings on three large “dark web” marketplaces — Dream, Point and Wall Street Market — over several days last month. The “dark web” is part of the internet that people can only access by using special software. To create this report, Fractl accessed the dark web through the browser Tor.

People buy other risky or illegal substances on the dark web, including drugs, pirated content like movies or music and materials that help with scams, including credit-card “skimmers.” Facebook logins can be sold for $5.20 each because they allow criminals to have access to personal data that could potentially let them hack into more of an individual’s accounts. The credentials to a PayPal account with a relatively high balance can be sold on the dark web for $247 on average, the report found. One’s entire online identity, including personal identification numbers and hacked financial accounts, can be sold for only about $1,200 on the dark web, Fractl found. That’s because so much personal information may already available to hackers, after repeated data breaches across a range of industries.

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“..fiscally incontinent government..” Great line.

Jerome Is The New Janet: Same Old Keynesian Jabberwocky (Stockman)

The election of 2016 was supposed to be the most disruptive break with the status quo in modern history, if ever. On the single most important decision of his tenure, however, the Donald has lined-up check-by-jowl with Barry and Dubya, too. That is to say, Trump’s new Fed chairman, Jerome Powell, amounts to Janet Yellen in trousers and tie. In fact, you can make it a three-part composite by adding Bernanke with a full head of hair and Greenspan sans the mumble. The overarching point here is that the great problems plaguing American society – scarcity of good jobs, punk GDP growth, faltering productivity, raging wealth mal-distribution, massive indebtedness, egregious speculative bubbles, fiscally incontinent government – are overwhelmingly caused by our rogue central bank.

They are the fetid fruits of massive and sustained financial repression and falsification of the most import prices in all of capitalism – the prices of money, debt, equities and other financial assets. Moreover, the worst of it is that the Fed is overwhelmingly the province of an unelected politburo that rules by the lights of its own Keynesian groupthink and by the hypnotic power of its Big Lie. So powerful is the latter that American democracy has meekly seconded vast, open-ended power to dominate the financial markets, and therefore the warp and woof of the nation’s $19 trillion economy, to a tiny priesthood possessing neither of the usual instruments of rule.

That is to say, never before in history has a people so completely and abjectly surrendered to an occupying power – even though its ostensibly democratic government already possessed all the votes and all the guns. So it is no exaggeration to say, therefore, that the Fed is an alien state unto itself. That was powerfully symbolized most recently by the appointment of John Williams, a lifetime apparatchik at the San Francisco Fed, to the job of head satrap at the central bank’s Liberty Street outpost in the heart of Wall Street. In the scheme of things, the President of the New York Fed is #2 in the whole central banking apparatus, and as such is immensely more powerful than any Senate Committee Chairman or House Speaker. But Williams’ appointment was not reviewed or passed upon by a single elected official accountable to any voter anywhere in the US of A.

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Hard to tell what the next steps are.

Yulia Skripal Discharged From Hospital (G.)

Yulia Skripal, the daughter of the former Russian spy Sergei Skripal, has been discharged from hospital, according to reports. Just over one month after she and her father were found in Salisbury in Wiltshire after being poisoned with a nerve agent, the BBC reported that Skripal had left Salisbury district hospital. Skripal, 33, flew to the UK on 3 March, the day before she and her father are believed to have been poisoned by a novichok nerve agent. She released a statement on Friday to say her strength was “growing daily”. The BBC reported on Tuesday morning that Skripal had been taken to a secure location, though a hospital spokesman declined to comment on the reports. Christine Blanshard, the hospital’s deputy chief executive, and Lorna Wilkinson, the director of nursing, are to make a statement later on Tuesday morning.

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It’s the White Helmets again.

No Trace Of Chemical Weapons In Douma, Photos Are Fake – Russia (RT)

The Russian military has found no trace of chemical weapons use after searching parts of Syria’s Douma allegedly targeted by an “attack.” Photos of victims posted by the White Helmets are fake, Russia’s Defense Ministry said. Experts in radiological, chemical and biological warfare, as well as medics, on Monday inspected the parts of the Eastern Ghouta city of Douma, where an alleged chemical attack supposedly took place on Saturday, the Russian Reconciliation Center for Syria said in a statement. The specialists “found no traces of the use of chemical agents” after searching the sites, the statement said. The center’s medical specialists also visited a local hospital but found no patients that showed signs of chemical weapons poisoning.

“All these facts show… that no chemical weapons were used in the town of Douma, as it was claimed by the White Helmets,” the statement said, referring to the controversial “civil defense” group that was among the first to report about the alleged attack. “All the accusations brought by the White Helmets, as well as their photos… allegedly showing the victims of the chemical attack, are nothing more than a yet another piece of fake news and an attempt to disrupt the ceasefire,” the Reconciliation Center said. On Saturday, some rebel-linked groups, including the White Helmets, accused the Syrian government of carrying out a chemical attack that, allegedly, affected dozens of civilians in the Eastern Ghouta town of Douma.

The reports have already provoked a wave of outrage in the West, as the US and the EU rushed to put the blame for the incident on Damascus and Moscow. US President Donald Trum hastily denounced the perceived attack as a “mindless” atrocity and a “humanitarian disaster for no reason whatsoever,” warning of a “big price” to be paid. Syria and Russia have dismissed the accusations and called the reports fake news, aimed at helping the extremists and at justifying potential strikes against Syrian forces. In the very early hours of Monday, Israeli fighter jets targeted Syria’s T-4 airbase in Homs province, the Russian Defense Ministry said. Israel has not commented on the strike. Earlier, a number of Israeli officials had called on the US to strike Syria as a response to the reported chemical attack.

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Like is the case with Russia, the Organization for the Prohibition of Chemical Weapons has declared Syria’s chemical weapons arsenal destroyed.

“Weapons Of Mass Destruction,” And All (Kunstler)

[..] a joint mission of the United Nations Human Rights Commission (UNHRC) and the Organization for the Prohibition of Chemical Weapons (OPCW) was called in to supervise the destruction of the Syrian government’s chemical weapons, and certified it as accomplished in late 2014. Yet, poison gas incidents continued – most notoriously in 2017 when President Donald Trump responded to one with a sortie of cruise missiles against a vacant Syrian government airfield. And now another incident in the Damascus suburb of Douma has provoked Mr. Trump to tweetstormed threats of retaliatory violence, just days after he proposed a swift withdrawal from that vexing corner of the world.

Surely by now the American public has developed some immunity to claims of nefarious doings in foreign lands (“weapons of mass destruction,” and all). The operative sentence in that New York Times report is “…Syrian forces hit a suburb of Damascus with bombs that rescue workers said unleashed toxic gas.” Yeah, well, how clear is it that the toxic gas was contained in the bombs, or rather that the bombs dropped by the Syrian military blew up a chemical weapon depot controlled by anti-government Jihadis? Does that hodgepodge of maniacs show any respect for the UN, or the Geneva Convention, or any other agency of international law?

As in many previous such incidents, we don’t know who was responsible — though there is plenty of reason to believe that parties within the US establishment are against Mr. Trump’s idea of getting the hell out of that place, and might cook up a convenient reason to prevent it. Lastly, how is it in Bashar al-Assad’s interests to provoke a fresh international uproar against him and his regime? I’d say it is not the least in his interest, since he is on the verge of putting an end to the awful conflict. He may not be a model of rectitude by Western standards, but he’s not a mental defective. And he has very able Russian support advising him in what has been so far a long and difficult effort to prevent his state from failing — or being failed for him.

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Germany, Japan, China.

In 2020, German Society Will Start Collapsing (GEFIRA)

The next crisis is just a couple of years away, and Germany will be its largest victim. Economies grow, driven by capital and labour. The ECB monetary policy is currently providing the German economy with enough funds, but the country is experiencing a catastrophic lack of youth, and its ageing labour force is not being replaced as a result of which workforce is already in short supply. Since the German population is declining at a staggering pace, before the end of the century there will only be 22 million indigenous Germans left. Currently the working population has already begun to shrink. This drop is still moderate compared to what will come after 2020.

The disappearing of the nation that has just begun will have catastrophic consequences. The German government recorded a large budget surplus last year, a sign that the authorities are not willing or able to invest in their own country. Germany lacks health care professionals, road construction workers and teachers, but allocating more tax money to this sector makes no sense because there are simply no people available. For that reason road construction sites have come to a standstill and road maintenance is postponed. In order to find consumers and labourers, the German industry is investing in new factories abroad.

In the past, the German economy was able to attract employees from Southern, Eastern and Central Europe, but at present the demographic situation in states such as Spain, Portugal, Italy and Poland – which have long provided Germany with workforce – has worsened, so for all practical purposes these sources of labour have all but dried out. Poland for instance has lost a large number of young people to the West European labour market and the loss has not been made good because of extremely low fertility.The financial sector depends on a growing economy, but – apart from periods of temporary increase – there is no significant growth, and banks have to unwind their positions by selling their assets and returning cash to their clients. When the ageing population tries to sell its investments – stocks, obligations or companies – after 2020 they will find a declining working age population that is willing and able to buy these assets. It is already difficult for German business owners to find successors.

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Tragic species, mankind.

Fishing Boat Caught With Illegal 18-Mile-Long Nets (Ind.)

A fishing ship carrying 600 illegal nets stretching up to 18 miles has been seized after it escaped Chinese authorities, while using the flags of eight different countries to evade capture. The vessel, STS-50, had targeted a cod species called Antarctic toothfish that plays an important role in the Southern Ocean ecosystem, according to Indonesia‘s fisheries ministry. Its hundreds of gillnets had walls of fine mesh and could expand to a distance of 18 miles. Gillnetting has been banned in Antarctic waters since 2006 and is described by Australia as posing a “huge risk to almost all marine life, including marine mammals due to [its] indiscriminate nature”.

The use of the nets also harm seabirds including endangered albatrosses, the country’s environment department said on its website in 2011. Indonesia was acting on a request from Interpol when it seized the officially stateless craft. It had eluded authorities by flying eight different flags at different times, including those of Sierra Leone, Togo, Cambodia, South Korea, Japan, Micronesia and Namibia, the ministry said in a statement. Interpol contacted Indonesia last week with a request to investigate the vessel, fisheries minister Susi Pudjiastuti said in the statement. “Navy ship Simeuleu conducted a ‘stop, investigate and detain’ operation on Friday and successfully seized the vessel,” she said.

The STS-50 had previously been detained by China, but escaped and was caught in the port of Maputo in Mozambique before fleeing again, Ms Pudjiastuti said. Prior to its capture off the Indonesian island of Weh in the northwestern province of Aceh, the vessel had also operated under several other names including Sea Breeze, Andrey Dolgov, STD No. 2 and Aida, the statement said. Shipping data in Thomson Reuters Eikon shows the 54m-long, 452-tonne vessel was built in 1985.

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Apr 072018
 


Dorothea Lange Farmers’ supply co-op. Nyssa, Malheur County, Oregon 1939

 

 

It’s Dr. D again. Told you he’s on a roll. He remains convinced America can re-invent itself. If only because it must.

 

 

Dr. D: Herbert Stein’s Law states “What Can’t Go On Forever, Doesn’t.” This is a neat summary of the present trade and currency imbalance. China makes real goods and the U.S. consumes them by typing digits on a keyboard. This is the very definition of what cannot go on forever.

 

• How long do you expect a nation can make nothing and consume everything?

• How long do you expect a nation without manufacturing, without a workforce, and now without a viable military to remain pre-eminent?

• How long does wealth and influence remain in a nation that makes nothing, does nothing, and knows nothing?

 

Reminds me of that other Law: “A fool and his money should be parted as soon as possible”, for to be wealthy, and helpless, and dumb, is not a combination that lasts for very long.

Since China cannot send the U.S. free goods forever, ergo, they won’t. That means slowly or quickly, now or later, they will cut us off. Right now it appears that can never happen, but I assure you it will very soon. And what will the U.S. do then? Actually, that’s very simple: the U.S. will have to close a $600B trade deficit instantly. Roughly, that means the U.S. will no longer import $600B worth of goods and be $600B/year poorer, or $2,000/year per person. Nor is this unusual. History is rife with examples of nations that once were prosperous and were suddenly cut off: Spain and Greece come immediately to mind. So how does this happen?

The Core nation, the trading hub has failed dozens of times in history, from Venice to Holland, Spain to England, and although most of history was on a gold standard, nevertheless the same thing happened: repudiation and devaluation of the currency. That’s why a U.K. Pound is no longer a troy pound of pure silver ($192) and why the U.S. Dollar is no longer 1/20th ounce of gold ($267). So let’s run down how this might unfold.

Like other empires, the U.S. rose to prominence with hard work and industry. Like other empires, this personal and physical industry was the foundation of an effective military. This military eventually stood alone, leaving the U.S. to set the rules of trade, the rules of diplomacy, and the rules of conduct. Like other nations, the U.S. bent those rules in its own favor, both early and late. Like other nations, the natural way to take advantage was to run an overvalued currency, which draws in capital from all trading partners worldwide, creating a 100-year spiral of wealth and influence that seems truly endless.

However math, the cruelest of Mother Nature’s laws, is not fooled. If you bend the rules to create market distortions, those distortions are indeed created. If there were fair trade, a gold standard, a nation that increases their wealth would find its currency rise. A rising currency would dampen manufacturing and efficiency, the gold would flow back out, and the unfair advantage would be corrected. But only in a free market. Any market on Earth has an Army, and that Army’s job day and night is to make sure that unfair advantage does NOT end. Ask Smedley Butler.

 

Mother Nature is never deterred. However long it takes, she waits. Lacking fair trade, an abnormally strong currency does the only other thing it can: destroy the Core nation’s industry, totally and completely. More certain than a nuclear explosion, economics will not miss a single spot until the wrong is righted and the truth is out. At first the low-gain commodity industries go: mining, shipping, smelting; then their sooty kinsmen: heavy rail, ships, ports, transportation.

After that go the lighter industries: manufacturing, stamping, autos, and so on up to mainframes, silicon chips and phones, and with them, their children, manufacturing processes and R&D. However, as London and NY showed, you can forestall currency correction even now by moving market distortions into services and financial engineering. At this point, however, the Core nation has nothing left but Banks, Universities, and the Government/Military, and no underlying economy to support them.

However, what Charles Hugh Smith calls the fiefdoms of monopoly cartels and apparatchiks of the 1% now lead an empty parade, horse-whipping the uncompliant 99% into supporting an economy that exists only in their minds. And then “What can’t go on, doesn’t.” The empire collapses from within, to the total surprise of historians of the 1%, and the total lack of interest of the 99%, for whom it had already collapsed decades before.

And of the other side? Thanks to the overly-high currency of the Core nation, the perimeter nation has an artificially LOW currency. They didn’t do that, because they are by definition small and weak and aren’t using an army to set the rules. The artificially low currency leads to low costs, low labor, high enterprise, and in the mirror image of the Core nation, the constant INCREASE in manufacturing. The increase in wealth, and the addition of commodity goods, then heavy industry, then manufacturing, then R&D. Whose fault is that? Who used a worldwide army to enforce the very rules that gutted their homeland? Not the Vandals; not China. It was Rome; it was D.C.

What is this whole imbalance based on? In our case, the artificially strong dollar, backed by a worldwide U.S. military. So how must it end? With a weak dollar, falling real markets, and a U.S. military returning home.

You say this can’t happen? Yet it must happen. To say otherwise means China will give us free goods for 10,000 years, and the U.S. will get always weaker that whole time. So how does the transition go?

The U.S. financial bulwark cracks, being highest and most based on psychology, not reality, very likely in conjunction to a military failure or withdrawal, as in empire finance, the military and currency are equivalent. Slowly, then rapidly, the tide flows out, the U.S. dollar gets weaker, the Chinese Yuan gets stronger, and the whole process reversed as it should have done years ago.

 


(mind the log scale)

 

Mother Nature isn’t fooled, and those 70 years of repression and manipulation are made up in a few years.

Down on the ground, what happens is not that China shuts off free imports to the U.S. directly, with a political embargo, what happens is the U.S. is seen as a has-been and the U.S. dollar falls in purchasing power on the world market, raising the price of foreign goods in a “free” and “open” marketplace. Lacking manufacturing and the military power to stop it, the U.S. can’t hold off Mother Nature and the laws of physics any more.

Knowing this to be inevitable, how would a nation prepare? For one thing, you would need to kick-start your industry, post-haste. Anything that can be made internally will find its prices stabilize and not rise. Yet before the currency rates are corrected this face overwhelming headwinds. Second, as income will be lost and the borders will be shut off, you need to switch the focus of taxation from income to tariffs, from finance to real goods.

Third, you need to open your pipelines, ports, and infrastructure, and expand the required steel, oil by any means necessary, even armed standoffs. Fourth, you’ll need to shove the culture away from government support and subsidies that will soon disappear, and into self-reliance and productivity. Firth, you’ll need to downsize the government and especially the military, which will and must return home. Any of those platforms sound familiar?

 

Despite what you read, it’s not all bad. Just as “The arrogant people will be brought down, and high and mighty people will be humbled”, “Every valley shall be raised up, and every mountain and hill shall be made low; and the crooked shall be made straight, and the rough places smooth.”

 

This is a master reversal of all manipulations, of all imbalances that have reached extremes. As the U.S. – China trade deficit must balance, we know that Chinese goods must rise. But that also means the cost of production for U.S. goods must fall. This cost-advantage puts Americans back to work just as it did the Chinese, while the rise of the Yuan will make China rich, but less productive.

What’s more, as matters reverse, the U.S. will raise prices on their exports: food and oil, two things China must have and cannot get elsewhere. Agriculture is at an all-time, 1,000 year low and must rise. Stocks and housing are at an all-time high and must fall. In a reversal, the high prices fall, the low prices rise, that’s obvious. That’s what “reversal” means, that’s what “extreme” means.

As for manufacturing, the world is changing fast. Even China is opening “dark” factories that employ no people, only robots. That will be true here as well, which undercuts any labor savings they once had. There’s a few problems, however: robotic mega-factories only work with very large scale of identical goods that can source reliable, high-quality inputs. If oil is too high, and/or shipping or marketing fractures, those factories scale down, retool more, and therefore require more people than presently.

How is China going to have huge robotic mega-factories if half their export market can no longer afford them? If the U.S. and China split the market, aren’t all those factories half the size of present? Since the U.S. will now have low-cost people and raw materials, what advantage does China bring to offset shipping and tariffs? The “market” isn’t uniform. There was worldwide mass-integration of manufacturing between India and England and the world in 1910 too, yet it’s didn’t persist; it changed.

 

One way it can change is to leapfrog China. We hear about how the U.S. is a has-been as we are supporting legacy copper telephones while the 3rd world goes directly to fiber and cell, and this is true. However, China has mainlined on low-price, low-profit, mass-manufacturing. Why would anyone compete with them there? It’s irrational. Build a baseline and let them have all the low-profit, environment-destroying work they want, the U.S. can’t and won’t beat them there.

We can beat them by leapfrogging into technology that’s out there, but no one is revealing yet, things they haven’t done, but Americans are good at doing: innovating, high-tech, medical. Much as I hate high-tech and its panacea as an answer, yet I believe there are goods, ideas out there that can transform the way things work.

Look at the rapid development and uptake of LEDs for example. The patent office is filled with them, and an outsized number are American. We have superconducting maglev, field physics, material science of no-weight foam, color-shifting paint, hyperconducting graphite, and transparent concrete to name a few. All there, all unused. Let’s make an example case in a very large, very quiet investment.

Medical and Biotech are to some extent used up, with overpriced, mass-market pharmaceuticals being rejected by price and form even by the wider population. But that’s so last-century. The new biotech is going to take a blood or DNA sample and synthesize a drug specifically for your blood and DNA. They are going to create another organ, a blood transfusion no one but you can use.

In one way, this may be more expensive, and that’s good for profits, but in another way, they will work for you, much better and guaranteed, and therefore fix your health faster, spare you useless drugs, bad side effects, and actually work, and therefore be cheaper. What does it take to make them? A complete revolution in drug manufacturing. Multi-billion dollars’ worth of equipment, extremely unique development and patents, a 20 year head start.

 

Could you sell such a thing to the Chinese? You bet. Could they get off retail manufacturing and scoop us on it? Not a chance. So you see how such a thing could happen, even with a U.S. dollar falling and a hard readjustment ahead. And that’s just one.

If boutique and robotic goods are the new industries, what do we do with 200 million unemployed? We won’t have 200 million. That’s a consequence of the distorted extreme of our finance, our centralization, our currency. For one thing, we have only 100 million now and a lower dollar will definitely restore the competitive advantage of highly-productive U.S. workers. At the same time, if work requires fewer workers, we will find a solution. Why?

Because you can’t have 200 million unemployed. Not even 100 million. The resulting inequity and income disparity can and has caused a revolution. Faced with that, any nation will adjust because they must or perish. As difficult as Americans can be, they are a practical people above all. This has happened to dozens of nations in the past: Spain, France, Germany, England, China, Japan, and they all still exist. Things rotated out in the big wheel of time. New things were made and the old ones faded away, and we will too.

We’re going back to being just one of many nations, and a fair and productive one too. There are ways and we will find them. How can I be so sure? Because “What Can’t Go On Forever, Doesn’t,” and it won’t this time either.

 

 

Aug 302017
 
 August 30, 2017  Posted by at 8:39 am Finance Tagged with: , , , , , , , , , ,  2 Responses »


Elliott Erwitt Crowd at Armistice Day Parade, Pittsburgh 1950

 

The Economy Minus Houston (Slate)
Harvey Didn’t Come Out Of The Blue (Naomi Klein)
The US Cities with the Biggest Housing Bubbles (WS)
“Crazy” House Prices Are Firing Up New Zealand’s Voters (BBG)
China’s $2 Trillion of Shadow Lending Throws Focus on Rust Belt (BBG)
Homeowner’s Lawsuit Says Wells Fargo Charged Improper Mortgage Fees (R.)
The Battle for India’s $45 Billion Gold Industry Has Begun (BBG)
US Defense Boost May Unravel Into a $65 Billion Cut (BBG)
England’s Fire Services Suffer 25% Cut To Safety Officers Numbers (G.)
UK’s Leading Companies’ Pension Deficit Rises To 70% Of Their Profits (G.)
We Need To Nationalise Google, Facebook and Amazon (G.)
As Poverty Surges in Italy, Five Star Propose a ‘Citizens’ Income’ (BBG)
Why Every European Country Has A Trump Or Sanders Candidate (Drake)

 

 

A huge number of people will not be able to rebuild, because they lack insurance. And in many cases, rebuilding on the same -flood prone- spot wouldn’t be a good idea to begin with. But where will the people go?

Time to stop talking about the damage to the economy, and focus on the people.

The Economy Minus Houston (Slate)

Houston, America’s fourth-largest city, has a massive, diversified economy. Sure, New Orleans sits near the mouth of the mighty Mississippi River and is an important entrepôt and site for export of raw materials, agricultural commodities chemicals, and petroleum products. But Houston is a larger, busier, and far more important node in the networked economy. Economies derive their power and influence from their connections to other cities, countries, and markets. And Houston is one of the more connected. It is one of the global capitals of the energy and energy services industries. Yes, there’s a degree to which consumption and other economic activity that is forestalled or foregone during a flood is consumption and economic activity deferred. And cleanup efforts tend to be additive to local economies. But in today’s economy, a lot of value can easily be destroyed very quickly.

With only a small portion of the housing stock carrying flood insurance, billions of dollars in property will simply be destroyed and not immediately replaced. People who get paid by the hour, or who work for themselves, won’t be able to make up for the income they’re losing a few weeks from now. Hotel rooms and airplane seats are perishable goods—once canceled, they can’t simply be rescheduled. Refineries won’t be able to make up all the time offline—they can’t run more than 24 hours per day. And given that supply chains rely on a huge number of shipments making their connections with precision, the disruption to the region’s shipping, trucking, and rail infrastructure will have far-reaching effects. If you’re a business in Oklahoma or New Mexico, there’s a pretty good chance the goods you are importing or exporting pass through the Port of Houston.

Read more …

Sorry, Naomi, but you can’t take individual events and blame them on cllmate change. The system is far too complex for that. We must stick to science, not lose ourselves in assumptions.

Harvey Didn’t Come Out Of The Blue (Naomi Klein)

Now is exactly the time to talk about climate change, and all the other systemic injustices — from racial profiling to economic austerity — that turn disasters like Harvey into human catastrophes. Turn on the coverage of the Hurricane Harvey and the Houston flooding and you’ll hear lots of talk about how unprecedented this kind of rainfall is. How no one saw it coming, so no one could adequately prepare. What you will hear very little about is why these kind of unprecedented, record-breaking weather events are happening with such regularity that “record-breaking” has become a meteorological cliche. In other words, you won’t hear much, if any, talk about climate change.

This, we are told, is out of a desire not to “politicize” a still unfolding human tragedy, which is an understandable impulse. But here’s the thing: every time we act as if an unprecedented weather event is hitting us out of the blue, as some sort of Act of God that no one foresaw, reporters are making a highly political decision. It’s a decision to spare feelings and avoid controversy at the expense of telling the truth, however difficult. Because the truth is that these events have long been predicted by climate scientists. Warmer oceans throw up more powerful storms. Higher sea levels mean those storms surge into places they never reached before. Hotter weather leads to extremes of precipitation: long dry periods interrupted by massive snow or rain dumps, rather than the steadier predictable patterns most of us grew up with.

The records being broken year after year — whether for drought, storm surges, wildfires, or just heat — are happening because the planet is markedly warmer than it has been since record-keeping began. Covering events like Harvey while ignoring those facts, failing to provide a platform to climate scientists who can make them plain, all while never mentioning President Donald Trump’s decision to withdraw from the Paris climate accords, fails in the most basic duty of journalism: to provide important facts and relevant context. It leaves the public with the false impression that these are disasters without root causes, which also means that nothing could have been done to prevent them (and that nothing can be done now to prevent them from getting much worse in the future).

It’s also worth noting that the Harvey coverage has been highly political since well before the storm made landfall. There has been endless talk about whether Trump was taking the storm seriously enough, endless speculation about whether this hurricane will be his “Katrina moment” and a great deal of (fair) point-scoring about how many Republicans voted against Sandy relief but have their hands out for Texas now. That’s politics being made out of a disaster — it’s just the kind of partisan politics that is fully inside the comfort zone of conventional media, politics that conveniently skirts the reality that placing the interests of fossil fuel companies ahead of the need for decisive pollution control has been a deeply bipartisan affair.

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Wolf Richter with a whole series of US cities, all with record new highs. How people can keep saying there is no bubble in the US, I don’t know.

The US Cities with the Biggest Housing Bubbles (WS)

For the good folks who hope fervently that the Fed doesn’t have reasons to raise rates or unwind QE because there isn’t enough inflation, here is an update on one aspect of inflation – asset price inflation, and particularly house price inflation – where the value of your hard-earned dollars has collapsed over a given number of years to where it takes a whole lot more dollars to pay for the same house. So here are some visuals of amazing house price bubbles, city by city. Bubbles really aren’t hard to recognize, if you want to recognize them. What’s hard to predict accurately is when they will burst. Normally the Fed doesn’t want to acknowledge them. But now it has its eyes focused on them.

The S&P CoreLogic Case-Shiller National Home Price Index for June was released today. It jumped 5.8% year-over-year, not seasonally adjusted, once again outpacing growth in household incomes, as it has done for years. At 192.6, the index has surpassed by 5% the peak in May 2006 of crazy Housing Bubble 1, which everyone called “housing bubble” after it imploded (data via FRED, St. Louis Fed). The Case-Shiller Index is based on a rolling-three month average; today’s release was for April, May, and June data. Instead of median prices, it uses “home price sales pairs,” for example, a house sold in 2011 and then again in 2017. Algorithms adjust this price movement and add other factors. The index was set at 100 for January 2000. An index value of 200 means prices have doubled in the past 17 years, which is what most of the metros in this series have accomplished, or are close to accomplishing.

Read more …

There is no easy way out for New Zealand.

“Crazy” House Prices Are Firing Up New Zealand’s Voters (BBG)

As ownership falls to the lowest since 1951, housing affordability is firing up voters ahead of New Zealand’s general election on Sept. 23. The government is under attack for failing to respond to price surges that have forced many to ditch their property dreams. New Labour leader Jacinda Ardern has made housing a key issue, helping restore the main opposition party in opinion polls and leaving the election too close to call. “The government’s response has been too slow and inadequate for many because they’ve seen house prices rising very fast,” said Raymond Miller, professor of politics at Auckland University. “Some voters might well have a feeling of being let down by what they see as indifference to their plight. It’s the government’s Achilles’ heel.” Prices across New Zealand have risen 34% the past three years, fanned by record immigration, historically low interest rates and a supply shortage.

That’s seen the portion of owner-occupied properties slump to 63% of the nation’s 1.8 million homes in the second quarter, down from a peak of 74% in the early 1990s. In response, the ruling National Party has made more land available for development and increased deposit grants to first-home buyers. But it’s done little to curb immigration that’s added 201,000 to the population the past three years, while a policy of taxing profits on investment properties sold within two years of purchase has been criticized as too mild. Labour is pledging a more aggressive solution. It’s promising to ban property sales to non-resident foreigners who it says have fanned price pressures, and will extend the period in which investors will be subject to tax to five years. It wants to curb immigration, and plans to build 100,000 homes over 10 years and sell them at affordable prices.

“We’re going to get the government back into the business of building large numbers of affordable homes for first-home buyers like governments used to in this country,” Labour’s housing spokesman Phil Twyford said in a Television New Zealand interview. “The government has had nine years and they’ve just tinkered around the edges.” Many New Zealanders are motivated to save for a home where they can bring up a family just as their parents and grandparents did. National will be wary that disillusioned home-buyers may turn their back on the party, thwarting its efforts to win a rare fourth term. No party has won an outright majority since the South Pacific nation introduced proportional representation in 1996. National had 44% support in a poll published Aug. 17. Labour had 37% but could get across the line with the additional support of ally the Green Party, which had 4%, and New Zealand First, which got 10%.

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I think the estimates are still low.

China’s $2 Trillion of Shadow Lending Throws Focus on Rust Belt (BBG)

Regional banks in China’s rust-belt provinces are driving the rapid expansion of shadow banking in the country, fueling a web of informal lending that poses wider risks to the financial system, according to a study by UBS. Smaller rust-belt banks like Bank of Tangshan Co. and Baoshang Bank have been using products such as trust beneficiary rights and directional asset-management plans to hide the true state of their bad loans and circumvent lending restrictions, the study by analyst Jason Bedford said. Others have been using the shadow loan instruments to diversify away from lending in their struggling home provinces, exposing themselves to a much wider spectrum of Chinese corporate risk in the event of a default, according to the report. By analyzing 237 Chinese banks, many of them small and unlisted regional lenders, Bedford casts a new spotlight on underground financing and the risks it poses to the nation’s $35 trillion banking industry.

Shadow loans grew almost 15% to 14.1 trillion yuan ($2.3 trillion) by December from a year earlier, equal to about 19% of economic output, he estimates. “This is a sleeper issue,” Bedford wrote. “The remarkable level of concentration in regional banks in rust-belt region banks, combined with evidence that these assets are increasingly being used to roll over loans to existing borrowers as well as being swapped between banks without a clear transfer of risk are alarming.” Accounting for this financing, Chinese banks’ nonperforming loans could be three times higher than the official published level, he said. By recording such lending under “investment receivables” rather than “loans” on their financial statements, banks were able to disguise what is in effect lending, to get around regulatory lending curbs or heavy reliance on wholesale funding.

Such financial engineering also enabled some lenders to overstate their capital adequacy ratios, understate nonperforming loans and reduce provision charges. [..] Bank of Tangshan is an unlisted lender in the struggling northeast city of the same name, which produces more steel than any other city around the world. The firm’s shadow loans grew 86% last year to a size equal to 308% of its formal book, the highest of any bank in China, according to Bedford’s report. Still, the bank reported a bad-loan ratio of just 0.05% last year, the lowest of any bank in UBS’ analysis, exemplifying the “distortion” shadow loan books create in assessing asset quality, Bedford said.

Read more …

How is this NOT criminal intent? Where are the indictments?

Homeowner’s Lawsuit Says Wells Fargo Charged Improper Mortgage Fees (R.)

A homeowner has filed a lawsuit accusing Wells Fargo of improperly charging thousands of customers nationwide to lock in interest rates when their mortgage applications were delayed. Filed on Monday in San Francisco federal court, the lawsuit said Wells Fargo managers pressured employees to blame homeowners for the delays, sometimes by falsely stating that paperwork was missing, so homeowners could be stuck with extra fees. Wells Fargo Spokesman Tom Goyda said the bank is reviewing past practices on rate lock extensions and will take steps for customers as appropriate. The lawsuit, which will request the court grant class action status, comes as Wells Fargo is trying to recover from a scandal last year when the bank was fined for opening accounts for customers without their authorization in order to boost sales figures.

Last month, a new lawsuit accused it of charging several hundred thousand borrowers for auto insurance they did not request. Monday’s lawsuit accuses the bank of violating state and federal consumer protection laws, including the U.S. Real Estate Settlement Procedures Act and the U.S. Truth in Lending Act. Earlier this month, Wells Fargo disclosed that the Consumer Financial Protection Bureau was investigating the fees the company charged to lock in interest rates for delayed mortgage loans. In a securities filing, the bank said it was working with regulators to see if customers had been harmed by the fees. Interest rate locks are guarantees by a lender to lock in a set interest rate, usually for several weeks, while a loan is processed. If the rate lock expires before a loan closes, lenders often cover the cost of extending the lock if the delay was their fault.

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Modi taking people’s incomes away. Reforms. Here’s thinking India is nowhere near ready for this.

The Battle for India’s $45 Billion Gold Industry Has Begun (BBG)

India’s past and future are colliding in Anand Ghugre’s family jewelry shop in Mumbai. “We still operate the way my father did for 50 years,” said Ghugre, 52, explaining that transactions were typically in cash and were not always recorded. “For small jewelers and the unorganized sector, most of our sales happen through personal connections. Sometimes they don’t want bills, but the jewelers can’t say no to them.” That way of doing business is under threat as the world’s second-largest gold market faces Prime Minister Narendra Modi’s campaign to bring India’s informal economy to book. About three quarters of the estimated $45 billion of the precious metal that is traded in the country each year makes its way through thousands of family-run jewelry shops that have catered for centuries to the nation’s love of gold.

Modi’s financial reforms, including demonetization and a new goods and services tax, combined with a younger generation that shops online, may usher in a wave of takeovers and mergers by big state-wide and national chains as small shops are swallowed up or close. “The one story that we hear is that the business is becoming problematic for smaller jewelers,” said Chirag Sheth at London-based precious metals consultancy Metals Focus. “The bigger jewelers have deeper pockets, they have larger shops, better designs and better margins. It is very difficult for a smaller guy to compete.” Modi in November banned higher denomination notes to bring unaccounted cash back into the system and introduced tougher proof of identity for purchases, capped the amount of cash used in transactions and topped it off with the uniform goods and services tax last month.

An overhaul of the fragmented industry is also on the cards with the government said to be planning a new policy on gold that will bolster confidence among consumers, where the gifting of gold at weddings and festivals or its purchase as a store of value are deeply held traditions. Fixing quality standards and allowing supply chains to be easily tracked are ways to enhance trust.

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Well, we can’t have that, can we?

US Defense Boost May Unravel Into a $65 Billion Cut (BBG)

U.S. national security funding may be slashed by about $65 billion in January as lawmakers forge ahead with a spending plan that collides with a budget ceiling under a six-year-old law. A $614 billion bill passed by the U.S. House in H.R. 3219 is caught in a political vise: President Donald Trump and most lawmakers want to see increases in Pentagon spending, yet that intention isn’t backed up by an agreement to undo the 2011 Budget Control Act. Without another budget agreement in place, the Defense Department faces automatic across-the-board cuts of 9% to 10% starting in mid-January, according to Chris Sherwood, a Pentagon spokesman. That’s about $65 billion, the Congressional Budget Office estimates.

Enforcement of the act’s caps are returning for the coming fiscal year that begins Oct. 1 after they were adjusted in fiscal 2016 and 2017 for discretionary domestic and national security spending. That was the third time since the act passed that the limits were adjusted, in those cases for both defense and domestic discretionary spending. Trump wants to cut domestic spending while adding to defense, a proposal opposed by Democrats and many Republicans. If the mandatory cuts go ahead, they would be leveled across thousands of Pentagon programs. The White House would have the option of exempting military personnel funds from the automatic cuts, known as sequestration. Such cuts are likely because all of the pending congressional defense bills so far propose busting the cap of $549 billion in national security spending for fiscal year 2018, or $522 billion for the Pentagon alone.

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Cameron and Osborne and May have gutted the entire country.

England’s Fire Services Suffer 25% Cut To Safety Officers Numbers (G.)

Fire services in England have lost more than a quarter of their specialist fire safety staff since 2011, a Guardian investigation has found. Fire safety officers carry out inspections of high-risk buildings to ensure they comply with safety legislation and take action against landlords where buildings are found to be unsafe. Figures released to the Guardian under the Freedom of Information Act showed the number of specialist staff in 26 fire services had fallen from 924 to 680, a loss of 244 officers between 2011 and 2017. Between 2011 and 2016, the government reduced its funding for fire services by between 26% and 39%, according to the National Audit Office, which in turn resulted in a 17% average real-terms reduction in spending power.

Warren Spencer, a fire safety lawyer, said the figures showed a “clear culture of complacency” about fire safety. “The government has tended to take the view that fewer people are dying in fires, fires occur less frequently, and therefore there’s no need to invest in fire prevention. So there’s been a total brain drain in fire safety knowledge and many experienced specialist officers have left the force,” he said. “But fire safety officers have been saying to me for years that one day, there would be a big fire in a multiple occupancy building, which would make everyone sit up and take notice of the lack of fire safety provision. Tragically, that’s what happened at Grenfell Tower.”

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As dividends keep being paid out.

UK’s Leading Companies’ Pension Deficit Rises To 70% Of Their Profits (G.)

The combined pension deficit of FTSE 350 companies has risen to £62bn, accounting for 70% of their profits. The deficit as a proportion of profits recorded for 2016 is higher than at any time since the financial crisis, following a £12bn rise since 2015. The 25% increase came in a second year of comparatively low profit for UK publicly listed companies. The deficit is the gap between the expected liabilities of pension commitments and the funds that companies hold to pay for pensions. While many have set aside billions in recent years, a trend towards rising life expectancy, combined with lower expectations for returns on investment, has put more pressure on pension schemes and seen the deficit grow. Actuaries have warned that even a slight fall in bond yields would see the pension deficit of the plcs outstrip their aggregate profits by 2019.

The figures, in a report from the actuarial consultancy Barnett Waddingham, show the deficit has risen sharply as a proportion of profits in the past five years, from 25% of the £214bn pre-tax profits of the FTSE 350 in 2011. Even in the aftermath of the financial crisis in 2009, the deficit was lower at 60%. For 21 plcs, the pensions shortfall is more than 10% of their value, which Barnett Waddingham described as alarming. However, the actuaries said recent data suggesting years of austerity had seen gains in UK life expectancy grind to a halt could provide “welcome respite for companies”. It showed that after a century in which the rate of increase in life expectancy had accelerated, the average age of death was levelling off at 79 for men and 83 for women.

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A discussion that must take place. But the political climate doesn’t lean towards nationalization. Besides, how do you nationalize companies that operate in many dozens of countries?

We Need To Nationalise Google, Facebook and Amazon (G.)

At the heart of platform capitalism is a drive to extract more data in order to survive. One way is to get people to stay on your platform longer. Facebook is a master at using all sorts of behavioural techniques to foster addictions to its service: how many of us scroll absentmindedly through Facebook, barely aware of it? Another way is to expand the apparatus of extraction. This helps to explain why Google, ostensibly a search engine company, is moving into the consumer internet of things (Home/Nest), self-driving cars (Waymo), virtual reality (Daydream/Cardboard), and all sorts of other personal services. Each of these is another rich source of data for the company, and another point of leverage over their competitors.

Others have simply bought up smaller companies: Facebook has swallowed Instagram ($1bn), WhatsApp ($19bn), and Oculus ($2bn), while investing in drone-based internet, e-commerce and payment services. It has even developed a tool that warns when a start-up is becoming popular and a possible threat. Google itself is among the most prolific acquirers of new companies, at some stages purchasing a new venture every week. The picture that emerges is of increasingly sprawling empires designed to vacuum up as much data as possible. But here we get to the real endgame: artificial intelligence (or, less glamorously, machine learning). Some enjoy speculating about wild futures involving a Terminator-style Skynet, but the more realistic challenges of AI are far closer.

In the past few years, every major platform company has turned its focus to investing in this field. As the head of corporate development at Google recently said, “We’re definitely AI first.” All the dynamics of platforms are amplified once AI enters the equation: the insatiable appetite for data, and the winner-takes-all momentum of network effects. And there is a virtuous cycle here: more data means better machine learning, which means better services and more users, which means more data. Currently Google is using AI to improve its targeted advertising, and Amazon is using AI to improve its highly profitable cloud computing business. As one AI company takes a significant lead over competitors, these dynamics are likely to propel it to an increasingly powerful position.

What’s the answer? We’ve only begun to grasp the problem, but in the past, natural monopolies like utilities and railways that enjoy huge economies of scale and serve the common good have been prime candidates for public ownership. The solution to our newfangled monopoly problem lies in this sort of age-old fix, updated for our digital age. It would mean taking back control over the internet and our digital infrastructure, instead of allowing them to be run in the pursuit of profit and power. Tinkering with minor regulations while AI firms amass power won’t do. If we don’t take over today’s platform monopolies, we risk letting them own and control the basic infrastructure of 21st-century society.

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Of course the headline said “populists”… Fixed that.

As Poverty Surges in Italy, Five Star Propose a ‘Citizens’ Income’ (BBG)

“Poverty will be center stage in the campaign,” says Giorgio Freddi, professor emeritus of political science at the University of Bologna. The populist Five Star Movement “has imposed the issue on national politics. The mainstream parties are being forced to play catch-up.” Five Star is a fast-growing group fueled by anger at the old political class. Three years ago the movement rode economic concerns to power in Livorno, ending 70 years of rule by the Communists and other left-leaning parties. The new mayor, a former engineer named Filippo Nogarin, introduced a €500 ($590) monthly subsidy to the disadvantaged. That idea is a key plank in Five Star’s national platform, and the group’s leaders have promised to quickly implement such a program if they take power. Beppe Grillo, the former television comedian who co-founded the party, says fighting poverty should be a top priority.

A basic income can “give people back their dignity,” Grillo’s blog declared in April. “The current government is ignoring millions of families in difficulty.” The Five Star program echoes universal basic income schemes being considered around the world. Finland in January started an experiment in which 2,000 unemployed people receive a stipend of €560 per month. And the Canadian province of Ontario this summer began trials in three cities in which individuals can get almost C$17,000 ($13,600) per year. Five Star’s version would give Italians below the poverty line as much as €780 a month. Recipients must perform several hours of community service each week and actively seek work, and they’d be cut off after rejecting three job offers. Five Star says the plan would cost €17 billion a year, funded in part by spending cuts as well as tax hikes on banks, insurance companies, and gambling.

Opinion polls show Five Star neck and neck with the Democratic Party, led by ex-Premier Matteo Renzi, and a center-right bloc including Forza Italia, the party of former Premier Silvio Berlusconi. To keep Five Star from dominating the debate, Prime Minister Paolo Gentiloni, a Renzi ally, has approved a less ambitious plan he calls “the first universal tool against poverty.” The scheme, dubbed “inclusion income,” would give 1.7 million people as much as €485 a month as long as they’re actively seeking work, at a cost of about €2 billion a year. With industrial output down by about 25% from 2008 to 2013 in Italy’s worst postwar recession, either plan could be helpful, says Giuseppe Di Taranto, a professor of economic history at Rome’s Luiss University. “We lost lots of jobs, and poverty has risen so much that we’ve got to experiment.”

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More of the same. But the anti-EU, anti-globalization mood is obvious: “77% of the people questioned in a recent poll could see no advantage to them at all from the country’s membership in the European Union.” While Macron and Merkel are planning a lot more EU. And claiming that the EU is doing fine.

Why Every European Country Has A Trump Or Sanders Candidate (Drake)

As a result of the methods used to promote globalization, the consequences for the West have been tragic. Work is becoming increasingly uncertain and insecure, or it is in the process of disappearing altogether. It would take Veblen’s talents for social satire, which are unsurpassed in all of American literature, to depict with the essential exactitude of artistic synthesis how far the United States has fallen away from democratic grace, the country’s dramatically widening gap between the haves and the have-nots being what it is. Clearly, we are on the wrong course. What the robotics revolution, now at an incipient stage, will do to further diminish opportunities for Western peoples to work can be easily imagined, if the economic imperative of corporate capitalism is the rule to go by.

The same desolating trends can be seen in Europe, where people increasingly regard the European Union as a Trojan horse. The economic elites and their political front-men responsible for this image-challenged contraption lose public support with each new poll. The people by and large blame the European Union and the other accessories of globalization for their worsening standard of living. When informed by the establishment media that thanks to globalization Europe has never been more prosperous and peaceful, Europeans in historic numbers are reacting with disbelief. Their deepening sense of betrayal propels the surge of populism that defines the politics of Europe today. Arguments long-settled in favor of deregulation, liberalization, open borders, and other globalization watchwords have been reopened.

The constituency is growing for a politics that puts the well-being of Europeans first. Political measures calling for the protection of European jobs and cultures have gained a following unforeseen prior to 2008. In Italy, for example, 77% of the people questioned in a recent poll could see no advantage to them at all from the country’s membership in the European Union. 64% of them expressed hostility toward it. Eight Italian businesses out of 10 can find nothing positive to say about the European Union. It is seen to be a creature of the banks and the big financial houses. As public relations disasters go, this one has unfolded on an epic scale as the underlying populations, long left out of consideration by the economic elites, have begun to sense the fate their masters have in store for them.

Leaving underlying populations out of consideration was a special feature of the planning that went into globalization. They have been voiceless. In America, Trump gave them a voice, and they responded to him with their political support. It did not matter that he came before them without a plan for their deliverance. That he came to them at all mattered. He understood the depth of the anger and alienation in America against a status quo personified by his opponent, Hillary Clinton, whose repeated and munificently rewarded speeches before the captains of finance on Wall Street effectively branded her as the safe candidate for all who wanted to leave existing economic arrangements fundamentally undisturbed.

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Jul 152017
 


Hieronymus Bosch The Conjurer 1502

 

Big Banks Continue Winning Streak, With Street at Least (BBG)
‘It’s Almost An Embarrassment Being An American’ – Jamie Dimon (G.)
US House Backs Massive Increase In Defense Spending (R.)
US Deficits To Jump $248 Billion Over Next Two Years Due To Tax Shortfall (R.)
We Do These Things Because They’re Easy (CHS)
The New Silk Road Will Go Through Syria (Escobar)
One Of Worst Droughts In Decades Devastates South Europe Crops (R.)
People Not Amused by EU Efforts to “De-Cash” their Lives (DQ)
Just 13% of Greeks Trust Their Government (K.)
World’s Large Carnivores Being Pushed Off The Map (BBC)

 

 

What happens when markets don’t function. Manipulation is the name of the game.

Big Banks Continue Winning Streak, With Street at Least (BBG)

U.S. bank earnings have kicked off without any tumult. Investors should be grateful for that increasing sense of dependability, though they appear to be looking for more. JPMorgan Chase, Wells Fargo, Citigroup and PNC Financial Services each delivered second-quarter results on Friday that topped Wall Street’s expectations. On a measure of earnings per share, each bank has improved its respective streaks of beating or meeting analysts’ estimates:Reliability Factor The U.S. banks that reported earnings on Friday lengthened their streak of surpassing or matching expectations which, to be fair, are managed by bank executives:

The business of fixed-income trading, which has been a bright spot over the past year, has received outsize attention as it has fallen from grace after a long stretch of low volatility and tepid volumes, as expected. Instead, its quarterly gyrations should be accepted by shareholders just as they withstand changes in the weather, according to JPMorgan’s chairman and CEO Jamie Dimon. He has a point – the diversity of JPMorgan combined with the size of its overall corporate and investment bank, which houses the fixed-income trading business, gives the bank a level of flexibility. That defense might not stick if JPMorgan’s other businesses weren’t performing, but they are. The bank posted quarterly net income of $7 billion in the three months ended June 30.

That was its biggest haul ever, driven in part by a significant jump in net interest income, a direct result of the Federal Reserve’s rate increases. Its efforts to bulk up asset and wealth management, where revenues have roughly doubled since 2006, have borne fruit. Net income for the business climbed 20% compared with results in the same period last year to a record $624 million. And for now, despite broad concerns about auto and credit card loans, there’s no need to worry about widespread cracks. The bank’s so-called net charge-off rate, which measures delinquencies, remains minimal. [..] Bank stocks have rallied in part because the expected growth in their respective earnings per share, or EPS, in 2018 far exceeds that of the benchmark index:

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Because you get to make record profits while others only get deeper into debt? Is that what Dimon is talking about?

‘It’s Almost An Embarrassment Being An American’ – Jamie Dimon (G.)

JP Morgan just had the most profitable 12 months ever for a US bank – but it wasn’t enough for Jamie Dimon, the bank’s boss. “It’s almost an embarrassment being an American traveling around the world and listening to the stupid shit Americans have to deal with in this country,” Dimon told journalists after the bank released its latest quarterly results on Friday. The world’s largest bank reported a profit of $7.03bn for the second quarter, 13% higher than last year. It has made $26.5bn over the past 12 months, a record profit for a US bank. But Dimon, who last year turned down Donald Trump’s offer to become treasury secretary, seemed more concerned about low rates of growth in the US and the health of the American body politic.

He blamed bad policy for “holding back and hurting the average American” and financial journalists for concentrating on the bank’s trading results when they should be focusing on policy. “Who cares about fixed-income trading in the last two weeks of June? I mean, seriously,” Dimon said after a reporter asked about the health of the bonds markets. “That is the weather,” he said of changes in the markets. “It goes up and down, this and that, and that’s 80% of what you guys focus on.” Dimon said financial journalists would be better off concentrating on the “bad policies” that are hurting average Americans. “It’s almost an embarrassment being an American traveling around the world and listening to the stupid shit Americans have to deal with,” he said. “At one point, we would have to get our act together, do what we’re supposed to do to the average American.”

[..] “We need infrastructure reform,” he said. “We need corporate tax reform. We need better skills and education. If we don’t focus on these things, we are hurting average Americans every day. “The USA has to start to focus on policy which is good for all Americans, and that is regulation, tax, education, we have to get those things done. You guys [journalists] should be writing a lot more about that stuff. That is holding it back and hurting the average American citizen if we don’t do it.

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Or is Dimon embarrassed over this?

US House Backs Massive Increase In Defense Spending (R.)

The U.S. House of Representatives passed its version of a massive annual defense bill on Friday, leaving out controversial amendments on transgender troops and climate policy but backing President Donald Trump’s desire for a bigger, stronger military. The vote was 344-81 to pass the National Defense Authorization Act (NDAA), which sets military policy and authorizes up to $696 billion in spending for the Department of Defense. Underscoring bipartisan support for higher defense spending in Congress, 117 Democrats joined 227 Republicans in backing the measure. Only eight Republicans and 73 Democrats voted no. But the measure faces more hurdles before it can become law, notably because it would increase military spending beyond last year’s $619 billion bill, defying “sequestration” caps on government spending set in the 2011 Budget Control Act.

Trump wants to pay for a military spending increase by slashing nondefense spending. His fellow Republicans control majorities in both the House and Senate, but they will need support from Senate Democrats, who want to increase military spending, for Trump’s plans to go into effect. The House NDAA also increases spending on missile defense by 25%, adds thousands more active-duty troops to the Army, provides five new ships for the Navy and provides a 2.4% salary increase for U.S. troops, their largest pay raise in eight years. And it creates a new Space Corps military service, pushed by lawmakers worried about China and Russia’s activities in space, but opposed by Defense Secretary Jim Mattis.

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Oh well, money’s cheap after all.

US Deficits To Jump $248 Billion Over Next Two Years Due To Tax Shortfall (R.)

The budget deficit for President Donald Trump’s first two years in office will be nearly $250 billion higher than initially estimated due to a shortfall in tax collections and a mistake in projecting military healthcare costs, budget chief Mick Mulvaney reported on Friday. In a mid-year update to Congress, Mulvaney, director of the Office of Management and Budget, revised the estimates supplied in late May when the Trump administration submitted its first spending plan. Since then, Mulvaney said, the deficit projected for the current fiscal year has increased by $99 billion, or 16.4%, to $702 billion. For 2018, the deficit will be $149 billion more than first expected, increasing by 33% to $589 billion.

The figures come as the administration is facing widespread doubts among economists and analysts that it can erase government deficits largely by boosting economic growth and changing laws like the Affordable Care Act. ACA reform is facing a difficult path in Congress, and the Congressional Budget Office on Thursday said the administration’s growth and deficit reduction plans were optimistic. The letter from Mulvaney said the bulk of the problem this year and next stems from lower-than-expected tax collections. Individual and corporate income taxes and other collections for this year are expected to be $116 billion less than the administration anticipated in May. Tax receipts in 2018 are expected to be $140 billion less than initially estimated.

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A reference to JFK. Our next discovery will be that debt is a harsh mistress.

We Do These Things Because They’re Easy (CHS)

We are now totally, completely dependent on expanding debt for the maintenance of our society and economy. Every sector of the economy–households, businesses and government–all borrow vast sums just to maintain the status quo for another year. Compare buying a new car with easy, low-interest credit and saving up to buy the car with cash. How easy is it to borrow $23,000 for a new $24,000 car? You go to the dealership, announce all you have to put down is a trade-in vehicle worth $1,000. The salesperson puts a mirror under your nose to make sure you’re alive, makes sure you haven’t just declared bankruptcy to stiff previous lenders, and if you pass those two tests, you qualify for a 1% rate auto loan. You sign some papers and drive off in your new car. Easy-peasy!

Scrimping and saving to pay for the new car with cash is hard. You have to save $1,000 each and every month for two years to save up the $24,000, and the only way to do that is make some extra income by working longer hours, and sacrificing numerous pleasures–being a shopaholic, going out to eat frequently, $5 coffee drinks, jetting somewhere for a long weekend, etc. The sacrifice and discipline required are hard. What’s the pay-off in avoiding debt? Not much–after all, the new auto loan payment is modest. If we take a 5-year or 7-year loan, it’s even less. By borrowing $23,000, we get to keep all our fun treats and spending pleasures, and we get the new car, too. At the corporate level, it’s the same story: borrow a billion dollars and use it to buy back shares.

Increasing the value of the corporation’s shares by increasing profit margins and actual value is hard; boosting the share price with borrowed money is easy. It’s also the same story with politicians and the government: cutting anything is politically painful, so let’s just float a bond, i.e. borrow money to pay for what was once paid out of tax revenues: maintaining parks, repaving streets, funding pensions, etc. This dependence on expanding debt for maintaining the status quo is a global trend. Debt is exploding in China in every sector, and the same is true in other nations, developed and developing alike. Borrowing more money from the future is easy, painless and requires no trade-offs, sacrifices or accountability–until the debt-addicted economy collapses under its own weight of debt service and insolvency.

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“..all those elaborate plans depend on no more war. And there’s the rub.”

The New Silk Road Will Go Through Syria (Escobar)

Amid the proverbial doom and gloom pervading all things Syria, the slings and arrows of outrageous fortune sometimes yield, well, good fortune. Take what happened this past Sunday in Beijing. The China-Arab Exchange Association and the Syrian Embassy organized a Syria Day Expo crammed with hundreds of Chinese specialists in infrastructure investment. It was a sort of mini-gathering of the Asia Infrastructure Investment Bank (AIIB), billed as “The First Project Matchmaking Fair for Syria Reconstruction”. And there will be serious follow-ups: a Syria Reconstruction Expo; the 59th Damascus International Fair next month, where around 30 Arab and foreign nations will be represented; and the China-Arab States Expo in Yinchuan, Ningxia Hui province, in September.

Qin Yong, deputy chairman of the China-Arab Exchange Association, announced that Beijing plans to invest $2 billion in an industrial park in Syria for 150 Chinese companies. Nothing would make more sense. Before the tragic Syrian proxy war, Syrian merchants were already incredibly active in the small-goods Silk Road between Yiwu and the Levant. The Chinese don’t forget that Syria controlled overland access to both Europe and Africa in ancient Silk Road times when, after the desert crossing via Palmyra, goods reached the Mediterranean on their way to Rome. After the demise of Palmyra, a secondary road followed the Euphrates upstream and then through Aleppo and Antioch. Beijing always plans years ahead. And the government in Damascus is implicated at the highest levels.

So, it’s not an accident that Syrian Ambassador to China Imad Moustapha had to come up with the clincher: China, Russia and Iran will have priority over anyone else for all infrastructure investment and reconstruction projects when the war is over. The New Silk Roads, or One Belt, One Road Initiative (Obor), will inevitably feature a Syrian hub – complete with the requisite legal support for Chinese companies involved in investment, construction and banking via a special commission created by the Syrian embassy, the China-Arab Exchange Association and the Beijing-based Shijing law firm. Few remember that before the war China had already invested tens of billions of US dollars in Syria’s oil and gas industry. Naturally the priority for Damascus, once the war is over, will be massive reconstruction of widely destroyed infrastructure.

China could be part of that via the AIIB. Then comes investment in agriculture, industry and connectivity – transportation corridors in the Levant and connecting Syria to Iraq and Iran (other two Obor hubs). What matters most of all is that Beijing has already taken the crucial step of being directly involved in the final settlement of the Syrian war – geopolitically and geo-economically. Beijing has had a special representative for Syria since last year – and has already been providing humanitarian aid. Needless to add, all those elaborate plans depend on no more war. And there’s the rub.

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Southern Europe: getting poorer and hotter.

One Of Worst Droughts In Decades Devastates South Europe Crops (R.)

Italian durum wheat and dairy farmer Attilio Tocchi saw warning signs during the winter of the dramatic drought to come at his holding a mile away from the Tuscan coast. “When it still hadn’t rained at the beginning of spring we realized it was already irreparable,” he said, adding that he had installed fans to try and cool his cows that were suffering in the heat. Drought in southern Europe threatens to reduce cereal production in Italy and parts of Spain to its lowest level in at least 20 years, and hit other regional crops including olives and almonds. Castile and Leon, the largest cereal growing region in Spain, has been particularly badly affected, with crop losses estimated at around 60 to 70%.

“This year was not bad, it was catastrophic. I can’t remember a year like this since 1992 when I was a little child,” said Joaquin Antonio Pino, a cereal farmer in Sinlabajos, Avila. Pino said many of his fields had not even been harvested, because crop revenues would not cover the wages of laborers who gathered them. While the EU is collectively a major wheat exporter, Spain and Italy both rely on imports from countries including France, Britain and Ukraine. Spanish soft wheat imports are expected to rise by more than 40% to 5.6 million tonnes in the 2017-2018 marketing year, according to Agroinfomarket. The drought has helped support EU wheat futures, which have risen around 6% since the beginning of June, although the prospect of a larger harvest in France this year should ensure adequate overall supplies in the trading bloc.

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Germans love cash.

People Not Amused by EU Efforts to “De-Cash” their Lives (DQ)

In January 2017 the European Commission announced it was exploring the option of imposing upper limits on cash payments, with a view to implementing cross-regional measures as soon as 2018. To give the proposal a veneer of respectability and accountability the Commission launched a public consultation on the issue. Now, the answers are in, but they are not what the Commission was expecting. A staggering 95% of the respondents said they were opposed to a cash ceiling at EU level. Even more emphatic was the answer to the following question: “How would the introduction of restrictions on payments in cash at EU level benefit you, or your business or your organisation (multiple replies are possible)?” In the curious absence of an explicit “not at all” option, 99.18% chose to respond with “no answer.”

In other words, less than 1% of the more than 30,000 people consulted could think of a single benefit of the EU unleashing cross-regional cash limits. Granted, 37% of respondents were from Germany and 19% from Austria (56% in total), two countries that have a die-hard love for physical lucre. Even among millennials in Germany, two-thirds say they prefer paying in cash to electronic means, a much higher level than in almost any other advanced economy with the exception of Japan. Another 35% of the survey respondents were from France, a country that is not quite so enamored with cash and whose government has already imposed a maximum cash limit of €1,000. By its very nature the survey almost certainly attracted a disproportionate number of arch-defenders of physical cash.

As such, the responses it elicited are unlikely to be a perfect representation of how all Europeans would feel about the EU’s plans to introduce maximum cash limits. Nonetheless, the sheer strength of opposition should (but probably won’t) give the apparatchiks in Brussels pause for thought. The biggest cited concern for respondents was the threat the cash restrictions would pose to privacy and personal anonymity. A total of 87% of respondents viewed paying with cash as an essential personal freedom. The European Commission would beg to differ. In the small print accompanying the draft legislation it launched in January, it pointed out that privacy and anonymity do not constitute “fundamental” human rights.

Be that as it may, many Europeans still clearly have a soft spot for physical money. If the EU authorities push too hard, too fast in their war on cash, they could provoke a popular backlash. In Germany, trust in Europe’s financial institutions is already at a historic low, with only one in three Germans saying they have confidence in the ECB. The longer QE lasts, the more the number shrinks.

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When they were elected in January 2015, Syriza’s approval rating was some 75%. But when you turn your back on your promises, and then unleash more austerity….

Just 13% of Greeks Trust Their Government (K.)

Just 13% of Greeks trusted the government in 2016, according to the Organization for Economic Cooperation and Development’s (OECD) biennial Government at a Glance report, placing Greece among the four member states with the sharpest decline in confidence in their administrations. According to the report, which was published by the Paris-based organization on Thursday and shows 2016 data, Greece joins Chile, Finland and Slovenia in recording a significant loss of trust between citizens and the government, slipping to 13% in 2016 from 19% in 2014. Confidence has also declined over the past decade across the OECD’s member states, though at a rate of 3%, coming to 42% in 2016 from 45% in 2007.

In terms of specific sectors, Greeks have lost faith across the board, with the Greek health system having the trust of just 31% of citizens from 35% in the 2015 study for 2014, public education of 44% from 45% and the judicial system of 42% from 44%. A new area added in this year’s survey is the police, where confidence was high last year at 69%. Across the OECD, average confidence in the health system came to 70%, education to 67% and justice to 55%.

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You’d almost wish they would fight back.

World’s Large Carnivores Being Pushed Off The Map (BBC)

Six of the world’s large carnivores have lost more than 90% of their historic range, according to a study. The Ethiopian wolf, red wolf, tiger, lion, African wild dog and cheetah have all been squeezed out as land is lost to human settlements and farming. Reintroduction of carnivores into areas where they once roamed is vital in conservation, say scientists. This relies on human willingness to share the landscape with the likes of the wolf. The research, published in Royal Society Open Science, was carried out by Christopher Wolf and William Ripple of Oregon State University. They mapped the current range of 25 large carnivores using International Union for Conservation of Nature (IUCN) Red List data. This was compared with historic maps from 500 years ago.

The work shows that large carnivore range contractions are a global issue, said Christopher Wolf. “Of the 25 large carnivores that we studied, 60% (15 species) have lost more than half of their historic ranges,” he explained. “This means that scientifically sound reintroductions of large carnivores into areas where they have been lost is vital both to conserve the large carnivores and to promote their important ecological effects. “This is very dependent on increasing human tolerance of large carnivores – a key predictor of reintroduction success.” The researchers say re-wilding programmes will be most successful in regions with low human population density, little livestock, and limited agriculture. Additionally, regions with large networks of protected areas and favourable human attitudes toward carnivores are better suited for such schemes.

“Increasing human tolerance of large carnivores may be the best way to save these species from extinction,” said co-researcher William Ripple. “Also, more large protected areas are urgently needed for large carnivore conservation.” When policy is favourable, carnivores may naturally return to parts of their historic ranges. This has begun to happen in parts of Europe with brown bears, lynx, and grey wolves. The Eurasian lynx and grey wolf are among the carnivores that have the smallest range contractions. The dingo and several types of hyena are also doing relatively well, compared with the lion and tiger.

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