Apr 012020
 


Byron In Chinatown, Pell Street, New York 1900

 

Greek Mothers, Grandmas and Wives to Enforce Quarantine As Police Struggle (GR)
White House Predicts 100,000 To 240,000 Will Die In US From Coronavirus (CNBC)
Putin Asked Trump If He Needed Help & He Accepted (RT)
How To Rescue Our Coronavirus-Infected Economy From Collapse (Richard Vague)
Obama’s Failure To Resupply Respirators In Federal Stockpile (JTN)
Do I Have to Pay My Rent or Mortgage During the Pandemic? (DB)
Will Shift To Distance Learning Reshape American Education? (JTN)
Should All Americans Be Wearing Face Masks? (JTN)
Fed Will Do ‘Whatever It Takes’ To Help US Economy Likely In Recession (R.)
US Virus Cases Off The Scale – But People Can Build Movement From This (MoA)
China Starts To Report Asymptomatic Coronavirus Cases (R.)
How Disinformation Really Works: Russian COVID19 Aid To Italy Smeared (RT)

 

 

The US is slowly coming to terms with the numbers representing its reality. And unlike fast food, they need to be fed the news in little bites.

 

 

Cases 872,777 (+ 73,054 from yesterday’s 799,723)

Deaths 43,271 (+ 4,551 from yesterday’s 38,720)

 

 

 

From Worldometer yesterday evening -before their day’s close-.

 

 

From Worldometer -NOTE: mortality rate for closed cases is at 19% –

 

 

From SCMP:

 

 

From COVID2019Live.info:

 

 

A good representation by Jo Michell of how the FT graph (see below) can be made clearer by tweaking between log scale and linear scale.

Log scale corona:

 

 

Linear scale corona:

 

 

 

 

Best story of the day for this day.

Greek Mothers, Grandmas and Wives to Enforce Quarantine As Police Struggle (GR)

Greek Prime Minister Kiriakos Mitsotakis who was among the first EU leaders to implement a strict quarantine in Greece, in now transferring the authority of enforcing the quarantine to Greek women. The decision took most by storm but police sources say it was planned since a few weeks ago, when police was needed to help in hospitals in vital positions for the fight against Coronavirus. The PM made his decision known with a tweet in the early hours of Wednesday:

“Police will continue to assist in enforcing the quarantine if needed on a case by case basis, but this won’t be its primary responsibility,” a Greek official clarified. The amendment to the current quarantine law transfers the power of issuing the necessary permits primarily to mothers and grandmothers, as well as wives and sisters where there in no mother or grandmother.


“A checkpoint on Patission street. Groups of 3-4 women will be assembling in each neighbourhood during rush-hour to check cars and individuals if they are on the street legally.” Credit: Greek Government handout

“Women have been defending the Greek household for thousands of years, since the Ancient times when every Greek woman was the protector of ‘estia’” noted the President of the Hellenic Republic Katerina Sakellaropoulou. It is also true that women and especially Greek women are also experts on discovering germs and dirt where you think there is none, so this might be another skill that comes in handy. “If one person of the household is infected the whole family is in danger, notes Antonia Parisi who sees this as a necessary step for a family’s wellbeing. “Women are best to protect the family” adds the shop owner and mother of two from Piraeus, Greece.


[..] some Greeks are not happy by the move. Most complain that Greek mothers and wives are way stricter in accepting fair reasoning to go out during a pandemic. “I don’t know if I will ever see the light of the day,” says Petros Kakavas from Peristeri, Athens who in absence of a mother and a grandmother has to ask his wife for permission to leave the house. In ancient Sparta the male fighters’ health was a responsibility of their mothers and wives. It is since then, we have the saying behind every strong man there is an even stronger woman. But sometimes history just repeats itself.

Read more …

I got a lot of criticism on my Fauci article 2 days ago, thought I merely connected two things he said over the space of two days, which meant 200 million Americans would become infected. That number is still not mentioned for some reason, but soon it will have to be. For now 240,000 deaths are the new normal.

White House Predicts 100,000 To 240,000 Will Die In US From Coronavirus (CNBC)

President Donald Trump prepared Americans for a coming surge in coronavirus cases, calling COVID-19 a plague and saying the U.S. is facing a “very, very painful two weeks.” “This could be a hell of a bad two weeks. This is going to be a very bad two, and maybe three weeks. This is going to be three weeks like we’ve never seen before,” Trump said at a White House press conference Tuesday. White House officials are projecting between 100,000 and 240,000 deaths in the U.S. with coronavirus fatalities peaking over the next two weeks. “When you look at night, the kind of death that has been caused by this invisible enemy, it’s incredible.” The U.S. has more coronavirus cases than any other country across the globe with 184,000 confirmed infections, according to data compiled by Johns Hopkins University.

New York has now become the new epicenter of the outbreak in the world with 75,795 confirmed cases as of Tuesday morning, more reported infections than China’s Hubei province where the coronavirus emerged in December. Earlier in the day, New York Gov. Andrew Cuomo said the outbreak in the state may not peak for three weeks. “I’m tired of being behind this virus. We’ve been behind this virus from day one,” the governor said in Albany. “We underestimated this virus. It’s more powerful, it’s more dangerous than we expected.” Trump, who grew up near New York City’s Elmhurst hospital in Queens, said no one can believe officials are setting up refrigerator trucks as temporary mortuaries outside the hospital. Trump said New York “got a late start” in rolling out its mitigation efforts.

New York City is setting up a handful of makeshift field hospitals to house coronavirus patients at the Jacob K. Javits Center, in Central Park and at the tennis courts in Queens that host the U.S. Open. De Blasio said the city is working with the federal government, the hotel industry and various other businesses to turn other buildings into potential medical facilities. More than 1,000 people in New York City alone have already died from the coronavirus, according to data updated at 5 p.m. ET by the NYC Health Department. “This is going to be the roughest three weeks we’ve ever had in this country,” Trump said. “I wanted as few as a number of people to die as possible. And that’s all we’re working on.”

US coronavirus deaths:

3/1 2
3/2 6
3/3 9
3/4 11
3/5 12
3/6 17
3/7 19
3/8 21
3/9 26
3/10 31
3/11 38
3/12 41
3/13 49
3/14 58
3/15 65
3/16 87
3/17 111
3/18 149
3/19 195
3/20 263
3/21 323
3/22 413
3/23 541
3/24 704
3/25 938
3/26 1195
3/27 1588
3/28 2043
3/29 2419
3/30 3004
Now 4076

Read more …

“At least 400 people died TODAY in New York because of the coronavirus.

We have refrigerated trucks now set up all over the city to hold the bodies.

The morgues are at capacity.

Absolutely heartbreaking day.”

Putin Asked Trump If He Needed Help & He Accepted (RT)

A cargo plane loaded with medical supplies and protection equipment may depart for the US by the end of Tuesday, the Kremlin said, after a phone call between US President Donald Trump and Russian President Vladimir Putin. The issue of protective gear was raised during the Monday phone talks, with Putin asking if the US needed help and Trump accepting, Kremlin spokesman Dmitry Peskov told reporters on Tuesday. Moscow suggested the aid in anticipation that the US will be able to return the favor if necessary, once its manufacturers of medical and protective equipment catch up with demand, Peskov said. The current situation “affects everyone without exception and is of a global nature,” he added. “There is no alternative to acting together in the spirit of partnership and mutual assistance.”


On Monday, Trump told reporters at the White House press briefing that “Russia sent us a very, very large planeload of things, medical equipment, which was very nice.” The comment left everyone scratching their heads, as no one in the US seemed to know anything about the plane in question. It appears the US president was referring to the aid arranged on the phone call as something that had already happened. Peskov chastised “some of the American side” who “at least did not contribute to the prompt resolution of technical issues” regarding the agreed-upon delivery, which could explain the delay. Official data shows the US has been among the nations hardest-hit by the Covid-19 pandemic, with almost 175,000 confirmed cases and 3,416 deaths as of Tuesday afternoon – overtaking China, where the contagion originated in December. Italy still has the highest death toll in the world, at 12,428.

Read more …

Steve Keen: “an editorial in The Hill by Richard Vague, who is Pennsylvania’s acting Secretary of Banking and Securities. Richard was a highly successful banker, the co-founder of two major personal-finance-oriented companies Juniper Financial, and First USA Bank, and then CEO of the energy marketing company Energy Plus. He is a patron and a close friend. He is the author of “A Brief History of Doom” (2019), which I regard as the best history of financial crises ever written–far better than Kindleberger and Mackay.”

How To Rescue Our Coronavirus-Infected Economy From Collapse (Richard Vague)

The U.S. government should implement a program of monthly checks of $1,000 for three months — a timeframe which could be extended — to individuals above 18 and below some income threshold, say $200,000. A one-time check is not enough. The continuity of these payments is the most central, critical recommendation. Even if Americans stay cooped up, they can and should be encouraged to spend across the board, including on things like restaurant gift certificates, since the restaurant industry alone now estimates up to 7 million job losses. Even ten years after the Great Recession, households and businesses still have near-record levels of debt and, with this GDP collapse, will now be drowning in that debt.

The U.S. government should institute an immediate three-month moratorium on payments of mortgages, credit cards and student debt, along with a similar moratorium policy for business loan payments. This should be extended beyond three months if necessary. Having spent much of my career in banking, I view this approach as feasible, as long as regulators have the guidance to allow it. As part of this, the federal government would implement this policy for government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, for government-guaranteed student loans and other lending programs that have its full or partial backing; the loans could be extended or restructured to accommodate this, and borrowers could continue to pay if they chose. Regulators also should work with the industry to put together other prudent forms of loan forbearance.

The government should implement a three-month moratorium on all rent payments, and establish a fund to extend money to landlords to accommodate this rent forbearance. It should implement a three-month moratorium on all federal tax payments, which could be extended if necessary. It should commit to cover all healthcare costs associated with the coronavirus, structured such that care providers can bill the government directly so no forms or reimbursements would be required of individuals. It also will be necessary to provide capital support for select, troubled industries beyond the airline, hotel and cruise ship industries. This part does not need to be a handout; it can take the form of a preferred equity investment. It will soon need to provide substantial support to states and local governments. This program will not provide a result that is perfect in its fairness, but the need to move quickly far outweighs that consideration.

Read more …

From a right wing source. A different view on this topic: “On March 1, 2003, the NPS became the Strategic National Stockpile (SNS) program managed jointly by DHS and HHS. With the signing of the BioShield legislation, the SNS program was returned to HHS for oversight and guidance. In 2018, oversight of Strategic National Stockpile was transferred to HHS/ASPR from HHS/CDC.”

What does the move from CDC to Assistant Secretary for Preparedness and Response entail?

Obama’s Failure To Resupply Respirators In Federal Stockpile (JTN)

The Strategic National Stockpile, America’s giant medical storage closet for a terrorist or biological crisis, once boasted more than 100 million respirator masks to protect doctors, nurses and other frontline health care workers in case of a contagion. But when the COVID-19 pandemic started a few months ago, the supply had dwindled down to just 12 million fitted masks, known as N95 respirators, and 30 million surgical masks, a supply deemed to be less than 2 percent of what the nation would need for full-blown pandemic. The tale of how such a critical supply lapsed, leading the Trump administration to scramble for 500 million new masks in the midst of pandemic, is one of government neglect and competing priorities that began in 2009.

That’s when the Obama administration drew down nearly 97 million of the masks to deal with the H1N1 swine flu pandemic, effectively protecting frontline medical workers from a virus that infected more than 60 million Americans. But when it was over, the administration decided not to fully restock the respirators, choosing to spend its $600 million annual budget for the stockpile on other priorities such as key drugs and vaccines to deal with smallpox, anthrax and the like, experts said. There is really “no answer why the supplies were not replenished because the N95 masks are invaluable tools for preparedness and it was important that they be restocked,” said Charles Johnson, President of International Safety Equipment Association, whose members make supplies for the stockpile.

In the end, Johnson said, the Obama administration chose to use its “limited funds” in other ways and “made the best choices at the time even though his association and others periodically restated their calls to replenish” the N95 masks. That trend continued in the early Trump years as well. The Clinton administration first began to examine a national plan to respond to pandemics and create the federal stockpile in 1990s. But the formal National Strategy for Pandemic Influenza was not officially published until 2005 during the George W. Bush administration, following the anthrax scare in 2001 and the severe acute respiratory syndrome (SARS) in 2002.

[..] According to a Center for Disease Control report published after the 2009 H1N1 pandemic, 39 million N95 masks were initially distributed from the stockpile, followed by 59.5 million more in second wave. According to Johnson, the stockpile originally was about 100 million masks. From April 12, 2009 to April 10, 2010, there were over 60 million cases of H1N1 requiring 274,304 hospitalizations and resulting in 12,469 deaths in the United States. After the H1N1 virus slowed down in 2010, according to Johnson, “it was important to restock.” That did not happen as the national stockpile budget focused on other priorities deemed higher.

Read more …

Literally every single state appears to have different rules?!

Do I Have to Pay My Rent or Mortgage During the Pandemic? (DB)

As March winds down, at least 250 million Americans have been told to stay home or “shelter in place” to help stop the spread of COVID-19. Problem is, many can’t help wondering if they can still afford a place to shelter in—if they ever could. Long before the coronavirus pandemic, generous swaths of the United States faced an affordable housing crisis. With millions of Americans losing their jobs and millions more facing unemployment in the near future thanks to a concerted economic shutdown geared at reining in the disease, talk of rent strikes and freezes are in the air.

The Trump administration recently nodded to the problem by ordering a foreclosure moratorium on single-family home mortgages backed by the Federal Housing Administration or obtained through government-owned lenders Fannie Mae and Freddie Mac. Fannie and Freddie have also offered forbearance for borrowers experiencing hardship. And the finance giants have dangled payment relief to indebted apartment building owners who grant respite to renters, a move the Federal Housing Finance Agency estimates could affect 43 percent of the market in multifamily leases. Then there’s the $2 trillion stimulus bill that passed last week, which contains language forbidding evictions and late charges on any property receiving virtually any federal aid.

It also permits those owing money to Fannie or Freddie to request up to six months of forbearance, though it leaves the onus on borrowers to do so. If your home doesn’t fall under one of these categories or programs, and you’re wondering if you owe money to your landlord or lender, the answer is probably yes—at least for now. Still, some state and local governments have moved to stem evictions and foreclosures for everyone, and a few are even freezing rent and mortgage payments entirely. Here’s a breakdown of COVID-19 rules on housing across every state and many large metropolitan areas. This story will be updated as events warrant.

Read more …

Like, make it even worse?

Will Shift To Distance Learning Reshape American Education? (JTN)

It likely represents one of the most ambitious, albeit uncoordinated, educational experiments in history: Can you successfully digitize an entire country’s higher education industry very nearly overnight? And if so, what does that say about the future of distance learning? Where does it go from here? Distance education itself is already widespread throughout the United States: The National Center for Education Statistics estimates that in the fall of 2017 there were well over 6.5 million American students enrolled in online programs, nearly a third of all postsecondary students in the country. Nearly half of those were exclusively enrolled in online programs; slightly more than half had “at least one” online course.

When they hear of online education, most people might picture private, for-profit corporations, the ones that build vanilla, office park-like campuses in the suburbs of American cities and whose commercials pop up regularly on network television and YouTube advertisements: Strayer, the University of Phoenix, DeVry University. Yet those establishments form a relatively small minority of the overall online education industry: the NCES says the vast majority of students who attend virtual classrooms do so at more traditional institutions. Not even 15% of all online attendance is done at private, for-profit organizations.

Distance education, then, is very much a concern for legacy institutions, including those known for their idyllic and venerated campus experiences: Schools like Harvard and Princeton and Northwestern and Chicago all have their own exclusively online divisions, while more and more state and regional schools are expanding their digital opportunities. Indeed, the existence of those programs is likely why many American schools were able to transition with (relative) ease to online learning environments. A vital question to ask, then, is: Does this near-total transition to online learning suggest an upcoming major shift in the distance education economy? Will schools be able to use this monumental adjustment to expand online learning and perhaps fundamentally reshape American higher education?

Dr. Wallace Boston, the president of the private, for-profit, online American Public University System, says yes. “I believe we will see an uptick in distance education” following the pandemic, he told Just the News. “The most likely reason that we will see an uptick is that many institutions will want to keep some form of online instruction and infrastructure in the event that this pandemic recycles through again or that there is another event that might require social distancing or quarantines,” he argued. “Some may even view online offerings as strategic opportunities for their institution.”

Read more …

Before or after they’ve been tested?

Should All Americans Be Wearing Face Masks? (JTN)

[California] Gov. Gavin Newsom Tuesday said that the state is considering guidance around whether people beyond the medical profession should wear some sort of mask or face covering, including in professions like grocery store workers. The science is incomplete in this area, according to Newsom, and there is a concern that people will think masks are a replacement for social distancing, which they aren’t. Surgeon General Jerome Adams has said that the practice often leads to increased touching of one’s face and can produce a “false sense of security,” adding that the World Health Organization and the CDC have reaffirmed in the last few days is that they do not recommend the general public wear masks.

“The virus is not spreading in the general community,” Dr. Nancy Messonnier, director of the Center for the National Center for Immunization and Respiratory Diseases, said in a Jan. 30 briefing. “We don’t routinely recommend the use of face masks by the public to prevent respiratory illness. And we certainly are not recommending that at this time for this new virus.” As the cases of COVID-19 grows across America and supplies like face masks and gowns are in short supply, health experts say implementing guidance may take masks away from the health care providers who are on the frontlines of the pandemic. However others believe that masks, even homemade masks, would help reduce the risk of unknowingly spreading the virus through coughs, sneezes, even yawns or simple conversation.

George Gao, director-general of the Chinese Center for Disease Control and Prevention said in an interview with Science magazine that “when you speak, there are always droplets coming out of your mouth.” “The big mistake in the U.S. and Europe, in my opinion, is that people aren’t wearing masks,” Gao said. Meanwhile, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said on Tuesday that the White House coronavirus task force is also seriously considering guidance that Americans wear masks. “The idea of getting a much more broad, community-wide use of masks outside of the health care setting is under very active discussion at the task force. The CDC group is looking at that very carefully,” Fauci told CNN.

Read more …

Poor choice of words perhaps? To hide the emptiness implied?

Fed Will Do ‘Whatever It Takes’ To Help US Economy Likely In Recession (R.)

The Federal Reserve is ready to do more to help a U.S. economy ground to a sudden halt as businesses shutter and people stay home to slow the coronavirus pandemic, San Francisco Fed President Mary Daly said on Tuesday. “The Federal Reserve is prepared to do whatever it takes within our powers to ensure that we are part of the solution of shoring up people over the virus, shoring up the American economy and putting us in the best position to grow again once the virus recedes,” Daly said in an interview with Yahoo Finance. “If we do the right thing and shelter in place and curb the spread of the virus, the economy will be in the best position to bounce back.”


With the coronavirus infecting tens of thousands of Americans and killing hundreds each day, three-quarters of the U.S. population are under orders to stay home except for essential trips to slow the spread of the virus. With businesses laying off millions of workers as demand dries up and states ordering non-essential businesses to close, the economy is likely already in recession, Daly said. The Fed’s job, along with that of the U.S. government that on Friday finalized a $2.2 trillion rescue package, is to provide the support to financial markets, businesses and people who are doing their duty to boost the public health, Daly said. Once the pandemic threat has passed, the Fed’s programs and low interest rates will help drive the economic recovery, she said.

Read more …

FTCoronaGraphMar31

Is Moon of Alabam going full hippie on us?

US Virus Cases Off The Scale – But People Can Build Movement From This (MoA)

When John Burn-Murdoch created that daily updated chart he did not anticipate that any country would have more than a 100,000 total cases. That was a reasonable assumption as China, with 1.4 billion inhabitants, stopped the epidemic with less than 85.000 total cases even when it was surprised by the outbreak. As of now the U.S. has 164.435 known cases. It will reach a total number of several dozens of millions and will have several hundreds of thousands of dead caused by the covid-19 disease. Most but not all of those who will die from it will have one or more co-morbid diseases.

The number of death in the U.S. will likely be higher than elsewhere because obesity, diabetes and heart problems are more prevalent in the U.S. than in most other countries. Another reason why the U.S. will have a larger than necessary outbreak is wide mistrust in the authority of the state. A significant number of people will reject stay at home orders or other measures the authorities will have to take. Then there is this: Pouya Alimagham @iPouya – 0:48 UTC · Mar 31, 2020 “The regime doesn’t want to antagonize the religious classes. Thus, it isn’t doing anything about the fact that some religious sites remain open & clerics are encouraging worshippers to come & pray. These gatherings risk exploding #COVID19. I’m talking about the US, not #Iran.”

The U.S. also has many people without health insurance. The many newly laid off people will additionally lose theirs. These people will avoid seeing a doctor or to go to a hospital as the enormous costs would ruin them. The for-profit health system will reject sick persons who are unlikely to be able to pay their bills. The cases of people who die from such circumstance should be put into the death by lack of money category instead of being blamed on something else. Congress has failed to take the necessary measures and to give everyone access to free tests and free care. This will come back to bite everyone as it makes sure that the disease will circulate longer and stronger than in other rich countries.

Every crisis is also a chance. Congress has used it to again loot the people and to push more money to the rich. At the same time the powers that be have denied universal healthcare and paid sick leave to those who need it. The covid-19 epidemic is a chance to change that. There are already a number of strikes at Amazon and similar companies over work safety, health care and pay. Rent strikes must now follow. When the bills come in for families with covid-19 cases many more people will get more interested in medicare for all. A movement can be build from these issues. The Sanders campaign should provide a (virtual) platform for it.

The U.S. has enough money to pay for the security of its people. Security is not a military issue. A hugely expensive aircraft carrier with sick sailors is worth nothing. Pandemics are a real security issues and the U.S. has left its people defenseless against them. Cut the aircraft carriers and other insane military spending and invest it in the health of the people. That message will soon be widely understood. We can all help to reinforce it.

Read more …

Q: how useless is this if you test only some people? Can’t very well adopt the western idea of testing only those who look sick.

China Starts To Report Asymptomatic Coronavirus Cases (R.)

Chinese health authorities began on Wednesday reporting on asymptomatic cases of the coronavirus as part of an effort to allay public fears that people could be spreading the virus without knowing they are infected with it. China, where the coronavirus emerged late last year, has managed to bring its outbreak under control and is easing travel restrictions in virus hot spots. But there are concerns that the end of lockdowns will see thousands of infectious people move back into daily life without knowing they carry the virus, because they have no symptoms and so have not been tested. Up to now, the number of known asymptomatic cases has been classified, and it is not included in the official data, though the South China Morning Post newspaper, citing unpublished official documents, recently said it was more than 40,000.


In an effort to dispel public fears about hidden cases of the virus, the government has this week ordered health authorities to turn their attention to finding asymptomatic cases and releasing their data on them. Health authorities in Liaoning province were the fist to do so on Wednesday, saying the province had 52 cases of people with the coronavirus who showed no symptoms as of March 31, they said in a statement on a provincial government website. Hunan province said it had four such cases, all of them imported from abroad, it said in a statement on its website. The National Health Commission is due to start reporting aggregate, national data on asymptomatic cases later on Wednesday.

Read more …

Unthinkable now, but soon Americans will be thanking Putin, and thanking Trump.

How Disinformation Really Works: Russian COVID19 Aid To Italy Smeared (RT)

With over 11,000 deaths and more than 100,000 cases of Covid-19, Italy is currently a country which feels under siege. But this is no impediment to the think tank racket twisting an offer of support for its propaganda purposes. Here’s what happened. The weekend before last, Vladimir Putin called Italian Prime Minister Giuseppe Conte. During the conversation, Conte asked for help, in fighting coronavirus, according to the Kremlin readout which hasn’t been contradicted by Italian officials. Let’s be clear from the outset, there was undoubtably a strong PR, as well as practical, element to Russia’s assistance. However, there were also advantages to Rome from this approach, as the move may have helped to concentrate a few minds among its traditional allies.

Moscow sent teams of “doctors, protective gear and medical equipment” to the stricken country. The detail included 100 military virologists and epidemiologists, along with eight medical teams, according to Russian news outlets. Most importantly, it delivered 600 ventilators. A significant amount given Italy apparently had only about 5,000 of the devices. Indeed, a few days after the Putin/Conte call, the New York Times was writing about Italy’s “ventilator crisis.” There’s usually nothing like a bit of Russian influence to jolt EU and NATO elites into action. As mentioned above, no doubt this was also part of Conte’s reasoning. That said, it’s also worth mentioning that some other Europeans states have tried to help the Italians. Germany and France, in particular, took patients and sent supplies, despite dealing with outbreaks of their own. Yet, many in Italy feel they haven’t done enough.

A few days after the aid landed, a campaign began on Twitter to discredit the Russian initiative. The first I saw of it was a tweet from Oliver Carroll, of London’s Independent newspaper, who presumably speaks Italian (I don’t, so I am relying on his translation). “Some Italians are expressing unease about Putin’s Covid-19 emergency aid,” he wrote. “Acc(ording) to La Stampa, 80 percent of supplies (are) “useless,” (and) sources worry about high-ranking military officers now in (the) country. Russian soldiers (are) free to roam (in) Italy a few steps away from NATO,” the paper stated. “La Stampa says China sent masks (and) ventilators; (but) Russia sent irrelevant equipment used for bacteriological and chemical outbreaks,” Carroll added. “(There is a) belief that Russia … (is) not helping us only for great goodness of its people… now beginning to circulate in broad sectors, military and political.”

Read more …

 

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“Our leaders, if they think of empathy at all, think in terms of Steve Martin’s advice: ‘Before you criticize a man, walk a mile in his shoes. That way, when you do criticize him, you’ll be a mile away and have his shoes.’”

 

 

 

 

 

 

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Mar 272020
 

 

 

More People Are Dying Of COVID-19 In The US Than We Know (BF)
We Could Watch Entire Populations Vanish (IC)
Coronavirus Could Kill 81,000 In US, Subside In June – Washington U. (R.)
Hold The Line (M.)
China Promotes Bear Bile As Coronavirus Treatment (NatGeo)
Fed Balance Sheet Tops $5 Trillion For First Time (R.)
Broward Poll Workers Test Positive For COVID-19 (L10)
Moscow Laboratories Will Conduct 13,000 Tests For Coronavirus Every Day (Tass)
New Zealand Coronavirus Deaths During Lockdown Could Be Just 20 – Modelling (G.)
Coronavirus Job Losses Will Raise Mortgage Stress More Than GFC Did (ABC.au)
France, Czechs, & Other US Allies Exit Iraq Over COVID-19 Fears (ZH)
Spike in Unemployment Claims is Even More Horrid Than it Appears (WS)
What Should The EU Do Now: 3-Point Plan For Averting A Depression (Varoufakis)
Dylan Ratigan: “An Abomination Beyond Comprehension” – “Bernie Folded” (Dore)
Muder Most Foul (Bob Dylan)

 

 

A word about testing. There are stories everywhere of people dying without even having beenn tested, and of doctors not getting permission to test. Many countries have a central body that must give permission for a test, and they often don’t until it’s too late in the game (the life). To a larg extent, this is because politicians simply failed to procure test kits. But there’s another thing: political incentives for massive and accurate testing hardly exist at all (in the short term), while incentives for not testing are obvious: you look better.

The UK testing story could change that all, with its potential finger-prick 15 minute test, but only if that test is at least 95% accurate. I know they claim it is, but we’ll have to see. There are stories about Chinese tests that are 30% accurate, and it’s easy to see why that is useless. But I was talking to someone yesterday who said: there are now tests that are fast and 70% accurate! But isn’t that useless too. No, they can do a better test with those who test negative! Yes, but the 70% applies to the positives too… So 70% means you have to retest everyone. And we haven’t even mentioned asymptomatic cases yet…

 

 

Note: we may see the first time that 100,000 new cases come within 24 hours

Cases 542,385 (+ 55,683 from yesterday’s 486,702)

Deaths 24,368 (+ 2,347 from yesterday’s 22,021)

 

 

 

From Worldometer yesterday evening (before their day’s close) US: 17,000 cases in a day

 

 

From Worldometer -NOTE: mortality rate for closed cases is at 16% –

 

 

From SCMP:

 

 

From COVID2019Live.info:

 

 

 

 

Not in the US, everywhere.

More People Are Dying Of COVID-19 In The US Than We Know (BF)

Medical professionals around the US told BuzzFeed News that the official numbers of people who have died of COVID-19 are not consistent with the number of deaths they’re seeing on the front lines. In some cases, it’s a lag in reporting, caused by delays and possible breakdowns in logging positive tests and making them public. In other, more troubling, cases, medical experts told BuzzFeed News they think it’s because people are not being tested before or after they die. In the US, state and county authorities are responsible for collecting data on cases of COVID-19, the disease caused by the novel coronavirus, and deaths. The data is then reported to the Centers for Disease Control and Prevention.

In California, one ER doctor who works at multiple hospitals in a hard-hit county told BuzzFeed News, “those medical records aren’t being audited by anyone at the state and local level currently and some people aren’t even testing those people who are dead.” “We just don’t know. The numbers are grossly underreported. I know for a fact that we’ve had three deaths in one county where only one is listed on the website,” the doctor said. A spokesperson for the California Department of Health told BuzzFeed News in an email that “local health jurisdictions are required to report all positive COVID-19 cases to the state. In addition, when a death or impending death from COVID-19 occurs, health care facilities must immediately notify their local health jurisdiction and the state.”

[..] two of the hardest-hit areas in the nation — New York City and Los Angeles County — released guidance earlier this week encouraging doctors not to test patients unless they think the test will significantly change their course of treatment. That means that potentially more people in both places could be admitted to hospitals with severe respiratory symptoms and recover — or die — and not be registered as a coronavirus case.

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Africa. Pray.

We Could Watch Entire Populations Vanish (IC)

On March 18, Burkina Faso suffered the first confirmed Covid-19 fatality in all of sub-Saharan Africa. The victim was Rose-Marie Compaoré, the first vice president of the Sahelian nation’s parliament. Tiny, impoverished, and conflict-scarred, Burkina Faso is now West Africa’s worst-affected country, with 146 confirmed cases, including four government ministers. The U.S. ambassador to Burkina Faso, Andrew Young, has also tested positive for the disease. Burkina Faso has seen more than its share of hardships: poverty, drought, hunger, coups. But the coronavirus poses a new kind of threat to a country wracked by a war that has displaced around 700,000 Burkinabe in the last year.

Many of those people now find themselves under great physical and emotional strain, lacking proper shelter, food, and the other necessities — all of which makes them more vulnerable to the pandemic. Experts fear that Covid-19 could decimate entire settlements of Burkina Faso’s displaced, and they are bracing for devastating outbreaks in conflict zones, refugee camps, and the poorest countries in the developing world. Globally, millions of refugees and internally displaced persons, or IDPs, living in cramped, squalid conditions find themselves at risk. “When the virus hits overcrowded settlements in places like Iran, Bangladesh, Afghanistan, and Greece, the consequences will be devastating,” warned Jan Egeland, secretary general of the Norwegian Refugee Council [..] He also spoke of “carnage when the virus reaches parts of Syria, Yemen, and Venezuela where hospitals have been demolished and health systems have collapsed.”

[..] I have no reason to believe Moumoumi Sawadogo had Covid-19 when I met him eight weeks ago in Burkina Faso. After living 89 years in an arid, impoverished land on the fringe of the Sahara Desert, surviving a massacre, walking for a week and enduring hunger and homelessness, it was clear that Sawadogo was a survivor. But Covid-19 posed a different kind of danger. “These populations are already very vulnerable to diseases that are otherwise easy to treat. But that’s not the case when they have no access to water or proper sanitation or health care,” Alexandra Lamarche, senior advocate for West and Central Africa at Refugees International, told The Intercept. “We could watch entire populations vanish.”

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Modelling is only as good as its initial assumptions. Which in this case come out of hot thin air.

Coronavirus Could Kill 81,000 In US, Subside In June – Washington U. (R.)

The coronavirus pandemic could kill more than 81,000 people in the United States in the next four months and may not subside until June, according to a data analysis done by University of Washington School of Medicine. The number of hospitalized patients is expected to peak nationally by the second week of April, though the peak may come later in some states. Some people could continue to die of the virus as late as July, although deaths should be below epidemic levels of 10 per day by June at the latest, according to the analysis. The analysis, using data from governments, hospitals and other sources, predicts that the number of U.S. deaths could vary widely, ranging from as low as around 38,000 to as high as around 162,000.

The variance is due in part to disparate rates of the spread of the virus in different regions, which experts are still struggling to explain, said Dr. Christopher Murray, director of the Institute for Health Metrics and Evaluation at the University of Washington, who led the study. The duration of the virus means there may be a need for social distancing measures for longer than initially expected, although the country may eventually be able relax restrictions if it can more effectively test and quarantine the sick, Murray said. The analysis also highlights the strain that will be placed on hospitals. At the epidemic’s peak, sick patients could exceed the number of available hospital beds by 64,000 and could require the use of around 20,000 ventilators. Ventilators are already running short in hard-hit places like New York City.

The virus is spreading more slowly in California, which could mean that peak cases there will come later in April and social distancing measures will need to be extended in the state for longer, Murray said. Louisiana and Georgia are predicted to see high rates of contagion and could see a particularly high burden on their local healthcare systems, he added.

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Let the caretakers talk. They need to, and we need to hear them.

Hold The Line (M.)

As an infectious disease epidemiologist (although a lowly one), at this point I feel morally obligated to provide some information on what we are seeing from a transmission dynamic perspective and how they apply to the social distancing measures. Like any good scientist I have noticed two things that are either not articulated or not present in the “literature” of social media. I have also relied on my much smarter infectious disease epidemiologist friends for peer review of this post; any edits are from peer review. Specifically, I want to make two aspects of these measures very clear and unambiguous. First, we are in the very infancy of this epidemic’s trajectory. That means even with these measures we will see cases and deaths continue to rise globally, nationally, and in our own communities in the coming weeks.

This may lead some people to think that the social distancing measures are not working. They are. They may feel futile. They aren’t. You will feel discouraged. You should. This is normal in chaos. But this is normal epidemic trajectory. Stay calm. This enemy that we are facing is very good at what it does; we are not failing. We need everyone to hold the line as the epidemic inevitably gets worse. This is not my opinion; this is the unforgiving math of epidemics for which I and my colleagues have dedicated our lives to understanding with great nuance, and this disease is no exception. I want to help the community brace for this impact. Stay strong and with solidarity knowing with absolute certainty that what you are doing is saving lives, even as people begin getting sick and dying. You may feel like giving in. Don’t.

Second, although social distancing measures have been (at least temporarily) well-received, there is an obvious-but-overlooked phenomenon when considering groups (i.e. families) in transmission dynamics. While social distancing decreases contact with members of society, it of course increases your contacts with group (i.e. family) members. This small and obvious fact has surprisingly profound implications on disease transmission dynamics. Study after study demonstrates that even if there is only a little bit of connection between groups (i.e. social dinners, playdates/playgrounds, etc.), the epidemic isn’t much different than if there was no measure in place. The same underlying fundamentals of disease transmission apply, and the result is that the community is left with all of the social and economic disruption but very little public health benefit. You should perceive your entire family to function as a single individual unit; if one person puts themselves at risk, everyone in the unit is at risk.

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This is about wildlife, not economic pessimists. Just in case you were confused.

China Promotes Bear Bile As Coronavirus Treatment (NatGeo)

Less than a month after taking steps to permanently ban the trade and consumption of live wild animals for food, the Chinese government has recommended using Tan Re Qing, an injection containing bear bile, to treat severe and critical COVID-19 cases. It is one of a number of recommended coronavirus treatments—both traditional and Western—on a list published March 4 by China’s National Health Commission, the government body responsible for national health policy. This recommendation highlights what wildlife advocates say is a contradictory approach to wildlife: shutting down the live trade in animals for food on the one hand and promoting the trade in animal parts on the other. Secreted by the liver and stored in the gallbladder, bile from various species of bears, including Asiatic black bears and brown bears, has been used in traditional Chinese medicine since at least the eighth century.

It contains high levels of ursodeoxycholic acid, also known as ursodiol, which is clinically proven to help dissolve gallstones and treat liver disease. Ursodeoxycholic acid has been available as a synthetic drug worldwide for decades. [..] Traditional Chinese medicine practitioners typically use Tan Re Qing to treat bronchitis and upper respiratory infections. Clifford Steer, a professor at the University of Minnesota in Minneapolis, has studied the medical benefits of ursodeoxycholic acid. He knows of no evidence that bear bile is an effective treatment for the novel coronavirus. But, he says, ursodeoxycholic acid is distinct from other bile acids in its ability to keep cells alive and may alleviate symptoms of COVID-19 because of its anti-inflammatory properties and ability to calm the immune response.

Although use of bear bile from captive animals is legal in China, bile from wild bears is banned, as is the import of bear bile from other countries. According to Aron White, wildlife campaigner for the Environmental Investigation Agency (EIA)—a nonprofit based in London, England, that exposes wildlife crimes—his organization learned first about the Chinese government’s recommendations to treat COVID-19 via social media posts from illegal traders. “We were witnessing how this government recommendation was being coopted by the traffickers to advertise their illegal products as a treatment,” White says. Illegal bile from wild bears is produced in China, he says, and is also imported from wild and captive bears in Laos, Vietnam, and North Korea.

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If numbers get big enough, they lose meaning.

Fed Balance Sheet Tops $5 Trillion For First Time (R.)

The U.S. Federal Reserve’s balance sheet soared past $5 trillion in assets for the first time this week as it scooped up bonds and extended loans to banks, mutual funds and other central banks in its unprecedented effort to backstop the economy in the face of the global coronavirus pandemic. The Fed’s total balance sheet size exploded by more than half a trillion dollars in a single week, roughly twice the pace of the next-largest weekly expansion in the financial crisis in October 2008. As of Wednesday, the Fed’s stash of assets totaled $5.3 trillion, according to data released on Thursday.

The Fed bought $355 billion of Treasuries and mortgage-backed bonds in the last week in what is now an open-ended commitment to stabilize financial markets rocked by the outbreak and the halt in economic activity that has come in its wake. It also offered more than $200 billion in credit through so-called foreign currency swap lines to other central banks to allow them to pump much-needed greenbacks into their jurisdictions to help foreign borrowers stay current with their dollar-denominated liabilities.

The weekly snapshot of the Fed’s balance sheet, released each Thursday, also showed sizable demand for a pair of brand new liquidity facilities aimed at stabilizing money markets and supporting primary dealers, the banks that transact directly with the central bank. The new Primary Dealer Credit Facility had been tapped for $27.7 billion in loans as of Wednesday, while the Money Market Mutual Fund Liquidity Facility had borrowings of $30.6 billion.

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Which bunch of fools decided to have that vote?

Broward Poll Workers Test Positive For COVID-19 (L10)

Two poll workers have been positively diagnosed with coronavirus, according to a statement from The Broward County Supervisor of Elections. One of the workers was only at Precinct V011 on Tuesday, March 17, Election Day, which is located at the Martin Luther King Community Center in Hollywood. The other worked at V020 at the David Park Community Center (also in Hollywood) as well as a Weston early voting location. The supervisor said that county staff as well as other poll workers at the locations have been notified of the situation. However, voters who were at the polls in person on March 17 at either of those locations or who voted early at the Weston early voting location may “wish to take appropriate steps and seek medical advice.”

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Because of western testing that may seem like a high number, but it’s not.

Moscow Laboratories Will Conduct 13,000 Tests For Coronavirus Every Day (Tass)

The laboratories in Moscow will carry out up to 13,000 tests for the novel coronavirus per day, Deputy Mayor Anastasiya Rakova said on Thursday. “Last week, only federal laboratories were authorized to conduct tests. We have fully joined this effort, launching nine laboratories. Today we are conducting nearly 4,000 tests for the coronavirus in Moscow laboratories. In the coming week w will boost the capacity to 13,000 [tests] per day,” Rakova told a TV program hosted by Vladimir Solovyov on Rossiya-1 channel. According to Rakova, the authorities were preparing for all scenarios of how the events would unfold. “Increasing the number of people who are to be tested for the coronavirus is a necessary condition and a crucial step for stopping the spread of the virus,” she stressed.


In late December 2019, Chinese authorities notified the World Health Organization (WHO) about the outbreak of a previously unknown pneumonia in the city of Wuhan, central China. Since then, cases of the novel coronavirus – named COVID-19 by the WHO – have been reported in more than 150 countries. [..]Russia has recorded 840 coronavirus cases, with more than half of them in Moscow. Some 38 people have recovered and have been discharged from hospitals, and two people have died.

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When the desire for optimist political messaging becomes fully irresponsible.

New Zealand Coronavirus Deaths During Lockdown Could Be Just 20 – Modelling (G.)

Jacinda Ardern has implored New Zealanders to “stay local” during a four-week countrywide lockdown as modelling showed that strict measures adopted by the country could limit deaths to 0.0004% of the population – or about 20 people. Research released by Te Punaha Matatini suggested that, left unchecked, the virus could eventually infect 89% of New Zealand’s population and kill up to 80,000 people in a worst-case scenario. According to the research, intensive care beds would reach capacity within two months and the number of patients needing intensive care would exceed 10 times capacity by the time the virus peaked.


However, with the strictest suppression measures, which the country has adopted, the fatalities would drop to just 0.0004%. Hospital capacity would not be exceeded for over a year. These measures included physical distancing, case isolation, household quarantine, and closing schools and universities and would require the restrictions to remain in place until a vaccine or other treatment was developed. However, researchers noted such strategies can “delay but not prevent the epidemic”. “When controls are lifted after 400 days, an outbreak occurs with a similar peak size as for an uncontrolled epidemic,” the researchers wrote. The government has currently mandated a four-week lockdown.

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Zero recognition of living in a bubble.

Coronavirus Job Losses Will Raise Mortgage Stress More Than GFC Did (ABC.au)

As job losses continue to rise because of shutdowns in place to fight the coronavirus crisis, the number of Australians struggling to repay their mortgages is expected to lift to higher levels than seen during the global financial crisis. Credit rating agency S&P Global has warned the number of Australians falling behind on their mortgage repayments is likely to soar. “We currently expect increases in arrears to be higher than during the 2008 global financial crisis, given the wide-ranging effects on the economy stemming from the sudden disruption to economic activity,” S&P analyst Erin Kitson said. Australia avoided mass defaults during the GFC, with mortgage arrears rising to 1.69 per cent after the 2008 crisis, from a pre-crisis average of about 1.40 per cent.

The latest S&P data said mortgage arrears were 1.36 per cent in January, up from 1.28 per cent last December. Ms Kitson could not put a number on the exact number of Australian households that would be impacted by arrears but noted that many of those facing difficulty would be the self-employed. But the Federal Government’s stimulus packages and hardship relief measures from banks would limit some of the damage, Ms Kitson added. To fight the economic threat, the Government will announce a third stimulus package, expected within days. Many banks have also recently announced COVID-19 support packages that provide affected borrowers with an option to defer their repayments for up to six months.

The Reserve Bank cuts interest rates to a record low and announces a quantitative easing program for the first time in its history to help prevent a coronavirus-driven recession. And regulator, the Australian Prudential Regulation Authority (APRA), has said if a borrower who has been meeting their repayment obligations until recently chooses to take up the repayment holiday, then the bank need not classify that period as “arrears”. Other emergency measures aimed at banks include an emergency interest rate cut and $90 billion in cheap 0.25-per-cent funding for three years for small business loans.

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One day the Pentagon stops all troop movements, the next day the US declares Maduro a terrorist, and the allies, want nno part of this.

Seeing your soldiers die of corona would be much too close to WWI mass Spanish flu deaths in the trenches.

France, Czechs, & Other US Allies Exit Iraq Over COVID-19 Fears (ZH)

The United States has shown itself willing to both keep up its ‘maximum pressure’ campaign on Iran and its proxies while riding roughshod over Iraqi sovereignty by remaining in the country even as Baghdad leaders and the broader population demand a final exit. But in another sign Europe is ready to divorce itself from US aims in the region, France has abruptly withdrawn its forces from the country after being there for five years. Interestingly the prime reason given was troop safety concerns over the coronavirus outbreak, but we imagine European leaders likely now see an opportunity to make a swift and easy exit without provoking the ire of their US counterparts. International correspondents say this includes French withdrawal from six bases, with a small contingent of about 100 troops remaining in the country.


The Czech Ministry of Defense also announced the exit of its forces Wednesday, which followed a large contingent of British forces leaving last week, also on fears of coronavirus exposure during the mission. “British, French, Australian and Czech troops who were coaching Iraqi counterparts were being temporarily sent home as Baghdad had put a hold on training operations to prevent the spread of COVID-19,” reports the AFP this week. All had been there to support coalition anti-ISIL operations led by Washington. But as the US mission to defeat the Islamic State has lately become less relevant given the demise of the terror group, Washington’s focus became Iranian influence inside Iraq – far beyond the original mission scope. The US itself had been reportedly drawing down from certain bases, but is not expected to ultimately depart given the current high state of tensions with Iran-backed militias in the country.

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The stimulus bill has opened access to assictance for the entire gig economy.

Spike in Unemployment Claims is Even More Horrid Than it Appears (WS)

This morning, the US Dept. of Labor announced that 3.283 million people had filed initial unemployment claims in the week ended March 21. We were warned yesterday that today’s initial claims would be horrid. In his press conference yesterday concerning the coronavirus, California Governor Gavin Newsom said that California by itself had “just passed the 1 million mark” in unemployment claims since March 13 — and this might include claims to be reflected in the next reporting week. And it’s going to get worse. The five largest counties of the San Francisco Bay Area were the first major region in the US to go into lockdown on March 17. The State of California followed on March 20, toward the end of the unemployment-claims reporting week (through March 21), and many other states followed within days – and many of those claims were filed after this reporting week had ended. This is the mind-blowing effect what started to happen in the week ended March 21:

The report by the Department of Labor this morning listed some sectors that were particularly hard hit by “COVID-19 virus impacts”: • Services industries broadly, particularly accommodation and food services; • health care and social assistance services; • arts, entertainment and recreation; • transportation and warehousing; • manufacturing industries. However, this horrid spike in claims only shows a partial picture. Since the end of that reporting week, lockdowns have spread to many other states, and companies in those states are now struggling with how to cope. Many companies had already laid off people before the lockdowns – and this is reflected in today’s unemployment claims. But much of the fallout from those lockdowns and their secondary effects will be reflected in future reports.


The gig economy, as the US economy has been called due to the growth of business models that shift labor from employees to contract workers, is unprepared for this. Under current rules, gig workers cannot file for unemployment claims – though the stimulus package will change this. And for now, they have not filed for unemployment claims. But their hours of many have been cut, and others lost their gigs entirely. This includes musicians whose gigs were eliminated when bars, restaurants, and clubs shut down. It includers actors and singers and artists. It includes Uber and Lyft drivers whose business has dwindled. It includes self-employed vacation-rental entrepreneurs with some units on Airbnb that no one is booking because the travel industry has shut down. It includes tech workers whose projects have been put on hold. It includes instructors and coaches of all kinds – such as figure skating coaches, language coaches, and corporate coaches. And so on. Many millions of people.

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The battle between getting closer together and staying further apart. Stuck between social distancing and political distancing.

What Should The EU Do Now: 3-Point Plan For Averting A Depression (Varoufakis)

With Lives, Livelihoods and the Union on the brink, the COVID-19 pandemic is the greatest test of the European project in the history of the Union — and we are failing. Solidarity was meant to be a foundational principle of the EU. But solidarity is missing at the moment it is most needed. COVID-19 has revealed a fundamental truth: Europe is only as healthy as its sickest resident, only as prosperous as its most bankrupted. But the EU’s leadership is paralysed by its beggar-thy-neighbour – and now sicken-thy-neighbour – mindset. The price of this failure will not merely be lives lost and livelihoods destroyed. It will be the disintegration of the Union itself. In line with its Green New Deal for Europe, DiEM25 offers a 3-point plan to protect all European residents, avert an economic depression, and prevent the collapse the Union.

Our plan is premised on four basic facts.
1) Public debt will, and must, rise: The precipitous fall in private sector incomes must be replaced by government expenditure. If not, bankruptcies will destroy much of Europe’s productive capacity and, thus, deplete the tax base even further.

2) The wholesale rise in public debt must not divide us: The last euro crisis wrecked some member-states’ fiscal position while improving the fiscal position of others. The results are wildly different fiscal absorption capacities across the eurozone. If the rise in public debt is not a shared burden, the new euro crisis will destroy the last chance to hold the European Union together once the virus itself has been defeated.

3) A Eurobond is essential, but the devil is in its details: Nine eurozone governments have rightly demanded the issue of a Eurobond so that the burden of rising public debt is shared. But the most important questions remain: Which institution should issue it? And who will back it? DiEM25 believes there is only one answer: an ECB-Eurobond backed solely by the ECB.

4) A Eurobond is essential, but it is not enough: Two more interventions are needed. During the pandemic, Europe must inject directly cash into every citizen’s bank account immediately so as to prevent as many bankruptcies and lost livelihoods as possible. Once the pandemic recedes, Europe must embark upon a sizeable, effective and common green investment program so as to improve Europe’s overall capacity to bounce back.

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I haven’t had time to listen to the whole thing. But I miss Dylan Ratigan.

Dylan Ratigan: “An Abomination Beyond Comprehension” – “Bernie Folded” (Dore)

Jimmy Dore talks to Dylan Ratigan

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In the midst of the corona crisis,, Bob Dylan dropped a 17-minute song, on the murder of JFK. It’s his first original song in 8 years, and also of course since getting the Nobel Prize.. And why not. For help with lyrics go here

The day that they killed him, someone said to me, ‘Son
The age of the Antichrist has only begun.’
Air Force One coming in through the gate
Johnson sworn in at 2:38
Let me know when you decide to thrown in the towel
It is what it is, and it’s murder most foul


What’s new, pussycat? What’d I say?
I said the soul of a nation been torn away
And it’s beginning to go into a slow decay
And that it’s 36 hours past Judgment Day

Muder Most Foul (Bob Dylan)

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Readership is up, but ad revenue is not. I’ve said it before, it must be possible to run a joint like the Automatic Earth on people’s kind donations. These are no longer the times when ads pay for all you read, your donations have become an integral part of it. It has become a two-way street; and isn’t that liberating, when you think about it?

Thanks everyone for your wonderful donations over the past few days.

 

 

 

Support us in virustime. Help the Automatic Earth survive. It’s good for you.

 

Dec 172018
 
 December 17, 2018  Posted by at 10:37 am Finance Tagged with: , , , , , , , , , , , ,  7 Responses »


Arnold Böcklin The Isle of Life 1888

 

Market Meltdown Could Spark Conditions ‘Worse Than 1929’- Ron Paul (CNBC)
For The First Month Since 2008, Not A Single Junk Bond Prices (ZH)
Starvation, Homelessness And More REAL Problems Pushed Aside By Brexit (Mi.)
Average UK Home Asking Price Dips £10,000 From October (G.)
No 10 Denies Making Plans For Second Brexit Referendum (G.)
May To Urge MPs Not To ‘Break Faith’ By Demanding People’s Vote (G.)
Saudi Arabia Rejects US Senate ‘Interference’ In Kingdom’s Affairs (AFP)
Turkey FM Says Saudis ‘Didn’t Share Anything’ On Khashoggi Murder (CNBC)
Turkey FM: Washington Is ‘Working On’ Gulen Extradition (CNBC)
US Ready To Fight To Last Brit (Garrison)
Trump Will Sit Down With Mueller ‘Over My Dead Body’ – Giuliani (Ind.)
FBI, CIA Told WaPo They Doubted Key Allegation In Steele Dossier (ZH)
Guardian Most Trusted Newspaper In Britain – Report (G.)

 

 

We’re just waiting for leveraged loans to go Poof.

Market Meltdown Could Spark Conditions ‘Worse Than 1929’- Ron Paul (CNBC)

Ron Paul is warning this year’s corrections could be a precursor to an epic market collapse that may come sooner than investors think. According to the former Republican presidential candidate, Wall Street is becoming more vulnerable to near-depression conditions within the next 12 months. “Once this volatility shows that we’re not going to resume the bull market, then people are going to rush for the exits,” Paul said Thursday on CNBC’s “Futures Now.” The relentlessly bearish former congressman added that “It could be worse than 1929.” During that year, the stock market began hemorrhaging, falling almost 90 percent and sending the U.S. economy into a tailspin.

Paul, a well-known Libertarian, has been warning Wall Street a massive market plunge is inevitable for years. He’s currently projecting a 50 percent decline from current levels as his base case, citing the ongoing U.S.-China trade war as a growing risk factor. “I’m not optimistic that all of the sudden, you’re going to eliminate the tariff problem. I think that’s here to stay,” he said. “Tariffs are taxes.” The scenario is exacerbating Paul’s chief reason behind his bearish call: 2008 financial crisis easy money policies. He contended the Federal Reserve’s quantitative easing has caused the “biggest bubble in the history of mankind.” “It’s so important to understand the original cause of the problem, and that is the Federal Reserve running up debt and letting politicians spend money,” he added.

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Damn vigilantes!

For The First Month Since 2008, Not A Single Junk Bond Prices (ZH)

Late last week, we reported that in the aftermath of a dramatic drop in loan prices, a record outflow from loan funds, and a general collapse in investor sentiment that was euphoric as recently as the start of October, the wheels had come off the loan market which was on the verge of freezing after we got the first hung bridge loan in years, after Wells Fargo and Barclays took the rare step of keeping a $415 million leveraged loan on their books after failing to sell it to investors. The two banks now “plan” to wait until January – i.e., hope that yield chasing desperation returns – to offload the loan they made to help finance Blackstone’s buyout of Ulterra Drilling Technologies, a company that makes bits for oil and gas drilling.

The reason the banks were stuck with hundreds of millions in unwanted paper is because they had agreed to finance the bridge loan whether or not there was enough demand from investors, as the acquisition needed to close by the end of the year. The delayed transaction means the banks will have to bear the risk of the price of the loans falling further, as well as costs associated with holding loans on their books. The pulled Ulterra deal wasn’t alone. As we reported previously, in Europe the market appears to have already locked up, as three loans were scrapped over the last two weeks. To wit, movie theater chain Vue International withdrew a 833 million pound-equivalent ($1.07 billion) loan sale.

While the deal was meant to mostly refinance existing debt, around 100 million pounds was underwritten to finance the company’s acquisition of German group CineStar. More deals were pulled the prior week when diversified manufacturer Jason Inc. became at least the fourth issuer to scrap a U.S. leveraged loan. Additionally, Perimeter Solutions also pulled its repricing attempt, Ta Chen International scrapped a $250MM term loan set to finance the company’s purchase of a rolling mill, and Algoma Steel withdrew its $300m exit financing. Global University System in November also dropped its dollar repricing.

[..] the FT picks up on the fact that the junk bond market – whether in loans or bonds – has frozen up, and reported that US credit markets have “ground to a halt” with fund managers refusing to fund buyouts and investors shunning high-yield bond sales as rising interest rates and market volatility weigh on sentiment (ironically it is the rising rates that assure lower rates as financial conditions tighten and the Fed is forced to resume easing in the coming year, that has been a major hurdle to floating-rate loan demand as the same higher rates that pushed demand for paper to all time highs are set to reverse). Meanwhile, things are even worse in the bond market, where not a single company has borrowed money through the $1.2tn US high-yield corporate bond market this month according to the FT. If that freeze continues until the end of the month, it would be the first month since November 2008 that not a single high-yield bond priced in the market

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“About a third of all kids are in “Dickensian” poverty.”

Starvation, Homelessness And More REAL Problems Pushed Aside By Brexit (Mi.)

I watched the ultimate damp squib -my friend’s mum says squid but I m pretty sure it’s squib- as it unfolded on Wednesday night. Theresa May had it confirmed that only 117 of her own MPs hate her. So, on she limps. She said she was going anyway but won’t say when -maybe not today, maybe not tomorrow, but soon and for the rest of our lives. In the process she revealed what this is really all about. Brexit must be delivered at all costs and it must be HER that does it. If not, she slinks off into the night with a legacy that adds up to nothing.

I watched it in one of the House of Commons bars with a friend of mine from Scotland. Good bloke. Hibs fan.And as we watched the ‘drama’ unfold we were talking about the real problems in the country. His mate helps direct people to foodbanks in Scotland. In one afternoon they saw five families, hungry and without food, seek help. Five different families. A mixture of out-of-work and in-work poverty. And across these five families there were 27 children. That is, in 2018, in Britain, 27 children going to bed hungry each night. It gets, as you can imagine, worse. One of the kids couldn’t go to school. Not through illness, mercifully, but because he didn’t have any shoes. One of the mums hadn’t eaten for three days. Three days without food. Starving so she could feed her kids.

There are lots more stories like this, about 4.1 million, in fact. About a third of all kids are in “Dickensian” poverty. In Britain, in the winter, in 2018. About 1.9 million pensioners live the same way. Last winter 94 people died on Scotland’s streets. Universal Credit has hit so hard some are turning to prostitution, others are eating out of bins. What happened this week is not going to make any of that better. Look at Scotland. Everything is viewed through the prism of independence and talk of a “second independence referendum”. That is the central aim of the Scottish National Party, so you can’t blame them for concentrating on it. But what it means is that, in the real world, people suffer. [..] here’s the thing about parliamentary sovereignty, and backstops, and Brexit, and independence, and the future of the Union: You can’t eat them.

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Only fools would buy homes in the UK right now. But yeah, there are lots of those over there.

Average UK Home Asking Price Dips £10,000 From October (G.)

Asking prices for homes coming on to the market in the UK are nearly £10,000 lower than they were in October, as the property market headed for its worst annual performance in almost a decade. The average asking price of a UK home dipped by 3.2%, or £9,719, between October and December to £297,527, according to the property website Rightmove, with prices dipping 1.7% and 1.5% in November and December respectively. A softening of prices at the end of 2018 meant that asking prices rose by just 0.7% over the year as a whole, the weakest rate of growth since 2010. The traditional hotspots of London and south-east England became the weakest spots this year, recording the biggest annual falls in asking prices.

This followed a 1% rise in UK asking prices in 2017. Rightmove is predicting zero growth in UK prices in 2019, against a backdrop of stretched affordability and Brexit uncertainty. The property market is a cornerstone of the British economy and drives a large proportion of consumer spending, from DIY to carpets and furniture. But with buyers and sellers reluctant to pay the current market prices, especially in the east and south of England where prices have rocketed in recent years, analysts expect the difficult conditions to radiate out from the property market to other areas of spending. And while a slowdown in prices will be welcomed by younger buyers and those on lower incomes, any falls in values are expected to add the pressure on MPs to agree a Brexit deal.

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That can’t NOT do it.

No 10 Denies Making Plans For Second Brexit Referendum (G.)

Theresa May will summon EU27 ambassadors to No 10 this week as she continues to seek reassurances over the Irish backstop, with Downing Street vehemently denying drawing up contingency plans for a second referendum. The education secretary, Damian Hinds, said on Sunday: “Government policy couldn’t be clearer. We are here to act on the will of the people clearly expressed in the referendum.” He added: “A second referendum would be divisive. We had the people’s vote, we had the referendum, and now we’ve got to get on with implementing it. Any idea that having a second referendum now would break through an impasse is wrong. It might postpone the impasse, but then it would extend it.”

May attacked the former Labour prime minister Tony Blair this weekend for advocating a second vote, saying: “There are too many people who want to subvert the process for their own political interests rather than acting in the national interest. “For Tony Blair to go to Brussels and seek to undermine our negotiations by advocating for a second referendum is an insult to the office he once held and the people he once served.” The prime minister appears determined to pursue her strategy of seeking legal guarantees on the backstop and then putting her deal to MPs after Christmas. She is sending the government’s most senior legal officer, Jonathan Jones, to Brussels this week.

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As millions of her people starve, May focuses on her legacy.

May To Urge MPs Not To ‘Break Faith’ By Demanding People’s Vote (G.)

Theresa May will urge MPs on Monday not to “break faith with the British people” by demanding a second referendum, as she faces intense pressure to give parliament a say on Brexit before Christmas. The prime minister will make a statement to MPs on last week’s European council summit in Brussels, from which she returned with little evidence of progress in securing legal reassurances on the Irish backstop. Jeremy Corbyn will take the opportunity to call on her to hold a vote on her Brexit deal this week, and senior Labour figures refuse to rule out an imminent no-confidence motion if she fails to do so. May, however, will use her appearance at the dispatch box to strongly reject the idea of a second referendum after Downing Street was forced to deny reports on Sunday that some of her key aides were secretly considering the idea.

“Let us not break faith with the British people by trying to stage another referendum,” the prime minister will tell MPs. “Another vote which would do irreparable damage to the integrity of our politics, because it would say to millions who trusted in democracy, that our democracy does not deliver. Another vote which would likely leave us no further forward than the last.” Her message is aimed partly at Conservative MPs, and some ministers, who have become increasingly convinced that a referendum is the only way out of the impasse at Westminster after the prime minister abruptly pulled plans for a vote on her deal last week. She also faces growing demands from within cabinet to present MPs with alternatives in non-binding indicative votes that might help to find options that could command a majority.

[..] May’s reluctance to hold a second referendum put her in rare agreement with her former foreign secretary, Boris Johnson. In his column in Monday’s Telegraph, he said the public would be “utterly infuriated” if Britain were to be put through the “misery and expense” of another referendum. However, the former Labour foreign secretary Margaret Beckett said: “It is highly significant that Downing Street felt it had to issue these advance extracts of Theresa May’s statement to the House of Commons on Sunday night, because officials know the prospect of a people’s vote is being discussed, not just in Westminster, but in the corridors of Whitehall, too. “The case for the public being given the final say is becoming so overwhelming that people from all parties, and of none, now recognise that this is the best way forward for our country.”

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They’re only too happy when the interference benefits them., as it has for many decades.

Saudi Arabia Rejects US Senate ‘Interference’ In Kingdom’s Affairs (AFP)

Saudi Arabia has rejected as “interference” a US Senate resolution to end American military support for a Riyadh-led war in Yemen, and another holding its crown prince responsible for the murder of Saudi journalist Jamal Khashoggi. “The Kingdom of Saudi Arabia rejects the position expressed recently by the United States Senate, which was based upon unsubstantiated claims and allegations, and contained blatant interferences in the Kingdom’s internal affairs, undermining the Kingdom’s regional and international role,” the statement carried by Saudi Press Agency on Sunday said.

“The Kingdom hopes that it is not drawn into domestic political debates in the United States of America, to avoid any ramifications on the ties between the two countries that could have significant negative impacts on this important strategic relationship.” On Thursday, the US Senate passed a resolution calling for an end to American military support to the Saudi-led coalition in the Yemen war, and asserted Congress’s right to decide on matters of war and peace. The measure, which passed by 56 votes to 41, marked the first time the Senate had invoked the 1973 War Powers Resolution to seek to curb the power of the president to take the US into an armed conflict. It marked a significant bipartisan rebuke to the Trump administration, which lobbied intensively against it.

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Maybe the US Senate can ask where the body is.

Turkey FM Says Saudis ‘Didn’t Share Anything’ On Khashoggi Murder (CNBC)

Turkey still hasn’t received actionable information on the murder of Saudi journalist Jamal Khashoggi, its foreign minster Mevlut Cavusoglu told CNBC Sunday. “So far we haven’t been provided any information from the ongoing investigation in Saudi Arabia. Their chief prosecutor got everything from us, he didn’t share anything with us. We want a transparent, credible, swift investigation on Saudi side as well,” Cavusoglu told the network’s Hadley Gamble at the annual Doha Forum in Qatar. The minister has previously vowed to get to the bottom of the case and hold those responsible to account. [..] Among the many questions remaining unanswered is that of the whereabouts of Khashoggi’s remains.

“We don’t know where the body is,” the minister said. “This is the main question – we need to find out. They said they had local collaborators; they haven’t provided the names of collaborators.” [..] Meanwhile, Cavusoglu said Saudi officials have listened to tapes of Khashoggi’s murder, contradicting earlier statements by Saudi foreign minister Adel al Jubeir that the Saudis had not heard them. [..] “You can hear very clearly that they planned in advance to kill him,” Cavusoglu said, reminding the audience that a forensic expert had been brought into the consulate to cut Khashoggi’s body apart. “From the beginning we’ve been willing to cooperate with Saudi Arabia as well, since all these perpetrators came from Saudi Arabia and now they are arrested there and we accepted immediately the proposal coming from them for cooperation with our prosecutors.”

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If true, that would be a really bad thing.

Turkey FM: Washington Is ‘Working On’ Gulen Extradition (CNBC)

Ankara and Washington have discussed the extradition of Turkish cleric Fethullah Gulen from the United States, Turkey’s foreign minister told CNBC Sunday. Turkey’s government has demanded Gulen’s return since the failed Turkish coup of 2016, which it accuses the cleric of orchestrating. “Last time when they met in Buenos Aires, Trump told Erdogan that they have been working on that, but we need to see concrete steps because it’s been already two years, almost three years,” Mevlut Cavusoglu told CNBC’s Hadley Gamble at the Doha Forum on Sunday. A former ally of President Recep Tayyip Erdogan, Gulen has lived in self-imposed exile in the U.S. for nearly 20 years.

He denies any involvement in the coup attempt, which saw rogue Turkish military personnel commandeer helicopters, jets and tanks, attack parliament and seize television stations. Political analysts suspected Trump might use Gulen as a bargaining chip in exchange for Turkish compliance in the scandal of Jamal Khashoggi. [..] But Trump told press last month that he was not considering extraditing the preacher to meet those ends.

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Ann Garrison interviews George Szamuely, a Hungarian-born scholar and Senior Research Fellow at London’s Global Policy Institute.

US Ready To Fight To Last Brit (Garrison)

GS: Well, of course Ukraine can ask for anything it likes. There’s no way in the world Turkey would try to stop Russian ships going through the Bosporus Strait. That would be a violation of the 1936 Montreux Convention and an act of war on the part of Turkey. It isn’t going to happen. As for the Kerch Strait, it is Russian territorial water. Ukraine is free to use it and has been doing so without incident since 2014. The only thing the Russians insist on is that any ship going through the strait use a Russian pilot. During the recent incident, the Ukrainian tug refused to use a Russian pilot. The Russians became suspicious, fearing that the Ukrainians were engaged in a sabotage mission to blow up the newly constructed bridge across the strait. You’ll remember that an American columnist not so long ago urged the Ukrainian authorities to blow up the bridge. That’s why the Russians accuse Kiev of staging a provocation.

AG: There’s a longstanding back channel between the White House and the Kremlin, as satirized in Dr. Strangelove. Anti-Trump fanatics keep claiming this is new and traitorous, but it’s long established. Obama and Putin used it to keep Russian and US soldiers from firing on one another instead of the jihadists both claimed to be fighting in Syria. Kennedy and Khrushchev used it to keep the Bay of Pigs crisis from escalating into a nuclear war. Shouldn’t Trump and Putin be talking on that back channel now, no matter how much it upsets CNN and MSNBC?

GS: Well, of course, they should. The danger is that in this atmosphere of anti-Russian hysteria such channels for dialogue may not be kept open. As a result, crises could escalate beyond the point at which either side could back down without losing face. What’s terrifying is that so many US politicians and press now describe any kind of negotiation, dialogue, or threat-management as treasonous collusion by Donald Trump.

Remember Trump’s first bombing in Syria in April 2017. Before he launched that attack, Trump administration officials gave advance warning to the Russians to enable them to get any Russian aircraft out of harm’s way. This perfectly sensible action on the part of the administration—leave aside the illegality and stupidity of the attack—was greeted by Hillary Clinton and the MSNBC crowd as evidence that the whole operation was cooked up by Trump and Putin to take attention off Russia-gate. It’s nuts.

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Why would there be a sit down with so much water under the bridge? What are the odds that Mueller would be impartial?

Trump Will Sit Down With Mueller ‘Over My Dead Body’ – Giuliani (Ind.)

Donald Trump will sit and talk to special counsel Robert Mueller “over my dead body”, his lawyer Rudy Giuliani has said, in the latest pushback against the investigation into possible collusion between the president’s election campaign and Moscow. As Mr Trump called his former personal lawyer Michael Cohen “a rat” for cooperating with the FBI, Mr Giuliani made clear Mr Mueller would not be offered an interview with the president. Mr Trump recently provided Mr Mueller’s team written answers to a series of questions, but on Friday CNN said the special prosecutor was still interested in an in-person interview. “Nothing has changed in that sense from the first day,” said a source.

Mr Giuliani, the former New York mayor who now serves as the president’s personal lawyer, on Sunday again firmly pushed back at such a notion. Asked on Fox News whether Mr Trump would take part in an interview, Mr Giuliani said: “Yeah, good luck, good luck – after what they did to [Michael] Flynn, the way they trapped him into perjury, and no sentence for him.” He added: “Over my dead body. But you know, I could be dead.” Mr Giuliani also attacked Mr Mueller’s investigation, saying the probe was a “joke”. “I am disgusted with the tactics they have used in this case,” he said. “What they did to Gen Flynn should result in discipline. They’re the ones who violated the law. They’re looking at a non-crime, collusion.”

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And WaPo declined to follow up on it. That’s American media for you.

FBI, CIA Told WaPo They Doubted Key Allegation In Steele Dossier (ZH)

FBI and CIA sources told a Pulitzer Prize-winning Washington Post reporter that they didn’t believe a key claim contained in the “Steele Dossier,” the document the Obama FBI relied on to obtain a surveillance warrant on a member of the Trump campaign. The Post’s Greg Miller told an audience at an October event that the FBI and CIA did not believe that former longtime Trump attorney Michael Cohen visited Prague during the 2016 election to pay off Russia-linked hackers who stole emails from key Democrats, reports the Daily Caller’s Chuck Ross. “We’ve talked to sources at the FBI and the CIA and elsewhere — they don’t believe that ever happened,” said Miller during the October event which aired Saturday on C-SPAN.

“We literally spent weeks and months trying to run down… there’s an assertion in there that Michael Cohen went to Prague to settle payments that were needed at the end of the campaign. We sent reporters to every hotel in Prague, to all over the place trying to – just to try to figure out if he was ever there, and came away empty.” -Greg Miller. Ross notes that WaPo somehow failed to report this information, nor did Miller include this tidbit of narrative-killing information in his recent book, “The Apprentice: Trump, Russia, and the Subversion of American Democracy.”

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Britian is as bad as the US.

Not the Onion, not April 1.

Guardian still hasn’t apologized for making up the Manafort-Assange story from scratch.

Guardian Most Trusted Newspaper In Britain – Report (G.)

The Guardian is the most trusted newspaper in Britain as well as being the most read quality news outlet, and the most popular quality news outlet among younger readers, according to industry figures released on Monday. The Guardian is now reaching more than 23 million British adults every month, with the organisation’s articles being read by 12 million Britons in a typical week and 4.1 million on the average day, aided by the decision to keep the website free for all readers. In addition, more than 97% of online readers think that reading the Guardian is time well spent, which is the highest score among all national publishers in the country. The figure rises to 99% among Guardian print readers.

Readers of the Guardian website were also substantially more likely to say that they felt a close connection to the outlet, that it offered them something they could not get elsewhere, and that they trusted its reporting. The Observer topped the equivalent rankings for Sunday newspapers. “This fantastic set of results demonstrates the Guardian’s unique position in the media,” said the editor-in-chief, Katharine Viner. “We see consistently high scores for trust and engagement from both our digital and print readers, and it is excellent news that the Guardian resonates so strongly with younger audiences, too.”

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Nov 142018
 
 November 14, 2018  Posted by at 10:15 am Finance Tagged with: , , , , , , , , , , , ,  4 Responses »


Pablo Picasso Still life 1917

 

Britiain, EU Agree on Brexit Plan (G.)
France and Facebook Announce Partnership Against Online Hate Speech (Pol.eu)
Oil’s Unprecedented Slide Accelerates, Capitulates To Darkening Outlook (BBG)
Major Markets Are All Flashing Warning Signs (Roberts)
Trump’s Tariff Battle With China Spurs Record Dollar-Yuan Trading (CNBC)
Goldman Sachs Is Implicated In History’s Largest Financial Con (Ind.)
IMF Says Governments Could Set Up Their Own Cryptocurrencies (G.)
Amazon’s ‘HQ2’ Headquarters Will Cost US Taxpayers $2 Billion (R.)
Decoding The Hypersonic Putin On A Day Of Remembrance (Escobar)
Angela Merkel Calls For Creation Of ‘Real, True’ EU Army (Ind.)
Saudi ‘Kill Team’s’ Luggage Contained Syringes, Defibrillators, Scissors (AFP)
Who Gets to Live in Victimville? (Monics Lewinsky)
Social Media Increases Depression And Loneliness (TI)
Heatwaves Can ‘Wipe Out’ Male Insect Fertility (G.)

 

 

At sort of the last moment, the long awaited deal is announced. Alas, all it really does is push forward any awkward decisions- and there are many. And even that can be voted down by the Cabinet, or parliament, or some other party involved, like the DUP. One thing seems certain: Theresa May will no longer be in charge when actual decisions are made. So why would she care? It’s about saving face by now.

Britiain, EU Agree on Brexit Plan (G.)

Theresa May summoned her cabinet to an emergency meeting on Wednesday afternoon to sign off her long awaited final Brexit deal, prompting hard-Brexit Tories to call for senior ministers to stand up and block it. The critical meeting is the culmination of months of negotiations and will see May’s senior ministers consider whether they can personally endorse the agreement that the prime minister has been able to reach. Ministers were summoned to No 10 in the early evening and some met individually with May or her chief of staff, Gavin Barwell. They were given the chance to read the key documents, although they were not trusted to take any papers home.

Further one-on-one meetings were expected to take place on Wednesday. “Cabinet will meet at 2pm tomorrow to consider the draft agreement the negotiating teams have reached in Brussels, and to decide on next steps,” a No 10 spokesman confirmed. “Cabinet ministers have been invited to read documentation ahead of that meeting.” Key elements of the deal began to leak in the early evening. The UK was understood to have agreed that an independent arbitration committee will judge when a UK-wide customs backstop could be terminated, comprising an equal number of British and EU representatives plus an independent element.

There will be a review in July 2020, Brussels sources added, six months before the end of the transition period, at which it will be determined if the UK is ready to move to a free trade deal; transfer to the backstop; or extend the transition period, possibly by a year to 2021.

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Scary. The leader of one political party seeks to decide with Silicon Valley, what constitutes hate speech. The main potential target of this is Marine le Pen, who’s already had her share of hate accusations. Thing is, Macron has fallen behind her in the -EU election- polls, his popularity has fallen to 23%. And now Zuckerberg gives him the tools to get rid of Le Pen.

France and Facebook Announce Partnership Against Online Hate Speech (Pol.eu)

Emmanuel Macron just “friended” Mark Zuckerberg. The French president announced on Monday a six-month partnership with Facebook aimed at figuring out how the European country should police hate speech on the social network. As part of the cooperation — the first time that Facebook has teamed up with national politicians to hammer out such a contentious issue — both sides plan to meet regularly between now and May, when the European election is due to be held. They will focus on how the French government and Facebook can work together to remove harmful content from across the digital platform, without specifying the outcome of their work or if it would result in binding regulation.

The partnership, which will involve meetings in Paris, Dublin and California, may be broadened out to cover other as yet unnamed areas after six months. A French official who asked not to be named called the partnership an “unprecedented experiment” that would grant authorities insight into Facebook’s processes to formulate recommendations that are “concrete and operational.” The social networking giant is now trying to lobby national lawmakers on the perceived dangers of regulating the internet. “We are giving blind faith to our daily digital tools,” Macron told an audience in Paris. “Today, when I see our democracy, internet is much better used by the extremes … or by terrorist groups.”

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Feeding on itself by now?!

Oil’s Unprecedented Slide Accelerates, Capitulates To Darkening Outlook (BBG)

Oil’s unprecedented decline deepened as investors fled a market hammered by swelling excess supplies, a darkening demand outlook and U.S. President Donald Trump’s Twitter critique of the world’s biggest crude exporter. Futures plunged 7.1 per cent in New York on Tuesday for the biggest one-day drop in three years. OPEC’s dire forecast for 2019 demand came at a time of steadily rising American production and stockpiles. Trump admonished Saudi Arabia for planning to curb output and lamented prices that settled below US$56 a barrel for the first time in a year. “This tweet certainly did not help prices,” said Warren Patterson, a senior commodities strategist at ING Bank.

“Given the growing global surplus over the first half of 2019, OPEC will likely try to ignore President Trump’s call as much as possible.” West Texas Intermediate futures have fallen for a record 12 sessions on fears that a supply glut similar to the price-killing surplus of 2014 is redeveloping. In London, Brent futures have declined in 11 of the past 12 sessions. Money managers’ combined bullish positions in WTI and Brent sank to the lowest in 14 months as of Nov. 6, Commodity Futures Trading Commission data show, as long positions shrank and shorts increased.

“Today’s move is just capitulation,” said Nick Gentile, managing partner of commodity trading advisor NickJen Capital Management & Consulting LLC in New York. “You’re getting a combination of the systematic CTAs, the trend following guys, adding to the shorts and global macro guys liquidating longs.” WTI for December delivery dropped US$4.24 to end the session at US$55.69 a barrel on the New York Mercantile Exchange. Total volume traded Tuesday was about 90 per cent above the 100-day average.

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Master graphmaker Lance Roberts has some more. I picked a few.

Major Markets Are All Flashing Warning Signs (Roberts)

[..] the failure of the market to hold the 200-dma also increases the downside risk of the market currently. There is an important point here to be made about “bull markets” and “bear markets. While there is no “official” definition of what constitutes a “bull” or “bear” market, the generally accepted definition is a decline of 20% in the market. However, since I really don’t want to subject my clients to a loss of 20% in their portfolios, I would suggest a different definition based on the “trend” of the market as a whole. As shown in the chart below: • If prices are generally “trending higher” then such is considered a “bull market.” • A “bear market” is when the “trend” changes from positive to negative.

[..] what is happening domestically should not be a surprise. The rest of the world markets have already confirmed bear market trends and continue to trade below their long-term moving averages. (The very definition of a bear market.) While it has been believed the U.S. can “decouple” from the rest of the world, such is not likely the case. The pressure on global markets is a reflection of a slowing global economy which will ultimately find its way back to the U.S.

(Note: we closed all international and emerging market positions in our portfolios at the beginning of this year.) Just as a side note, China has been in a massive bear market trend since 2015 and is down nearly 50% from its previous highs.

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China’s foreign reserves are under severe pressure.

Trump’s Tariff Battle With China Spurs Record Dollar-Yuan Trading (CNBC)

Market uncertainty tied to the ongoing U.S.-China trade war has spurred more transactions than ever before between the American dollar and the Chinese yuan in recent months. Much of that volume comes as businesses and investors with exposure to the Chinese market are looking to hedge their foreign exchange risk. Many of them are looking to buy into the strengthening dollar, and that’s stoked speculation that Chinese authorities are intervening in the market to defend their currency, boosting trading volumes to new highs in the process. On Tuesday, currency traders told Reuters major state-owned banks were selling dollars to defend the Chinese yuan, as the greenback climbed to a 16-month peak against a basket for currencies.

Most trading between the two currencies takes place on the spot market, where dollars and yuan change hands as soon as a deal is done. That sort of market has seen volumes surge this year for the currency pair. But futures trading — where the transaction is agreed to take place at a later date at a certain price — is also increasingly catching dollar-yuan traders’ interests, according to Benjamin Lu, an investment analyst with Singapore brokerage Phillip Futures. [..] ups-and-downs in the foreign exchange market have prompted a Singapore-based privately backed Chinese exchange to launch a new dollar-offshore yuan futures contract. “Nobody knows how the trade war will end. There’s a lot of fear and panic in the financial market and worries about trade,” said Eugene Zhu, CEO of the Chinese-backed Asia Pacific Exchange.

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Malaysia should call Blankfein to testify in court. He knew, he was there. But Goldman is far more likely to just pay some huge fine.

Goldman Sachs Is Implicated In History’s Largest Financial Con (Ind.)

Even by Wall Street standards of gouging customers this was one hell of a skim. In 2012 and 2013, the Malaysian government was raising $6.5bn (£5bn) from investors to establish a sovereign wealth fund and finance various domestic infrastructure investment projects. And the cut for Goldman Sachs – the most prestigious investment bank in the world – for arranging the fundraising from the global capital markets? Ten per cent, or $600m. Now we can have a guess as to why the Malaysian authorities were so insouciant about those extortionate fundraising costs: because they themselves were, apparently, going to loot the pot in one of the biggest frauds in history. Around half of the fund has gone missing.

According to the US Justice Department a fair amount has been pumped into luxury American real estate and shady art auction bids. Appropriately, some went into investing in Martin Scorsese’s The Wolf of Wall Street. At one stage $680m mysteriously appeared in the bank account of the former Malaysian prime minister, Najib Razak, who chaired the 1MDB advisory board, and who is now charged in his own country with corruption. Malaysian politicians, officials and financiers had effectively bought Goldman Sachs’ blue chip reputation to pull in naive investors to the “1MDB” state investment fund. Ten per cent probably seemed a reasonable cut in the circumstances. The question is: what did Goldman know about the theft?

The bank claims today that it was completely oblivious. But the senior Goldman banker on the ground in Malaysia, Tim Leissner, certainly knew. He pleaded guilty in New York to financial crimes related to 1MDB last week, including bribery of officials to ensure Goldman was the sole fundraiser. What’s even more problematic for the bank is that Leissner told the court there was a “culture” at Goldman Sachs of bypassing internal compliance. That’s backed up by US prosecutors, who say Goldman’s business culture in the region was “highly focused on consummating deals, at times prioritising this goal ahead of the proper operation of its compliance functions”.

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And then let the IMF control them all.

IMF Says Governments Could Set Up Their Own Cryptocurrencies (G.)

Governments should consider offering their own cryptocurrencies to prevent the systems becoming havens for fraudsters and money launderers, Christine Lagarde, head of the International Monetary Fund said referring to the fast-growing fintech industry. Lagarde said central banks had to work quickly to establish digital cash for burgeoning networks of private financial transactions or risk their mushrooming into trading networks that were inherently unstable. A system regulated by central banks could become the basis for a rapid expansion of financial services to developing world countries and the poorest people in western societies without the risks associated with privately managed digital currencies, she said.

[..] Speaking at a fintech conference in Singapore, Lagarde said central banks would take over the processing of transactions while private-sector providers offered innovative services to customers. “The advantage is clear. Your payment would be immediate, safe, cheap, and potentially semi-anonymous. And central banks would retain a sure footing in payments. In addition, they would offer a more level playing field for competition, and a platform for innovation. Meanwhile your bank or fellow entrepreneurs would have ensured a friendly user experience based on the latest technologies,. “Putting it another way. The central bank focuses on its comparative advantage – back-end settlement – and financial institutions and start-ups are free to focus on what they do best – client interface and innovation. This is public-private partnership at its best.”

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Because Bezos is barely scraping by. Everywhere you look, Amazon gets rewarded for destroying communities.

Amazon’s ‘HQ2’ Headquarters Will Cost US Taxpayers $2 Billion (R.)

Amazon.com picked America’s financial and political capitals for massive new offices on Tuesday, branching out from its home base in Seattle with plans to create more than 25,000 jobs in both New York City and an area just outside Washington, D.C. The world’s largest online retailer plans to spend $5 billion on the two new developments in Long Island City and Arlington, Virginia, and expects to get more than $2 billion in tax credits and incentives with plans to apply for more. The prize, which Amazon called HQ2, attracted hundreds of proposals from across North America in a year-long bidding war that garnered widespread publicity for the company. Amazon ended the frenzy by dividing the spoils between the two most powerful East Coast U.S. cities and offering a consolation prize of a 5,000-person center in Nashville, Tennessee, focused on technology and management for retail operations.

[..] At the outset of its search last year, Amazon said it was looking for a business-friendly environment. The company said it will receive performance-based incentives of $1.525 billion from the state of New York, including an average $48,000 for each job it creates. It can also apply for other tax incentives, such as New York City’s Relocation and Employment Assistance Program that offers tax breaks potentially worth $900 million over 12 years. What benefit the company would actually get was unclear. In Virginia, Amazon will receive performance-based incentives of $573 million, including an average $22,000 for each job it creates. These rewards come on top of $1.6 billion in subsidies Amazon has received across the United States since 2000, according to a database from watchdog Good Jobs First.

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“We don’t have any defense that could deny the employment of such a weapon against us.”

Decoding The Hypersonic Putin On A Day Of Remembrance (Escobar)

A battle of ideas now rages across Europe, epitomized by the clash between the globalist Macron and populism icon Matteo Salvini, the Italian interior minister. Salvini abhors the Brussels system. Macron is stepping up his defense of a “sovereign Europe.” And much to the horror of the US establishment, Macron proposes a real “European army” capable of autonomous self-defense side by side with a “real security dialogue with Russia.” Yet all these “strategic autonomy” ideals collapse when you must share the stage, live, with the undisputed stars of the global show: President Donald Trump and President Vladimir Putin.

So the optics in Paris were not exactly of a Yalta 2.0 conference. There were no holds barred to keep Trump and Putin apart. Seating arrangements featured, from left to right, Trump, Chancellor Angela Merkel, Macron, his wife Brigitte and Putin. Neither Trump nor Putin, for different reasons, took part in a “walking in the rain” stunt evoking peace. And yet they connected. Sir Peter Cosgrove, the governor general of Australia, confirmed that Trump and Putin, at a working lunch, had a “lively and friendly” conversation for at least half an hour. No one better than Putin himself to reveal, even indirectly, what they really talked about. Three themes are absolutely key.

[..] Vast sectors of the US Deep State are in denial, but Putin may have been able to impress on Trump the necessity of serious dialogue due to an absolutely key vector: the Avangard. The Avangard is a Russian hypersonic glide vehicle capable of flying over Mach 20 – 24,700km/h, or 4 miles per second – and one of the game-changing Russian weapons Putin announced at his ground-breaking March 1 speech. The Avangard has been in the production assembly line since the summer of 2018, and is due to become operational in the southern Urals by the end of next year or early 2019.

In the near future, the Avangard may be launched by the formidable Sarmat RS-28 intercontinental ballistic missile and reach Washington in a mere 15 minutes, flying in a cloud of plasma “like a meteorite” – even if the launch is from Russian territory. Serial production of Sarmat ICBMs starts in 2021. The Avangard simply cannot be intercepted by any existing system on the planet – and the US knows it. Here is General John Hyten, head of US Strategic Command: “We don’t have any defense that could deny the employment of such a weapon against us.”

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“This is one of the scariest speeches I have heard as an MEP in my nine years. Merkel is an out-and-out European federalist and we should not be pandering to her as if she is on our side. She is on the side of the superstate.”

Angela Merkel Calls For Creation Of ‘Real, True’ EU Army (Ind.)

Angela Merkel has called for the creation of a “real, true” European army, echoing a similar call by her French counterpart. The German chancellor’s backing for the force comes amid a spat with US president Donald Trump, who took offence to a suggestion by Emmanuel Macron that such an army could ensure Europe’s security in the shadow of the United States. Ms Merkel endorsed the creation of the army while addressing MEPs at the European parliament in Strasbourg. “We should work on a vision of one day establishing a real, true European army,” Ms Merkel said. The French president made his call during a radio interview last week: “We have to protect ourselves with respect to China, Russia and even the United States of America.

“We will not protect the Europeans unless we decide to have a true European army.” He added: “When I see President Trump announcing that he’s quitting a major disarmament treaty which was formed after the 1980s Euro-missile crisis that hit Europe, who is the main victim? Europe and its security.” [..] Ms Merkel’s intervention is significant because France has historically been the strongest and most vocal proponent of an EU army, with its neighbour tentatively endorsing proposals for a joint command structure for military interventions. Eurosceptics reacted angrily to the speech. Conservative MEP David Campbell Bannerman said: “This is one of the scariest speeches I have heard as an MEP in my nine years. Merkel is an out-and-out European federalist and we should not be pandering to her as if she is on our side. She is on the side of the superstate.”

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Bone saw was a local purchase. As was the acid.

Saudi ‘Kill Team’s’ Luggage Contained Syringes, Defibrillators, Scissors (AFP)

Luggage carried by a 15-member Saudi team dispatched to Istanbul included scissors, defibrillators and syringes that may have been used against journalist Jamal Khashoggi, who was murdered in the Saudi consulate, a pro-government Turkish daily said Tuesday. X-ray images of the luggage were published in the Sabah newspaper as the New York Times reported that a member of the team at the consulate had told a superior by phone to “tell your boss”, suspected to be Crown Prince Mohammed bin Salman, that the operation was accomplished. Turkish media has published gruesome details of the murder of 59-year-old Khashoggi who according to a Turkish prosecutor was strangled and dismembered soon after he entered the Istanbul consulate on October 2.

After repeated denials, Saudi Arabia finally admitted Khashoggi, a Washington Post columnist and Riyadh critic, had been murdered at the mission in a “rogue” operation. Turkish President Recep Tayyip Erdogan has said the 15-member Saudi team travelled from Riyadh to Istanbul to kill Khashoggi. The luggage carried by the team was loaded into two planes that left for Riyadh at 1520 GMT and 1946 GMT on October 2, Sabah newspaper said. The luggage contained 10 phones, five walkie-talkies, intercoms, two syringes, two defibrillators, a jamming device, staplers, and scissors, the paper reported. [..] Khashoggi’s body has never been found, but Sabah reported on Saturday that his killers poured his remains down the drain after dissolving them in acid.

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“..with the false narrative that my mouth was merely a receptacle for a powerful man’s desire”

Who Gets to Live in Victimville? (Monics Lewinsky)

The process of this docuseries led me to new rooms of shame that I still needed to explore, and delivered me to Grief’s doorstep. Grief for the pain I caused others. Grief for the broken young woman I had been before and during my time in D.C., and the shame I still felt around that. Grief for having been betrayed first by someone I thought was my friend, and then by a man I thought had cared for me. Grief for the years and years lost, being seen only as “That Woman”—saddled, as a young woman, with the false narrative that my mouth was merely a receptacle for a powerful man’s desire. (You can imagine how those constructs impacted my personal and professional life.)

Grief for a relationship that had no normal closure, and instead was slowly dismantled by two decades of Bill Clinton’s behavior that eventually (eventually!) helped me understand how, at 22, I took the small, narrow sliver of the man I knew and mistook it for the whole. The process became meta. As the project re-examined the narratives, both personal and political, surrounding the events of 1998, so did I. I revisited then-President Bill Clinton’s famous finger-wagging Oval Office interview from early 1998, in which I was anointed “That Woman,” and was transported to my apartment in the Watergate apartment complex.

Sitting on the edge of my grandma’s bed and watching it unfold on TV, 24-year-old me was scared and hurt, but also happy that he was denying our relationship, because I didn’t want him to have to resign. (“I didn’t want to be responsible for that,” I thought at the time, absolving anyone else of responsibility.) Forty-five-year-old me sees that footage very differently. I see a sports coach signposting the playbook for the big game. Instead of backing down amid the swirling scandal and telling the truth, Bill instead threw down the gauntlet that day in the Oval Office: “I did not have sexual relations with that woman, Miss Lewinsky.” With that, the demonization of Monica Lewinsky began. As it so often does, power throws a protective cape around the shoulders of the man, and he dictates the spin by denigrating the less powerful woman.

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Just like alcohol and cocaine do.

Social Media Increases Depression And Loneliness (TI)

Ever since sites like Facebook and Instagram became part of daily life, scientists have wondered whether they contribute to mental health problems. In fact, research has hinted at a connection between social media use and depression for several years. A new study, published in the Journal of Social and Clinical Psychology, has added more evidence to the theory. [..] “Here’s the bottom line,” said Melissa G. Hunt, a psychologist at the University of Pennsylvania and lead author of the study. “Using less social media than you normally would leads to significant decreases in both depression and loneliness. These effects are particularly pronounced for folks who were more depressed when they came into the study.”

She added 18-to-22-year-olds shouldn’t stop using social media altogether, but cutting down might be beneficial. “It is a little ironic that reducing your use of social media actually makes you feel less lonely,” she said. “Some of the existing literature on social media suggests there’s an enormous amount of social comparison that happens. When you look at other people’s lives, particularly on Instagram, it’s easy to conclude that everyone else’s life is cooler or better than yours.”

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Mammals too. Semen is temperature sensitive.

Heatwaves Can ‘Wipe Out’ Male Insect Fertility (G.)

Heatwaves severely damage the fertility of male beetles and consecutive hot spells leave them virtually sterilised, according to research. Global warming is making heatwaves more common and wildlife is being annihilated, and the study may reveal a way in which these two trends are linked. The scientists behind the findings said there could also be some relevance for humans: the sperm counts of western men have halved in the last 40 years. Researchers studied beetles because their 400,000 species represent about a quarter of all known species. Insect populations are plunging worldwide as temperatures rise, falling by about 80% in 30 years in Puerto Rico’s rainforest and by 75% in German nature reserves.

Insects are such an integral part of life, as pollinators and prey, that scientists say their decline could lead to “ecological Armageddon”. Little is known about the precise causes of the decline, though climate change, habitat destruction and global use of pesticides are considered probable factors. The research, published in the Nature Communications journal, found that exposing beetles to a five-day heatwave in the laboratory reduced sperm production by three-quarters; females were unaffected. “Beetles are thought to constitute a quarter of biodiversity, so these results are very important for understanding how species react to climate change,” said Kris Sales, at the University of East Anglia, who led the work.

Other research has shown that heat can damage male reproduction in humans as well as cows, sheep and other mammals. “There could be relevance for human fertility,” said Prof Matt Gage, co-leader of the UEA research group. “The paradox is that one of the reasons the climate is warming up and we are having more heatwaves is there are too many humans. So maybe this is a leveller.” Stuart Wigby, of the University of Oxford, who was not involved in the study, said: “Given what we already know about the generality of the sensitivity of sperm to heat, there is every reason to expect that similar effects would be seen in other insects and also in mammals including humans.”

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Aug 012018
 
 August 1, 2018  Posted by at 8:59 am Finance Tagged with: , , , , , , , , , ,  6 Responses »


Getty Marilyn Monroe in NY subway 1955

 

Apple Buybacks Eclipse Value Of Most S&P 500 Companies (R.)
A Record 18% Of China’s GDP Goes To Debt Service (ZH)
IMF Warns On Greek Debt Sustainability (ZH)
The Greatest Depression (Coppola)
EU’s Brexit Declaration Could Be Just ‘Four Or Five Pages’ Long (G.)
UK Government Accused Of Trying To Hide Devastating Impact Of Brexit (Ind.)
No UK Car Manufacturer Ready For Brexit (Ind.)
Seymour Hersh On Novichok, Russian Links To Donald Trump And 9/11 (Ind.)
Please Sign Letter To Pope Francis Seeking Help For Julian Assange (LACW)
Julian Assange And Lawyer Want Malcolm Turnbull To ‘Stand Up To US’ (N.)
As Long As Assange Is Silenced, Claims Against Him Are Illegitimate (CJ)
Italian Ship Violates International Law, Returns Rescued People To Libya (G.)

 

 

Why are Apple shares rising? We can’t know. This is not a market.

Apple Buybacks Eclipse Value Of Most S&P 500 Companies (R.)

Apple Inc said on Tuesday it handed its shareholders $20 billion through share buybacks in the June quarter, bringing its tally this year to a record $43 billion and helping push its stock price to an all-time high. With a mountain of overseas cash freed up by last year’s sweeping U.S. corporate tax cuts, Apple’s share repurchases in the first half of calendar 2018 exceed the stock market value of almost three quarters of the companies in the S&P 500, including Ford, Delta Air Lines and Twitter Inc. Apple’s share repurchases in the June quarter were only eclipsed in the history of the S&P 500 by Apple repurchasing $22.8 billion of its shares in the prior quarter, according to S&P Dow Jones Indices analyst Howard Silverblatt.

The recent pace of Apple’s buybacks, disclosed in a quarterly report that beat Wall Street’s expectations, could help support the iPhone maker’s stock as investors worry that some high-flying technology companies have become too expensive. Confidence in top-shelf technology and consumer stocks has been shaken in recent days following poor results from Facebook and Netflix. Apple said in May it was adding $100 billion to its budget for buybacks. Its stock is up 16% in 2018, compared with the S&P 500’s 5% rise. “I see the buybacks as a major determinant of near-term price appreciation,” said D.A. Davidson & Co analyst Thomas Forte.

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Effectively borrowing at an 18% interest rate?!

A Record 18% Of China’s GDP Goes To Debt Service (ZH)

Think China’s new “proactive” fiscal policy shigt will be sufficient to kick start the local economy, and boost global GDP? Think again. In the latest analysis from Vertical Group’s Gordon Johnson, the strategist writes “that China’s proactive fiscal policy pledge could fall short as servicing its existing credit stock absorbs an increasing share of GDP.” As a reminder, last week, China’s State Council said it will adopt a proactive fiscal policy, outlining ways to fund ¥1.4tn in bonds to local government for infrastructure & provide ¥1.1tn in tax cuts, among other actions (e.g., R&D tax credits), all while urging no broad-based stimulus.

In Johnson’s view, this is a narrative that is rather reminiscent of ‘14, when the gov’t unleashed a wave of “micro-stimulus” measures after a string of weak data points (i.e., 5 mos. of contracting real estate investment). Yet, as he notes, the most recent PBoC mini-stimulus is much smaller than ‘14, while key restrictions remain in place for real estate/shadow loans (historically growth-driving conduits), compounded by the law of diminishing returns, suggesting a smaller boost from a much larger base this time around.

Moreover, China’s total credit stock is markedly higher now than in ’14, implying more of every yuan in stimulus is going to service outstanding debt. How much? That may well be the critical question to gauge the flow through from any new fiscal policy. Here is Vertical Group’s answer: While China exited ’17 with an est. 266% of total credit to GDP, some economists put that ratio at >300% today. On trailing 12-mo. nominal GDP of ¥86.5tn, as of 2Q, this equates to >¥259.5tn in credit, which, assuming an avg. borrowing cost of 6%, means China’s annual debt service is ~¥14.3tn, or 18.0% of GDP – sensitizing interest & credit-to-GDP, to a respective range of 4-7% & 285-320%, puts China’s debt service at 14-22% of GDP.

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Insanity: “..Greece’s debt costs will “begin an uninterrupted rise” after 2038 — costing around 20% of the country’s GDP every year..”

IMF Warns On Greek Debt Sustainability (ZH)

As Greeks attempt to recover from the devastating and deadly wildfires, The IMF has decided to pile on the pain with a new report that raises questions about Greece’s debt sustainability, warning that the nation’s cash buffer is set to drop by half by end of 2022. IMF Mission Chief for Greece Peter Dohlman told reporters on conference call this morning that Greece’s cash buffer will rise to EU24b as a result of debt relief measures agreed by euro-area finance ministers in June, but that amount is set to drop by half to EU12b by end of 2022. Translating The IMF’s newspeak, it is explaining that without more generous debt relief measures, Greece “could struggle to maintain market access over the long run”, the fund said in its last economic assessment of the country before the end of its bailout on August 20.

The fund’s calculations find Greece’s debt costs will “begin an uninterrupted rise” after 2038 — costing around 20% of the country’s GDP every year. It is at this point that “additional relief would be needed to secure debt sustainability”, said the report. [..] Additionally, the fund suggests that Greek banks raise capital: “Stress tests results published by the ECB in May point to the resilience of the Greek banks in the baseline scenario but significant capital depletions in the adverse scenario,” IMF says in Art. IV report on the state of the Greek economy. IMF “staff estimates that if the three banks with lower CET1 were asked to maintain capital ratios under adverse conditions in line with a capital requirement of 7.5–8.0%, the related capital shortfall could be in the range of €1.3–1.9 billion”.

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Any recovery stories for Greece are bogus. Oh, and Zero Hedge is a ‘satirical blog’?

The Greatest Depression (Coppola)

The IMF has just released its latest review of the Greek economy. “Following a deep and protracted contraction,” it says in its press release, “growth has finally returned to Greece.” The green light has been given for Greece’s exit from its bailout program in August 2018. For many, this is welcome news. Greece has turned a corner. The dark days are behind it, and the future will be bright. But is this really the end of Greece’s troubles – or will there be more pain to come? The magnitude of Greece’s collapse over the last decade is extraordinary. Right at the start of the IMF’s review is this chart, which compares the fall in Greek output over the last 10 years with other major historical contractions, including the U.S.’s Great Depression:

The Greek people have just lived through a Depression as deep as the Great Depression and considerably longer. It is now the greatest recorded peacetime Depression. Fortunately, the Greatest Depression may now have run its course. The Greek economy grew by 1.4% in 2017, and the IMF projects that GDP growth will rise to 2% in 2018 and 2.4% in 2019. Of course, IMF growth forecasts for Greece need to be treated with considerable caution. As the Greek economy sank ever deeper into depression, the IMF continued to predict that growth would rebound “any day now.” The satirical blog ZeroHedge lampooned the IMF’s dire forecasting record as “hockey stick comedy.” But Greece did emerge from its long-running depression in 2017, and indications so far are that growth will be maintained this year.

[..] The legacy of the Greatest Depression, even with the doubtful benefit of those structural reforms, is a terribly weak and deeply damaged economy. Adult unemployment, which peaked at over 25% at the height of the Greatest Depression, is still over 20%, while youth unemployment is twice as high. In a footnote to its review, the IMF comments that structural unemployment (the average excess of people over jobs across the business cycle) was 15% in 2016 and is expected to fall only gradually “over the next two decades.” Many of Greece’s young people will be middle-aged by the time there is any work for them. Some may never work at all. An entire generation thrown on the scrap heap.

Despite all the pain the Greeks have endured to fix their country’s finances, Greece’s fiscal situation remains extremely precarious. The IMF staff predictions show absolutely no room for fiscal expansion, even though it is desperately needed, not least to relieve extremely high poverty levels. One in four people in Greece is living below the poverty line.

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The EU doesn’t think May will last much longer.

EU’s Brexit Declaration Could Be Just ‘Four Or Five Pages’ Long (G.)

The EU’s declaration on the trade and security relationship with the UK after Brexit will be just five to 30 pages long, reflecting a lack of time to have an internal debate and scepticism that Theresa May will remain in Downing Street to deliver it, officials in Brussels have disclosed. While the UK is seeking a “precise and substantive” document, to match the recently published 100-page white paper, officials in Brussels say the EU’s political declaration on the “future framework” has diminishing importance for them. Brussels is aware that the prime minister needs the document, due in the autumn, to be a “sweetener” to the main withdrawal agreement, which will commit the UK to pay a £39bn divorce bill and spell out whatever difficult deal is sealed on the issue of the Irish border.

The declaration will not be legally binding on either party but is designed to offer major economic actors some reassurance through a vision of the future trading and security relationship, and it will form part of the package on which the UK parliament and MEPs will ultimately vote in the new year. Given doubts in Brussels that May will get a deal through parliament, or remain in Downing Street for long if she manages it with the help of Labour votes, there will not be the high level of detail that the British government has been seeking, sources said.

A senior EU official told The Guardian that the paper could even be as short as “four or five pages”, the same length as the European council guidelines setting out the bloc’s headline objectives. “It can either be four five pages, or it could be a bit more elaborate but I think we are in the league of five to 25 to 35 pages. We have not time to thrash out the details,” the official said. “The more details you want the more advanced you should be in these negotiations.” The official added: “The reality is that, imagine after March next year the UK gets rid of May, the hard Brexiters take over and Boris says: ‘Too bad. I am not interested in all this. I want a basic free trade agreement, I want all my freedom.’ We have to adjust.

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And it will get a lot worse.

UK Government Accused Of Trying To Hide Devastating Impact Of Brexit (Ind.)

Ministers have been accused of misleading the public after denying that plans to “turn most of Kent into a giant lorry park” are because of Brexit. Work is underway to convert four lanes of a 13-mile stretch of the M20 motorway to allow hundreds of articulated lorries to park up if they are delayed in reaching the Port of Dover. The Department for Transport (DfT) claimed the work was simply an improvement on the existing Operation Stack, a way of managing traffic used many times to cope with “serious disruption to cross-channel transport”. But it has now emerged that the project has been renamed Operation Brock – which Kent County Council says stands for “Brexit Operations Across Kent”.

Vast extra space for lorries will be needed if the Brexit talks fail and, as Theresa May has threatened, the UK crashes out of the EU without a deal next year. There will be massive disruption if any extra checks are required in future – with one study warning of immediate 20-mile tailbacks at Dover if the time taken to clear customs merely doubles from the current two minutes. Virendra Sharma, a Labour MP and supporter of the anti-Brexit Best for Britain group, said: “The government is trying to hide the devastating impact of their Brexit policy. “Food will rot on the motorway and jobs are at risk as manufacturing supply chains are muddled and slowed by Brexit. We cannot let ministers use secrecy to railroad the concerns of councils about Brexit.”

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Nobody’s ready. If only because they don’t know what to be ready for.

No UK Car Manufacturer Ready For Brexit (Ind.)

The British motor industry has warned that “no one would confess to being Brexit ready” in their trade. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), argues that his members are “increasingly concerned” about the prospects for the UK leaving the EU on World Trade Organisation (WTO) terms, in the light of developments since Theresa May published the government’s latest Brexit white paper, which he and the SMMT welcomed. Michel Barnier, the EU’s chief negotiator, has since expressed scepticism about the proposed Facilitated Customs Arrangement (FCA), which would have been of particular value to manufacturing and the automotive sector.

In the light of EU resistance, and growing UK political volatility, the chances of the UK going to a “no deal” exit are increasing, meaning that Britain would move to WTO terms, as opposed to staying in the Single Market, the customs union or the FCA. This would imply tariffs of up to 10% in UK-EU trade in cars and parts, and greater bureaucracy in both directions, which would only be partly mitigated by “stockpiling” in the short run, given the demands of “just in time” manufacturing techniques and integrated cross-border supply chains. There is a tail risk that factory production of models such as the Mini at BMW’s plant in Oxford could be disrupted if crucial car components become unavailable.

Mr Hawes added that the prospect of a “no deal” Brexit was something no-one wished to see and that industry leaders wished to see “all options open as long as possible”. Reflecting on the 1,100 trucks that enter the UK from Europe every day to feed its factories, he said that the eight months remaining until formal Brexit on 29 March 2019 were “a real challenge”. British car production for the home market almost halved in June, compared to the same month a year ago, due to what the industry calls “a perfect storm” of factors that resulted in a freakish result.

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“The day after 9/11 we should have gone to Russia. We did the one thing that George Kennan warned us never to do – to expand NATO too far..”

Seymour Hersh On Novichok, Russian Links To Donald Trump And 9/11 (Ind.)

Hersh is honest enough to admit that today he might not have made it. He worked during the heyday of American journalism – when he was paid handsomely for exposes and when media outlets had the financial muscle to fund serious writing. When he covered the Paris Peace Accords for The Times, he was put up at the world famous five-star deluxe Hotel de Crillon. It is not long before we discuss contemporaneous events including the alleged Russian hacking of the US presidential election. Hersh has vociferously strong opinions on the subject and smells a rat. He states that there is “a great deal of animosity towards Russia. All of that stuff about Russia hacking the election appears to be preposterous.” He has been researching the subject but is not ready to go public… yet.

Hersh quips that the last time he heard the US defence establishment have high confidence, it was regarding weapons of mass destruction in Iraq. He points out that the NSA only has moderate confidence in Russian hacking. It is a point that has been made before; there has been no national intelligence estimate in which all 17 US intelligence agencies would have to sign off. “When the intel community wants to say something they say it… High confidence effectively means that they don’t know.” Hersh is also on the record as stating that the official version of the Skripal poisoning does not stand up to scrutiny. He tells me: “The story of novichok poisoning has not held up very well. He [Skripal] was most likely talking to British intelligence services about Russian organised crime.”

The unfortunate turn of events with the contamination of other victims is suggestive, according to Hersh, of organised crime elements rather than state-sponsored actions – though this flies in the face of the UK government’s position. [..] He ends the Goldsmiths talk with an anecdote about having lunch with his sources in the wake of 9/11. He vents his anger at the agencies for not sharing information. One of his CIA sources fires back: “Sy you still don’t get it after all these years – the FBI catches bank robbers, the CIA robs banks.” It is a delicious, if cryptic aphorism.

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The Pope is not a bad idea.

Please Sign Letter To Pope Francis Seeking Help For Julian Assange (LACW)

Your Holiness,

In your first Papal visit outside of Rome only months after your election as Supreme Pontiff, you choose the Italian island of Lampedusa, a refuge for migrants and asylum seekers fleeing the prospect of death. You did so to express your closeness and love to suffering people, to promote their dignity, which was under threat at home and in jeopardy in the countries where they seek refuge. Your first act upon arrival was to lay a wreath in the sea in memory of all those who had lost their lives seeking refuge. We, the undersigned, write to you, Your Holiness, as a loving Father to those who lives are in imminent danger, begging and beseeching you to speak up for someone whose life is in imminent danger.

A life that can only be saved by your intervention. In order to lessen the possibility of us laying a wreath in the coming days, in memory of the stateless asylum seeker Julian Assange, we ask that you speak out on his behalf. Julian is possible moments or hours away but certainly days away from being abducted by a SAS squad from the Ecuadorian Embassy in London, where his asylum status is about to be revoked. Based on the precedent the risk of death is very high. Last time the SAS entered an Embassy in London they assassinated their targets after they had surrendered and were unarmed lying on the ground.

With all legal avenues exhausted and the British, American, Ecuadorian and Australian governments all arranging the imminent raid on Julian, we cry out to you, Holy Father and ask that you encourage nations to respect the life of Julian Assange and to cease his arbitrary detention (as cited by the United Nations) and grant him asylum status where he can continue his work as a journalist, telling the truth, that is the truth that respects the dignity of persons. Please, Holy Father speak up and defend this life which so many powerful nations want to end and whose life only you can plead for leniency in a manner which may be heeded by the powerful who seek to end him.

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Australia should honor its own laws. And that means protecting its citizens.

Julian Assange And Lawyer Want Malcolm Turnbull To ‘Stand Up To US’ (N.)

[..] new British Foreign Secretary Jeremy Hunt claimed Assange was facing “serious charges” from local police. But there is confusion about what they are, as he is only facing a minor charge for breaching bail. Jennifer Robinson, Assange’s lawyer in London, told news.com.au she was “obviously very concerned” about the speculation he could be forced from the embassy. “We are monitoring that really closely. From our point of view he requires ongoing protection (because) the risk of prosecution is as high as it has ever been.” The Times quoted a source familiar with the case who expected Assange would “lose his asylum status imminently. This means he will be expelled from the embassy. When this will happen is impossible to say.”

It was Ms Robinson’s view, and Assange’s, that Australia could help break the stalemate. “Julian is still an Australian citizen and they have an obligation — and I think a duty — to exercise rights of protection over an Australian citizen,” she said. “They could usefully engage in this to help solve the impasse.” Ms Robinson said Canberra had good relationships with both the UK and US, so it shouldn’t be a difficult matter. “For me as a fellow Australian citizen, it is disappointing the government has not done more — but that doesn’t preclude them from doing it now and I very much hope that they will.” She said it raised concerns about the Federal Government’s willingness to “stand up for Australians” when the US Government was involved.

[..] Ms Robinson was mystified as to what charges Mr Hunt was referring to. “Jeremy Hunt’s statement is curious in the sense that Mr Assange doesn’t face any charges whatsoever … A magistrate will have to decide whether to bring bail proceedings against him when he leaves the embassy.” [..] “So is Mr Hunt talking about an extradition request from the US where he would face serious charges?” asked Ms Robinson. “Has he misspoken and disclosed that?” She told news.com.au that would be a serious matter. Assange’s legal team had sought assurances from the UK there was no extradition request and had been met with a “standard, blanket will not confirm or deny”. “So if Mr Hunt is talking about serious charges … there are none on the public record, so of course, we are concerned about what that might be from the US.”

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“..prosecuting a journalist for publishing authentic documents would arguably constitute a greater leap in the direction of Orwellian dystopia than the Patriot Act.”

As Long As Assange Is Silenced, Claims Against Him Are Illegitimate (CJ)

As attempts to evict Julian Assange from the Ecuadorian embassy in London get more and more aggressive, we are seeing a proportionate increase in the establishment smear campaign against him and against WikiLeaks. This is not a coincidence. The planned campaign to remove Assange from political asylum and the greatly escalated smear campaign to destroy public support for Assange are both occurring at the same time that Assange has been cut off from the world without internet, phone calls or visitors, completely unable to defend himself from the smear campaign. This, also, is not a coincidence.

The ability to control the narrative about what is going on in the world is of unparalleled importance to the plutocrats who use governments as tools to advance their agendas. The agenda to make an example of a leak publisher with a massive platform who has repeatedly exposed the corruption of the establishment upon which western plutocrats have built their empires will require continuous narrative spin, since the precedent set by prosecuting a journalist for publishing authentic documents would arguably constitute a greater leap in the direction of Orwellian dystopia than the Patriot Act.

Among the latest components of this campaign has been a viral dump of Twitter DMs being promoted as a hot news item by outlets like Motherboard, The Hill, Forbes and Think Progress and across #Resistance Twitter. The fact that the juicy bits from those DMs had already been published months ago by The Intercept, and the fact that the smears and spin we’re seeing reruns of today were long ago ripped to shreds in journalist Suzie Dawson’s epic essay “Being Julian Assange” after the Intercept publication, has not dampened the orgiastic frenzy with which this non-story is being bandied about by establishment loyalists and defenders of power as evidence of Assange’s nefariousness.

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Are we ever going to have that UN Emergency Meeting?

Italian Ship Violates International Law, Returns Rescued People To Libya (G.)

A search and rescue charity has alleged that an Italian ship returned scores of people rescued from the Mediterranean to Libya, even though Libya is not regarded by Europe as a safe place under international law. In what would be an unprecedented case if confirmed, the Asso 28, an oil rig support vessel, allegedly saved 108 people from a dinghy and then took them to Tripoli. The allegation was made by Òscar Camps, the founder of Proactiva Open Arms, a Spanish sea search and rescue NGO. It is unclear whether the ship had received instructions from the Italian coastguard. “The Asso 28, with an Italian flag, rescued 108 people in international waters and is now deporting them to Libya, a country where human rights are not respected. No chance [for them] to get asylum or shelter,” Camps wrote on Twitter.

Camps’ allegation was supported by Nicola Fratoianni, an Italian politician with Free and Equal, a small leftwing party, who was on board the Proactiva rescue ship. “We don’t know yet if this operation was instructed by the Italian coastguard, but if so it would be a very serious precedent, a real collective rejection, which Italy and the captain of the ship would have to respond to in court,” Fratoianni said. Two weeks ago Italy assured Germany that it would continue to accept migrants rescued at sea until an EU-wide plan on redistributing people across the continent was established. The pledge came after high-profile moves by Matteo Salvini, the interior minister and leader of the far-right League, to block rescue ships from docking at Italian ports.

In a response to Camps’ allegation on Tuesday, Salvini made no mention of the alleged involvement of an Italian ship in the incident. He wrote on Twitter: “The Libyan coastguard has rescued and brought back 611 immigrants in recent hours. The NGOs protest and the traffickers lose business? Fine, we’ll continue in this direction!” In another post, on Facebook, he wrote: “The Italian Coast Guard has not coordinated and participated in any of these operations, as falsely declared by a foreign NGO and a poorly informed leftist MP.”

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Jan 242018
 
 January 24, 2018  Posted by at 3:59 pm Finance Tagged with: , , , , , , , , , , , ,  11 Responses »


Rembrandt van Rijn The Storm on the Sea of Galilee 1633
On March 18, 1990, the painting was stolen by thieves disguised as police officers. They broke into the Isabella Stewart Gardener Museum in Boston, MA, and stole this painting, along with 12 other works. The paintings have never been recovered, and it is considered the biggest art theft in history. The empty frames still hang in their original location.

 

 

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

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

 

 

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

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

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

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

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

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

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

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

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

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

 

Let’s go down the list:

 

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

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

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

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

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

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

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

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

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

 

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

But this is history, and it never ends there.

 

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

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

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

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

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

 

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

 

1. Stock market rose, like he said.

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

3. Unemployment drops, like he said.

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

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

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

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

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

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

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

 

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

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

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

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

 

 

Jan 212018
 
 January 21, 2018  Posted by at 11:09 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »


Francisco Goya The Dog 1819-23

 

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

 

 

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

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

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

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

Read more …

No gloating.

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

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

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

Read more …

They have to release it, no choice.

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

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

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

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

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

Read more …

Don’t worry, the shadow banks will.

China Orders Banks To Stop Financing Cryptocurrencies (SCMP)

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

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

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

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As does Russia.

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

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

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

Read more …

A good point not particularly well made.

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

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

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

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

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Little emperor.

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

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

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

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It’s starting to feel like Stockholm Syndrome.

Athens Hopeful For Eurogroup Decisions Despite Problems (K.)

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

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

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Nice. Kiwis believe in fairy tales.

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

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

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

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

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

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

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

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

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

Read more …

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

Turkey Threatens Refugee Deal With EU (K.)

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

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

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

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New year, same old lack of humanity.

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

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

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

Read more …

Nov 302017
 


Roger Viollet Great Paris Flood, Gare Saint-Lazare 1910

 

Goldman Warns Highest Market Valuations Since 1900 Mean Pain Is Coming (BBG)
The Last Time This Happened Was Just Months Before The Great Depression (ZH)
Pecking Order (Ben Hunt)
The Bitcoin Debate: Max Keiser vs. Steve Keen (RT)
Why We Can’t Trust Basic Economic Figures (Qz)
What Americans Spent The Most Money On In The Third Quarter (ZH)
Monetary Imperialism (Michael Hudson)
One In 10 London Families Rely On Food Banks To Survive (Ind.)
Half A Million UK Children Go To School Hungry Every Day (Ind.)
All Is Not Well In The Visegrad Economies (CER)
Pressure On Greece To Scrap Arms Deal With Saudi Arabia (G.)
Greece Moves Hundreds Of Asylum Seekers From Lesvos To Mainland (R.)
Common Pesticide Can Make Migrating Birds Lose Their Way (G.)
‘Shocking’ Rise In Rubbish Washing Up On UK Beaches (G.)
Lobster Found With Pepsi Logo ‘Tattoo’ (G.)

 

 

Bubble, anyone?

Goldman Warns Highest Market Valuations Since 1900 Mean Pain Is Coming (BBG)

A prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to translate into pain for investors, according to Goldman Sachs. “It has seldom been the case that equities, bonds and credit have been similarly expensive at the same time, only in the Roaring ’20s and the Golden ’50s,” Goldman Sachs International strategists including Christian Mueller-Glissman wrote in a note this week. “All good things must come to an end” and “there will be a bear market, eventually” they said. As central banks cut back their quantitative easing, pushing up the premiums investors demand to hold longer-dated bonds, returns are “likely to be lower across assets” over the medium term, the analysts said.

A second, less likely, scenario would involve “fast pain.” Stock and bond valuations would both get hit, with the mix depending on whether the trigger involved a negative growth shock, or a growth shock alongside an inflation pick-up. “Elevated valuations increase the risk of draw-downs for the simple reason that there is less buffer to absorb shocks,” the strategists wrote. “The average valuation percentile across equity, bonds and credit in the U.S. is 90%, an all-time high.” A portfolio of 60% S&P 500 Index stocks and 40% 10-year U.S. Treasuries generated a 7.1% inflation-adjusted return since 1985, Goldman calculated – compared with 4.8% over the last century. The tech-bubble implosion and global financial crisis were the two taints to the record.

Low inflation has prevailed in the current period, just as it did alongside economic growth in the 1920s and 1950s, according to the Goldman report. “The worst outcome for 60/40 portfolios is high and rising inflation, which is when both bonds and equities suffer, even outside recessions.” An increase in policy rates triggered by price pressures “remains a key risk for multi-asset portfolios. Duration risk in bond markets is much higher this cycle,” they wrote.

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Bubble? Hell, no.

The Last Time This Happened Was Just Months Before The Great Depression (ZH)

As Goldman observes: “we are closing in on the longest 60/40 bull market in history – there has been no 10% drawdown in real terms since 2009. A passive long-only balanced portfolio has delivered attractive risk-adjusted returns since the 90s. A favourable ‘Goldilocks’ macro backdrop, supported by the ‘Great Moderation’ and the central bank put, has boosted returns in both equities and bonds. However, after the recent ‘bull market in everything’, valuations across assets are as expensive as they have been this century, which reduces the potential for returns and diversification in balanced portfolios. Some more statistics: “We are nearing the longest bull market for balanced equity/bond portfolios in over a century – a simple 60/40 portfolio (60% S&P 500, 40% US 10-year bonds) has not had a drawdown of more than 10% since the GFC trough (8.7 years) and has delivered a 143% return (11% p.a.) since then.”

And when was the last time a balance portfolio had such a tremendous return? Goldman answers again: “The longest run has been during the Roaring 20s, ending with the Great Depression. The second longest run was the post-war ‘Golden age’ in the 50s – the 90s Boom has been in third place but is now fourth, after the current run. In other words, one would have to go back to some time in early 1929 to be looking at the kind of returns that a balanced “60/40” portfolio is generating today. In fact, the current period of staggering returns without a 10% total drawdown is now 8.7 years. How long was the comparable period in the 1928s? 9.1 years. Which means that if history is any guide, the second great depression is just around the corner.

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If we can agree that trickle down is just a ruse invented to trick the gullible, we should also agree that any and all QE is robbery in plain daylight.

Pecking Order (Ben Hunt)

Step One in the Pecking Order Lie is to promote a narrative of trickle-down economics — that making the rich even richer is a good thing for the non-rich. This is exactly what Ben Bernanke is saying here, that the Fed’s extraordinary efforts to prop up the stock market aren’t just good for the rich, but will be good for everyone once the “wealth effect” kicks in and the rich start spending their money. Whenever someone uses the phrase “wealth effect”, they are promoting a trickle-down narrative. How does trickle-down monetary policy work? By spending TRILLIONS of dollars to buy financial assets, the world’s central banks have inflated the prices of ALL financial assets, EVERYWHERE in the world. This is not a secret plan. This is not a hidden agenda. This is the avowed purpose of what central bankers call Large Scale Asset Purchases (LSAPs).

The goal is to force us to “reach for yield”. The goal is to force us to buy more and more risky assets (stocks) at higher and higher prices. The Fed is trying to make the stock market go up. And they’re succeeding. Here’s a great chart from TCW showing how this works. The orange line is the growth rate of the US economy. The blue line is the growth rate of how rich we are. By tripling the stock market, the Fed has made us much richer than our economy has grown … SOOO much richer than our economy has grown. But the goodies of a trebled stock market aren’t evenly distributed. Who owns stocks? If we’re talking about households, leaving aside pension funds and endowments and other institutional investors, it’s the rich, mostly. And that household share of the Central Bankers’ Bubble doesn’t increase linearly with wealth, but exponentially, meaning that the really rich own a lot more stocks than the merely rich, so the really rich have gotten a lot richer than the merely rich.

Here’s a chart from Deutsche Bank showing the impact (it’s a year old, so the effect is even more pronounced today with the stock market 20% higher). Thirty years ago, the non-rich (the bottom 90% of American households by income) owned 35% of American household wealth. Today they own about 22%. Forty years ago, the really rich (the top 1/10th of 1% of American households by income) owned about 7% of American household wealth. Today they, too, own about 22%. Moreover, the gains of the really rich have mirrored the losses of the non-rich, which means that the well-off and merely rich (the remaining 9.9% of American households) haven’t seen much of a change one way or another.

Now this shift in relative wealth of the non-rich and the really rich didn’t start with the Central Bankers’ Bubble and its narrative of trickle-down wealth effects from monetary policy. It started roughly in 1980 with the Reagan narrative of trickle-down wealth effects from fiscal policy. And before we make overly facile comparisons with the 1920s and 1930s, this chart isn’t taking into account pensions and social security and other safety net features of the modern semi-sorta-welfare state. So I don’t know how historically abnormal today’s level of significant wealth inequality might be, whether it’s Louis XVI level inequality or simply robber baron level inequality. But I know that it IS.

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Love Max (as does Steve), but he doesn’t look good here. You don’t enter a discussion with Steve Keen without even trying to listen. And I remember Max pushing silver the same way he does bitcoin.

The Bitcoin Debate: Max Keiser vs. Steve Keen (RT)

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Netherlands as a (quasi-) legal money launderer.

Why We Can’t Trust Basic Economic Figures (Qz)

Donald Trump doesn’t know what he’s talking about when he decries America’s trade deficits with countries around the world—and that’s not his fault. None of us do. Thanks to offshoring practices like those revealed in the Paradise and Panama Papers, global investment figures are “a big black hole,” says Daniel Haberly, an economic geographer at the University of Sussex. “We don’t really know what the world economy actually looks like. That’s the big burning question for me. We have this picture of what it looks like on paper but in reality it’s probably something completely different.” Look no further than the UK for an example of how crazy investment statistics are. The first name on its list of top foreign direct investors doesn’t surprise—it’s the world’s biggest economy, the United States.

Second place, however, isn’t such a behemoth. According to British government stats, the Netherlands supposedly shoveled £139.8 billion ($186 billion), 28% of its GDP, into the UK in 2015. Anglo-Dutch ties run long and deep, but can a country of just 17 million people really be investing so much cash into Britain alone? Quite simply, no. The Netherlands is not just a smallish European trading nation—it’s also one of the world’s biggest conduits for cash going to and from tax havens. When the British government broke down its FDI statistics this year (chapter 6), it realized that only 34.5% of that money actually came from the Netherlands; much of the rest being from European subsidiaries of big US companies or… from British companies rerouting their money.

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The US political system failing to tackle healthcare, with a ton of examples how to do it across the world, tells you all you need to know about how morally bankrupt it is.

What Americans Spent The Most Money On In The Third Quarter (ZH)

One month ago, when the BEA released its first estimate of the hurricane-impacted economy during the third quarter (which came in at a stronger than expected 3.0%) we were surprised to report that according to the Department of Commerce, in the third quarter the biggest driver of marginal spending was car sales (technically Motor Vehicles and Parts), which increased by $15.6 billion to $463.5 billion. Which, as we said at the time and considering recent US and global automakers data, was paradoxical in light of the ongoing decline in overall sales in the second half of 2017, and it was far too early to expect the post-hurricane spending spree. It was also surprising because as Americans splurged on cars, they pulled back on gasoline purchases, which was the single biggest detractor to spending, subtracting a marginal $3.5 billion in PCE, to $283.6 billion.

In any case, we concluded by saying that “we now await for the revisions to this initial estimate over the coming two months, because something tells us that the auto spending spree will be thoroughly revised well lower.” One month later, when the BEA released its second Q3 GDP estimate, it appears we were right: the contribution from motor vehicles was indeed revised lower, but not nearly as dramatically as we expected, only from a marginal increase of $15.6 million to $13.5 million. And yet, many other line items did see a downward revision, which means that something had to increase sharply to compensate for the downward revisions among other spending components.

Sure enough, something did: the old faithful “plug” which has saved the US economy every quarter for the past 4 years: Healthcare, or as it is better known, Obamacare, because with Trump failing to repeal Obama’s signature health law, it means that Healthcare will merrily “contribute to GDP” for years to come, by being the single biggest marginal spending item for the foreseeable future.

Finally, for a comparison of how dramatically the contribution of “Healthcare” was revised higher, here is a chart showing side by side the change in spending among all key line items. One can almost hear the orders “from above” to make GDP 3% or higher at any cost when looking at this chart.

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Must. Read. Like anything Hudson.

Monetary Imperialism (Michael Hudson)

In theory, the global financial system is supposed to help every country gain. Mainstream teaching of international finance, trade and “foreign aid” (defined simply as any government credit) depicts an almost utopian system uplifting all countries, not stripping their assets and imposing austerity. The reality since World War I is that the United States has taken the lead in shaping the international financial system to promote gains for its own bankers, farm exporters, its oil and gas sector, and buyers of foreign resources – and most of all, to collect on debts owed to it. Each time this global system has broken down over the past century, the major destabilizing force has been American over-reach and the drive by its bankers and bondholders for short-term gains.

The dollar-centered financial system is leaving more industrial as well as Third World countries debt-strapped. Its three institutional pillars – the IMF, World Bank and World Trade Organization – have imposed monetary, fiscal and financial dependency, most recently by the post-Soviet Baltics, Greece and the rest of southern Europe. The resulting strains are now reaching the point where they are breaking apart the arrangements put in place after World War II. The most destructive fiction of international finance is that all debts can be paid, and indeed should be paid, even when this tears economies apart by forcing them into austerity – to save bondholders, not labor and industry. Yet European countries, and especially Germany, have shied from pressing for a more balanced global economy that would foster growth for all countries and avoid the current economic slowdown and debt deflation.

After World War I the U.S. Government deviated from what had been traditional European policy – forgiving military support costs among the victors. U.S. officials demanded payment for the arms shipped to its Allies in the years before America entered the Great War in 1917. The Allies turned to Germany for reparations to pay these debts. Headed by John Maynard Keynes, British diplomats sought to clean their hands of responsibility for the consequences by promising that all the money they received from Germany would simply be forwarded to the U.S. Treasury. The sums were so unpayably high that Germany was driven into austerity and collapse. The nation suffered hyperinflation as the Reichsbank printed marks to throw onto the foreign exchange also were pushed into financial collapse. The debt deflation was much like that of Third World debtors a generation ago, and today’s southern European PIIGS (Portugal, Ireland, Italy, Greece and Spain).

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Medieval third world.

One In 10 London Families Rely On Food Banks To Survive (Ind.)

One in 10 London families are relying on charity handouts to eat and food banks are facing unprecedented strain in the run-up to Christmas, new figures reveal. One in four London parents worry about being able to afford to feed their children, the research found, while almost one in five have to choose between heating their homes or feeding their family. The exclusive poll, conducted by Kellogg’s to mark the start of The Independent and Evening Standard Help a Hungry Child campaign, exposed the devastating choices facing parents around the country as food banks struggle to keep up with growing demand. At least 146,798 three-day emergency parcels were handed out by Trussell Trust foodbanks in December 2016, a 47% spike compared to the average for the overall 2016/17 financial year, according to the charity.

Children accounted for 61,093 of those affected. Now the charity is warning 2017 could herald an even higher increase, following a 13% surge in food bank usage during the first six months of this year. The figures are revealed as a Labour MP urges the Government to accurately measure the number of people going hungry with a food insecurity bill. Emma Lewell-Buck, a member of the All-Party Parliamentary Group on Hunger, will present the cost-neutral bill to the Commons on Wednesday. It will ask the Government to incorporate questions about how often people go without food into national surveys. She called rising food bank usage a “massive dereliction of state duty” and is urging Theresa May to take urgent action to recognise the scale of the problem.

“They have to admit what everybody already knows that the levels of hunger are far higher than we have realised,” she said. “It is the duty of the state, there is no way food banks should have filled the gap left by the welfare state that this Government has created.” She added: “Now food banks are becoming a pillar of the welfare state and they should not be and they should never have been.” The South Shields MP said getting a measure on the true scale of the numbers going hungry would force the Government into taking a more proactive stance in tackling hunger.

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Talk about a failed society…

Half A Million UK Children Go To School Hungry Every Day (Ind.)

When money is tight eight-year-old Emma’s parents are forced to send their daughter to school, tummy rumbling, without any breakfast. In the evening, she fills up on plain pasta or reduced microwave meals – cheap food her parents can afford. Emma says she often feels too tired to concentrate on her schoolwork. The situation Emma lives with is the devastating reality faced by the 500,000 children across the UK who go to school hungry each day. Eight million people in Britain – the world’s sixth largest economy – are living in food poverty, according to the United Nations (UN). And an estimated 870,000 children in England may be going to bed hungry each night because their parents are unable to provide the meals they need.

But not eating isn’t the only problem – access to nourishing and nutrient-filled food is simply out of reach for thousands of families living on the breadline, with far-reaching consequences for too many of Britain’s children. Dr George Grimble, a medical scientist at University College London, said the situation was “disastrous” for developing children, resulting in malnourishment, obesity and squandered potential. “When people are in poverty they are forced to buy the cheapest foods – filling but nutrient-lacking food,” Dr Grimble told The Independent. “Food poverty in the community overlays to a large extent on disease malnutrition.” More than 60% of paediatricians believe food insecurity contributed to the ill health among children they treat, according to a 2017 survey by the Royal College of Paediatricians and Child Health.

The harrowing hunger stats sit juxtaposed with the fact 100 million tons of food is wasted each year across the EU. More than 400 million meals’ worth of edible food was sent to landfill in 2016 which could have been redistributed to feed hungry people across Britain, according to the Government’s waste advisory body, Wrap.

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“..succumbed to populists..” is too easy a cop-out. These countries will define Europe going forward.

All Is Not Well In The Visegrad Economies (CER)

On the face of it, the Visegrad countries – the Czech Republic, Hungary, Poland and Slovakia – are doing well economically. The data for GDP per head suggest a gradual convergence in living standards with Western Europe. They continue to attract a disproportionate share of inward investment in EU manufacturing, and their integration into EU-wide supply chains helps to explain why they are now collectively Germany’s most important trade partner, ahead of China and the US. But the political situation across the Visegrad is anything but rosy. Voters in all four countries have succumbed to populists. The reasons for this populism are complex, but economics probably provides a bigger part of the explanation than the positive headline numbers suggest.

In 2016, GDP per head in the Visegrad four (adjusted for price differences) ranged from 64% of eurozone levels in Poland to 82% in the Czech Republic. The Czech Republic, Slovakia and Poland have experienced significant convergence in GDP per head with the eurozone over the last ten years (though it should be noted that the dire performance of the eurozone economy over that period was a major reason for this). But what matters to the average person is not GDP growth, but personal income growth, and hence living standards. And here the Visegrad picture is less reassuring. In 2016 worker ‘compensation’ (wages and salaries and other benefits) ranged from just 50% of the eurozone’s in Hungary to 59% in the Czech Republic. And the rate of convergence of compensation with the eurozone average has been slower than the rate of convergence of GDP.

Growth in consumption across the Visegrad countries has lagged behind growth in GDP, resulting in a sharp fall in consumption as a share of overall spending. This has happened in nearly all developed economies over the last decade, but the scale of the decline in all four Visegrad economies has been much greater. Average households have not seen enough of the fruits of economic growth. Those rewards have gone disproportionately to the owners of capital, and in these countries, that tends to mean foreigners. In the Czech Republic, Hungary, and Slovakia, the most important sectors are largely or wholly foreign-owned. The Polish economy is much bigger and more diversified than the other three, but the level of foreign ownership is still very high.

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How about the pressure on US, France, UK?

Pressure On Greece To Scrap Arms Deal With Saudi Arabia (G.)

The Greek government has announced it will abide by any EU embargo on Saudi Arabia as it faces criticism over a controversial arms deal, including from its own MPs. As cracks appeared in the leftist-led coalition over the €66m weapons agreement with the kingdom, the administration’s spokesman said Athens would apply the law “by the letter” if EU sanctions were announced. “We are waiting to see the decisions of the European parliament and will act accordingly,” said Dimitris Tzannakopoulos. “The process is frozen.” Mounting tensions within the ruling Syriza party have matched international condemnation of the agreement by human rights groups. Amnesty International has said the munitions could end up being used by the Gulf state in its war against neighbouring Yemen, where civilian populations have borne the brunt of the conflict.

“[We] call on Greece to immediately rescind the sale and transfer of military equipment to Saudi Arabia and to refuse approval of the transport of every type of conventional weapons, ammunitions and war material to point of conflicts in Yemen,” the rights group said. Prominent members of the ruling Syriza party have questioned the morality of selling arms to Saudi Arabia, and on Tuesday the Greek parliament’s military procurements committee also hinted it may scrap the deal. “Greece is a hub of stability, peace and friendship in the greater region and that is what it should be exporting,” the former deputy European affairs minister Nikos Xydakis told the Guardian. “There is no need for this [deal] to go through and frankly when we’re talking about €66m, not €66bn, it isn’t worth the trouble. It’s not the sort of money that will save Greece.”

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Whose initiative? Brussels, Berlin?

Greece Moves Hundreds Of Asylum Seekers From Lesvos To Mainland (R.)

Greek authorities on Thursday said they have moved a few hundred asylum seekers from the island of Lesvos to the mainland in an effort to ease overcrowding in its camps. Thousands of asylum seekers have become stranded on Lesbos and four other islands close to Turkey since the European Union agreed a deal with Ankara in March 2016 to shut down the route through Greece. “I came to heaven from hell,” said 30-year old Mohammad Firuz, who lived for two months in a state-run camp in Lesvos.

Firuz was among 300 people, many of them women and children, aboard a ferry that reached the port of Piraeus early on Thursday morning. The asylum seekers would be taken to camps and apartments in the mainland, authorities said. Lesvos is now hosting some 8,500 asylum-seekers, nearly three times the capacity of state-run facilities. Violence often breaks out, mainly over delays in asylum procedures and poor living standards. Lesvos residents went on strike earlier this month to protest against European policies they say have turned it into a “prison” for migrants and refugees.

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This is just too nuts. Ban the shit.

Common Pesticide Can Make Migrating Birds Lose Their Way (G.)

The world’s most widely used insecticide may cause migrating songbirds to lose their sense of direction and suffer drastic weight loss, according to new research. The work is significant because it is the first direct evidence that neonicotinoids can harm songbirds and their migration, and it adds to small but growing research suggesting the pesticides may damage wildlife far beyond bees and other insects. Farmland birds have declined drastically in North America and Europe in recent decades and pesticides have long been suspected as playing a role. The first evidence for a link came in 2014 when a study in the Netherlands found that bird populations fell most sharply in the areas where neonicotinoid pollution was highest, with starlings, tree sparrows and swallows among the most affected.

“The reason our new study is special is this is not a correlation – it is actual experimental evidence,” said Prof Christy Morrissey, at the University of Saskatchewan in Canada, who said the results shocked her. “The effects were really dramatic. We didn’t anticipate the acute toxicity, because the levels [of neonicotinoid] we gave them were so low. Three neonicotinoids were banned from use on flowering crops in the European Union in 2013 due to unacceptable risks to bees and other pollinators and a total outdoor ban is being considered. Canada is also considering a total ban. Neonicotinoids now pollute the environment across the world and pressure is growing to slash pesticide use, which research shows would not reduce food production on almost all farms.

The new research, published in the peer-reviewed journal Scientific Reports, analysed the effect of the neonicotinoid imidacloprid on white-crowned sparrows that migrate from the southern US and Mexico to northern Canada in summer. Birds were given doses equivalent to less than a single corn seed and within hours became weak, developed stomach problems and stopped eating. They quickly lost 17-25% of their weight, depending on the dose, and were unable to identify the northward direction of their migration. “Basically, these birds became lost,” said Morrissey. Control birds that were not exposed to the insecticide were unaffected.

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Again: ban the shit.

‘Shocking’ Rise In Rubbish Washing Up On UK Beaches (G.)

The rubbish washing up on the UK’s beaches is continuing to increase, rising by 10% in 2017, the Marine Conservation Society’s (MCS) annual beach clean has revealed. Much of the waste is plastic, leading the MCS to call on the government to urgently introduce a charge on single-use plastic items, such as straws, cups and cutlery. The chancellor, Philip Hammond, recently announced the government is considering such action. About 12m tonnes of plastic litter enters the oceans every year, killing millions of marine animals. People are also believed to be inadvertently eating the plastic, potentially contaminated with toxic chemicals, via seafood. The MCS beach clean in September saw 7,000 volunteers scour 340 beaches and collect an average of 718 pieces of rubbish every 100 metres.

The survey uses a standard methodology and data from the last decade and shows a rising tide of litter along the coast. Most of the litter is small, unidentifiable fragments of plastic, broken down in the sea from larger objects and often mistaken for food by fish and birds. But 20% of the rubbish is packaging from “on the go” food and drink, such as cups, bottles, cutlery, stirrers and sandwich packets. “Our beach clean evidence shows a shocking rise in the amount of litter this year,” said Sandy Luk, MCS chief executive. “Our oceans are choking in plastic. We urgently need a levy on single-use plastic as a first step.” “We are concerned we are continuing on this upwards trend,” said Lizzie Prior, beach and river clean project officer at the MCS. “Plastic never goes away – it does not decompose. It just goes to smaller and smaller pieces and becomes much more harmful for our marine environment.”

She said the tax on plastic bags introduced in 2015, which has seen their use drop by 85%, had a rapid impact, with the number of bags found on beaches down by 40% since 2014. “It is really fantastic to see that small charge completely changed people’s behaviour,” she said. “A levy [on other single use plastic] would be a fantastic next step.”

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Any day now, McDonald’s will start beaming ads onto the surface of the moon.

Lobster Found With Pepsi Logo ‘Tattoo’ (G.)

Concerns over debris littering the world’s oceans are back in the spotlight after a Canadian fishing crew found a lobster with the blue and red Pepsi logo imprinted on its claw. Trapped in the waters off Grand Manan, New Brunswick, the lobster had been loaded onto a crate to have its claws banded when Karissa Lindstrand came across it. Lindstrand, who drinks as many as 12 cans of Pepsi a day, quickly spotted the resemblance. “I was like: ‘Oh, that’s a Pepsi can,’” she said. On closer look, it seemed more like a tattoo on the claw. “It looked like it was a print put right on the lobster claw.” Neither she or any of the crew had seen anything like it. More than a week after the find, debate has swirled over how it might have come to be: some believe the lobster might have grown around a can that ended up at the bottom of the ocean.

Others speculate that part of a Pepsi box somehow become stuck on the lobster. Lindstrand disputes these theories. The image on the claw was pixelated, she said, suggesting it couldn’t have come from a can. And the image on a Pepsi box is far too large to be what she saw on the claw. The logo looked like it came from a printed picture, but paper would have deteriorated in the ocean. “I’m still trying to wrap my brain around what exactly it was,” she said. The find comes amid growing concerns over the amount of debris accumulating in the world’s oceans. Between 5m and 13m tonnes of plastic leak into the world’s oceans each year to be ingested by sea birds, fish and other organisms, leading the record-breaking sailor Dame Ellen MacArthur to warn that by 2050 the sea could have more plastic in it than fish, by weight.

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Apr 222017
 
 April 22, 2017  Posted by at 8:38 am Finance Tagged with: , , , , , , , , ,  Comments Off on Debt Rattle April 22 2017


Andrei Rublev Trinity 1411

 

White House Orders Agencies to Prepare for Potential Government Shutdown (BBG)
Beware: The Next Financial Crisis Is Coming (Planet Ponzi)
Robert Prechter Is Awaiting A Depression-Like Shock In The US (MW)
Fed’s Fisher Warns Trump About Plans To ‘Do A Number’ On Dodd-Frank (BI)
Former FinMin Says China Should Let Local Governments Default on Debt (BBG)
Everything Gets Worse – Pakistan vs. India (Bhandari)
Dijsselbloem Sees ‘Tough’ Greek Debt Relief Talks With IMF (BBG)
Schaeuble Says Greece to Blame for Delays in Bailout Program
Greece Blows EU-IMF Bailout Targets Away With Strong Budget Performance (R.)
Greek Primary Surplus Chokes Market (K.)
On Neocons and their Mental Defects (Taleb)
28 Refugees Found Dead In Drifting Dinghy Off Libyan Coast (Ind.)

 

 

It could happen.

White House Orders Agencies to Prepare for Potential Government Shutdown (BBG)

The White House ordered federal agencies Friday to began preparations for a potential partial government shutdown after signaling President Donald Trump would demand money for key priorities in legislation to continue funding the government beyond April 29. But the president and his aides expressed confidence that Congress would work out a spending agreement and that there won’t be any halt in government operations. Administration officials portrayed the order as normal contingency planning, stressing that the previous administration had followed the same practice as funding deadlines approached. “I think we’re in good shape” on avoiding a deadlock on maintaining funding, Trump told reporters in the Oval Office on Friday. White House press secretary Sean Spicer said the administration is “confident” because negotiations are ongoing and “no one wants a shutdown.”

The push to reach an agreement on spending is complicated by White House efforts to try again for a House vote on replacing Obamacare next week, crowding the congressional schedule with two politically thorny measures the same week. House approval of an Obamacare repeal would give the president a legislative victory to boast about before his 100th day in office April 29. But failure to reach an agreement on spending legislation would risk marring the anniversary with a government shutdown. House Republicans plan a conference call Saturday with Ryan and other leaders to discuss the health-care bill as well as spending legislation. Republican Congressional leaders have pushed back against scheduling an Obamacare vote during the week, indicating there isn’t a clear strategy yet for achieving passage.

Mick Mulvaney, Trump’s director of Office of Management and Budget, said Thursday Democrats will need to agree to pay for some Trump’s top priorities, including a wall at the U.S.-Mexico border, in legislation to fund the government for the remainder of the fiscal year, which ends Oct. 1. Democrats responded harshly to Mulvaney’s remarks Thursday. “Everything had been moving smoothly until the administration moved in with a heavy hand,” said Matt House, spokesman for Senate Minority Leader Chuck Schumer of New York.

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“Constantly printing more money will not end in prosperity, but in ruin.”

Beware: The Next Financial Crisis Is Coming (Planet Ponzi)

There is more debt, credit, and leverage today than there was preceding the banking crisis of 2008. No lessons were learned from that catastrophe as trillions of taxpayer dollars were provided in the form of bank bailouts from the US Federal Reserve. Despite their name, US Federal Reserve Banks are not part of the federal government and they are not banks. For the past 11 years, the Federal Reserve has been run by non-elected officials, Ben Bernanke and Janet Yellen (career academics), alongside a host of X Goldman and JP Morgan bankers. Since 2007, these non-elected bankers have provided banks “temporary, emergency liquidity measures.” Since when is eight years temporary?

Banks have continued to lend trillions and trillions of dollars to fund the construction of grotesquely overpriced residential and commercial properties around the world. The trillions of dollars given in bank bailouts are a perfect example of government “pay-to-play.” When giving out this money, most bankers are making at least three flawed assumptions:
1. Real estate prices will always go up. Clearly, this is the denial phase of “a bubble mentality.”
2. Rents will always keep rising. Rents peaked a few years ago. There is a massive oversupply of high-end residential and commercial properties on the market while real wages have declined. This is a sign that a crash is imminent.
3. The Federal Reserve will always bail them out. With zero transparency or an audit the Federal Reserve’s balance sheet has ballooned from 500 billion to nearly 5 trillion in a short period. The Federal Reserve doesn’t have the money to keep bailing companies out.

The Federal Reserve has become nothing more than a rogue hedge fund taking leveraged, wildly speculative, gargantuan and high-risk positions in bonds and mortgages. Next up, the Fed will angle to dump these toxic real estate assets in your pension fund. There are several steps that need to be taken to address this situation and save your pensions:
1. The President and Congress need to order an immediate audit of the Fed.
2. The Fed’s positions need to be unwound.
3. No more taxpayer funded bailouts – save your pension!

Capitalism without bankruptcy is like Catholicism without hell. Constantly printing more money will not end in prosperity, but in ruin. The coming collapse will be much worse than in 2008-2009 because the debt is so much larger and the Federal Reserve has run out of bullets. Since the 1980s, we have seen real average wages decline, college tuition skyrocket nearly 2,000%, and housing prices hitting all-time new highs while high-paying jobs have disappeared. Rents have risen so much that many small businesses are no longer economically viable. The situation doesn’t look any better for graduates. Graduates entering the jobs market have nearly $250,000 in student debt. A graduate may get a job in Manhattan for $40,000 a year ($3,333 a month before tax) but rent on a studio apartment costs $3,000 a month. The numbers just don’t add up anymore.

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Social mood: “declining stock and property prices, contracting debt, angry and somber music, more intense horror movies..”

Robert Prechter Is Awaiting A Depression-Like Shock In The US (MW)

Avi Gilburt: You’ve said that, once the stock market tops, you expect a major bear market and economic contraction to take hold. What is your general timing for this to occur?

Robert Prechter: The true top for stocks in terms of real money (gold) occurred way back in 1999. Overall prosperity has waned subtly since then. Primary wave five in nominal terms started in March 2009, and wave B up in the Dow/gold ratio started in 2011. Their tops should be nearly coincident.

Gilburt: What do you foresee will set off this event?

Prechter: Triggers are a popular notion, borrowed from the physical sciences. But I don’t think there are any such things in financial markets. Waves of social mood create trends in the stock market, and economic and political events lag behind them. Because people do not perceive their moods, tops and bottoms in markets sneak right past them. At the top, people will love the market, and events and conditions will provide them with ample bases for rationalizing being heavily invested.

Gilburt: You’ve said we will be mired in a “depression-type” event. How long could that last?

Prechter: I don’t know. All I can say for sure is that the degree of the corrective wave will be larger than that which created the malaise of the 1930s and 1940s.

Gilburt: How are conditions going to change from what we have now?

Prechter: The increasingly positive trend in social mood over the past eight years has been manifesting in rising stock and property prices, expanding credit, buoyant pop music, lots of animated fairy tales and adventure movies, suppression of scandals, an improving economy and — despite much opinion — fairly moderate politics. This trend isn’t quite over yet. In the next wave of negative mood, we should see the opposite: declining stock and property prices, contracting debt, angry and somber music, more intense horror movies, eruption of scandals, a contracting economy and political upheaval. That’s been the pattern of history.

It’s all relative, though, and it’s never a permanent condition. Just as people give up on the future, its brightness will return. The financial contraction during the negative mood trend of 2006-2011 was the second worst in 150 years. Yet, thanks to the return of positive mood, many people have already forgotten about it. Investors again embrace stocks, ETFs, real estate, mortgage debt, auto-loan debt and all kinds of risky investments that they swore off just a few years ago.

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Because the Fed is doing such a great job of keeping banks in check.

Fed’s Fisher Warns Trump About Plans To ‘Do A Number’ On Dodd-Frank (BI)

Stanley Fischer, the vice chairman of the Federal Reserve, on Friday delivered an unusually sharp warning to President Donald Trump and his plan to “do a number” on post-crisis reforms aimed at reining in Wall Street. Fed officials usually go out of their way to not appear political, which makes the comments all the more startling. Fischer, a former Citigroup banker and respected policymaker who led the Bank of Israel for many years, appears truly concerned. “We seem to have forgotten that we had a financial crisis, which was caused by behavior in the banking and other parts of the financial system, and it did enormous damage to this economy,” Fischer told CNBC’s Sara Eisen in the lobby of the IMF, responding to a question about the potential rolling back of Dodd-Frank rules.

This happened just as the president was signing an executive order aimed at what he said was “reviewing” Dodd-Frank. “Millions of people lost their jobs. Millions of people lost their houses,” Fischer said. “This was not a small-time, regular recession. This was huge, and it affected the rest of the world, and it affected, to some extent, our standing in the world as well. We should not forget that. “The strength of the financial system is absolutely essential to the ability of the economy to continue to grow at a reasonable rate, and taking actions which remove the changes that were made to strengthen the structure of the financial system is very dangerous.”

Asked specifically about Trump’s vow to “do a number” on Dodd-Frank, Fischer shot back: “I’m not sure precisely what the president said and what a ‘number’ is, but there are aspects of Dodd-Frank, which if they were taken away would have very serious potential consequences for the economy — not immediately but when times get tough.” What provisions is he most worried about? The ability of the Fed and other regulators to wind down large banks, many of which are still seen as too big to fail. “I think it is very important that big banks be subject to the discipline of the possibility of going bankrupt. It is also very important that that discipline extends to not making those changes, the bankruptcy of a big bank, a huge shock and the source of crisis or damage to the overall economy,” Fischer said. “So we need the resolution mechanisms that have been put in place which will allow the authorities and the markets to wind up a big bank.”

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Beware the cascade.

Former FinMin Says China Should Let Local Governments Default on Debt (BBG)

Former Finance Minister Lou Jiwei said China should allow smaller local governments to default on debt because it would signal that central government bailouts aren’t assured. Such defaults would educate investors that their investments will be allowed to go bad, Lou said Friday at a public finance forum in Beijing. “They need to shoulder responsibility,” said Lou, who’s now chairman of the country’s social security fund. “Nobody will save them.” Lou’s comments reiterate those by Premier Li Keqiang and other central government officials such as current Finance Minister Xiao Jie that local government debt shouldn’t be bailed out, or benefit from assumptions it will be.

With economic growth accelerating for a second-straight quarter to 6.9% through March, policy makers have more room to cut leverage and rein in risks. A credit surge since 2014 that underpinned growth has also fueled a further buildup in borrowing. Total debt rose to 258% of economic output last year from 161% in 2008, Bloomberg Intelligence estimates show. Lou said government debt remains broadly safe, but borrowing levels are poised to keep climbing given increased investment in substandard public-private partnership projects.

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Great long read on India and its region.

Everything Gets Worse – Pakistan vs. India (Bhandari)

When Narendra Modi announced on 8th November 2016 that he was demonetizing 86% of the monetary value of all currency in circulation, he gave three major reasons for doing so: to end corruption, to end terrorism and to eliminate counterfeit currency. Ironically, all three are now in far worse condition than they were previously, and even worse than the predictions I made. Many ATMs in India still dispense no cash. The economy is in shatters. This had to happen, as any new cash is rapidly moving under the carpets of the financial powerful that hoard currency. Small businesses are traumatized by the lack of access to cash – many are closing for good. People continue to avoid making non-essential purchases. Even food demand has failed to recover. Poor people very likely are still forced to go to bed half-hungry.

No-one knows whether there are famines in parts of India, as none of the mainstream media are covering the issue. Not unlike North Koreans or the Chinese during the times of Mao, Indians today, particularly members of the so-called educated class, simply cannot see what Modi or their nationalistic paradigm does not want them to see. Indian banks and other financial institutions are extremely unethical. Since privatization was implemented in the 1990s, they have charged fees and commissions for accounts that were never agreed upon. Indians never fight, so this continues. After the demonetization exercise, these mysterious charges have started to appear more often. Then they deduct certain services and financial taxes, and most people don’t make the effort to try to understand them. Indians are getting very tired of the banks – not for moral, but simply for financial reasons.

Bank websites are extremely unwieldy. They require a sequence of passwords and OTPs (one time pad codes), which have an automatic expiry date. Getting the whole sequence right to make an online payment without having these websites freeze during the procedure leaves one with a sense of accomplishment. Most people prefer to walk down to their banks to get bank officials to perform such online transactions. India is simply not ready for the digital age. This experiment in going cashless will end in a disaster. Similar to every tyrant, Modi likes to think that tax collection should be at the heart of society. He imagines a society in which subjects dance around the state. The problem is, one can perfect the tax system or minimize corruption, but with a per capita GDP of $1,718, India simply does not have the required productivity.

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Anything you do can and will be used against you: The more such surplus it has, the less debt relief will be needed.

Dijsselbloem Sees ‘Tough’ Greek Debt Relief Talks With IMF (BBG)

Discussions between Greece’s European creditors and the IMF on additional debt relief for the Mediterranean euro region member will be difficult because of political hurdles within the 19-nation bloc, though a solution is on the horizon, Eurogroup Chairman Jeroen Dijsselbloem said. “Greece: We’re very close, it’s really the last stretch,” he said in a Bloomberg Television interview on Friday in Washington with Francine Lacqua and Tom Keene. “We have a full agreement on the major reforms. How they are to be designed, when they are to be implemented, the size of them.”

IMF Managing Director Christine Lagarde said Friday she had “constructive discussions” with Greek Finance Minister Euclid Tsakalotos in preparation for the return of bailout auditors to Athens after euro-area finance ministers reached a tentative agreement on the measures Greece needs to implement to qualify for the next tranche of emergency loans. Dijsselbloem met Tsakalotos earlier on Friday in Washington. “That will be a tough discussion with the IMF,” said Dijsselbloem, who is also the Dutch Finance Minister in a caretaker cabinet, “There are some political constraints where we can go and where we can’t go.” The level of Greece’s primary budget surplus is key in determining the kind of debt relief it will need. The more such surplus it has, the less debt relief will be needed.

The Hellenic Statistical Authority on Friday unveiled data on last year’s primary surplus, which Eurostat is expected to validate on Monday. The surplus was 3.9% according to the European Union’s statistics office methodology, or 4.2% according to what has been agreed in the bailout program. The bailout target was for a primary surplus of 0.5% of GDP. In spite of its better-than-expected primary surplus last year, the IMF is not convinced Greece will be able to maintain that level of performance for 2018 and beyond. The fund estimates that at least half of the primarily surplus for 2016 came from one-off measures rather than structural changes that will continue delivering results in the years to come, according to a person familiar with its analysis. That has prompted the fund to demand more austerity measures.

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Groundhog man.

Schaeuble Says Greece to Blame for Delays in Bailout Program

German Finance Minister Wolfgang Schaeuble said the Greek government bore responsibility for current delays in the country’s bailout program. Greece is to blame that its creditors didn’t return to Athens during the Greek Easter break to finish negotiations on steps the nation must take to qualify for the next tranche of emergency loans, Schaeuble told reporters Friday on the sidelines of the IMF spring meetings. IMF European Department head Poul Thomsen said at a media briefing there’s been enough progress recently to send back a mission to Greece. Greece and its international creditors struck a tentative agreement at a meeting of euro-area finance ministers in Malta earlier this month, breaking the latest deadlock over the country’s rescue and paving the way for about €7 billion in aid for Athens.

Although the decision represents progress, the euro area won’t unlock the payout until their audit in Athens is concluded. “It would have been possible to continue the mission in Athens immediately in the week after Malta,” said Schaeuble. “This was not possible during the Greek Easter break.” In a statement on Friday, IMF Managing Director Christine Lagarde said she had a “constructive dialogue” with Greek Finance Minister Euclid Tsakalotos “in preparation for the return of the mission to discuss the two legs of the Greece program: policies and debt relief.” The IMF isn’t holding back progress, said Schaeuble. “The IMF isn’t delaying this process at all,” he said.

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The worst thing Greece could do.

Greece Blows EU-IMF Bailout Targets Away With Strong Budget Performance (R.)

Greece far exceeded its international lenders’ budget demands last year, official data showed on Friday, posting its first overall budget surplus in 21 years even when debt repayments are included. The primary surplus – the leftover before debt repayments that is the focus of IMF-EU creditors – was more than eight times what they had targeted. Data released by Greek statistics service ELSTAT – to be confirmed on Monday by the EU – showed the primary budget surplus at 3.9% of GDP last year versus a downwardly revised 2.3% deficit in 2015. This was calculated under European System of Accounts guidelines, which differ from the methodology used by Greece’s in bailout deliberations.

Under EU-IMF standards, the surplus was even larger. Government spokesman Dimitris Tzanakopoulos said the primary budget surplus under bailout terms reached 4.19% of GDP last year versus the 0.5% of GDP target. “It is more than eight times above target,” Tzanakopoulos said in a statement. “Therefore, the targets set under the bailout program for 2017 and 2018 will certainly be attained.” Debt-strapped Greece and its creditors have been at odds for months over the country’s fiscal performance, delaying the conclusion of a key bailout review which could unlock needed bailout funds. The IMF, which has reservations on whether Greece can meet high primary surplus targets, has yet to decide if it will fund Greece’s current bailout, which expires in 2018.

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The surplus kills the economy even more.

Greek Primary Surplus Chokes Market (K.)

The state’s fiscal performance last year has exceeded even the most ambitious targets, as the primary budget surplus as defined by the Greek bailout program, came to 4.19% of GDP, government spokesman Dimitris Tzanakopoulos announced on Friday. It came to €7.369 billion against a target for €879 million, or just 0.5% of GDP. A little earlier, the president of the Hellenic Statistical Authority (ELSTAT), Thanos Thanopoulos, announced the primary surplus according to Eurostat rules, saying that it came to 3.9% of GDP or €6.937 billion. The two calculations differ in methodology, but it is the surplus attained according to the bailout rules that matters for assessing the course of the program. This was also the first time since 1995 that Greece achieved a general government surplus – equal to 0.7% of GDP – which includes the cost of paying interest to the country’s creditors.

There is a downside to the news, however, as the figures point to overtaxation imposed last year combined with excessive containment of expenditure. The amount of €6-6.5 billion collected in excess of the budgeted surplus has put a chokehold on the economy, contributing to a great extent to the stagnation recorded on the GDP level in 2016. On the one hand, the impressive result could be a valuable weapon for the government in its negotiations with creditors to argue that it is on the right track to fiscal streamlining and can achieve or even exceed the agreed targets. On the other hand, however, the overperformance of the budget may weaken the argument in favor lightening the country’s debt load. It is no coincidence that German Finance Minister Wolfgang Schaeuble noted in Washington that over the last couple of years, Greek government deficit forecasts are more realistic than those of the IMF.

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Skin in the game.

On Neocons and their Mental Defects (Taleb)

So we tried that thing called regime change in Iraq, and failed miserably. We tried it in Libya, and now there are now active slave markets in the place. But we satisfied the objective of “removing a dictator”. By the exact same reasoning, a doctor would inject a patient with “moderate” cancer cells “to improve his cholesterol numbers”, and claim victory after the patient is dead, particularly if the post-mortem shows remarkable cholesterol readings. But we know that doctors don’t do that, or, don’t do it in such a crude format, and that there is a clear reason for it. Doctors usually have some skin in the game. And don’t give up on logic, intellect and education, because a tight but higher order logical reasoning would show that the logic of advocating regime changes implies also advocating slavery.

So these interventionistas not only lack practical sense, and never learn from history, but they even make mistakes at the pure reasoning level, which they drown in some form of semi-abstract discourse. The first flaw is that they are incapable in thinking in second steps and unaware of the need for it –and about every peasant in Mongolia, every waiter in Madrid, and every car service operator in San Francisco knows that real life happens to have second, third, fourth, nth steps. The second flaw is that they are also incapable of distinguishing between multidimensional problems and their single dimensional representations –like multidimensional health and its stripped, cholesterol-reading reduced representation. They can’t get the idea that, empirically, complex systems do not have obvious one dimensional cause and effects mechanisms, and that under opacity, you do not mess with such a system.

An extension of this defect: they compare the actions of the “dictator” to the prime minister of Norway or Sweden, not to those of the local alternative. And when a blow up happens, they invoke uncertainty, something called a Black Swan, not realizing that one should not mess with a system if the results are fraught with uncertainty, or, more generally, avoid engaging in an action if you have no idea of the outcomes. Imagine people with similar mental handicaps, who don’t understand asymmetry, piloting planes. Incompetent pilots, those who cannot learn from experience, or don’t mind taking risks they don’t understand, may kill many, but they will themselves end up at the bottom of, say, the Atlantic, and cease to represent a threat to others and mankind.

So we end up populating what we call the intelligentsia with people who are delusional, literally mentally deranged, simply because they never have to pay for the consequences of their actions, repeating modernist slogans stripped of all depth. In general, when you hear someone invoking abstract modernistic notions, you can assume that they got some education (but not enough, or in the wrong discipline) and too little accountability. Now some innocent people, Yazidis, Christian minorities, Syrians, Iraqis, and Libyans had to pay a price for the mistakes of these interventionistas currently sitting in their comfortable air-conditioned offices. This, we will see, violates the very notion of justice from its pre-biblical, Babylonian inception. As well as the ethical structure of humanity.

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Just a week ago we commemorated a man on a cross whose image we remember but whose teachings we’ve forgotten.

28 Refugees Found Dead In Drifting Dinghy Off Libyan Coast (Ind.)

Almost 30 migrants have been found dead in a boat drifting off the coast of Libya as the number of refugees dying in attempts to reach Europe reach record highs. Fishermen found the bodies of 28 people, including four children, in waters near the smuggling hub of Sabratha after more than 8,300 asylum seekers were rescued over the Easter weekend. “Their boat stopped in the middle of the water because the engine was broken,” said Ahmaida Khalifa Amsalam, the interior ministry’s security commander. He said the victims appeared to have died of thirst and hunger after their vessel was left drifting in the Mediterranean.

They were buried in a cemetery dedicated to migrants whose bodies are regularly washed up on the coast of Libya, which remains embroiled in a bloody civil war six years after the UK helped overthrow Muammar Gaddafi. Smugglers have increasingly resorted to packing migrants into flimsy dinghies that are unable to survive the crossing to Europe, with some being intercepted and forced back by the Libyan coastguard, others being rescued by EU officials and aid agencies, and many sinking. Tuesday’s tragic discovery was the latest incident of refugees being found dead inside boats, with a worrying trend emerging suggesting engines are being removed or sabotaged at sea.

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Apr 192017
 
 April 19, 2017  Posted by at 9:06 am Finance Tagged with: , , , , , , , , ,  2 Responses »


Jan van Eyck Saint Barbara 1437

 

The Great Western Economic Depression (Nielson)
How Western Civilisation Could Collapse (BBC)
Why the Federal Reserve Is Bad for America (DDMB)
Trump’s New Problem: Americans Aren’t Shopping (CNN)
British PM Wants Election Now, Before Cost of Brexit Becomes Clear (ICept)
UK Tory MPs Still Under Investigation For Election Fraud (Can.)
China’s $8.5 Trillion Shadow Bank Industry Is Back in Full Swing (BBG)
So China’s Authorities Crack Down on Housing Speculation? (WS)
Subsidiarity – A European Union Smokescreen To Justify Failure (Bilbo)
Greece’s Migration Policy Ministry to Spread Migrants in Small Towns (GR)
How the Greek Crisis is Profitable for the International Monetary Fund (GR)
Key South Africa Leopard Population Crashing (AFP)

 

 

“Consider 0% and near-zero interest rates to be the economic equivalent of a defibrillator: the most-extreme, last-resort attempt to “stimulate” the human body when it is near death. Our economies have had this economic defibrillator attached to them for more than eight years – without the slightest glimmer of life.”

The Great Western Economic Depression (Nielson)

Western economies are “recovering”. How do we know this? We are told this, over and over and over again by our governments. Then this assertion is repeated thousands of times more by the dutiful parrots of the Corporate media. The problem is that in the real world there is not a shred of evidence to support this assertion. In the U.S.; ridiculous official lies were created claiming the creation of 15 million new jobs. In reality, there are three millionless Americans with jobs today than at the official end of the “recession”. These imaginary jobs are invented by assorted statistical frauds, with the primary deceit being so-called “seasonal adjustments”. To be legitimate, all seasonal adjustments must to net to zero at the end of each year. Instead, in the U.S.A., the biggest job creator in the nation every year is the calendar.

Beyond the grandiose but absurd claims of new jobs in the U.S., there have been few signs of economic health across the Corrupt West. Despite this, these traitorous regimes continue the pretense that their horrific mismanagement of our economies is making things better rather than worse. There are numerous subtle means of demonstrating that Western economies have never been in more calamitous ill health than they are today. Fortunately, there are also two very large and important indicators which provide absolute proof that all of the economies of the Corrupt West are in a Greater Depression: interest rates and energy demand. Regular readers have often seen the observation in these commentaries that interest rates across the West have never been this low for this long in the entire history of these nations – not even close. Why not? Two reasons:

1) Interest rates this low have always been perceived (by our governments and all legitimate economic commentators) as being so reckless that any short-term benefit from such rates would have been more than offset by long-term harm.

2) The reason why our governments have always deemed interest rates this low to be reckless is that in remotely healthy economies such rates would cause these economies to “over-heat” so rapidly and extremely that they would reach unsustainable levels of production and demand.

Are our economies over-heating? No. Nothing could be further from the truth. We see nothing but over-capacity all around us: one hundred million permanently unemployed people across the West, relentless business closures, declining real wages, and near-empty shopping malls (in “consumer economies”). Interest rates this low are supposed to cause such rapid business expansion that the economy suffers from a labour shortage. Why are there a hundred million people unemployed across the West instead of labour shortages? Regular readers have seen this question answered in the past in the form of a metaphor.

Consider 0% and near-zero interest rates to be the economic equivalent of a defibrillator: the most-extreme, last-resort attempt to “stimulate” the human body when it is near death. Our economies have had this economic defibrillator attached to them for more than eight years – without the slightest glimmer of life. What would happen to a human body if it was defibrillated continuously for more than eight years? Charred meat. This is what Western economies have become: charred meat.

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Bit bland, because BBC. But useful to note that inequality collapses civilizations.

How Western Civilisation Could Collapse (BBC)

While it’s impossible to predict the future with certainty, mathematics, science and history can provide hints about the prospects of Western societies for long-term continuation. Safa Motesharrei, a systems scientist at the University of Maryland, uses computer models to gain a deeper understanding of the mechanisms that can lead to local or global sustainability or collapse. According to findings that Motesharrei and his colleagues published in 2014, there are two factors that matter: ecological strain and economic stratification. The ecological category is the more widely understood and recognised path to potential doom, especially in terms of depletion of natural resources such as groundwater, soil, fisheries and forests – all of which could be worsened by climate change.

That economic stratification may lead to collapse on its own, on the other hand, came as more of a surprise to Motesharrei and his colleagues. Under this scenario, elites push society toward instability and eventual collapse by hoarding huge quantities of wealth and resources, and leaving little or none for commoners who vastly outnumber them yet support them with labour. Eventually, the working population crashes because the portion of wealth allocated to them is not enough, followed by collapse of the elites due to the absence of labour. The inequalities we see today both within and between countries already point to such disparities.

For example, the top 10% of global income earners are responsible for almost as much total greenhouse gas emissions as the bottom 90% combined. Similarly, about half the world’s population lives on less than $3 per day. For both scenarios, the models define a carrying capacity – a total population level that a given environment’s resources can sustain over the long term. If the carrying capacity is overshot by too much, collapse becomes inevitable. That fate is avoidable, however. “If we make rational choices to reduce factors such as inequality, explosive population growth, the rate at which we deplete natural resources and the rate of pollution – all perfectly doable things – then we can avoid collapse and stabilise onto a sustainable trajectory,” Motesharrei said. “But we cannot wait forever to make those decisions.”

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Seeing the world through beer goggles.

Why the Federal Reserve Is Bad for America (DDMB)

Commercial real estate and bonds are more overvalued than at any time in history and stocks are trading at their priciest level save one period, the late 1990s before the dotcom implosion. The beer goggles, it would seem, have blinded investors to the bubble wrap that’s enveloped their portfolios. There are a few brave souls at the Fed who have raised a red flag. On March 22nd, Boston Fed President Eric Rosengren warned, “…we must acknowledge that the commercial real estate sector has the potential to amplify whatever problems may emerge when we at some point face an economic downturn.”

Wiser words, especially given so few who recall that it was not the decline in oil prices that made the late 1980s such a painful period for the economy, but rather the crash in commercial real estate the energy crunch catalyzed. Underlying the multiple overheating markets is a persistent underappreciation of financial instability among Fed policymakers. The institution, overladen as it is with PhD economists, has yet to revisit the models that drive its setting of interest rate policy. Had the Fed’s inflation metrics taken into account runaway stock prices in the late 1990s and skyrocketing home prices in the early 2000s, it’s likely they would have intervened to tighten financial conditions much sooner than they did. Revisiting the wisdom of former Fed chair McChesney Martin is useful:

The danger with these econometricians is they don’t know their own limitations, and they have a far greater sense of confidence in their analyses than I have found to be warranted. Such people are not dangerous to me because I understand their limitations.

They are, however, dangerous to people like you and the politicians because you don’t know their limitations, and you are impressed and confused by the elaborate models and mathematics. The flaws in these analyses are almost always embedded in the assumptions on which they are based. And that is where broader wisdom is required, a wisdom that these mathematicians generally do not have.

You always want these technical experts on tap in positions like this, but never on top. The hope is that President Donald Trump heeds McChesney Martin’s 1970s-era wisdom, that he respects the wishes of those who originally envisioned the Fed as an appreciably more intellectually diverse entity. After all, the original 1913 Federal Reserve Act requires the president to appoint leaders across a diversity of industries.

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How is it possible that these people completely miss out on the reason why? Which is: they have no money to spend. They’re not stingy, or skeptical, they’re simply poor.

Trump’s New Problem: Americans Aren’t Shopping (CNN)

President Trump keeps pushing “Buy American.” He’s planning to tout it again at a stop in Wisconsin on Tuesday. But the alarming reality is Americans aren’t spending much money on anything right now, regardless of where it’s made. Retail sales declined in February and March from the prior month, according the Commerce Department. Shoppers haven’t been this stingy since early 2015, and it’s likely to hurt the economy. The U.S. is on track for very sluggish 0.5% growth in the first three months this year, according to the latest estimates from Macroeconomic Advisers and the Atlanta Federal Reserve. That falls massively short of the 4% growth that Trump has promised. Trump loves to plug how Americans’ confidence in the economy has skyrocketed since he won the election. He’s right.

Consumers, businesses (big and small) and investors are all feeling a lot more optimistic, according to various surveys. But all that enthusiasm isn’t translating into more shopping, which drives the U.S. economy. About 70% of the American economy comes from people buying stuff. Kate Warne, a long-time investment strategist at Edward Jones, calls this the era of “skeptical optimism.” “People are more optimistic, but they’re skeptically optimistic,” Warne told CNNMoney. “I don’t think they are confident yet that things will change as much as they would like them too.” [..] Another twist is that Republicans are a lot more optimistic than Democrats. [..] Overall, the University of Michigan index of consumer confidence has jumped from 87 in October to 98 today. But that headline figure masks a wild division.

Democrats believe “a deep recession” is coming under Trump (their confidence index is a mere 55), while Republicans expected a “new era of robust economic growth” (their index level is a sky-high 122). Independents are in between, as you might expect. If half the country thinks recession is near, that might explain why retail sales are slowing, or even showing some signs of decline.

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Good observation. But a good chance for May’s opponents.

British PM Wants Election Now, Before Cost of Brexit Becomes Clear (ICept)

Prime Minister Theresa May, who was actually against Brexit before she was for it, made another dramatic U-turn on Tuesday, declaring that Britain needs to elect a new Parliament in June, three years ahead of schedule, despite her clear promise not to call an election when she campaigned to succeed David Cameron last year. Her decision to subject Britons to a third national election campaign in just over two years — after the 2015 general election and the referendum on exiting the European Union ten months ago — was met with something less than enthusiasm by many voters. In her address to the nation, May claimed that a fresh election was necessary to keep opposition parties from obstructing her Conservative government during negotiations over Britain’s withdrawal from the European Union.

That argument rang hollow, however, given that the opposition Labour Party had just voted for the government’s bill to begin the process of leaving the E.U. and is not campaigning to overturn the results of last year’s referendum. To most political observers, it was clear that May’s decision was driven by something else: a desire to capitalize on the unprecedented weakness of the Labour Party, which is divided over Brexit, and its own leader, Jeremy Corbyn, and has trailed the Conservatives by up to 21 points in recent polls. As the writer Robert Harris and the broadcaster James O’Brien suggested, it might also be in May’s own self-interest, and that of her party, to ask the nation for a five-year term now, before the costs of Brexit become apparent. Although even many die-hard Labour supporters seemed resigned to defeat, some on the left welcomed the chance to vote against what they see as the potentially disastrous policy of a complete break with Europe.

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What is this, Brazil?

20 UK Tory MPs Still Under Investigation For Election Fraud (Can.)

Theresa May has announced a snap election on 8 June 2017. But as the country prepares for another election campaign, it’s important to remember that MPs in her party are being investigated for election fraud for the 2015 general election. And given the mainstream media’s reluctance to report the issue, we need to ensure it is kept firmly on the agenda. 12 police forces have submitted files to the Crown Prosecution Service (CPS) over allegations that up to 20 MPs and/or their agents broke election spending limits in the 2015 election. The CPS is deciding whether charges should be brought. And a decision is expected soon – and is likely to come during the election campaign. The allegations centre around the ‘battle bus’ campaign, and associated expenses such as hotel rooms.

Many argue that the campaign promoted prospective local MPs in key seats. Under election law, any expenditure which promotes a local candidate should be covered locally. But the ‘battle bus’ and associated costs were declared nationally. Each constituency has a fixed amount of money it can spend locally. And including the ‘battle bus’ expenditure would have meant many candidates overspent. Additionally, the Election Commission has fined the Conservatives £70,000 for multiple breaches in connection to election spending during the 2015 campaign. But it isn’t just the ‘battle bus’ campaigns where the Conservatives have been accused of fraud. As The Canary previously reported, there are questions over how the party used social media and, particularly, Facebook, to target voters.

A report by the London School of Economics has also warned [pdf] that Facebook targeting opens the door to electoral fraud: “The ability to target specific people within a particular geographic area gives parties the opportunity to focus their attention on marginal voters within marginal constituencies. This means, in practice, that parties can direct significant effort – and therefore spending – at a small number of crucial seats. Yet, though the social media spending may be targeted directly at those constituencies, and at particular voters within those constituencies, the spending can currently be defined as national, for which limits are set far higher than for constituency spending.”

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“..the property and construction industries, which contribute about 25 to 30% of China’s economic output..”

China’s $8.5 Trillion Shadow Bank Industry Is Back in Full Swing (BBG)

China’s shadow banking is back in full swing, an unintended side effect of the government’s campaign against financial leverage, which has curbed traditional lending and squeezed bond financing. Data from the central bank Friday showed that off-balance sheet lending surged 754 billion yuan ($109 billion) in March, taking the first quarter’s total increase to a record 2.05 trillion yuan. Efforts by the People’s Bank of China to curb fresh lending may have prompted borrowers, especially real estate developers, to resort to alternative forms of financing, said Xu Gao at Everbright Securities. Since late last year, the PBOC and regulators have taken steps to rein in risks to China’s financial system, including raising short-term interest rates, clamping down on leverage in the bond market, and curbing funding for property speculation.

The measures have sent debt-reliant borrowers scurrying to shadow financing, an industry Moody’s Investors Service estimates is worth about $8.5 trillion, and another area where regulators are trying to reduce risk. “You must tread a fine line,” said Everbright’s Xu. “Choking the bond market to death doesn’t mean the financing needs will be curbed as well. Instead, it will drive funding to areas that are more unreachable for the regulators. At the end of the day, risks may be declining in the bond market, but in the overall financial system, they would be rising.” The PBOC in January ordered the nation’s lenders to strictly control new loans in the first quarter of the year, putting a particular emphasis on mortgage lending to contain runaway home prices.

The move saw banks extending 4.22 trillion yuan of new loans in the first quarter, 8.5% less than the same period in 2016. It was the first year-on-year decline since 2011. The government is trying to contain the possibility of a shock emanating from the property and construction industries, which contribute about 25 to 30% of China’s economic output, Moody’s estimates. The increasing role of shadow banks as providers of finance is among characteristics that have raised the financial system’s vulnerability to a property-related shock, Moody’s said in a March report. In a move to curb shadow banking, financial regulators are working together to draft sweeping new rules for asset-management products, people familiar with the matter said in February.

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Cracking down on what is 25-30% of your economy?!

So China’s Authorities Crack Down on Housing Speculation? (WS)

Dozens of cities have imposed ever tougher buying restrictions, more stringent down-payment requirements especially for second homes, stricter resale limits, etc. etc., and they’ve redoubled their efforts since mid-March when it became apparent that the prior redoubled efforts had not produced results, as people figured out how to get around them. But China depends heavily on property development and property speculation for its economic growth, and no one really wants to bring it down: The National Bureau of Statistics (NBS) reported on Monday that first-quarter growth in property investment – residential, commercial, and office spaces combined – soared 9.1%. This red-hot property sector, and the 40 other sectors that are directly affected by it, drove China’s official GDP growth in Q1 to 6.9%.

As always, analysts keep saying that it would take a few more months for the restrictions to take effect and start cooling the market. That line was once again repeated on Monday, officially: “Because the latest round of cooling measures came out after March 17, their impact on the entire economy including home prices may show in April or later,” Mao Shengyong, a spokesman for the NBS said at a briefing, according to Reuters. Houses are for habitation, not for speculative investment, he said. That would be a novel concept in these crazy times. But who really wants to cool the market, when state-owned developers and state-owned banks are firing it up? Yet, everyone sees the risks. Reuters: “Most analysts agree an overheating property market poses the single biggest risk to China’s economic growth, with increasingly tough government measures to cool soaring prices raising the risk of a nasty crash.”

But the cooling off is not happening yet. New construction measured in floor space soared 11.6% in the first quarter, year-over-year, the NBS reported, and sales jumped 19.5%, though that growth rate was down a notch from the year 2016, when sales at soared 22.5%, the highest in seven years, as the boom in first-tier cities was spilling into second- and third-tier cities. With state-owned developers, funded by state-owned banks, firing up much of the show, and with speculators, who assume the government has their back, running wild in a gushing celebration of ever-soaring prices and huge automatic profits, there’s little chance that this scheme that has already transcended irrational exuberance will simply “cool” to a level of “stability,” and plateau somewhere soon, as it is hoped. Phenomenal bubbles like this don’t go quietly.

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“The Oxford Dictionary defines subsidiarity as “(in politics) the principle that a central authority should have a subsidiary function, performing only those tasks which cannot be performed at a more local level”

Subsidiarity – A European Union Smokescreen To Justify Failure (Bilbo)

One of the various smokescreens that were erected by the European Commission and the bevy of economists that it either paid or were ideologically aligned to justify the design of the monetary union around the time of the Maastricht process was the concept of subsidiarity. In 1993, the Centre for Economic Policy Research (a European-based research confederation) published its Annual Report – Making Sense of Subsidiarity: How Much Centralization for Europe? – which attempted to justify (ex post) the decisions imported from the 1989 Delors Report into the Maastricht Treaty that eschewed the creation of a federal fiscal capacity.

It was one of many reports at the time by pro-Maastricht economists that influenced the political process and pushed the European nations on their inevitable journey to the edge of the ‘plank’ – teetering on the edge of destruction and being saved only because the European Central Bank has violated the spirit of the restrictions that a misapplication of the subsidiarity principle had created. It is interesting to reflect on these earlier reports. We find that the important issues they ignored remain the central issues today and predicate against the monetary union ever being a success. One of the authors of the 1993 Report, Jean-Pierre Danthine has recently reflected on the work some 25 years after its publication.

In his Op Ed (April 12, 2017) – Subsidiarity: The forgotten concept at the core of Europe’s existential crisis – he argues that “the disenchantment with Europe can arguably be traced to the failed application of the subsidiarity principle that was enshrined in the Maastricht Treaty.” He recognises that: “Europe’s deep-seated institutional design problem is tied to the inevitable trade-off between efficiency-enhancing centralisation and democracy-enhancing sovereignty.” Let’s go back to the Delors Report 1989, which I argue in my book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale – misapplied the concept of subsidiarity. It is clear from the historical record that the Delors Committee mainly relied on the concept of subsidiarity to justify the absence of a European-level fiscal function in the plan it outlined for monetary union.

The term, subsidiarity, a long-standing concept in political theory (as far back to Aristotle), entered the European dialogue in 1989 as part of a new ‘Eurolanguage’ as the political leaders were intent on pushing through the economic and monetary union. The Oxford Dictionary defines subsidiarity as “(in politics) the principle that a central authority should have a subsidiary function, performing only those tasks which cannot be performed at a more local level”. The concept was popularised by the Roman Catholic Church in the 1931 encyclical, Quadragesimo Anno, which pronounced that: “It is a fundamental principle of social philosophy, fixed and unchangeable, that one should not withdraw from individuals and commit to the community what they can accomplish by their own enterprise and/or industry.”

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An ‘everybody gets rich’ scheme.

Greece’s Migration Policy Ministry to Spread Migrants in Small Towns (GR)

The Migration Policy Ministry is developing a plan to spread about 20,000 migrants in small towns and rural communities across Greece, offering economic incentives to locals. According to a Proto Thema report, the project has been implemented in the town of Livadia with relative success. Now the ministry is looking for similar communities (with populations of 10,000-15,000) that have economic problems. According to the plan, such communities can accommodate 500-1,500 migrants in rented homes, while migrants can buy food and services using coupons provided by the State and the UNHCR. As authorities expect that some communities will be hostile to Muslim migrants, the ministry aims at counter-balancing religious differences and possible frictions by offering strong financial incentives to boost the ailing local economies.

The project will be extended in towns of Epirus, Western Macedonia and North-Western Greece that have high unemployment rates, provided that they are not located close to international borders. The Migration Policy Ministry also plans to offer high wages to people who wish to work in the migrant hospitality infrastructure. According to the Proto Thema report, a project coordinator working in Livadia right now earns an annual salary of 24,933 euros and a housing program director earns 22,666, wages that are double of that of an average public sector employee. Similar wages are offered to people who wish to work with migrants. The report says that such wages and overall economic incentives aim at mitigating any reactions by locals. Characteristically, the report says, apartments of 60-90 square meters in Livadia are rented for around 400 euros, again, a price above an average rental.

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“Interest rates of 3.6% for a super senior risk free lender were almost three times as high as the more junior ESM loans..”

How the Greek Crisis is Profitable for the International Monetary Fund (GR)

The relationship between Greece and the International Monetary Fund has been, from the start, very contentious to say the least. There is no question that Greece needs to build the trust and confidence of taxpayers and the global capital markets. But, the IMF advice more often than not seems to be more political or ideological than practical. However, the IMF should not be used as a scapegoat for successive Greek governments disappointing performance in building trust and confidence. The EC, especially Germany, enlisted the IMF to act as a foil for any failed policies, arguably smart political insurance. As the political foil, the IMF was provided with a cash cow to milk: Greece. And, milk Greece it has.

Greece has paid almost €4 billion in fees and interest to the IMF since the start of the programme. Interest rates of 3.6% for a super senior risk free lender were almost three times as high as the more junior ESM loans. Greece payments are so important to the IMF that they were 118% of IMF’s operating profit. Since 2010, IMF personnel expense have increased 48% compared to a decline of 8% in the prior seven years. And, not to go unnoticed, the IMF newly refurbished headquarters is 31% over budget at $562 million. With 97% of IMF’s cost now essentially fixed, losing Greece, Portugal, and Ireland, would cause massive financial trauma at the IMF and may well render it insolvent. So, the obvious question is: does the IMF have an incentive to keep Greece in crisis to protect its own financial survival and continue to milk the Greek cow?

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How many will just glance over a story like this? In only a few years, species are pushed over a cliff.

Key South Africa Leopard Population Crashing (AFP)

The leopard population in a region of South Africa once thick with the big cats is crashing, and could be wiped out within a few years, scientists warned on Wednesday. Illegal killing of leopards in the Soutpansberg Mountains has reduced their numbers by two-thirds in the last decade, the researchers reported in the Royal Society Open Science journal. “If things don’t change, we predict leopards will essentially disappear from the area by about 2020,” lead author Samual Williams, a conservation biologist at Durham University in England, told AFP. “This is especially alarming given that, in 2008, this area had one of the highest leopard densities in Africa.” The number of leopards in the wild worldwide is not known, but is diminishing elsewhere as well. The “best estimate” for all of South Africa, said Williams, is about 4,500.

What is certain, however, is that the regions these predators roam has shrunk drastically over the last two centuries. The historic range of Panthera pardus, which includes more than half-a-dozen sub-species, covered large swathes of Africa and Asia, and extended well into the Arabian Peninsula. Leopards once roamed the forests of Sri Lanka and Java unchallenged. Today, they occupy barely a quarter of this territory, with some sub-species teetering on the brink of extinction, trapped in 1 or 2% of their original habitat. Leopards were classified last year as “vulnerable” to extinction on the International Union for the Conservation of Nature’s Red List of endangered species, which tracks the survival status of animals and plants.

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