Sep 232022
 
 September 23, 2022  Posted by at 8:54 am Finance Tagged with: , , , , , , , , ,  117 Responses »


Max Ernst The Angel of the home or the Triumph of Surrealism 1937

 

Nuclear War Is Possible – US Commander (RT)
Ex-US General Warns Russia Of ‘Devastating Strike’ (RT)
Serbian President Warns of “Great World Conflict” Within Two Months (SN)
Medvedev Responds To Military Threat From Ex-US General (RT)
Von der Leyen Is Completely Wrong About anti-Russia Sanctions (Timofeev)
EU To Impose New Sanctions On Moscow – Borrell (RT)
Brussels’ Sanctions Caused Crisis – Orban (RT)
Austria To Reject Russian Gas Ban – FM (RT)
Ukraine: 5-Year Prison Sentence For Anyone Voting In “Sham Referendums” (ZH)
Ukraine Perfect Testing Ground For New US Weapons – Kiev (RT)
Lavrov Puts Spotlight On ‘Impunity’ In Ukraine (RT)
Jamie Dimon: Stopping Oil And Gas Production ‘Road To Hell’ For US (NYP)
A Greek Watergate Threatens the West (Varoufakis)
‘He’s Done’: How Donald Trump’s Legal Woes Have Just Gotten A Lot Worse (G.)

 

 

Poster seen in Amsterdam

 

 

“There is no such thing as a heartbeat at six weeks. It is a manufactured sound designed to convince people that men have the right to take control of a woman’s body.”

 

 

 

 

Matt Walsh

 

 

CO2

 

 

 

 

 

 

“..the Kremlin would “without a doubt use all available means to protect Russia and our people..”

Nuclear War Is Possible – US Commander (RT)

Navy Admiral Charles Richard, commander of US Strategic Command, declared on Wednesday that for the first time since the end of the Cold War, the US faces the possibility of nuclear war with a peer-level opponent. Speaking at an Air Force-organized conference in Maryland, Richard claimed that the US would have to prepare to escalate quickly against possible opponents, including to defend the United States itself. “All of us in this room are back in the business of contemplating…direct armed conflict with a nuclear-capable peer,” he said, according to a Pentagon summary of his comments. “We have not had to do that in over 30 years.”

“Russia and China can escalate to any level of violence that they choose in any domain with any instrument of power worldwide,” he continued. “We just haven’t faced competitors and opponents like that in a long time.” In the eyes of Moscow, the US is currently locked in a proxy conflict with Russia in Ukraine, and has steadily escalated its commitment of weapons, intelligence and financial assistance to Kiev since Russian troops entered Ukraine in February. Russia’s current nuclear doctrine allows for the use of nuclear weapons in the event of a first nuclear strike on its territory or infrastructure, or if the existence of the Russian state is threatened by either nuclear or conventional weapons. American doctrine allows for a nuclear first strike in “extreme circumstances to defend the vital interests of the United States or its allies and partners.”

Russian President Vladimir Putin reiterated this position on Wednesday, declaring that the Kremlin would “without a doubt use all available means to protect Russia and our people,” should Russian territory be threatened. Russian Foreign Minister Sergey Lavrov also warned that the US was “teetering on the brink” of becoming a direct party in the Ukraine conflict, with Washington risking “a direct collision between nuclear powers.” Similar warnings have come from within the US too, most notably from former President Donald Trump, who declared on Wednesday that the conflict, which he said “should have never happened,” could “end up being World War III.”

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These people appear to think they live in the 1960’s.

Ex-US General Warns Russia Of ‘Devastating Strike’ (RT)

The US could destroy Russia’s Crimea-based Black Sea Fleet or its bases on the peninsula if Moscow resorts to using nuclear weapons in Ukraine, the former commander of the US Army in Europe, Ben Hodges, has said. In an interview with the Daily Mail on Wednesday, Hodges described the possibility of Russian President Vladimir Putin ordering the deployment of nukes as “very unlikely.” Putin will not do so because “he knows the US will have to respond if Russia uses a nuclear weapon,” he claimed. “The US response may not be nuclear… but could very well be a devastating strike that could, for example, destroy the Black Sea Fleet or destroy Russian bases in Crimea,” Hodges, who was in charge of the US forces in Europe between 2014 and 2018, said.


“So, I think President Putin and those around him will be reluctant to draw the US into the conflict directly.” The comments were made in response to Putin’s address earlier that day, in which he said Russia is fighting “the entire Western military machine” in Ukraine, citing the lavish assistance in lethal aid and intelligence provided to Kiev by the US, UK, EU and others. “If the territorial integrity of our nation is threatened, we will certainly use all the means that we have to defend Russia and our people,”he warned. White House National Security Council spokesman John Kirby said the Biden administration took Putin’s words “seriously,”but insisted that it was “irresponsible rhetoric for a nuclear power to talk that way.”

Scott Ritter

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“..nuclear war between the United States and Russia would cause two-thirds of the planet to starve to death within two years..”

Serbian President Warns of “Great World Conflict” Within Two Months (SN)

The President of Serbia has warned that the planet is entering into a “great world conflict” that could take place within the next two months. Aleksandar Vucic made the alarming comments during the first day of the UN General Assembly session in New York. “You see a crisis in every part of the world,” Vucic told the Serbian state broadcaster RTS. “I think realistic predictions ought to be even darker,” he added. “Our position is even worse, since the UN has been weakened and the great powers have taken over and practically destroyed the UN order over the past several decades.” The Serbian leader cautioned that the war between Russia and Ukraine had moved on to a far deadlier phase.

“I assume that we’re leaving the phase of the special military operation and approaching a major armed conflict, and now the question becomes where is the line, and whether after a certain time – maybe a month or two, even – we will enter a great world conflict not seen since the Second World War,” he said. Vucic’s remarks were made on the same day that Russian President Vladimir Putin ordered an immediate “partial mobilization” of troops amounting to 300,000 soldiers. In a public address to the nation, Putin warned that he wasn’t bluffing and that he was prepared to use “all the means at our disposal” to protect Moscow’s territorial integrity. “Now they (the West) are talking about nuclear blackmail,” said Putin. “The Zaporizhzhia nuclear power plant was shelled and also some high positions – representatives of NATO states – who are saying there might be possibility and permissibility to use nuclear weapons against Russia,” he added.

Putin ominously asserted that western powers should “be reminded that our country also has various weapons of destruction, and with regard to certain components they’re even more modern than NATO ones.” As we highlighted last month, a study conducted by Rutgers University found that nuclear war between the United States and Russia would cause two-thirds of the planet to starve to death within two years. 5 billion people would perish, primarily as a result of nuclear detonations causing huge infernos that inject soot into the atmosphere which blocks out the sun and devastates crops. One wonders how a generation that thinks words are “violence” and misgendering someone is stochastic terrorism will react to an intercontinental nuclear war. The mind truly boggles.

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“retired idiots with generals’ stripes” should not attempt to intimidate Moscow..”

Medvedev Responds To Military Threat From Ex-US General (RT)

Moscow may use nuclear weapons to defend its territory, including the Donbass republics and Zaporozhye and Kherson Regions, should they decide to join Russia, former president, Dmitry Medvedev said on Thursday. He also warned that “retired idiots” in the Western military should not contemplate strikes on Moscow’s naval bases in the Black Sea. Writing on Telegram on Thursday, Medvedev stressed that the referendums, planned for between September 23 and 27, would definitely take place, and “the Donbass republics and other territories would be admitted to Russia.” The former president went on to say that the Russian military would “significantly reinforce” the defenses of all incorporated territories.

He added that to defend its territories, Russia may use “not only its mobilization capabilities, but also any Russian weapons, including strategic nuclear weapons.” Without naming names, Medvedev cautioned that “retired idiots with generals’ stripes” should not attempt to intimidate Moscow by claiming that NATO could attack Crimea, a peninsula that overwhelmingly voted to unite with Russia in 2014 following a coup in Kiev. “Hypersonic [missiles] are sure to hit targets in Europe and the US much faster,” he warned, adding that “the Western establishment and NATO citizens need to understand that Russia has chosen its own path” and there is “no way back.”

On Wednesday, Ben Hodges, the former commander of the US Army in Europe, said that Washington could destroy Russia’s Black Sea Fleet, that’s based in Crimea, or its bases on the peninsula if Moscow resorts to using nuclear weapons in Ukraine. He noted that it’s “very unlikely” that Russian President Vladimir Putin would order to deploy nukes. Last week, Medvedev accused Western “half-wits” from “stupid think tanks” of leading their countries down the road of nuclear Armageddon with their hybrid war against Moscow. He also warned that the “unrestrained pumping of the Kiev regime with the most dangerous types of weapons,” could prompt Russia to move its military campaign to the next level.

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Ivan Timofeev, Valdai Club Programme Director & one of Russia’s leading foreign policy experts.

Von der Leyen Is Completely Wrong About anti-Russia Sanctions (Timofeev)

European Commission chief Ursula von der Leyen has, as could be expected, called for new sanctions against Russia in connection with the forthcomingreferendums in Donbass and two regions of Ukraine. These concern the Donetsk and Lugansk People’s Republics – which have been de-facto self-governing since 2014 – and the Kherson and Zaporozhye regions. In her opinion, the penalties already imposed on Russia are having an impact.”The sanctions have been very successful. If you look at the Russian economy, its industry is in tatters,” the politician asserted. Let’s allow ourselves to argue a little with Ms. von der Leyen. The key measure of the effectiveness of sanctions is whether they change the political course of the target country.

This criterion has been well researched in both academic and applied literature and few people have any doubts about its veracity. However, Russia has not changed its political course in Ukraine under the influence of the large-scale sanctions of the EU, US and other initiators. Moreover, its position is hardening, as evidenced by this week’s announcements of both a partial mobilization and the referendums. Thus, we can say that the measures are actually having a negative effect in terms of what they are supposed to be doing. Apparently, Ms. von der Leyen links effectiveness to the amount of pain inflicted. In other words, she believes that the greater it is, the better. There are problems here, too. The damage is indeed large. But we are not just sitting still and feeling sorry for ourselves. We are adapting very energetically.

Now, you can criticize Russia’s domestic financial policy and question import substitution as much as you like. And they will not, of course, make ‘everything as it was.’ But it is clear that the economy is shrinking much less than expected, that inflation has, at least so far, been brought under control, and that adaptations in sourcing, helped by domestic production, are mitigating the effects of the sanctions. The economy is simply becoming different. It is changing in terms of focus and quality. In a number of sectors it will “run slower” or limp along. But Russiawill continue to live. Of course, we have already heard the words “the Russian economy is in tatters,” from US President Barack Obama. That was in 2015. Seven years ago.

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10,000 sanctions. A silly game.

EU To Impose New Sanctions On Moscow – Borrell (RT)

The EU has agreed to slap new sanctions on Russia “as soon as possible” over plans to hold referendums in the Donbass republics and Russian-controlled regions in Ukraine on whether to unite with Russia, the bloc’s foreign policy chief said on Wednesday. Speaking after an emergency meeting of EU foreign ministers, Josep Borrell said that the bloc had made a “political” decision to impose new sectoral and individual sanctions on Russia. “These restrictive measures would be brought forward as soon as possible against Russia in coordination with partners,” he said. While he did not clarify the details of the new sanctions, he hinted that they would hit the Russian economy, especially the technology sector, while the EU would also blacklist a number of individuals.


He also noted that the bloc would provide Ukraine with security assistance for “as long as it takes.” “Today it’s clear that we will continue to increase our military support and continue to provide arms to Ukraine,” he added. Borrell also commented on recent developments in the Ukraine conflict, accusing Russian President Vladimir Putin of “trying to destroy Ukraine” and organizing partial mobilization to support what he called “illegal referenda.” On Wednesday, Vladimir Putin announced a partial mobilization which calls on 300,000 reservists to take part in the conflict with Ukraine. The move comes a day after the two Donbass republics and Russian-controlled Zaporozhye and Kherson Regions decided to hold referendums from September 23 to 27, on whether to unite with Russia.

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Waiting for the first threats to throw him out.

Brussels’ Sanctions Caused Crisis – Orban (RT)

The EU leadership caused a continent-wide crisis by imposing sanctions on Russian energy, Hungarian Prime Minister Viktor Orban has said. The Eurosceptic politician criticized Brussels on his Facebook page on Wednesday evening as he announced a meeting with members of the ruling coalition in the parliament. According to local media, during the closed-door gathering, he blamed EU bureaucrats for the hardships that member states, including Hungary, currently face. Orban told MPs from his Fidesz party and the allied Christian Democrats (KDNP) that if the EU’s sanctions on Russia were dropped, gas prices would go down by one-half, and as a result, inflation would also decline, Magyar Nemzet daily reported.

The Hungarian PM said the EU leadership promised in early summer that the sanctions would hurt Russia’s economy, not people in the EU, but the opposite has occurred, according to the report. Orban predicted that dropping the sanctions would allow the EU to avoid a recession. In November, there will be a meaningful opportunity for the EU to reconsider the restrictions on trading with Russia, Orban reportedly said, and the ruling Hungarian coalition should work hard to have them lifted by the end of the year. The prime minister also lashed out at the Hungarian opposition, accusing them of backing Brussels’ policies without giving a second thought to the damage they are causing to the country, Magyar Nemzet said.

He also outlined a number of measures, such as energy subsidies, which the Fidesz–KDNP government is taking to alleviate the effects of the skyrocketing prices, the newspaper reported. Orban, who was re-elected in a landslide victory in April, is an outspoken critic of the EU leadership. He has called the bloc the main loser in the Russia-Ukraine conflict, in which it sided with Kiev. The sanctions were imposed by Brussels in retaliation for Russia’s decision to send troops into Ukraine in late February.

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Hungary, Serbia, Austria. Next!

“in case of further steps, primarily in the energy sector, with regard to gas, there will be a clear ‘no’ from Austria.”

Austria To Reject Russian Gas Ban – FM (RT)

Vienna will say an emphatic ‘no’ to proposals of a ban on Russian natural gas imports, Austrian Foreign Minister Alexander Schallenberg said on Thursday, noting that the already adopted EU sanctions packages are comprehensive and may require clarification. “I have said in the past that we should discuss this [possible tightening of sanctions] in an appropriate way, namely behind closed doors, but yes – we have already adopted six large-scale sanctions packages, and now we can think about closing the loopholes,” the FM told ORF while answering a question on whether Vienna’s position has changed regarding the possible strengthening of sanctions against Russia. Schallenberg added that “in case of further steps, primarily in the energy sector, with regard to gas, there will be a clear ‘no’ from Austria.”


Austria, which is heavily dependent on Russian energy and sources around 80% of natural gas from Russia, has been opposing the EU’s plan to restrict imports from Moscow. The Federation of Austrian Industries earlier warned that the suspension of Russian gas supplies would be “a serious blow” to the welfare of the Austrian people as it threatens some 300,000 jobs. According to the president of the federation, Georg Knill, almost the entire food industry depends on the supply of the “blue fuel.” He stated in May that he saw danger not so much in the fact that Russia could “turn off the taps,”but in the decision of the European Union to stop importing Russian gas. In March, the EU rolled out a plan to reduce dependence on Russian gas by two thirds before the end of the year. The proposal is part of a wider plan to become independent from all Russian fossil fuels “well before 2030.”

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Voting Sep 23-27. Percentages predicted run from 80% to 95%, depending on the region. Russia will annex them.

Ukraine: 5-Year Prison Sentence For Anyone Voting In “Sham Referendums” (ZH)

Starting last month Ukrainian lawmakers began seeking to implement severe consequences for those participating in Russia-sponsored referendums in occupied territories of Ukraine. For example, a law is being pushed through parliament which criminalizes obtaining a Russian passport in temporarily occupied territories, Ukrainian sources reported last week, according to Yahoo News. Proposed possible punishments have included losing Ukrainian citizenship, or even lengthy jail sentences. But other officials have argued for a more compromising approach given the necessity of survival in occupied areas. But now the Ukrainian government has reiterated its willingness to impose steep penalties for even participating in any Kremlin-sponsored vote to join the Russian Federation.

Russian President Putin’s Wednesday morning address announcing partial mobilization also affirmed plans to move forward with referendums in the LPR, DPR, Kherson and Zaporozhye regions. Ukraine has responded by warning its citizens that any official who promotes or organizes the voting faces a “prison term of five to ten years” – as well as possible asset seizure by the state, and being barred from employment in select positions for up to 15 years. Ukrainian Deputy Prime Minister Irina Vereshchuk announced this week that a five year prison term is currently being considered for anyone caught participating in “sham referenda” by government authorities:

“Some lawyers believe that those actions fall under Article 110 part 1 of the Criminal Code of Ukraine, ‘Infringement on Ukraine’s territorial integrity,’ punishable with a prison term of up to five years,” she told the Strana portal on Tuesday. She further called on citizens currently in occupied to territories to “leave, if possible.” Vereshchuk was cited further as follows according to a Russian media translation of her words: “This [may] mean imprisonment for up to five years. So, once again I strongly advise residents of the temporarily occupied territories: do not take a [Russian] passport, do not go to referendums, do not cooperate with the occupiers and leave, if it’s possible,” the official stated.

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Come test them on my country!

Ukraine Perfect Testing Ground For New US Weapons – Kiev (RT)

US defense companies should send their new weapons to Ukraine so they can be tested in actual combat against Russian forces, Kiev’s deputy defense minister, Vladimir Gavrilov, has said. Gavrilov made the suggestion during a speech before hundreds of American defense industry representatives and military acquisitions personnel at the Future Force Capabilities Conference and Exhibition in Austin, Texas on Wednesday. “If you have some ideas, or some pilot projects to be tested before mass manufacturing, you can send it to us and we will explain how to do it. And in the end you will get the stamp, proved by the war in Ukraine. You will sell it easy,” he said, as cited by the Military Times.

According to the deputy defense minister, startup companies, including those involved in anti-drone and anti-jamming equipment, have already brought new technologies to the Ukrainian battlefield. “And they come back with a product that is competitive in the market now because it was tested in a combat zone,” Gavrilov said, without revealing the companies that have worked with Ukraine in this capacity. His comments were made on the day Russian President Vladimir Putin announced a partial mobilization, which he said is necessary because Russia has been fighting “the entire Western military machine” in Ukraine. Defense Minister Sergey Shoigu later stated that around 300,000 reservists are planned to be called up.

In view of this shift in Russia’s tactics, Kiev will require more counter-drone and electronic warfare technologies, armored vehicles, and long-range anti-tank and precision fire weapons, Gavrilov said. Ukraine is now almost entirely dependent on weapons supplied by the US, UK, EU, and other nations, according to Shoigu, as most of the Soviet-made hardware it had before the fighting began in late February has been destroyed by Russian forces.

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8 years, not 6 months.

“..he may be a son of a b*tch, but he is our son of a b*tch,”

Lavrov Puts Spotlight On ‘Impunity’ In Ukraine (RT)

The current crisis in Ukraine was brought about by the West systematically covering up the crimes of the Kiev government since the 2014 coup, Russian Foreign Minister Sergey Lavrov told the UN Security Council on Thursday. Lavrov noted that “impunity” is a good term for what has been happening in Ukraine, not since February but since 2014, when US-backed nationalists and neo-Nazis seized power by force. No one has ever been held responsible for the murders on the Maidan, the burning of peaceful protesters in Odessa, or the assassinations of dissidents, he pointed out. Civilians of Donbass have been bombed mercilessly for years and dubbed terrorists and even subhuman, simply for refusing to accept the results of the coup and insisting on their basic human right to speak Russian, Lavrov said.

The Russian foreign minister presented a long list of human rights violations by Kiev that went ignored by various European and global human rights groups, from “burning books, just like in Nazi Germany” to using banned ‘petal’ land mines against civilians this summer. “Such outrages became possible and remain unpunished due to the fact that the US and its allies, with the connivance of international human rights institutions, have been systematically covering up the crimes of the Kiev regime for eight years, basing their policy towards [Ukrainian President Vladimir] Zelensky based on the well-known American principle: he may be a son of a b*tch, but he is our son of a b*tch,” said Lavrov.

This was a reference to an apocryphal quote attributed to President Franklin Delano Roosevelt, and thought to apply either to Anastasio Somoza of Nicaragua or Rafael Trujillo of the Dominican Republic – both US-backed dictators. Lavrov also accused the Ukrainian armed forces of using civilians as human shields and said that Russia and the Donbass republics are fighting against the “Western military machine” in Ukraine, with the US and its allies perilously close to being overt participants in the conflict. Moscow has shared evidence demonstrating that the West has sought to turn Ukraine into a forward outpost that could threaten Russia’s security, Lavrov told the UN. “I can assure you, we will not let that happen.”

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Tlaib literally has no idea what she’s talking about. You can’t “save the climate” by bankrupting your economy.

Jamie Dimon: Stopping Oil And Gas Production ‘Road To Hell’ For US (NYP)

JPMorgan Chase CEO Jamie Dimon said slamming the brakes on new oil and gas production “would be the road to hell for America” after Rep. Rashida Tlaib asked him to divest in oil. Dimon’s comments came during a House hearing where the far-left Michigan Democrat asked him and other top bank execs if they would commit to no longer investing funds into oil and gas companies to slow down climate change. “Please answer with a simple yes or no, does your bank have a policy against funding new oil and gas products,” Tlaib asked, with Dimon up first. “Absolutely not and that would be the road to hell for America,” Dimon shot back.


Tlaib then slammed JPMorgan-Chase and circled back to criticism Dimon leveled against President Joe Biden’s plan to forgive up to $20,000 in student debt during the hearing. She encouraged people to cancel their accounts with the major bank. “Sir, you know what, everybody that got relief from student loans — has a bank account with your bank — should probably take out their account and close their account,” an irritated Tlaib said. “The fact that you’re not even there to help relieve many of the folks that are in debt, extreme debt, because of student loan debt and you’re out there criticizing it,” Tlaib said before moving on to the next bank executive on the panel, Citi CEO Jane Fraser, who offered a more diplomatic response.

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Note: this case would be non-existant if the politician who was tapped was not also a European parliament member.

A Greek Watergate Threatens the West (Varoufakis)

The sequence of events leading to the exposure of Greece’s Watergate scandal began in July 2019, immediately after Mr Mitsotakis won the last general election on behalf of New Democracy, our conservative party. One of the very first decrees he issued, as incoming Prime Minister, was one that gave his office direct control over and responsibility for EYP. “Why on earth is the PM taking over the supervision of EYP?”, I remember a parliamentary colleague asking me that very day. It was, indeed, a curious move. Our trepidation only grew following two personnel choices. First, Mitsotakis appointed a nephew of his, Grigoris Dimitriadis, to oversee EYP on his behalf. Secondly, he chose as EYP’s new head Panagiotis Kontoleon, the CEO of the Greek franchise of the private security firm G4 — a man with no record of public service, and whose appointment Mitsotakis could only complete after amending the relevant law to remove the prerequisite that the EYP chief holds a postgraduate degree.

Given his concerted and very public efforts to take complete control of the state intelligence agency, something no other PM had ever done, it became impossible to shift blame to some other minister once the faeces hit the proverbial fan. Of the more than 17,000 wiretaps that EYP admits it has placed during the last year alone, two cases are at the heart of the current scandal. The first is that of Thanasis Koukakis, an investigative journalist who dared look into Greek shipowners’ loans that had been illegally written off by the Bank of Piraeus (one of the banks that Greek taxpayers have had to repeatedly bailout). It turns out that Koukakis was one of EYP’s “subjects of interest”, an outrage that would have probably gone unnoticed without the second, higher profile, case.

It was this case that broke the camel’s back: an investigation begun by the European Parliament’s IT department accidentally revealed that Nikos Androulakis, an MEP belonging to PASOK (the formerly dominant party in Greek politics), was being phone-tapped by EYP. It was explosive news because, at the time his phone was tapped, Androulakis was contesting the leadership of PASOK — a contest that he, eventually, won. The significance of that contest cannot be understated, since its outcome mattered a great deal to Mitsotakis and his governing New Democracy party. Since the middle of the pandemic, opinion polls have persistently suggested that the next election, which must take place by July 2023, will result in a hung parliament. While Mitsotakis’ New Democracy seemed likely to remain the largest party, it was not even close to an absolute majority. PASOK, in third place, was therefore positioned as kingmaker: whoever the party chose to side with would end up in government.

The stakes of PASOK’s leadership race suddenly seemed very high. Of the three main candidates, the one that would almost certainly choose to back New Democracy and Mitsotakis to form a government was Andreas Loverdos — an MP and former minister who had served gladly in New Democracy-PASOK coalition governments between 2011 and 2015. Every newspaper, radio and television station supporting Mitsotakis was rooting for Loverdos to beat Androulakis in the PASOK leadership primary. Is it any wonder that the revelation of EYP’s surveillance of Androulakis was big news? In a period during which the ruling party was rooting for Androulakis’s opponent, the nation’s spy agency — which ruling party’s leader and his nephew controlled and supervised to the full — was tapping Androulakis’ phone!

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Let’s turn to the Guardian for the real news.

Letitia James ran on “get Trump” and then spent her entire tenure as NY AG trying to “get Trump”, already the most investigated and prosecuted person in the history of the US. She will fail just like the others.

Meanwhile: why did James make this a civil, not a criminal case?

And: if Trump defrauded banks and pension funds, why did none of them ever file a case?

‘He’s Done’: How Donald Trump’s Legal Woes Have Just Gotten A Lot Worse (G.)

Donald Trump’s legal perils have become insurmountable and could snuff out the former US president’s hopes of an election-winning comeback, according to political analysts and legal experts. On Wednesday, Trump and three of his adult children were accused of lying to tax collectors, lenders and insurers in a “staggering” fraud scheme that routinely misstated the value of his properties to enrich themselves. The civil lawsuit, filed by New York’s attorney general, came as the FBI investigates Trump’s holding of sensitive government documents at his Mar-a-Lago estate in Florida and a special grand jury in Georgia considers whether he and others attempted to influence state election officials after his defeat there by Joe Biden.

The former US president has repeatedly hinted that he intends to run for the White House again in 2024. But the cascade of criminal, civil and congressional investigations could yet derail that bid. “He’s done,” said Allan Lichtman, a history professor at American University, in Washington, who has accurately predicted every presidential election since 1984. “He’s got too many burdens, too much baggage to be able to run again even presuming he escapes jail, he escapes bankruptcy. I’m not sure he’s going to escape jail.” After a three-year investigation, Letitia James, the New York attorney general, alleged that Trump provided fraudulent statements of his net worth and false asset valuations to obtain and satisfy loans, get insurance benefits and pay lower taxes. Offspring Don Jr, Ivanka and Eric were also named as defendants.

At a press conference, James riffed on the title of Trump’s 1987 memoir and business how-to book, The Art of the Deal. “This investigation revealed that Donald Trump engaged in years of illegal conduct to inflate his net worth, to deceive banks and the people of the great state of New York. Claiming you have money that you do not have does not amount to ‘the art of the deal’. It’s the art of the steal,” she said. Her office requested that the former president pay at least $250m in penalties and that his family be banned from running businesses in the state. James cannot bring criminal charges against Trump in this civil investigation but she said she was referring allegations of criminal fraud to federal prosecutors in Manhattan as well as the Internal Revenue Service.

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Phone vs life
https://twitter.com/i/status/1573015092828180480

 

 

 

 

Correa

 

 

Monarchs

 

 

 

 

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Sep 222017
 
 September 22, 2017  Posted by at 9:15 am Finance Tagged with: , , , , , , , , , ,  3 Responses »


Harry Callahan Chicago 1947

 

Albert Edwards: The Bank Of England’s ‘Monetary Schizophrenia’ (CW)
4-Warnings For The Bull Market (Roberts)
QT1 Will Lead to QE4 Rickards)
S&P Strips Hong Kong of AAA Rating A Day After China Downgrade (BBG)
China Hits Back At S&P’s ‘Mistaken’ Credit Downgrade (AFP)
Jamie Dimon Faces Market Abuse Claim Over Bitcoin Comments (ZH)
Spain’s Attack On Catalonia Spills Over To 100,000 Domain Names (IN)
Spain Hires Cruise Liner to House Police in Rebel Catalonia (BBG)
Greece Will Remain Under Strict Supervision For Years, EWG Chief Says (K.)
Life Unlikely Beyond 115 Year Mark Despite Medical Advances (DT)

 

 

“At the same time it is warning of a consumer credit bubble, the BoE has just increased its programme of lending to banks at preferential rates to increase bank lending in things like, yes you’ve guessed it, consumer credit!”

Albert Edwards: The Bank Of England’s ‘Monetary Schizophrenia’ (CW)

After last month admitting he was becoming tired of central bank bashing – a feeling many of his readers may relate to – Albert Edwards has launched another scathing attack. The Bank of England (BoE) was in the line of fire this time, with the SocGen strategist claiming Mark Carney’s team was leading the way when it comes to ‘monetary schizophrenia’. Edwards finds it remarkable how similar the US and UK macro situations often are. ‘This was most evident in the run-up to the 2008 global financial crisis with both the Federal Reserve and Bank of England (BoE) asleep at the wheel, building a most precarious pyramid of prosperity upon the shifting sands of rampant credit growth and illusory housing wealth,’ he said. ‘These of all the major central banks were the most culpable in their incompetence and most prepared with disingenuous excuses. And 10 years on, not much has changed.

‘The Fed and BoE are once again presiding over a credit bubble, with the BoE in particular suffering a painful episode of cognitive dissonance in an effort to shift the blame elsewhere. The credit bubble is everyone’s fault but theirs.’ Edwards sees unsecured credit at the heart of the problem, where growth has shot up by more than 10% in both the UK and US. Edwards accepts the debt time-bomb is specific to the UK. ‘We are in a QE, zero interest rate world, where central banks are effectively force-feeding debt down borrowers’ throats. They did it in 2003-2007 and they are doing it again,’ he highlights. ‘Most of the liquidity merely swirls around financial markets, but there is certainly compelling evidence now of a consumer credit bubble in both the UK and US (as well as a corporate credit bubble in the US).’

However, he finds the reaction of the BoE most ‘bizarre’, with Carney darkly warning banks of lessons of the past while recently increasing bank capital requirements on consumer loans. The perplexed Edwards points out: ‘At the same time it is warning of a consumer credit bubble, the BoE has just increased its programme of lending to banks at preferential rates to increase bank lending in things like, yes you’ve guessed it, consumer credit!

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“It may not ‘feel’ like the mania of the late 1990s to early 2000, but in terms of actually measurable data, the overall bullish consensus seems to be even greater than it was back then.”

4-Warnings For The Bull Market (Roberts)

As I have discussed many times previously, the stock market rise has NOT lifted all boats equally. More importantly, the surge in confidence is a coincident indicator and more suggestive, historically, of market peaks as opposed to further advances. As David Rosenberg, the chief economist at Gluskin Sheff noted: ‘For an investment community that typically lives in the moment and extrapolates the most recent experience into the future, it would only fall on deaf ears to suggest that peak confidence like this and peak market pricing tend to coincide with each other.” He is absolutely correct. As shown below in the consumer composite confidence index (an average of the Census Bureau and University Of Michigan surveys), previous peaks in confidence have been generally associated with peaks in the market.

For those of you unfamiliar with Texas sayings, “all hat, no cattle” means that someone is acting the part without having the “stuff” to back it up. Just wearing a “cowboy hat,” doesn’t make you a “cowboy.” I agree with the premise that leverage alone is not a problem for stocks in the short-term. In fact, it is the increase in leverage which pushes stock prices higher. As shown in the chart below, there is a direct correlation between stock price and margin debt growth. But, margin debt is NOT a benign contributor. As I discussed previously in “The Passive Indexing Trap:” “At some point, that reversion process will take hold. It is then investor ‘psychology’ will collide with ‘margin debt’ and ETF liquidity. It will be the equivalent of striking a match, lighting a stick of dynamite and throwing it into a tanker full of gasoline.”

Not surprisingly, the expansion of leverage to record levels coincides with the drop in investor cash levels to record lows. As noted by Pater Tenebrarum via Acting-Man blog: “Sentiment has become even more lopsided lately, with the general public joining the party. It may not ‘feel’ like the mania of the late 1990s to early 2000, but in terms of actually measurable data, the overall bullish consensus seems to be even greater than it was back then. Along similar lines, here is a recent chart that aggregates the relative cash reserves of several groups of market participants (including individual investors, mutual fund managers, fund timers, pension fund managers, institutional portfolio managers, retail mom-and-pop type investors). It shows that there is simply no fear of a downturn:”

So much for the “cash on the sidelines” theory. When investors believe the market can’t possibly go down, it is generally time to start worrying. As Pater concludes: “As a rule, such extremes in complacency precede crashes and major bear markets, but they cannot tell us when precisely the denouement will begin.”

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“The Fed has essentially trapped itself into a state of perpetual manipulation.” All major central banks have.

QT1 Will Lead to QE4 Rickards)

There are only three members of the Board of Governors who matter: Janet Yellen, Stan Fischer and Lael Brainard. There is only one Regional Reserve Bank President who matters: Bill Dudley of New York. Yellen, Fischer, Brainard and Dudley are the “Big Four.” They are the only ones worth listening to. They call the shots. The don’t like dots. Everything else is noise. Here’s the model the Big Four actually use: 1. Raise rates 0.25% every March, June, September and December until rates reach 3.0% in late 2019. 2. Take a “pause” on rate hikes if one of three pause factors apply: disorderly asset price declines, jobs growth below 75,000 per month, or persistent disinflation. 3. Put balance sheet normalization on auto-pilot and let it run “on background.” Don’t use it as a policy tool.

[..] Here’s what the Fed wants you to believe… The Fed wants you to think that QT will not have any impact. Fed leadership speaks in code and has a word for this which you’ll hear called “background.” The Fed wants this to run on background. Think of running on background like someone using a computer to access email while downloading something on background. This is complete nonsense. They’ve spent eight years saying that quantitative easing was stimulative. Now they want the public to believe that a change to quantitative tightening is not going to slow the economy. They continue to push that conditions are sustainable when printing money, but when they make money disappear, it will not have any impact. This approach falls down on its face — and it will have a big impact.

Markets continue to not be fully discounted because they don’t have enough information. Contradictions coming from the Fed’s happy talk wants us to believe that QT is not a contractionary policy, but it is. My estimate is that every $500 billion of quantitative tightening could be equivalent to one .25 basis point rate hike. The Fed is about to embark on a policy to let the balance sheet run down. The plan is to reduce the balance sheet $30 billion in the fourth quarter of 2017, then increase the quarterly tempo by an additional $30 billion per quarter until hitting a level of $150 billion per quarter by October 1, 2018. Under that estimate, the balance sheet reduction would be about $600 billion by the end of 2018, and another $600 billion by the end of 2019. That would be the equivalent of half a .25 basis point rate hike in each of the next two years in addition to any actual rate hikes.

While they might attempt to say that this method is just going to “run on background,” don’t believe it. The decision by the Fed to not purchase new bonds will be just as detrimental to the growth of the economy as raising interest rates. The Fed’s QT policy that aims to tighten monetary conditions, reduce the money supply and increase interest rates will cause the economy to hit a wall, if it hasn’t already. The economy is slowing. Even without any action, retail sales, real incomes, auto sales and even labor force participation are all declining. Every important economic indicator shows that the U.S. economy is slowing right now. When you add in QT, we may very well be in a recession very soon. Because they’re getting ready for a potential recession where they’ll have to cut rates yet again. Then it’s back to QE. You could call that QE4 or QE1 part 2. The Fed has essentially trapped itself into a state of perpetual manipulation.

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Hong Kong dollar is pegged to USD.

S&P Strips Hong Kong of AAA Rating A Day After China Downgrade (BBG)

S&P Global Ratings cut Hong Kong’s credit rating a day after it downgraded China for the first time since 1999, a move that reflects the “strong institutional and political linkages” between the special administrative region and the mainland, the ratings firm said. The financial hub’s long-term issuer credit rating was lowered to AA+ from AAA, S&P said in a statement Friday. The agency lowered China’s sovereign rating Thursday to A+ from AA-, citing the risks from soaring debt, and revised its outlook to stable from negative. “We are lowering the rating on Hong Kong to reflect potential spillover risks to the SAR should deleveraging in China prove to be more disruptive than we currently expect,” S&P said in a statement, referring to the Hong Kong special administrative region.

It’s the second time this year Hong Kong’s rating has been cut in response to a China downgrade. Moody’s Investors Service in May lowered the finance hub’s rating and changed the outlook to stable from negative after it cut China for the first time since 1989. “Downgrading Hong Kong after China is a natural step,” said Mark McFarland, chief Asia economist at Union Bancaire Privee. “It has been widely anticipated that S&P would eventually follow the others and that Hong Kong would be dropped a notch too.” While S&P said Hong Kong’s credit metrics remain “very strong” based on the strength of the central government in Beijing, it faces a slew of challenges from surging property prices to the Federal Reserve’s plans to raise interest rates. Because the former British colony’s currency is pegged to the dollar, it effectively imports U.S. monetary policy.

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The only thing they can do. But claiming that China is ‘so different’ from developed nations is not terribly encouraging.

China Hits Back At S&P’s ‘Mistaken’ Credit Downgrade (AFP)

China on Friday lashed out at the decision by Standard & Poor’s to downgrade the country’s credit rating, calling the warning against ballooning debt “mistaken” and based on “cliches” about its economy. The agency slashed China from AA-minus to A-plus on Thursday, a move that followed a similar decision in May by Moody’s stemming from concerns that the world’s second largest economy is increasingly overleveraged. “Standard & Poor’s downgrade of China’s sovereign credit rating is a mistaken decision,” the finance ministry said in a statement, adding that the move was “perplexing.” It went on to scold the company for making a decision based on “cliches” about China’s economy. The rating “ignores the unique characteristics of the capital raising structure of China’s financial markets”, it said.

“Most unfortunately, this is inertial thinking that international ratings agencies have held for a long time and is a misreading of China’s economy based on the experiences of developed countries,” the ministry said. “This misreading also overlooks the good fundamentals and development potential of China’s economy.” S&P followed the move on Friday by cutting the top-notch credit rating of Hong Kong citing the city’s close links the the mainland economy. Debt-fuelled investment in infrastructure and property has underpinned China’s rapid growth, but there are widespread concerns that years of freewheeling credit could lead to a financial crisis with global implications. Beijing has been clamping down on bank lending and property purchases, but those efforts are complicated by the government’s determination to meet its full-year growth target of around 6.5%. That compares with last year’s pace of 6.7%, which was the slowest in more than a quarter of a century.

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JPMorgan trading in what its CEO calls a fraud demands some answers.

Jamie Dimon Faces Market Abuse Claim Over Bitcoin Comments (ZH)

A week after Jamie Dimon made headlines by proclaiming Bitcoin a “fraud” and anyone who owns it as “stupid,” the JPMorgan CEO faces a market abuse claim for “spreading false and misleading information” about bitcoin. Unless you have been living under a rock for the past week, you will be well aware of JPMorgan CEO Jamie Dimon’s panicked outburst with regard the ‘fraud’ that Bitcoin’s ‘tulip-like’ bubble is. To paraphrase: “It’s a fraud. It’s making stupid people, such as my daughter, feel like they’re geniuses. It’s going to get somebody killed. I’ll fire anyone who touches it.” One week later, an algorithmic liquidity provider called Blockswater has filed a market abuse report against Jamie Dimon for “spreading false and misleading information” about bitcoin. The firm filed the report with the Swedish Financial Supervisory Authority against JPMorgan Chase and Dimon, the company’s chief executive.

Blockswater said Dimon violated Article 12 of the EU Market Abuse Regulation (MAR) by declaring that cryptocurrency bitcoin was “a fraud”. The complaint said Dimon’s statement negatively impacted “the cryptocurrency’s price and reputation”. It also said Dimon “knew, or ought to have known, that the information he disseminated was false and misleading”. “Jamie Dimon’s public assertions did not only affect the reputation of bitcoin, they harmed the interests of some of his own clients and many young businesses that are working hard to create a better financial system,” said Florian Schweitzer, managing partner at Blockswater. Blockswater said JPMorgan traded bitcoin derivatives for their clients on Stockholm-based exchange Nasdaq Nordic before and after Dimon’s statements, which Schweitzer said “smells like market manipulation”.

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Democracy 2017.

Spain’s Attack On Catalonia Spills Over To 100,000 Domain Names (IN)

The offices of the .cat registry were raided by Spanish police this morning. The Guardia Civil officers entered the .cat registry’s offices around 9am local time this morning and have seized all computers in the domain registry’s offices in downtown Barcelona. The move comes a couple of days after a Spanish court ordered the domain registry to take down all .cat domain names being used by the upcoming Catalan referendum. The .cat domain registry currently has over 100 thousand active domain names and in light of the actions taken by the Spanish government it’s unclear how the registry will continue to operate if their offices are effectively shutdown by the Spanish authorities. The seizure won’t impact live domain names or general day to day operations by registrars, as the registry backend is run by CORE and leverages global DNS infrastructure. However it is deeply worrying that the Spanish government’s actions would spill over onto an entire namespace.

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Why do you think the Catalans want out? Spain is answering that.

Spain Hires Cruise Liner to House Police in Rebel Catalonia (BBG)

Spain has discreetly hired ferries to be moored in the Port of Barcelona as temporary housing for possibly thousands of police specially deployed to keep order in rebel Catalonia and help suppress an illegal independence referendum. The country’s interior ministry asked Catalan port authorities to provide a berth for one ship until Oct. 3 – two days after the planned vote – saying it was a matter of state, a spokeswoman for the port said by phone Wednesday. The vessel, known as “Rhapsody,” docked in the city about 9:30 a.m. Thursday, she said. The aim is to amass more than 16,000 riot police and other security officers by the Oct. 1 referendum, El Correo newspaper reported on its website. That would exceed the number of Catalan police, the Mossos d’Esquadra, who serve both the Catalan and central governments.

Spain is putting more boots on the ground in the northeastern region as it arrests local officials, raids regional-government offices and takes control of payroll administration in the run-up to the referendum. The ballot initiative, passed by the Catalan Parliament and declared illegal by the country’s highest court, has escalated a years-long stand-off between pro-independence campaigners and Spain’s central administration in Madrid. As well as the “Rhapsody,” with capacity for 2,448 people, the ministry also hired another vessel to dock in Barcelona with a third headed for the port of Tarragona, 100 kilometers (60 miles) west along the coast, El Confidencial website reported. The “Rhapsody” is operated by the Italian shipping company Grandi Navi Veloci SpA, the port spokeswoman said.

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Without debt relief all streets are dead ends.

Greece Will Remain Under Strict Supervision For Years, EWG Chief Says (K.)

The Greek economy will remain under close supervision for years after the completion of the third bailout deal, the president of the Euro Working Group (EWG), Thomas Wieser told insider.gr in an interview published on Wednesday. Even though he is confident the cash-strapped country will be able to recover, Wieser says that a lot of work needs to be done first, starting with the timely completion of the third bailout review. He also suggests that additional measures may be needed in 2019 and 2020 depending on the course of the budget next year. Asked whether he believes this will be Greece’s last memorandum, the Austrian-American economist says “three programs have already been implemented in the space of eight years and the political desire for yet another is zero. The rest of the eurozone also wants the third program to be the last one.”

Wieser adds that Greece’s ability to tap international lending markets by the end of the program in August 2018 will be a “decisive factor for the Greek government to push ahead with reforms.” “In other words, knowing that the program is ending in a few months is a huge incentive to get the reforms done,” he says, adding that a successful completion of the program is within reach given the government’s limited fiscal obligations. Wieser appears confident that Greece will successfully wrap up the upcoming review within the fall even though the government needs to push through 95 so-called prior actions, saying the majority has already been legislated. However, he adds, Greece may need additional measures after August 2018 depending on whose scenario plays out: the IMF’s pessimistic outlook, or the upbeat projects of the European institutions and the Greek government.

Greece will also remain under supervision – as have Spain, Ireland, Portugal and Cyprus – until 75% of its debts are paid off, and this will be much stricter “in the first few years at least, than, say, it was for Ireland,” Wieser adds. Regarding debt relief, Wieser tells insider.gr that “an analysis will be conducted in the summer of 2018 and a decision taken upon the completion of the program.”

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Freedom exists because there are limits and boundaries. Living forever is not freedom.

Life Unlikely Beyond 115 Year Mark Despite Medical Advances (DT)

Researchers claim to have discovered the maximum age ‘ceiling’ for human lifespan. Despite growing life expectancy because of better nutrition, living conditions and medical care, Dutch scientists say our longevity cannot keep extending forever. Women can only live to a maximum of 115.7 years, they said, while men can only hope for 114.1 years at the most. The research by statisticians at Tilburg and Rotterdam’s Erasmus universities said, however, there were still some people who had bent the norm. The research by statisticians at Tilburg and Rotterdam’s Erasmus universities said women could live to a maximum of 115.7 years, while men could only hope for 114.1 years at the most. However, they did concede that there were exceptions, like Jeanne Calment, the French woman who died in 1997 at the age of 122 years and 164 days old – the longest life ever recorded.

Lifespan is the term used to describe how long an individual lives, while life expectancy is the average duration of life that individuals in an age group can expect to have – a measure of societal wellbeing. The team mined data over 30 years from some 75,000 Dutch people whose exact ages were recorded at the time of death. “On average, people live longer, but the very oldest among us have not gotten older over the last thirty years,” Prof John Einmahl said. “There is certainly some kind of a wall here. Of course the average life expectancy has increased,” he said, pointing out the number of people turning 95 in the Netherlands had almost tripled. “Nevertheless, the maximum ceiling itself hasn’t changed,” he said.

The Dutch findings, to be published next month, come in the wake of those by US-based researchers who last year claimed a similar age ceiling. However, that study by Albert Einstein College of Medicine in New York found that exceptionally long-lived individuals were not getting as old as before. Einmahl and his researchers disputed that, saying their conclusions deduced by using a statistical brand called ‘Extreme Value Theory’, showed almost no fluctuation in maximum lifespan.

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Sep 132017
 
 September 13, 2017  Posted by at 9:18 am Finance Tagged with: , , , , , , , , , ,  8 Responses »


Sergio Larraín Valparaiso Chile 1963

 

Greece Property Value Review A Hard Task (K.)
Creditors Set To Increase Pressure On Athens (K.)
US Threatens To Cut Off China From SWIFT If It Violates North Korea Sanctions (ZH)
Yuan Fixing Takes Center Stage, Again (BBG)
Cryptocurrency Chaos As China Cracks Down On ICOs (R.)
JPMorgan’s Dimon Says Bitcoin ‘Is A Fraud’ (R.)
America’s Fiscal Doomsday Machine (Stockman)
IMF Is Resisting A Moratorium On Barbuda’s Sovereign Debt Repayments (Ind.)
UK’s High Street Banks Are Accident Waiting To Happen (G.)
We Must Repeal The Authorization For The Use Of Military Force (Rand Paul)
Democrats Fought For 25 Years Over Single-Payer. Now Many Back Sanders (Sirota)
China Plans Nationwide Use Of Ethanol Gasoline By 2020 (R.)
Capitalism Can’t Save The Planet – It Can Only Destroy It (Monbiot)

 

 

As EU President Juncker this morning unveils his vision of more Europe all the time, here’s what Europe is really like:

42% of Greek mortgage loans are non-performing. Today’s sale prices are 70-80% lower than in 2008. And that’s before 200-300,000 homes will be forced onto the market this fall.

Greece Property Value Review A Hard Task (K.)

The government is facing a daunting task in adjusting the so-called objective values (the property rates used for tax purposes) to market levels by the end of the year, as its bailout agreement dictates. The huge slump in transactions and the forced sales of properties due to their owners’ debts do not lead to any safe conclusions for the values per area. One in four sales are conducted with prices that lag the objective value by 60-70%, and the prices of 2008 by 70-80%. The Finance Ministry must overcome all the obstacles to bring to Parliament all the necessary adjustments and regulations.

Moreover, once the objective values are brought in line with market rates, the government will have to maintain the same amount of revenues from the Single Property Tax (ENFIA) either by raising the tax’s rates or by introducing a new tax in the form of the old Large Property Tax. Furthermore, once the objective values are reduced by 40-50% to match the going prices, banks’ may see problems with their capital adequacy, as lenders will incur losses by having to revise the collateral they get. Mortgage loans in Greece amount to €59.44 billion, of which 42%, or €25.4 billion are nonperforming.

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Forget about more Europe, or you’ll wind up with a whole lot less Europe.

Creditors Set To Increase Pressure On Athens (K.)

Technical experts representing the country’s creditors started visiting the country’s ministries in Athens on Monday, paving the way for the third bailout review, which has long ceased to be viewed as a simple matter and is increasingly burdened with problems. Pressure for a satisfactory conclusion to the review will grow with the planned visit on September 25 of Eurogroup chief Jeroen Dijsselbloem, who will meet with Greek Finance Minister Euclid Tsakalotos. Responding to a question by Kathimerini, Dijsselbloem’s spokesman said that the head of the Eurogroup will discuss eurozone issues and certainly the progress of the adjustment program. Government officials estimate that the discussion on the course of the review and the Greek program may be combined with the expiry of Dijsselbloem’s mandate at the Eurogroup chair at year-end.

The Dutch minister – whose last visit in Athens and his meeting with his counterpart at the time, Yanis Varoufakis, was quite eventful – would obviously like to leave on a positive note in regards to the Greek program. It has been rumored that he may seek another office in the eurozone. Sources from Brussels also say that the top European Commission’s top representative, Declan Costello, will also be coming to Athens in the next few days. In addition to the main cluster of 113 prior actions, of which 95 should be implemented by year-end, the creditors have expressed their objections and doubts about recent legislative moves made by the government, such as the labor law passed last Thursday.

Sources say that the creditors have also expressed concerns about clauses related to the reduced value-added tax on agricultural supplies, the opening up of closed professions, as well as the civil service. A large number of the 95 prior actions the government must implement in record time have a high degree of difficulty, and government officials believe this may require revisions on family benefits, the operation of the sell-off hyperfund and its subsidiaries, the opening up of the energy market, etc.

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How would the US pay for all the shiny trinkets?

US Threatens To Cut Off China From SWIFT If It Violates North Korea Sanctions (ZH)

In an unexpectedly strong diplomatic escalation, one day after China agreed to vote alongside the US (and Russia) during Monday’s United National Security Council vote in passing the watered down North Korea sanctions, the US warned that if China were to violate or fail to comply with the newly imposed sanctions against Kim’s regime, it could cut off Beijing’s access to both the US financial system as well as the “international dollar system.” Speaking at CNBC’s Delivering Alpha conference on Tuesday, Steven Mnuchin said that China had agreed to “historic” North Korean sanctions during Monday’s United Nations vote. “We worked very closely with the U.N. I’m very pleased with the resolution that was just passed. This is some of the strongest items. We now have more tools in our toolbox, and we will continue to use them and put additional sanctions on North Korea until they stop this behavior.”

In response, Andrew Ross Sorkin countered that “we haven’t been able to move the needle on China, which seems to be the real mover on this, in terms of being able to apply the real pressure. What do you think the issue is? What is the problem?” The stunner was revealed in Mnuchin’s answer: “I think we have absolutely moved the needle on China. I think what they agreed to yesterday was historic. I’d also say I put sanctions on a major Chinese bank.That’s the first time that’s ever been done. And if China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the U.S. and international dollar system. And that’s quite meaningful.”

And to underscore his point, the Treasury Secretary also said that “in North Korea, economic warfare works. I made it clear that the President was strongly considering and we sent a message that anybody that wanted to trade with North Korea, we would consider them not trading with us. We can put on economic sanctions to stop people trading.” In other words, to force compliance with the North Korean sanctions, Mnuchin threatened Beijing with not only trade war, but also a lock out from the dollar system, i.e. SWIFT, something the US did back in 2014 and 2015 when it blocked off several Russian banks as relations between the US and Russia imploded. Of course, whether the US would be willing to go so far as to use the nuclear option, and pull the dollar plug on its biggest trade partner, in the process immediately unleashing an economic depression domestically and globally is a different matter.

So far Washington has been reluctant to impose economic sanctions on China over concerns of possible retaliatory measures from Beijing and the potentially catastrophic consequences for the global economy. Washington runs a $350 billion annual trade deficit with Beijing, while the PBOC also holds over $1 trillion in US debt. Ironically, the biggest hurdle to the implementation of the just passed sanctions may be the president himself. “We think it’s just another very small step, not a big deal,” Trump told reporters at the start of a meeting with Malaysian Prime Minister Najib Razak. “I don’t know if it has any impact, but certainly it was nice to get a 15-to-nothing vote, but those sanctions are nothing compared to what ultimately will have to happen,” said Trump who has vowed not to allow North Korea to develop a nuclear ballistic missile capable of hitting the United States.

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Xi demands peace for the Party Congress. Brokerages have been told: no holidays during Congress.

Yuan Fixing Takes Center Stage, Again (BBG)

China’s yuan fixing is back in focus, with a run of surprises moving the market in recent days. The central bank set its reference rate – which limits onshore moves to 2% on either side – at a weaker than expected level for the third day in a row Wednesday. The rates, and the removal of a reserve requirement rule on the trading of foreign-exchange forwards, are fueling bets that authorities want to limit gains after the onshore yuan surged more than 4% against the dollar in the three months through Sept. 7. The People’s Bank of China set Wednesday’s fixing at 6.5382 per dollar, compared with the average forecast of 6.5355 in a Bloomberg survey of 19 traders and analysts. The authorities have had greater opportunity to sway the fixing either way since May, with the introduction of a “counter-cyclical factor” to the rate-setting mechanism.

“The PBOC still wants a relatively stable yuan,” said Nathan Chow at DBS. “Even if it strengthens or weakens, the pace needs to be controlled, and in an orderly and gradual manner. This will be easier for exporters to manage risks. The market expectation is that there should be no big changes or surprises before the party congress next month.” The yuan’s rally began to falter on Friday as the removal of the reserve rule made it less expensive to bet on yuan declines. The monetary authority weakened Tuesday’s fixing by the most in eight months following an overnight surge in a gauge of the greenback, pushing the onshore spot rate lower.

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“There are a lot of companies raising a lot of money for not very good ideas..”

Cryptocurrency Chaos As China Cracks Down On ICOs (R.)

China’s move last week to ban initial coin offerings (ICO) has caused chaos among start-ups looking to raise money through the novel fund-raising scheme, prompting halts, about-turns and re-thinks. China is cracking down on fundraising through launches of token-based digital currencies, targeting ICOs in a market that has ballooned this year in what has been a bonanza for digital currency entrepreneurs. The boom has fueled a jump in the value of cryptocurrencies, but raised fears of a potential bubble. “This is not unlike the dotcom bubble of 2000,” said a partner at a venture capital fund in Shanghai, who didn’t want to be named because of the issue’s sensitivity. “There are a lot of companies raising a lot of money for not very good ideas, and these will eventually be weeded out. But even from the big dotcom bust, you still have gems.”

“One of the reasons regulators stepped in was that the ICO fever extended beyond the traditional crypto community. The timing was an attempt to pre-empt this before it goes into a much broader mass market in China,” the partner said. Investors in China contributed up to 2.6 billion yuan ($394 million) worth of cryptocurrencies through ICOs in January-June, according to a state-run media report citing National Committee of Experts on Internet Financial Security Technology data. Pre-ICO roadshows featuring elaborate standing room-only presentations at 5-star hotels drew a diverse crowd, including grandmothers – a likely tipping point for regulators. The hype and subsequent crackdown came as China focuses on economic and social stability ahead of next month’s congress of the Communist Party, a once-in-five-years event.

Beijing is also waging a broader campaign against fraudulent fundraising and speculative investment, which analysts attribute to China’s underdeveloped financial regulation and lack of legitimate investment options. While several start-ups said the exuberance had got out of control and they had expected Beijing to act, they said last week’s move panicked investors and caused confusion.

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Worse than tulip bulbs.

JPMorgan’s Dimon Says Bitcoin ‘Is A Fraud’ (R.)

Bitcoin “is a fraud” and will blow up, Jamie Dimon, chief executive of JPMorgan Chase, said on Tuesday. Speaking at a bank investor conference in New York, Dimon said, “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.” Dimon said that if any JPMorgan traders were trading the crypto-currency, “I would fire them in a second, for two reasons: It is against our rules and they are stupid, and both are dangerous.” Dimon’s comments come as the bitcoin, a virtual currency not backed by any government, has more than quadrupled in value since December to more than $4,100.

[..] “It is worse than tulips bulbs,” Dimon said, referring to a famous market bubble from the 1600s. JPMorgan and many of its competitors, however, have invested millions of dollars in blockchain, the technology that tracks bitcoin transactions. Blockchain is a shared ledger of transactions maintained by a network of computers on the internet. Dimon said such uses will roll out over coming years as it is adapted to different business lines. Financial institutions are hoping blockchain can be adapted to simplify and lower the costs of processes such as securities settlement, loan trading and international money transfers. Dimon predicted big losses for bitcoin buyers. “Don’t ask me to short it. It could be at $20,000 before this happens, but it will eventually blow up.” he said.

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From Reagan’s Budget Director.

America’s Fiscal Doomsday Machine (Stockman)

Maybe the Democrats did win the 2016 election. Or at least the the Deep State and its accomplices among the beltway political class, K-Street lobbies and the media did. That’s because the media won a giant victory against something they deplore and despise more than anything else — the public debt ceiling. They sanctimoniously admonish that it’s a relic of the nation’s fiscally benighted past. They operate on a belief that this is an episodic tendency to threaten America’s credit and to offer Capitol Hill an opening to grandstand about the fiscal verities is a blight on orderly governance. So the Donald’s latest burst of impetuosity — agreeing with Sen. Schumer to permanently abolish the public debt ceiling — has descended on the beltway like manna from heaven.

Not Barack Obama, Bill Clinton, Jimmy Carter or even the Great Texas Porker, Lyndon Johnson, dared to utter the thought of it — at least not in polite company. Suddenly, and notwithstanding all the good he has done disrupting the status quo, the Donald has become the foremost enemy of America’s very financial survival. The Federal budget is a Fiscal Doomsday Machine. The depository of American wars and entitlements have run rampant. Under the pile drivers of a global empire and the retiring baby boom, it is rapidly propelling the nation toward fiscal catastrophe. That grim outcome is virtually guaranteed if the only remaining safety brake — the debt ceiling — is summarily abolished. Due to entitlements, debt service and the slow pipeline of appropriated spending there is no such thing as an annual Federal budget or accountability for how much Uncle Sam spends and borrows.

Instead, the $4.1 trillion that Congressional Budget Office (CBO) projects the Federal government will spend in FY 2018, and the $563 billion it will borrow, reflects the dead hand of the past. Entitlements and other mandatory spending alone is projected to reach $2.566 trillion or 63% of total FY 2018 outlays. Another $307 billion will be required for interest on the nation’s $20 trillion public debt, while upwards of half the $1.22 trillion for so-called “discretionary” or appropriated programs also reflects funds appropriated years ago. Altogether, $3.5 trillion, or 85% of outlays, will be essentially baked into the cake before a single Congressional vote is taken on anything regarding the FY 2018 budget.

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They just want to lend more.

IMF Is Resisting A Moratorium On Barbuda’s Sovereign Debt Repayments (Ind.)

The IMF is resisting putting a moratorium on Barbuda’s sovereign debt repayments in the wake of the devastation left by Hurricane Irma on the tiny Caribbean island. Barbuda is said to have lost around 90% of its structures in the wake of the storm and the national repair and reconstruction bill has been estimated at $150m. The prime minister of Antigua and Barbuda, Gaston Browne, has also said that around half or the island’s population of 1,600 is now homeless. Yet Antigua and Barbuda have debt with the IMF of around $15.8m and a coalition of US faith institutions have been calling on the Fund to pause the repayments of states battered by the hurricane. However, the IMF’s special representative to the UN, Christopher Lane, reportedly suggested late last week that the Fund would rather lend more money to the island, rather than stop collecting the repayments due.

“Our general view is that we’d rather put new money in than to have moratoria,” he said, according to Court House News. Stressing that were technical and political difficulties in simply stopping the debt collection he said: “We borrow money from our members who lend. So we’d have to get agreement from the lending parties.” “We might borrow money from the United States and loan that to Antigua. If we don’t get paid back on time, we’d have to make an arrangement with the source of the funds themselves. It gets a bit arcane, but there’s a number of constraints on how we operate. We’re like a bank. We borrow and lend.”

In a letter to the IMF managing director Christine Lagarde on 7 September the Jubilee USA network wrote: “We invite the IMF to implement an immediate moratorium on debt payments for countries severely impacted by the Category 5 storm until they have rebuilt and recovered.” “For example, the nation of Antigua and Barbuda has almost $3m in debt payments due to the Fund today and a debt payment moratorium could immediately be put into rebuilding Barbuda where almost the entire population is homeless.” The group also urged that further IMF reconstruction payments to Barbuda, and other affected islands, should be in the form of grants, rather than loans.

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All major banks are.

UK’s High Street Banks Are Accident Waiting To Happen (G.)

The UK’s high street banks are an accident waiting to happen and could struggle in another financial crisis, according to a report published on Wednesday to mark the 10th anniversary of the run on Northern Rock. The report criticises the annual health checks – stress tests – that have been conducted by the Bank of England since the crisis and concludes that the methodology used by Threadneedle Street is flawed and the tests not gruelling enough. [..] Kevin Dowd, a professor of finance and economics at Durham University and a long-standing critic of the stress tests, said the Bank does not use the correct measures to assess the health of the banking system. Dowd is also a senior fellow at the Adam Smith Institute, a rightwing thinktank. His analysis – which the Bank of England has previously rejected – focuses on the health check of the major lenders published last November.

Those tests were based on a number of hypothetical scenarios including house prices falling and the global economy contracting by 1.9%. Royal Bank of Scotland failed the test and Barclays and Standard Chartered would both have struggled to cope. Dowd argued that the scenarios were “hardly doomsday” and disputes the way banks’ capital strength is measured. “The stress tests are about as useful as a cancer test that cannot detect cancer. They seek to demonstrate a financial resilience on the part of UK banks that simply isn’t there,” said Dowd in the report. “Our banking system is an accident waiting to happen.” The Bank uses the value of assets as calculated by the banks rather than their value on the markets which, he argued, would give a more accurate assessment of their financial health. “It is disturbing that 10 years on from Northern Rock, the best measures of leverage – those based on market values – indicate that UK banks are even more leveraged than they were then,” said Dowd.

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“American warfare in 7 different countries..”

We Must Repeal The Authorization For The Use Of Military Force (Rand Paul)

As Congress takes up the 2018 National Defense Authorization Act (NDAA), I will insist it vote on my amendment to sunset the 2001 and 2002 Authorizations for the Use of Military Force. Why? Because these authorizations to use military force are inappropriately being used to justify American warfare in 7 different countries. Sunsetting both AUMFs will force a debate on whether we continue the Afghanistan war, the Libya war, the Yemen war, the Syria war, and other interventions. Our military trains our soldiers to be focused and disciplined, yet the politicians who send them to fight have for years ignored those traits when developing our foreign policy. The result? Trillions spent in seemingly endless conflicts in every corner of the globe, while we find ourselves 16 years into the war in Afghanistan wondering what our purpose there even is any more, or if we’ll ever bring our troops home.

If we don’t get this rudderless foreign policy under control now, we’ll still be asking the same questions another 16 years down the road. It’s time to demand the policymakers take their own jobs as seriously as the men and women we ask to risk it all for our nation. Doing so means restoring constitutional checks and balances. Congress has no greater responsibility than defending our country, and the Founders entrusted it with the power of declaring war because they wanted such a weighty decision to be thoroughly debated by the legislature instead of unilaterally made by the Executive branch. Yet Congress has largely abdicated its role anyways, and its sidekick status was plainly evident when former President Obama proposed a new AUMF for the fight against ISIS while insisting he really had all the authority he needed – it being more of a “wouldn’t it be nice” afterthought than an acknowledgement of any required step.

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Not a lot of insight into what’s wrong with US Democrats.

Democrats Fought For 25 Years Over Single-Payer. Now Many Back Sanders (Sirota)

When U.S. Sen. Bernie Sanders’ introduces his Medicare-for-All legislation on Wednesday, advocates of a single-payer, government-sponsored health care hope it will be the end of a bitterly fought policy battle that has roiled the Democratic Party for generations. Since Democratic President Harry Truman first proposed a government-sponsored universal health care system in 1945 — and since a Democratic president and Democratic congress first enacted Medicare and Medicaid in the mid-1960s — progressives have hoped that the United States would follow other industrialized countries by guaranteeing health care to all citizens. Indeed, many of the original proponents of Medicare hoped the system would ultimately be expanded to cover the entire country — as former Social Security commissioner Robert Ball wrote, “We expected Medicare to be a first step toward universal national health insurance.”

And although the intervening years saw the rise of Republican President Ronald Reagan, who derided “socialized medicine,” some Democrats continued to champion the idea. The party’s 1992 presidential contender Jerry Brown ran for the White House promising to support single-payer. But when Bill Clinton defeated him and won the presidency, the Clinton administration opted to back health care reforms that preserved the existing private insurance system — even as Hillary Clinton made favorable comments about single-payer. A generation later, Barack Obama also retreated from single-payer, and instead pushed the Affordable Care Act, which subsidizes the private insurance system.

Now, things appear once again to be shifting. Even as Sanders has declared that his Medicare-for-All bill is not a litmus test, Democrats from across the party’s ideological spectrum are flocking to his legislation. On the progressive side, Democratic senators such as Elizabeth Warren (MA), Jeff Merkley (OR) and Al Franken (MN) have signed onto the legislation. Within the party establishment, former Vice President Al Gore has expressed support, as has conservative former Sen. Max Baucus — one of the architects of the Affordable Care Act whom single-payer advocates saw as a nemesis. With polls showing rising support for government-sponsored health care, the party’s long civil war over the issue may be over, potentially allowing a more unified party to campaign on Medicare-for-All in 2018.

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China has hardly enough land to feed its people.

China Plans Nationwide Use Of Ethanol Gasoline By 2020 (R.)

China plans to roll out the use of ethanol in gasoline nationally by 2020, state media reported on Wednesday citing a government document, as Beijing intensifies its push to boost industrial demand for corn and clean up choking smog. It’s the first time the government has set a targeted timeline for pushing the biofuel, known as E10 and containing 10% corn, across the world’s largest car market, although it has yet to announce a formal policy. Mandates requiring that a minimum amount of biofuel must be blended into fuel for the nation’s cars, similar to the United States and Brazil, are currently set at a provincial level. “This news has greatly boosted confidence inside the industry,” said Michael Mao, analyst with Sublime China Information, adding that without government support ethanol would likely be too expensive to survive in the market.

Shares in biofuel producers rallied on the news, with Shandong Longlive Bio-Technology Co surging 10%, on track for its biggest one-day gain since December 2015. Major producer COFCO Biochemical Anhui Co, a listed unit of state-owned grains trader COFCO, was up almost 6%. A renewed effort to promote the nation’s fledging biofuels industry will be a further blow to major oil producers. On Saturday, the government said it has begun studying when to ban the production and sale of cars using traditional fuels. The news comes after the government said late last year it would aim to double ethanol output by 2020 amid growing pressure to whittle down mountains of ageing corn in state warehouses.

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Some good points, but needs much more work.

Capitalism Can’t Save The Planet – It Can Only Destroy It (Monbiot)

There was “a flaw” in the theory: this is the famous admission by Alan Greenspan, the former chair of the Federal Reserve, to a congressional inquiry into the 2008 financial crisis. His belief that the self-interest of the lending institutions would lead automatically to the correction of financial markets had proved wrong. Now, in the midst of the environmental crisis, we await a similar admission. We may be waiting some time. For, as in Greenspan’s theory of the financial system, there cannot be a problem. The market is meant to be self-correcting: that’s what the theory says. As Milton Friedman, one of the architects of neoliberal ideology, put it: “Ecological values can find their natural space in the market, like any other consumer demand.” As long as environmental goods are correctly priced, neither planning nor regulation is required.

Any attempt by governments or citizens to change the likely course of events is unwarranted and misguided. But there’s a flaw. Hurricanes do not respond to market signals. The plastic fibres in our oceans, food and drinking water do not respond to market signals. Nor does the collapse of insect populations, or coral reefs, or the extirpation of orangutans from Borneo. The unregulated market is as powerless in the face of these forces as the people in Florida who resolved to fight Hurricane Irma by shooting it. It is the wrong tool, the wrong approach, the wrong system. There are two inherent problems with the pricing of the living world and its destruction. The first is that it depends on attaching a financial value to items – such as human life, species and ecosystems – that cannot be redeemed for money. The second is that it seeks to quantify events and processes that cannot be reliably predicted.

[..] A system that depends on growth can survive only if we progressively lose our ability to make reasoned decisions. After our needs, then strong desires, then faint desires have been met, we must keep buying goods and services we neither need nor want, induced by marketing to abandon our discriminating faculties, and to succumb instead to impulse. [..] Continued economic growth depends on continued disposal: unless we rapidly junk the goods we buy, it fails. The growth economy and the throwaway society cannot be separated. Environmental destruction is not a byproduct of this system: it is a necessary element.


Illustration: Sebastien Thibault

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Jul 152017
 


Hieronymus Bosch The Conjurer 1502

 

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

 

 

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

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

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

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

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

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

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

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

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

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

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Or is Dimon embarrassed over this?

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

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

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

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Oh well, money’s cheap after all.

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

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

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

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

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

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

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

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

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

The New Silk Road Will Go Through Syria (Escobar)

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

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

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

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

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Southern Europe: getting poorer and hotter.

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

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

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

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Germans love cash.

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

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

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

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

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

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

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

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

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

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You’d almost wish they would fight back.

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

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

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

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

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