Jan 032020
 
 January 3, 2020  Posted by at 11:15 am Finance Tagged with: , , , , , , , , , , , ,  14 Responses »


Alfred Palmer New B-25 bomber at Kansas City plant of North American Aviation 1942

 

America Just Took Out The World’s No. 1 Bad Guy (CNBC)
US Strike That Killed Iranian Commander Starkly Divides US Lawmakers (CNN)
Erdogan Questions Europe As 250,000 Flee Idlib (ZH)
US Dollar as Global Reserve Currency vs Euro, Yen, Renminbi, & Others (WS)
China Cuts US Dollar Weighting In Key Index To Boost Fortunes Of Yuan (SCMP)
China’s Central Bank Frees Up $115 Billion To Support Growth (SCMP)
What the Fed Did to Calm Year-End Hissy-Fit of its Crybaby Cronies (WS)
Greece, Israel, Cyprus: Turkey’s Libya Troops Bill Dangerous Escalation (R.)
Leaders Of Greece, Israel, Cyprus Ink Deal For Pipeline (K.)
The Terrifying Rise of the Zombie State Narrative (Craig Murray)

 

 

Inevitably, the killing of Qassim Soleimani in Baghdad leads to the confirmation of US party lines’ divide. While the GOP stands behind the decision, the Dems have a hard time reconciling their own contradictions. They are a war party, if you look past Tulsi Gabbard and Bernie Sanders, but they can’t be seen to agree with Trump. So the likes of Schumer and Pelosi say that while Soleimani won’t be mourned by any American since he was a really terrible person, Trump should have asked for their permission.

The logic being that this could lead to WWIII, a theme that’s all over the internet, so much it makes one think independent thought is under threat. Be that as it may, the president needs permission to declare war, not to hit an individual. Moreover, since they agree killing the man might have been a good idea, they surely realize that he was in a spot where they could get at him, for a limited amount of time, so asking for permission would heve risked losing the opportunity. Weak.

The following two tweets are worth citing:

Nicole Alexander Fisher: “Pelosi voted for Trump’s NDAA which stripped a provison that would have prevented unauthorized war with Iran. She sided with Trump and warhawks on this, as did 188 other Democrats. 41 Dems like AOC, Ilhan Omar, Tulsi Gabbard, Ro Khanna, and Joe Kennedy voted no.”

Soleimani fought ISIS, Al-Nusra, Al-Qaeda etc., along with the US.

Sara Abdallah: “The “no. 1 bad guy” who led the counter-terrorism campaigns that defeated ISIS and Al-Qaeda in Iraq, Syria and Lebanon; the “no. 1 bad guy” who prevented a jihadist takeover of the Middle East.”

I’m still wondering how CNBC became the no. 1 warmonger for the MSM. This is some headline. As for the Dems and GOP, one would be inclined to say: pick your side. But if you look just a little bit closer, you see there is only one side.

 

America Just Took Out The World’s No. 1 Bad Guy (CNBC)

So, just who is this top Iranian general the U.S. just eliminated? For many of us who watch and analyze news out of the Middle East daily, he was the world’s number one bad guy. Qassim Soleimani has been in control of Iran’s Quds Force for more than 20 years. His current greatest hits include helping Bashar al Assad slaughter hundreds of thousands of his own people in the Syrian civil war, stoking the Houthis in Yemen’s civil war, and overseeing the killing of hundreds of Iraqi protesters recently demonstrating against Iranian influence in their country. But most importantly for Americans, Soleimani was behind the deaths of hundreds of American soldiers during the Iraq War. Last year, the U.S. State Department put the number of Americans killed by Iranian proxies in Iraq at 608 since 2003.


The killing of Soleimani doesn’t have the emotional power of the takedown of Osama bin Laden, and he wasn’t even as well-known to Americans as ISIS founder Abu Bakr al Baghdadi. But in many ways, taking him out means much more in terms of saving current lives. Remember that bin Laden and al Baghdadi were mostly out of business and in hiding at the time of their deaths. Solemani was busier than ever, directing mayhem all over the Middle East and beyond. For example, these last few days have made it clear to the whole world just how much Iran controlled just about all of Iraq and Iraq’s Shia population. It appears Solemeini not only felt justified in being the likely mastermind behind Tuesday’s attack on the U.S. embassy in Baghdad, he also was comfortable enough to travel to Iraq personally to oversee it. But this time, he got too comfortable.

Read more …

No, it doesn’t.

US Strike That Killed Iranian Commander Starkly Divides US Lawmakers (CNN)

The US airstrike that killed Iran Quds Force commander Qasem Soleimani generated starkly different reactions along party lines Thursday night, with Republicans heaping praise on President Donald Trump and Democrats expressing concerns about the legality and consequences of the attack. The Pentagon confirmed in a statement that Trump had ordered the strike, saying Soleimani “was actively developing plans to attack American diplomats and service members in Iraq and throughout the region. General Soleimani and his Quds Force were responsible for the deaths of hundreds of American and coalition service members and the wounding of thousands more.”

[..] Some key members of Congress — such as Senate Minority Leader Chuck Schumer, a New York Democrat who is a member of the congressional Gang of Eight leaders, who are briefed on classified matters — had not been made aware of the attack ahead of time. It’s not clear how many other lawmakers had advance notice of the strike. The Pentagon added that “this strike was aimed at deterring future Iranian attack plans” and the US “will continue to take all necessary action to protect our people and our interests wherever they are around the world.”

[..] Democrats pushed back on Republican sentiments about the attack, stressing the potential consequences and lambasting the decision to carry out the strike without congressional authorization. Sen. Chris Murphy of Connecticut emphasized that Soleimani “was an enemy of the United States” in a tweet before stating, “The question is this – as reports suggest, did America just assassinate, without any congressional authorization, the second most powerful person in Iran, knowingly setting off a potential massive regional war?” In a more explicit statement, Sen. Tom Udall of New Mexico said, “President Trump is bringing our nation to the brink of an illegal war with Iran without any congressional approval as required under the Constitution of the United States.”

[..] On the campaign trail, Democratic former Vice President Joe Biden said “no American will mourn” Soleimani but that the strike that killed him is a “hugely escalatory move.” “President Trump just tossed a stick of dynamite into a tinderbox, and he owes the American people an explanation of the strategy and plan to keep safe our troops and embassy personnel, our people and our interests, both here at home and abroad, and our partners throughout the region and beyond,” Biden said in a statement. “I’m not privy to the intelligence and much remains unknown, but Iran will surely respond. We could be on the brink of a major conflict across the Middle East. I hope the Administration has thought through the second- and third-order consequences of the path they have chosen.”

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This situation is not likely to improve after the assassination:

Erdogan Questions Europe As 250,000 Flee Idlib (ZH)

As Russian and Syrian jets have dramatically stepped up their bombardment of jihadist-held Idlib over the past three weeks, Turkish President Recep Tayyip Erdogan has again warned a massive wave of refugees is headed into Turkey, but that his country is without help and thus is seeking to prevent the new influx. “Right now, 200,000 to 250,000 migrants are moving toward our borders,” Erdogan said while addressing a conference in Ankara. “We are trying to prevent them with some measures, but it’s not easy. It’s difficult, they are humans too.” This after the UN on Monday said that of Idlib province’s some 3 million civilian population, up to 284,000 are currently on the move.


International reports commonly put the current numbers of Syrian refugees hosted by Turkey at about 3.7 million, which Erdogan has of late constantly reminded Europe of as he seeks support for foreign military intervention in places like northeast Syria and now even Libya. During his latest comments, Erdogan actually put the number of refugees across all provinces of Turkey at a whopping 5 million — which would be larger than many small countries. Crucially, during his speech on Thursday, he alluded to his prior threats to “open the gates” and allow refugees to flood into Europe, starting with Greece and other Mediterranean nations:

“Although they [the West] have more resources than we do, why don’t they accept them, why don’t they open the gates?” Erdogan asked. While also slamming Arab League member states for not acting, he answered his own question with, “We are Turkey. Alone this gives us a power and superiority that nobody has.” In late December, Erdogan reiterated prior provocative threats underscoring that “Turkey cannot handle a fresh wave of migrants from Syria, President Tayyip Erdogan said on Sunday, warning that European countries will feel the impact of such an influx if violence in Syria’s northwest is not stopped,” as Reuters summarized of the statement.

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Remarkably stable, really.

US Dollar as Global Reserve Currency vs Euro, Yen, Renminbi, & Others (WS)

The US economy and financial system – including being able to maintain and fund the gargantuan trade deficits and fiscal deficits – has become reliant on the dollar being the dominant global reserve currency. And the IMF just released its next installment on how this status has been changing. Total foreign exchange reserves in all currencies combined declined 0.6% in the third quarter from the second quarter to $11.66 trillion, according to the IMF’s quarterly COFER data. US-dollar-denominated exchange reserves – such as Treasury securities, US corporate bonds, etc. held by foreign central banks – ticked down 0.4% to $6.51 trillion. But holdings denominated in other currencies fell faster, and the share of dollar-denominated reserves edged up to 61.8% of total exchange reserves.


The US dollar’s share of total global reserve currencies declines when central banks other than the Fed proportionately reduce their dollar-denominated assets and add assets denominated in other foreign currencies. Over the long term, the recent moves in the dollar’s share are relatively small. There have been huge moves from 1977 through 1991, when the dollar’s share plunged from 85% to 46%, and then huge moves as the share rose again to 70% by 2000:

In October 2016, the IMF included the Chinese renminbi in the currency basket of the Special Drawing Rights (SDR), and the renminbi became officially a global reserve currency. But since then, progress of the currency has been exceedingly slow, and there are no signs the RMB would dethrone the US dollar anytime soon.The creation of the euro came with a lot of hopeful rhetoric that it would reach parity with the US dollar in every way, including as global trade currency, global financing currency, and global reserve currency. [..] During the initial phase of the conversion of European currencies to the euro, the euro’s share of global reserve currencies rose and the dollar’s share fell from 71.5% in 2001 to 66.5% in 2002.

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Wait, so China is desperate for dollars, and then decides dollars are becoming less important? Yeah, we’ll all believe it.

China Cuts US Dollar Weighting In Key Index To Boost Fortunes Of Yuan (SCMP)

China’s decision to cut the weighting of the US dollar in a basket of foreign currencies used to determine the strength of the yuan will help Beijing’s long-term efforts to weaken the international dominance of the American currency, economists said. The China Foreign Exchange Trade System (CFETS), a unit of the Chinese central bank, trimmed the weighting of the US dollar on Wednesday to 21.59 per cent from 22.40 per cent in a key yuan exchange index to make it “more representative” of current trade conditions. The new version of the index will be based on 2018 trade data, rather than data from 2015, when the CFETS was first established. The move, which comes amid heightened trade tensions between China and the United States, will help Beijing’s long-term efforts to create an alternative international payments system, economists said.


“The yuan hopes to become a reserve currency, to prevent the situation where the US dollar dominates the global financial system – or the so-called hegemony of the US dollar. This is a longer-term goal … and an inevitable trend,” said Shen Jianguan, vice-president and chief economist at JD Digits, although he added that the adjustment also reflected changes to China’s trading environment. His remarks were echoed by Lu Zhengwei, chief economist at China Industrial Bank, who said the cut would give the yuan marginally more independence against the US dollar. “The yuan should live its own way – now there is too much shadow from other [currencies] hanging over it,” he said.

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The amount is symbolic.

China’s Central Bank Frees Up $115 Billion To Support Growth (SCMP)

China’s central bank has announced a move to unleash 800 billion yuan (US$115 billion) from the banking system to support the economy, sending a pro-growth message on the first day of 2020. The People’s Bank of China (PBOC) will reduce the deposit reserve ratio in financial institutions by 0.5 percentage points from January 6, mainly to offer sufficient funding to the real economy, according to a notice published on the bank’s website. The announcement on Wednesday came after growth continued to weaken while China and the United States prepared to sign an interim trade deal in mid-January. The central bank said this round of funding was partially to offset cash withdrawals before the Lunar New Year, and would not change its stance on monetary policy.


From Monday, the reserve requirement ratio (RRR) for big banks will be lowered to 12.5 per cent, while the ratio for medium and small banks will be reduced to 10.5 per cent and 7 per cent respectively. In 2019, the central bank cut the RRR rate three times. “The RRR cut will help boost investor confidence and support the economy, which is gradually steadying,” said Wen Bin, an economist at Minsheng Bank in Beijing, who also expects another cut in China’s new loan prime rate this month. After 18 months of the trade war between China and the United States, the Chinese economy, the world’s second largest, is facing external and domestic headwinds, with growth slowing to 6 per cent in the third quarter, the lowest since 1992. By value of goods, China’s export growth fell 0.3 per cent between January and November 2019, while import growth was down 4.5 per cent for the same period.

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End the Fed. They lost control a decade ago.

What the Fed Did to Calm Year-End Hissy-Fit of its Crybaby Cronies (WS)

The big fear was that the repo market would blow out again at the end of 2019, as banks would be window-dressing their balance sheets by building up reserves to certain levels. In the process, they would refuse to lend to the repo market. And borrowing pressure on the other side – such as hedge funds or mortgage REITs that borrow cheaply in the repo market to fund long-term bets – would drive up repo rates. At the end of 2018, repo rates blew out, but quickly settled down without the Fed’s involvement. In September 2019, repo rates blew out again. At this point, the rattled Fed started dousing the market with hundreds of billions of dollars to calm the repo market and prevent another year-end blowout.


To do this, the Fed engaged in repo operations and also began purchasing short-term Treasury bills. This calmed the repo market, and at the end of December, repo rates didn’t blow out. But on January 1, the Fed did a huge $64 billion reverse repo, the opposite of a repo, thus draining overnight $64 billion in liquidity from the market. This astounding spike in reverse repo balances showed up on its balance sheet for the week ended January 1, released today:

In a reverse repo, the Fed sells securities and takes in cash, under an agreement to buy back those securities at a fixed price on a set date. A reverse repo drains liquidity from the market. When the reverse repo unwinds on the maturity date, as the Fed buys back those securities, it adds liquidity to the market. Reverse repos are liabilities on the Fed balance sheet. In a normal repo, the Fed buys Treasury securities and mortgage-backed securities (MBS) guaranteed by Fannie Mae and Freddie Mac, or Ginnie Mae, under agreements to repurchase them at a fixed price on a specific date, such as the next day or in a longer period. This adds liquidity to the market for the duration of the repo.


When the repo matures and unwinds, the liquidity gets drained. But a new repo can roll this over. Repos are assets on the Fed’s balance sheet. Total repos on the Fed’s balance sheet on January 1 rose to $256 billion, up $48 billion from a month earlier (as of Dec 4 balance sheet):

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Erdogan is not sitting pretty.

Greece, Israel, Cyprus: Turkey’s Libya Troops Bill Dangerous Escalation (R.)

Turkey’s bill allowing troop deployment in Libya marks a dangerous escalation in the North African country’s civil war and severely threatens stability in the region, a joint statement by Greece, Israel and Cyprus said late on Thursday. “This decision constitutes a gross violation of the UNSC resolution…imposing an arms embargo in Libya and seriously undermines the international community’s efforts to find a peaceful, political solution to the Libyan conflict,” Greek Prime Minister Kyriakos Mitsotakis, Israel’s Prime Minister Benjamin Netanyahu and Cyprus President Nicos Anastasiades said in the statement.


Turkish parliament overwhelmingly approved a bill that allows troops to be deployed in Libya, in a move that paves the way for further military cooperation between Ankara and Tripoli but is unlikely to put boots on the ground immediately. Turkey’s move comes after Ankara and the internationally recognized government of Libyan Prime Minister Fayez al-Serraj signed two separate agreements in November: one on security and military cooperation and another on maritime boundaries in the eastern Mediterranean, infuriating Greece, Israel, Egypt and Cyprus.

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The exact same countries want to cut a pipeline straight through an area claimed by Turkey. Think there’s a connection?

Leaders Of Greece, Israel, Cyprus Ink Deal For Pipeline (K.)

The intergovernmental agreement signed on Thursday by Greece, Israel and Cyprus for the construction of the EastMed pipeline sent out multiple diplomatic messages. The first of these relates to the endurance of the trilateral cooperation itself. In the 10 years since its inception, Cyprus President Nicos Anastasiades and the prime ministers of Israel, Benjamin Netanyahu, and Greece, Kyriakos Mitsotakis, confirmed that the relationship between the three countries is not circumstantial. Skepticism concerning the situation in Jerusalem after three consecutive national elections which will have been held by March is reasonable. However, it will be very difficult for any Israeli government to roll back years of planning.

The second message concerns Turkey, as the pipeline will link Israel’s reserves with Cyprus, then Crete and mainland Greece through an area that Ankara says belongs to Turkey, according to the pact it signed with Libya’s Tripoli-based government. The EastMed agreement is essentially a legal act stemming from international law as it expresses the will of three sovereign and elected governments (in contrast to that in Tripoli) to deepen their cooperation. At the same time it is a message of cooperation which leaves the door open for Ankara to take part if it decides so. However, signs Thursday were not encouraging as a pair of Turkish F-16s fighter jets made six overflights over Oinousses and the nearby island of Panagia, while the presence of the Turkish fleet around Cyprus remains emphatic.

Moreover, the Turkish Parliament decided on Thursday to approve the deployment of troops to Libya, if deemed necessary. A Turkish Foreign Ministry spokesman said any project that ignores the rights of Turkey and Turkish Cypriots in the region will fail, while Turkish-Cypriot leader Mustafa Akinci said the pipeline is an obstacle to efforts for a solution to the Cyprus problem. The third message is to countries such as Italy and Egypt. With the signing of the deal, Athens, Nicosia and Jerusalem showed they were not willing to wait for the perfect conditions to prevail before moving ahead.

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“..the western powers are now busily attacking the Iraqi Shia majority government they themselves installed, for the crime of being a Shia majority government.”

The Terrifying Rise of the Zombie State Narrative (Craig Murray)

The ruling Establishment has learnt a profound lesson from the debacle over Iraqi Weapons of Mass Destruction. The lesson they have learnt is not that it is wrong to attack and destroy an entire country on the basis of lies. They have not learnt that lesson despite the fact the western powers are now busily attacking the Iraqi Shia majority government they themselves installed, for the crime of being a Shia majority government. No, the lesson they have learnt is never to admit they lied, never to admit they were wrong. They see the ghost-like waxen visage of Tony Blair wandering around, stinking rich but less popular than an Epstein birthday party, and realise that being widely recognised as a lying mass murderer is not a good career choice.

[..] The security services outlet Bellingcat would publish some photos of big missiles planted in the sand. The Washington Post, Guardian, New York Times, BBC and CNN would republish and amplify these pictures and copy and paste the official statements from government spokesmen. Robert Fisk would get to the scene and interview a few eye witnesses who saw the missiles being planted, and he would be derided as a senile old has-been. Seymour Hersh and Peter Hitchens would interview whistleblowers and be shunned by their colleagues and left off the airwaves. Bloggers like myself would be derided as mad conspiracy theorists or paid Russian agents if we cast any doubt on the Bellingcat “evidence”.

Wikipedia would ruthlessly expunge any alternative narrative as being from unreliable sources. The Integrity Initiative, 77th Brigade, GCHQ and their US equivalents would be pumping out the “Iraqi WMD found” narrative all over social media. Mad Ben Nimmo of the Atlantic Council would be banning dissenting accounts all over the place in his role as Facebook Witchfinder-General.

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Oct 042019
 


Paul Gauguin Breton woman 1886

 

Ignore The Hype — This Is Not An Impeachment Inquiry (McCarthy)
Trump Dares Pelosi To Hold Impeachment Inquiry Vote (ZH)
Joe Biden Sprang Into Action When Ukraine Prosecutor Came After His Son (MoA)
Trump Approval Climbs To Highest Level Of 2019 Amid Impeachment Inquiry (Hill)
Weakening The Dollar Is The Last Hope For The Global Economy – Saxo (CNBC)
Fed Policymakers ‘Open’ To Rate Cut As Risks To Outlook Rise (R.)
America’s Manufacturing Industry Is In Contraction (CNN)
Boris Has Destroyed What Is Left Of UK’s Credibility (Fintan O’Toole)
Hong Kong Leader Carrie Lam Invokes Emergency Powers, Bans Face Masks (CNBC)
UK Wildlife Species Dying Out, Many Will Soon Vanish (Ind.)

 

 

“What is portrayed as an “impeachment inquiry” is actually just a made-for-cable-TV political soap opera.”

Pelosi claims she can call a House impeachment inquiry without a House vote, and totally ignore Republican House members while she’s at it. That smells of prorogation.

The courts will have to decide this one. And that may take all the way to the 2020 election. Which the Dems think suits them just fine.

Ignore The Hype — This Is Not An Impeachment Inquiry (McCarthy)

There is no impeachment inquiry. There are no subpoenas. You are not to be faulted if you think a formal inquest is under way and that legal process has been issued. The misimpression is completely understandable if you have been taking in media coverage — in particular, reporting on a haughty Sept. 27 letter from House Democrats, presuming to direct Secretary of State Mike Pompeo, on pain of citation for obstruction, to cooperate in their demands to depose State Department officials and review various records. The letter is signed by not one but three committee chairmen. Remember your elementary math, though: Zero is still zero even when multiplied by three. What is portrayed as an “impeachment inquiry” is actually just a made-for-cable-TV political soap opera.

The House of Representatives is not conducting a formal impeachment inquiry. To the contrary, congressional Democrats are conducting the 2020 political campaign. The House has not voted as a body to authorize an impeachment inquiry. What we have are partisan theatrics, proceeding under the ipse dixit of Speaker Nancy Pelosi (D-Calif.). It raises the profile, but not the legitimacy, of the same “impeachment inquiry” House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) previously tried to abracadabra into being without a committee vote. Moreover, there are no subpoenas. As Secretary Pompeo observed in his fittingly tart response on Tuesday, what the committee chairmen issued was merely a letter.

Its huffing and puffing notwithstanding, the letter is nothing more than an informal request for voluntary cooperation. Legally, it has no compulsive power. If anything, it is rife with legal deficiencies. The Democrats, of course, hope you don’t notice that the House is not conducting a formal impeachment inquiry. They are using the guise of frenetic activity by several standing committees — Intelligence, Judiciary, Foreign Affairs, Oversight and Reform, Financial Services, and Ways and Means — whose normal oversight functions are being gussied up to look like serious impeachment business. But standing committees do have subpoena power, so why not use it? Well, because subpoenas get litigated in court when the people or agencies on the receiving end object. Democrats want to have an impeachment show — um, inquiry — on television; they do not want to defend its bona fides in court.

Read more …

“.. the White House is planning to send Nancy Pelosi a letter as soon as Friday arguing that President Trump and his team can ignore lawmakers’ demands until she holds a full House vote..”

Trump Dares Pelosi To Hold Impeachment Inquiry Vote (ZH)

Why do Republicans want a vote, besides have Democrats – especially those in states won by Trump – be put on the record? Because, as RealClearPolitics explains, holding a formal vote on impeachment would allow Republicans to subpoena documents and witnesses and investigate all the revelations surrounding the whistleblower’s complaint about Trump’s interactions with Ukraine, as well the roles of Joe Biden and his son Hunter in Ukrainian corruption allegations. “Republicans would have the opportunity to get information from all sources and get it on the table,” Cleta Mitchell, a conservative political law attorney, told RealClearPolitics. “The process they are proceeding under through their committee attorney means they are the only ones who have the rights to gather information.”

[..] Which brings us to late on Thursday, when Trump himself figured out that his position would be strengthened by having a formal vote, because according to Axios, the White House is planning to send Nancy Pelosi a letter as soon as Friday arguing that President Trump and his team can ignore lawmakers’ demands until she holds a full House vote formally approving an impeachment inquiry. In addition to the above considerations, Axios notes that by putting in writing the case that Trump and his supporters have been making verbally for days, “the White House is preparing for a court fight and arguing to the public that its resistance to Congress’ requests is justified.”

Trump wants to force House Democrats in vulnerable races to be on the record if they favor pursuing impeachment, these sources tell us. Republicans also say the minority party can exert more influence over hearings and other aspects of an inquiry once it is formalized with a vote. By calling this an inquiry without holding a vote, Pelosi and the Democratic committee chairmen are having it both ways, one official said. “They want to be a little bit pregnant.” A letter could be filed as soon as Friday, because according to Axios sources, several White House lawyers spent a good chunk of their Thursday reviewing the language in the letter, expecting that it could find its way before a judge.

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The MSM story that Shokin was corrupt seems to be falling apart. Biden’s defense for demanding him gone is that many voices said so. Yeah, the likes of Pyatt and Nuland, the architects of the Maidan coup.

Joe Biden Sprang Into Action When Ukraine Prosecutor Came After His Son (MoA)

After the U.S. sponsored Maidan coup in 2014 then Vice President Joe Biden led the Ukraine policy of the Obama administration. His campaign against prosecutor general Shokin started in September 2015: “[The U.S. ambassador at the time, Geoffrey] Pyatt kicked off the effort with a speech on Sept. 24, 2015 in which he blasted Shokin for “openly and aggressively undermining reform” and having “undermined prosecutors working on legitimate corruption cases.” In testimony to the Senate Foreign Relations Committee on Oct. 8, Nuland declared: “The Prosecutor General’s Office has to be reinvented as an institution that serves the citizens of Ukraine, rather than ripping them off.”


Biden followed up with a visit to Kiev in December. On Dec. 7, he held a news conference with Poroshenko and announced $190 million to “fight corruption in law enforcement and reform the justice sector.” He made no public mention of the loan guarantee, but behind the scenes he had explicitly linked the $1 billion loan guarantee to reform efforts, including removing Shokin, according to Colin Kahl, Biden’s national security adviser at the time. A day after the news conference, he addressed the Ukrainian parliament and decried the “cancer of corruption” in the country. “The Office of the General Prosecutor desperately needs reform,” he noted.

Biden next met on Jan. 20 with Poroshenko on the sidelines of the World Economic Forum in Davos, Switzerland, when he also pressed “the need to continue to move forward on Ukraine’s anti-corruption agenda,” according to a White House statement.

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Backdraft.

Trump Approval Climbs To Highest Level Of 2019 Amid Impeachment Inquiry (Hill)

President Trump’s approval ticked up to 49 percent – its highest mark this year, according to a new Hill-HarrisX survey released on Wednesday. The figure marks a 2-point increase from a Sept. 11-12 poll, but a 2-point decrease from its previous peak of 51 percent in August 2018. Trump’s disapproval rating, meanwhile, dropped to 51 percent, which marks his lowest level so far this year. The nationwide survey was conducted on Sept. 28 and 29, less than a week after House Democrats launched a formal impeachment inquiry into Trump over concerns raised in a whistleblower’s complaint about the president’s communications with Ukraine.


House Democrats threatened Wednesday morning to subpoena the White House for documents related to Trump’s dealings with Ukraine as part of their impeachment inquiry. House Oversight Committee Chairman Elijah Cummings (D-Md.) said in a memo that House committees have repeatedly tried to obtain voluntary compliance from Trump officials, but the White House has “refused to engage with – or even respond to – the Committees.” Speaker Nancy Pelosi (D-Calif.) and House Intelligence Committee Chairman Adam Schiff (D-Calif.) held a joint news conference later that morning, warning that attempts by the White House to “stonewall” the impeachment inquiry and “conceal facts” would be considered an obstruction of justice.

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Wait, isn’t that what Trump is after?

Weakening The Dollar Is The Last Hope For The Global Economy – Saxo (CNBC)

Weakening the dollar is the last throw of the dice in rescuing the global economy, according to Saxo Bank’s Steen Jakobsen. In the online trading and investment specialist’s outlook report for the fourth quarter, published Thursday, Jakobsen said 2019 will most likely be remembered as the year that kickstarted a global recession, despite the lowest ever nominal and real interest rates. “Monetary policy has reached the end of a very long road and has proven a failure,” Jakobsen, who is the chief economist and CIO at Saxo Bank, added. The U.S. Federal Reserve in September made a second 25 basis point cut to interest rates, moving to a range of 1.75% to 2%. Its initial 25 basis point reduction in July was the central bank’s first rate cut since the financial crisis.

The European Central Bank (ECB), meanwhile, recently unveiled a package of measures to reinvigorate the euro zone economy, cutting its deposit rate by 10 basis points to -0.5% and launching a massive new quantitative easing (QE) program. A host of other central banks across the world have also embarked on dovish policy shifts. Fears for the global economy have been exacerbated of late by the weakest manufacturing data out of the U.S. for over a decade, which compounded already fragile readings from across the euro zone and beyond. “In a global system of failed monetary policies and a long and difficult path to fiscal policy, there is only one other tool left in the box for the global economy and that is lower the price of global money itself: the U.S. dollar,” Jakobsen said.

The outlook report pointed to an estimated $240 trillion of debt worldwide, roughly 240% of global GDP, and argued that too much of this debt is denominated in dollars, due to the greenback’s role as global reserve currency and the deep liquidity of U.S. capital markets. This means the prospects for all asset classes have become a function of U.S. dollar liquidity and direction, Saxo Bank economists suggested. “If the dollar rises too much, the strain in the system increases: not only for U.S. exports, but also for the emerging market with its high dependence on USD funding and export machines,” Jakobsen said.

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End the Fed.

Fed Policymakers ‘Open’ To Rate Cut As Risks To Outlook Rise (R.)

Two Fed policymakers on Thursday signaled they are open to delivering another rate cut after a report showed the growth in the vast U.S. services sector is slowing, but the Fed’s No. 2, speaking late in the day, gave little away on his own thinking. The Fed “will act as appropriate to sustain a low unemployment rate and solid growth and stable inflation,” Fed Vice Chairman Richard Clarida said in New York, repeating a phrase Fed Chair Jerome Powell has used ahead of meetings when the Fed did cut rates, as well as in June, when it didn’t. The U.S. consumer and economy are in a “good place,” and the U.S. labor market is “very healthy,” Clarida said. At the same time, risks include slowing global growth, uncertainty over trade, and persistent low inflation overseas, all of which impact the U.S. economy.


“We have eight meetings a year, we take them one at a time. We are not on a preset course,” he said. Clarida’s circumspect comments came at the end of a day where traders bid up expectations of two more Fed rate cuts this year after the Institute for Supply Management (ISM)’s non-manufacturing activity index dropped to its lowest reading since August 2016. Separate data earlier in the week showed an index of U.S. factory activity contracting to its lowest level in more than a decade. The reports may signal that a slide in exports, business sentiment and business investment is spreading to the consumer, whose spending accounts for the bulk of the $20 trillion U.S. economy.

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Gee, that’s surprising. Service economy, right?

America’s Manufacturing Industry Is In Contraction (CNN)

America’s manufacturing industry is in contraction. Business spending is soft. And now the biggest chunk of the economy, the US service sector, is growing at its weakest pace in three years. Recession fears were reinforced on Thursday after the Institute for Supply Management said its non-manufacturing index dropped to 52.6 last month, down from 56.4 in August. This barometer of growth among service providers such as banks, restaurants and hotels is now at the lowest level since August 2016. Businesses expressed concern about tariffs, a shortage of workers and the direction of the economy, ISM said.


Although the service sector is still expanding, the gloomy report raises concern that America’s manufacturing troubles are spilling over into the broader economy. Slammed by the trade war, US manufacturing activity dropped deeper into contraction in September, the most sluggish month for factories since June 2009. “The weakness in manufacturing has now infected the services side of the US economy,” Peter Boockvar, chief investment officer at Bleakely Advisory Group, wrote in a note to clients on Thursday.

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The EU is talking about unilaterally declaring a Brexit extension.

Boris Has Destroyed What Is Left Of UK’s Credibility (Fintan O’Toole)

When Boris Johnson described his long-awaited proposals for changes to the Brexit withdrawal treaty as a compromise, he was not wrong. Two questions arise, however. What is being compromised? And who is Johnson compromising with? The answer to the second is obvious: the proposals are a compromise, not with the EU, but with the DUP. And what is being compromised is the credibility of the UK as a partner in any international negotiations. Though the EU and the Irish government are too polite to say so directly, Johnson’s plan destroys any remaining sense that the current regime in London is capable of sticking even to its own self-declared principles.

Ever since its victory in the referendum of June 2016, the Brexit project has been dogged by its inability to transcend its own origins. The referendum was always driven by the internal politics of the Conservative Party. Its purpose, from the point of view of the man who called it, David Cameron, was to silence the increasingly turbulent anti-EU faction in his own party and see off the threat of Nigel Farage. And it has never been able to move on from being an internal negotiation to being an external one. The only thing that has really changed is that “internal” Tory politics came, after the 2017 election, to include the DUP.

And so here we are again. Political compromise is about two sides with different agendas meeting each other half way. It is easy to see why Johnson might be sincere in thinking he has achieved this – but only if the two sides are Johnson himself with his need to look like he is coming up with some vaguely credible alternative to the backstop and the DUP with its “blood red line” of Northern Ireland leaving the EU on exactly the same terms as the rest of the UK.

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A 1922 law, right? Nothing much changed in the territory since then?

Hong Kong Leader Carrie Lam Invokes Emergency Powers, Bans Face Masks (CNBC)

Hong Kong leader Carrie Lam on Friday invoked emergency powers and banned face masks, saying the order goes into effect on Saturday, Oct. 5. Consequences for breaking the ban include up to one year in jail and a fine of $25,000 Hong Kong dollars ($3,187). In a press conference, Lam explained that the face mask ban was necessary because “almost all protesters who carry out vandalism and violence covered their face.” “The purpose was to hide their identity and evade the law and they have become more and more daring,” Lam said. She noted, however, that the mask ban contains certain exemptions “to cater for legitimate needs.”


Face masks have become ubiquitous in the city after the 2003 SARS outbreak. The disease killed 298 people in Hong Kong, according to World Health Organization data. Hong Kong’s parliamentary body, the Legislative Council, will discuss the legislation on Oct. 16 when it resumes session, Lam said. The Hong Kong leader said the decision was made after she called a special meeting of the Executive Council, which decided to invoke the Emergency Regulations Ordinance. Lam explained that the government believes the regulation will have a “deterrent effect” against violent behavior and help police officers carry out their duties. Under the 1922 law, the chief executive is allowed to “make any regulations whatsoever which he may consider desirable in the public interest.”

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Study since 1970. But more of the damage had already been done before that.

UK Wildlife Species Dying Out, Many Will Soon Vanish (Ind.)

The UK’s wildlife is dying out and many species will go extinct if urgent action is not taken, according to the latest State of Nature report, which draws on scientific monitoring since the 1970s. Leading professionals from more than 70 wildlife organisations have joined government agencies to create the comprehensive report, which warns wildlife declines continue “unabated”. Among thousands of mammal and plant species assessed, 15 per cent are threatened with being lost from Britain, including wildcats and greater mouse-eared bats. More than two-fifths of UK species including animals, birds and butterflies have seen significant declines in recent decades, the study found.


Since 1500 around 133 species have already vanished from Britain’s shores, including birds such as the wryneck and serin, which were lost as breeding birds in the 20th century. Dr Daniel Hayhow, lead author on the report and conservation scientist at RSPB, said: “We know more about the UK’s wildlife than any other country on the planet, and what it is telling us should make us sit up and listen. “We need to respond more urgently across the board if we are to put nature back where it belongs.” Data on nearly 700 species of land, freshwater and sea animals, fish, birds, butterflies and moths reveals 41 per cent have seen populations decline since 1970, while 26 per cent have increased.

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Aug 242019
 


Frank Walton Crows on a beach 1884

 

World Needs To End Risky Reliance On US Dollar: BoE’s Carney (R.)
China Strikes Back At US With New Tariffs On $75 Billion In Goods (R.)
Trump Heaps Another 5% Tariff On Chinese Goods In Latest Escalation (R.)
Majority Of Americans Don’t Want Trump Impeached, Removed From Office (USAT)
CNN Hires Former FBI #2 Andy McCabe, Who Was Fired For Leaking And Lying (ZH)
Genesis and Evolution of the Jeffrey Epstein-Bill Clinton Relationship (Webb)
Bill Barr And Bill Clinton (Webb)
Long Before Epstein: Sex Traffickers & Spy Agencies (Vos)
Psychologist Approved Jeffrey Epstein’s Removal From Suicide Watch (R.)
France Launches Rape Inquiry in Jeffrey Epstein Case (BBC)
Lost at Sea (Kunstler)
Tulsi Gabbard Victimized by DNC’s Dubious Debate Criteria (Tracey)

 

 

“Synthetic Hegemonic Currency” sounds creepy to me.

World Needs To End Risky Reliance On US Dollar: BoE’s Carney (R.)

Bank of England Governor Mark Carney took aim at the U.S. dollar’s “destabilizing” role in the world economy on Friday and said central banks might need to join together to create their own replacement reserve currency. The dollar’s dominance of the global financial system increased the risks of a liquidity trap of ultra-low interest rates and weak growth, Carney told central bankers from around the world gathered in Jackson Hole, Wyoming, in the United States. “While the world economy is being reordered, the U.S. dollar remains as important as when Bretton Woods collapsed,” Carney said, referring to the end of the dollar’s peg to gold in the early 1970s. Emerging economies had increased their share of global activity to 60% from around 45% before the financial crisis a decade ago, Carney said.

But the dollar was still used for at least half of international trade invoices – five times more than the United States’ share of world goods imports – fuelling demand for U.S. assets and exposing many countries to damaging spillovers from swings in the U.S. economy. Carney – who was considered a candidate to be the next head of the International Monetary Fund but failed to secure backing from Europe’s governments – said the problems in financial system were encouraging protectionist and populist policies. [..] Carney warned that very low equilibrium interest rates had in the past coincided with wars, financial crises and abrupt changes in the banking system. As a first step to reorder the world’s financial system, countries could triple the resources of the IMF to $3 trillion as a better alternative to countries protecting themselves by racking up enormous piles of dollar-denominated debt.

“While such concerted efforts can improve the functioning of the current system, ultimately a multi-polar global economy requires a new IMFS (international monetary and financial system) to realize its full potential,” Carney said. China’s yuan represented the most likely candidate to become a reserve currency to match the dollar, but it still had a long way to go before it was ready. The best solution would be a diversified multi-polar financial system, something that could be provided by technology, Carney said. Facebook’s Libra was the most high-profile proposed digital currency to date but it faced a host of fundamental issues that it had yet to address. “As a consequence, it is an open question whether such a new Synthetic Hegemonic Currency (SHC) would be best provided by the public sector, perhaps through a network of central bank digital currencies,” Carney said.

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Globalization is dead.

China Strikes Back At US With New Tariffs On $75 Billion In Goods (R.)

China said on Friday it will impose retaliatory tariffs against about $75 billion worth of U.S. goods, putting as much as an extra 10% on top of existing rates in the dispute between the world’s top two economies. The latest salvo from China comes after the United States unveiled tariffs on an additional $300 billion worth of Chinese goods, including consumer electronics, scheduled to go into effect in two stages on Sept. 1 and Dec. 15. China will impose additional tariffs of 5% or 10% on a total of 5,078 products originating from the United States including agricultural products such as soybeans, crude oil and small aircraft. China is also reinstituting tariffs on cars and auto parts originating from the United States.

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Dead as a doornail.

Trump Heaps Another 5% Tariff On Chinese Goods In Latest Escalation (R.)

U.S. President Donald Trump on Friday lashed back at a new round of Chinese tariffs by heaping an additional 5% duty on some $550 billion in targeted Chinese goods in the latest tit-for-tat trade war escalation by the world’s two largest economies. Trump’s move, announced on Twitter, came hours after China unveiled retaliatory tariffs on $75 billion worth of U.S. goods, prompting the president earlier in the day to demand U.S. companies move their operations out of China. The intensifying U.S.-China trade war stoked market fears that the global economy will tip into recession, sending U.S. stocks into a tailspin, with the Nasdaq Compositedown 3%, and the S&P 500 down 2.6%. U.S. Treasury yields also declined as investors sought safe-haven assets, and crude oil, targeted for the first time by Chinese tariffs, fell sharply.


Trump’s tariff response was announced after markets closed on Friday, leaving potentially more damage for next week. “Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer,” Trump said on Twitter. “As President, I can no longer allow this to happen!” He said the United States would raise its existing tariffs on $250 billion worth of Chinese imports to 30% from the current 25% beginning on Oct. 1, the 70th anniversary of the founding of the communist People’s Republic of China. At the same time, Trump announced an increase in planned tariffs on the remaining $300 billion worth of Chinese goods to 15% from 10%.

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Don’t take Nadler’s hobby away.

Majority Of Americans Don’t Want Trump Impeached, Removed From Office (USAT)

A majority of Americans oppose impeaching President Donald Trump, according to a new poll by Monmouth University released Thursday. The data point – with 59% of those surveyed responding that Trump should not be impeached and compelled to leave office – comes as Trump’s approval rating remains at 40% in the same poll. In the poll, there is a clear partisan divide on whether the House Judiciary Committee should pursue an impeachment inquiry. While 72% of Democrats believe such an inquiry is a good idea, only 39% of independents and 8% of Republicans share that belief. House Judiciary Committee Chairman Rep. Jerry Nadler, D-N.Y. confirmed the launch of an impeachment inquiry by his House panel earlier this month in an interview on CNN.

Additionally, Nadler sent a letter Thursday asking four other Democratic House committee chairs currently leading investigations into Trump to share documents to aid his committee’s investigation into possible obstruction and other abuses, which could lead to potentially filing articles of impeachment against the president. Nadler wrote to Intelligence Chairman Adam Schiff, D-Calif., Oversight and Reform Chairman Elijah Cummings, D-Md., Financial Services Chairwoman Maxine Waters, D-Calif., and Foreign Affairs Chairman Eliot Engel, D-N.Y. He asked for “documents and testimony, depositions, and/or interview transcripts that you believe may be relevant to the Judiciary Committee’s ongoing impeachment investigation relating to President Trump.”

The Monmouth University poll surveyed 800 adults in the U.S. via telephone from August 16-20, 2019. It has a margin of error of plus or minus 3.5 percentage points.

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Neither Orwell nor Bizzarro World have anything on this: CNN just hired the FBI’s former no. 2, who was fired for lying to his own employer/agency. For which he should obviously be in jail, but he’s not. Want to guess where you would be if you lied to the FBI? Ask George Papadopoulos. His lie was superficial slash meaningless at best, but he served time. McCabe’s lies are a whole different universe.

CNN Hires Former FBI #2 Andy McCabe, Who Was Fired For Leaking And Lying (ZH)

Another Ex-Obama official has joined the ranks of anti-Trump cable news punditry, this time disgraced FBI #2 Andrew McCabe, who was fired for leaking information to the media – then lying about it at least four times, including under oath. Now, McCabe – who is suing the DOJ and FBI over what he claims was a “politically motivated” firing just days before he was set to retire with full benefits,” will join former Director of National Intelligence James Clapper at CNN. Succinctly put by The Federalist’s Mollie Hemmingway: “Andrew McCabe, one of the central figures of the “Russia collusion” hoax, who was fired from the FBI for lying about his leaks to the media, has been hired by CNN, one of the media outlets that did the most to perpetuate the damaging hoax.” – Mollie (@MZHemingway) August 23, 2019

McCabe authorized an FBI spokesman to tell the Wall Street Journal’s Devlin Barrett – just days before the 2016 US election, that the FBI hadn’t put the brakes on an investigation into the Clinton Foundation – at a time in which McCabe was coming under fire for his wife taking a $467,500 campaign contribution from Clinton associate, Terry McAuliffe. As noted above, McCabe then lied about the leak at least four times and was subsequently fired over it. McCabe claimed that his boss, also-fired former FBI Director James Comey, was well aware of the leaks. Comey shot back on ABC’s The View, calling McCabe a liar.

Comey was asked by host Megan McCain how he thought the public was supposed to have “confidence” in the FBI amid revelations that McCabe lied about the leak. “It’s not okay. The McCabe case illustrates what an organization committed to the truth looks like,” Comey said, adding “Good people lie … I still believe Andrew McCabe is a good person but the inspector general found he lied,” noting that there are “severe consequences” within the DOJ for doing so.

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Part 4 of Whitney Webb’s incredible series on sexual blackmail.

“Of particular importance are Epstein’s relationship to the Clinton Foundation and the alleged role of Epstein’s Virgin Islands-based hedge fund and the Clinton Foundation in money laundering activity.. [..] It is this tale of intrigue that fully reveals the extent to which this decades-old alliance between organized crime, the CIA, and Israeli intelligence has corrupted and influenced politicians of both political parties, both through the use of sexual blackmail and through other means of coercion. ”

Genesis and Evolution of the Jeffrey Epstein-Bill Clinton Relationship (Webb)

[..] these sexual blackmail operations proliferated during the Iran-Contra affair, which involved this same dark alliance between U.S./Israeli intelligence and organized crime. Though this series has thus far largely focused on the ties of Republican officials to those operations and associated crimes, the final installment of this series will focus on Democratic politicians, namely the Clinton family, and their ties to this same network as well as Jeffrey Epstein. The Clintons’ own involvement in Iran-Contra revolved around the covert activities at Arkansas’ Mena Airport, which involved the CIA front company Southern Air Transport and occurred while Clinton was governor.

Just a few years into the Clinton presidential administration, Leslie Wexner and Jeffrey Epstein would play a major role in Southern Air Transport’s relocation to Columbus, Ohio, leading to concerns among top Ohio officials that both men were not only working with the CIA, but that Wexner’s company, The Limited, sought to use the CIA-linked airline for smuggling. During that same period of time, Epstein had already forged close ties to important Clinton White House officials and prominent Clinton donors like Lynn Forester de Rothschild and made several personal visits to the official presidential residence.

Some of these ties appear related to Epstein’s shady financial activities, particularly involving currency markets and offshore tax havens — activities he began to perfect while working for prominent Iran-Contra figures in the early 1980s, several of whom were tied to the CIA-linked bank Bank of Credit and Commerce International (BCCI) and had known relationships with Israeli intelligence, namely the Mossad. The nature of Epstein’s work for these individuals and other evidence strongly suggests that Epstein himself had a relationship with BCCI after leaving Bear Stearns and prior to the bank’s collapse in 1991.

Of particular importance are Epstein’s relationship to the Clinton Foundation and the alleged role of Epstein’s Virgin Islands-based hedge fund and the Clinton Foundation in money laundering activity, a relationship still under investigation by MintPress. It is this tale of intrigue that fully reveals the extent to which this decades-old alliance between organized crime, the CIA, and Israeli intelligence has corrupted and influenced politicians of both political parties, both through the use of sexual blackmail and through other means of coercion.

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From the same Whitney Webb article. This part warrants attention.

Bill Barr And Bill Clinton (Webb)

After Clinton’s half-brother Roger was busted for cocaine smuggling (Clinton would later pardon him while president) the CIA sought to move Contra operations out of Arkansas, hoping to put a damper on the increasingly public and sloppy Arkansas-based operation. According to Terry Reed in his book Compromised: Clinton, Bush and the CIA, co-written with John Cummings, a hushed meeting was held in a bunker at Camp Robinson in North Little Rock, Arkansas. During the meeting, William Barr, who represented himself as the emissary of then-CIA Director Bill Casey told Clinton: “The deal we made was to launder our money through your bond business but what we didn’t plan on was you and your n****r here start taking yourselves seriously and purposely shrinking our laundry.”

Barr chastised Clinton for his sloppy handling of the delicate operation and his half-brother’s very public fall from grace. He would later tell Clinton, according to Reed, “Bill, you are Mr. Casey’s fair-haired boy … You and your state have been our greatest asset. Mr. Casey wanted me to pass on to you that unless you fuck up and do something stupid, you’re No. 1 on the short list for a shot at the job that you’ve always wanted. You and guys like you are the fathers of the new government. We are the new covenant.” Attempts to investigate Clinton’s role in the Mena operations and more broadly in the Iran-Contra affair were allegedly axed by Clinton’s own confidantes, who consistently denied he played a role in the scandal.

According to the Wall Street Journal, former IRS investigator William Duncan teamed with Arkansas State Police Investigator Russell Welch in what became a decade-long battle to bring the matter to light. In fact, of the nine separate state and federal probes into the affair, all failed. Duncan would later say of the investigations, “[They] were interfered with and covered up, and the justice system was subverted,” and a 1992 memo from Duncan to high-ranking members of the attorney general’s staff notes that Duncan was instructed “to remove all files concerning the Mena investigation from the attorney general’s office.” The attorney general, serving under George H. W. Bush, at that time was William Barr, who is currently attorney general under Trump.

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This stuff is so institutionalized, so deeply engrained in our societies, that is will be very hard to get rid of.

Long Before Epstein: Sex Traffickers & Spy Agencies (Vos)

In the U.S., the New York State Select Committee On Crime in 1982 investigated nationwide networks of trafficking underage sex workers and producing child pornography. Dale Smith, a committee investigator, noted that call services using minors also profited from “sidelines,” besides the income from peddling prostitution. Smith said they sold information “on the sexual proclivities of the clients to agents of foreign intelligence.” Presumably, this information could be used to blackmail those in positions of power. Smith added that one call service sold information to “British and Israeli intelligence.”

Another U.K. scandal included allegations that Sir Peter Hayman, a British diplomat and deputy director of MI6, was a member of the Pedophile Information Exchange (PIE). Police discovered that two of the roughly dozen pedophiles in his circle had been writing to each other about their interest in “the extreme sexual torture and murder of children,” according to the The Daily Mail. In 2015, The Guardian reported that former Prime Minister Margaret Thatcher had been “adamant that officials should not publicly name” Hayman, “even after she had been fully briefed on his activities….formerly secret papers released to the National Archives shows.”

Still, Hayman was unmasked as a subscriber to PIE in 1981 by M.P. Geoffrey Dickens, who also reportedly raised the national security risk of Hayman’s proclivities, implying they were a potential source of blackmail sought by intelligence agencies. The British tabloid The Mirror reported that intelligence agencies, including the KGB and CIA, kept their own dossiers on U.K. establishment figures involved with PIE and the abuse of minors, to blackmail the targets in exchange for information.

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Makes very little sense. Suicide watch is a serious thing, and all it takes is one psychologist?

Psychologist Approved Jeffrey Epstein’s Removal From Suicide Watch (R.)

A psychologist at the federal detention center in New York City where financier Jeffrey Epstein was jailed on sex-trafficking charges had approved his removal from suicide watch before he killed himself, the U.S. Justice Department said on Friday. The disclosure came in a letter dated on Thursday from Assistant Attorney General Stephen Boyd and addressed to the leaders of the Judiciary Committee of the U.S. House of Representatives, seeking details about the circumstances surrounding Epstein’s death earlier this month. Epstein, who was 66, was found dead Aug. 10 in his cell inside a segregated housing unit of the Metropolitan Correctional Center (MCC) in Lower Manhattan. An autopsy concluded that he hanged himself.


His death triggered investigations by the FBI, the Justice Department’s Office of Inspector General and the U.S. Bureau of Prisons, which runs the detention facility. The Boyd letter, provided to Reuters on Friday, confirmed that Epstein had been placed on suicide watch in July, a status under which the designated prisoner is held in a special cell under constant observation by staff or “inmate companions.” Epstein was “later removed from suicide watch after being evaluated by a doctoral-level psychologist who determined that a suicide watch was no longer warranted,” Boyd wrote in the three-page letter. The letter did not state precisely why a suicide watch had been ordered for Epstein. But Epstein in July had been found unconscious on the floor of his cell with marks on his neck, and officials had been investigating that incident as a possible suicide attempt or assault.

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Maybe it takes the French to dig deep enough. Certainly wouldn’t bet on Bill Barr doing the job.

France Launches Rape Inquiry in Jeffrey Epstein Case (BBC)

French prosecutors have opened an inquiry into rape allegations against the late US financier Jeffrey Epstein. [..] He had an apartment in Paris, and French gender equality minister Marlène Schiappa had called for an inquiry into any abuses committed on French soil. On Friday Paris prosecutors launched a probe for “rape” and “sexual assault”. [..] Epstein spent plenty of time in Paris and owned a luxury apartment near the Arc de Triomphe. Investigations “will focus on potential crimes committed against French victims… and on suspects who are French citizens”, Paris Prosecutor Remy Heitz said in a statement.


A French advocacy group for child sex abuse victims, Innocence En Danger (Innocence at Risk), said this week it had received 10 witness statements involving Epstein regarding alleged sex crimes committed against minors on French soil. Epstein was also friends with French modelling tycoon Jean-Luc Brunel, who was accused in US court documents of procuring young girls for Epstein, along with allegations of rape. Mr Brunel has denied the accusations.

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“The Democratic contest may be peaking way too early. And Joe Biden hasn’t even had a chance to claim he is the out-of-wedlock grandson of W.C. Handy.”

Lost at Sea (Kunstler)

Elizabeth Warren set the stage for anointing herself America’s Race Hustler-in-Chief by addressing the niggling matter of her former claim to be a Cherokee Indian, since disproven by a DNA test. There was loose talk, you see, that she used the Cherokee ruse to bamboozle her overseers on the Harvard Plantation, where she got to work in the Big House known as the Harvard Law School based on her “diversity” bona fides — a “minority hire!” The claim was so transparently idiotic and dishonest that she was desperate to walk it back as delicately as possible, in order to keep up with the race hustling of her fellow pols chasing the nomination. A rain dance was arranged in the aptly-named heartland town of Sioux City.

“Like anyone who’s being honest with themselves, I know that I have made mistakes,” said Ms. Warren, who was met with a standing ovation when she took the stage [The Times reported]. “I am sorry for harm I have caused. I have listened and I have learned a lot, and I am grateful for the many conversations that we’ve had together.” Was a more disingenuous political statement ever contrived? A bundle of devious platitudinous promises of the sort that white people always offered the indigenous folk at a thousand crooked treaty councils? It would have been a little more satisfying, perhaps, if Ms. Warren had specified the mistakes made, e.g. I was falsely claiming a racial identity for career advancement. Now that’s an apology!

“Listening and learning?” I dunno… sounds a little like groveling and pandering. Anyone can choke down a few bites of humble pie but please don’t make me eat that shit sandwich! The Democratic contest may be peaking way too early. And Joe Biden hasn’t even had a chance to claim he is the out-of-wedlock grandson of W.C. Handy. There are indications that the political center is already a little tired of the Everything-Is-Racist trope that the party ran up the flagpole this summer. For The New York Times, it became the publicly acknowledged official editorial slant when newsroom chief Dean Baquet announced that the paper needed a replacement for the shredded gonfalon of RussiaGate.

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Is the DNC secretly working for Trump?

Gabbard torpedoed Kamala Harris’s shot at the job. That won’t be forgiven.

Tulsi Gabbard Victimized by DNC’s Dubious Debate Criteria (Tracey)

Tulsi Gabbard is on the verge of being excluded from the next Democratic presidential debate on the basis of criteria that appear increasingly absurd. Take, for instance, her poll standing in New Hampshire, which currently places Gabbard at 3.3% support, according to the RealClearPolitics average as of Aug. 20. One might suspect that such a figure would merit inclusion in the upcoming debates — especially considering she’s ahead of several candidates who have already been granted entry, including Cory Booker, Amy Klobuchar, Beto O’Rourke, and Andrew Yang. But the Democratic National Committee has decreed that the polls constituting this average are not sufficiently “qualifying.”

What makes a poll “qualifying” in the eyes of the DNC? The answer is conspicuously inscrutable. Months ago, party chieftains issued a list of “approved sponsoring organizations/institutions” for polls that satisfy their criteria for debate admittance. Not appearing on that list is the Boston Globe, which sponsored a Suffolk University poll published Aug. 6 that placed Gabbard at 3%. The DNC had proclaimed that for admittance to the September and October debates, candidates must secure polling results of 2% or more in four separate “approved” polls – but a poll sponsored by the newspaper with the largest circulation in New Hampshire (the Globe recently surpassed the New Hampshire Union Leader there) does not count, per this cockamamie criteria.

There has not been an officially qualifying poll in New Hampshire, Gabbard’s best state, in over a month. The absurdity mounts. A South Carolina poll published Aug. 14 by the Post and Courier placed Gabbard at 2%. One might have again vainly assumed that the newspaper with the largest circulation in a critical early primary state would be an “approved” sponsor per the dictates of the DNC, but it is not. Curious.

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Cerberus, the early days.

 

 

 

 

 

Aug 052019
 


Odilon Redon Peyrelebade landscape 1880

 

It’s never easy to gauge what exactly is happening in China, or why the CCP Politburo takes the decisions it does. Today, or overnight, is no exception to that. However, one thing that appears certain, but which I don’t see reflected in all the analyses, is that Beijing pushing the value of the renminbi (yuan) down below 7 to the USD in one fell swoop, is a major setback for Xi Jinping and his government.

Yes, China may have given up hope of reaching positive conclusions in its trade talks with the US. And yes, some may think, even in China itself, that devaluing the currency is a tool that can be useful in a potential currency war. But there’s another side to this coin. It’s not even about the value itself, or the change in it, it’s the heavy-handed way it’s executed.

 

China wants, and desperately needs too, for the yuan to be a force in global financial markets. In very simple terms this is true because if it then wants to buy something, it can simply print the money for it. But only about 1% of global trade today is executed in yuan. That is not nearly enough. It means China needs dollars and euros, all the time. And devaluing the yuan means the country needs even more of those.

You’d almost think: why would you want to do that? What are the long-term prospects for a move like this? You’re telling forex markets that the value of the yuan is not trustworthy, because if Xi or the PBOC decides in the next five minutes that it should go up or down by 10% or 20%, they can do it. The Fed and ECB also have tools to manipulate their currencies (re: interest rates), but none of that magnitude.

 

The crux of the dilemma probably lies in the Belt and Road Initiative (BRI), which I’ve been saying for years is just China’s way to sell its overcapacity and overproduction abroad. Sure, there may be loftier goals, and surely in the glitzy brochures, but the fact remains that China has tried to be an economic miracle, doing in 10 years what took the US a century, and it never slowed down its growth, at least not voluntarily, even if that might have been a wise move.

Already lately, purchases by Chinese citizens and companies of real estate and businesses abroad have been curtailed, and not a little bit, by Beijing. There’s no better way to convince Chinese people of the miracle’s success than to let them travel the world and spend there, but that, too, may well soon be cut. It kills foreign reserves.

If Beijing could charge participating countries in the Belt and Road Initiative in yuan, and they could pay for the overcapacity’s steel and cement and what not in yuan, that could be a game-changing program for the entire planet. But these countries have no reason to hold yuan, other than the BRI itself. And they, too, were watching the overnight move above 7 and must have thought: let’s be careful now.

And to top it all off, China right now needs for these countries to pay in dollars instead of yuan, because its foreign reserves are shrinking so fast. It’s Catch-22 all the way down. China’s need for dollars goes against everything BRI stands for.

 

Could the move hurt the US as well? Absolutely. But the long-term view behind the tariffs, and the talks China appears to have lost faith in, is to move the US away from its near all-encompassing addiction to Chinese production, and to move at least some of that production back home. Problem of course is, that is precisely what China’s miracle growth has been built on.

If the US starts bringing production home, who is Beijing going to sell its (over-)production to? Yes, I hear you, to the BRI countries. But there it runs into the currency problems mentioned before. To Europe? The top of that trade route is also behind us. Europe will have to follow the US to an extent, and also bring factories back to the continent (and not just to Germany either).

China could perhaps sell more than it does today to Russia. But that country still does produce a lot of things, and has been forced to be much more self-sufficient due to US and EU sanctions. It’s also a mighty small market compared to 350 million North Americans and 500 million Europeans, who are on average much richer than your average Russian to boot.

 

There is a way for China to make the yuan more important in global trade (but devaluation is definitely not that way): Beijing could let go of its central and total control over the value of its currency, and let forex markets figure it out. That would give traders -and everyone else- faith in the value. Problem with that is, this is not how central control communist governments think.

Beijing wants both: central total control AND a prominent place in world trade. And it may take them a long time to figure out that is not going to happen, unless of course they first conquer the entire world militarily. That is not an option, at least not for the foreseeable future. Come see me next century.

 

It wouldn’t be the first time for me to say I can see China retreat into itself, into its own borders and culture and market (1.3 billion people!). If the Communist Party wants to remain in power, and there’s no doubt it does, this may be only possible choice going forward. If growth has indeed left the miracle -as many observers think-, it can implode in very rapid succession. And even if growth hasn’t yet evaporated, it may well very soon. Without the growth, there is no miracle anymore.

And if China can no longer grow its exports, its domestic growth will also become a thing of the past. Domestic consumption can only grow as long as exports do too. Seen from that angle, the problems with trade and the currency look downright ominous. If you need dollars that badly, and you notice that you’re already getting fewer of them, not more, you’re in trouble.

Devaluing your currency may afford you some temporary respite, but it can’t possibly solve your troubles. It can make them much worse though.

I think China has wanted too much too fast, got carried away and forgot to take care of a few potential barriers to its growth, in particular the standing its currency had and still has in the world, and the grinding need for dollars that stems from it. And the Communists have no answer to this problem.

 

 

 

 

Apr 272019
 


Vincent van Gogh Pietà (after Delacroix) 1889

 

The Big Mystery In The GDP Report – Where Did The Inventories Come From? (MW)
China Finds Dollar Hegemony Is A Tough Nut To Crack (WS)
Nearly 102 Million Americans Do Not Have A Job Right Now (Snyder)
Trump Makes Post-Mueller Vow To Release “Devastating” FISA Docs (ZH)
Blowback Is a Harsh Mistress (Kunstler)
Marina Butina Sentenced To 18 Months In Prison (ZH)
Labour Party In ‘Complete Meltdown’ Over Final Say (Ind.)
London Extinction Rebellion Mural is a Banksy (G.)
Greeks The Most Stressed People Worldwide – Gallup (K.)
Brazil Governed By ‘Lunatics’ And US ‘Lackeys’ – Lula (G.)

 

 

Industrial production and imports are both down. But inventories rise.

The Big Mystery In The GDP Report – Where Did The Inventories Come From? (MW)

It is a case that would make Sherlock Holmes proud. Growth in the first quarter smashed expectations, fueled in part by strong inventory building. According to the government, $32 billion of goods were added to inventories this quarter, or $128 billion annualized. This stockpiling of goods boosted first-quarter GDP growth by about 70 basis points and helped propel growth to a 3.2% annual rate, well above forecasts. The problem is that it is not at all obvious where these inventories came from. Goods have to come from somewhere, either produced by domestic firms or imported from abroad. The mystery is that both production and imports fell in the first three months of the year, according to government data.

“You can’t stockpile what you do not import or do not produce,” said Robert Brusca, chief economist at FAO Economics. The Fed reported last week that industrial output slipped at a 0.3% annual rate in the first quarter. And the government’s GDP report estimates that imports fell 3.7% in the first three months of the year. The one other explanation — that consumption fell sharply enough to leave businesses with unexpected unsold goods — also doesn’t fit the evidence, Brusca said. Consumption did not fall faster than industrial production or imports to generate any surplus, he said. To be sure, spending on consumer durable goods fell 5.3%, the biggest drop in 10 years. Business spending on equipment was also weak. “Any way you slice it, this GDP report…is an apparent mess,” he said.

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Nobody will want the yuan as long as Beijing decides what it’s worth.

China Finds Dollar Hegemony Is A Tough Nut To Crack (WS)

In terms of global reserve currency, the renminbi (RMB) has a share of only 1.9%, in fifth place, and barely ahead of the Canadian dollar, but miles behind the US dollar (61.7%) and the euro (20.7%). Over the past two years, the RMB has made only microscopic headway as a reserve currency. And as an international payments currency, the RMB has failed similarly to crack the co-hegemony of the dollar and the euro. “With more than 1,900 financial institutions now using the RMB for payments with China and Hong Kong, the internationalization of RMB carries great strategic significance” for banks and financial institutions, gushes SWIFT (Society for Worldwide Interbank Financial Telecommunication), which tracks the progress of the RMB as payment currency.


But in March 2019, the RMB had a minuscule share of merely 1.22% for international cross-border payments by value (cross-border payments from one Eurozone country to another Eurozone country are excluded). This minuscule share put the RMB in 8th position, just behind the Swiss franc:

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Civilian labor force participation rate lingers around 63%.

Nearly 102 Million Americans Do Not Have A Job Right Now (Snyder)

At this moment, we are told that only 6.2 million Americans are officially “unemployed”, and that sounds really, really good. But that is only half the story. What the mainstream media rarely mentions is the fact that the number of Americans categorized as “not in the labor force” has absolutely exploded since the last recession. Right now, that number is sitting at 95.577 million. When you add 6.2 million “officially unemployed” Americans to 95.577 million Americans that are categorized as “not in the labor force”, you get a grand total of almost 102 million Americans that do not have a job right now. If that sounds terrible to you, that is because it is terrible.

Yes, the U.S. population has been growing over the last decade, and that is part of the reason why the number of Americans “not in the labor force” has been growing. But overall, the truth is that the level of unemployment in this country is not that much different than it was during the last recession. John Williams of shadowstats.com tracks what the real employment figure would be if honest numbers were being used, and according to him the real rate of unemployment in the United States at the moment is 21.2 percent.

Just before the last recession, the civilian labor force participation rate was sitting at about 66 percent, and that was pretty good. But then the recession hit, and the civilian labor force participation rate fell below 63 percent, and it stayed between 62 percent and 63 percent for an extended period of time. So where are we today? At this moment, we are sitting at just 63.0 percent. Does that look like a recovery to you? Of course not.

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“I’m glad I waited because i thought that maybe they would obstruct if I did it early..”

Trump Makes Post-Mueller Vow To Release “Devastating” FISA Docs (ZH)

President Trump on Thursday renewed his vow to declassify a wide swath of “devastating” documents related to the Russia probe “and much more” – adding that he’s glad he waited until the Mueller investigation was complete. In a Thursday night phone interview on Fox News, host Sean Hannity asked “will you declassify the FISA applications, gang of 8 material, those 302s – what we call on this program ‘the bucket of five’?” To which Trump replied: “Yes, everything is going to be declassified – and more, much more than what you just mentioned. It will all be declassified, and I’m glad I waited because i thought that maybe they would obstruct if I did it early – and I think I was right. So I’m glad I waited, and now the Attorney General can take a look – a very strong look at whatever it is, but it will be declassified and more than what you just mentioned.”

Last September 17th, Trump vowed to release all text messages related to the Russia investigation with no redactions, as well as specific pages from the FBI’s FISA surveillance warrant application on former Trump campaign aide Carter Page, and interviews with the DOJ’s Bruce Ohr. nFour days later, however, Trump said over Twitter that the Justice Department – then headed by Attorney General Jeff Sessions (while the Russia investigation was headed up by Deputy AG Rod Rosenstein) – told him that it might have a negative impact on the Russia probe, and that key US allies had asked him not to release the documents.

“I met with the DOJ concerning the declassification of various UNREDACTED documents,” Trump tweeted. “They agreed to release them but stated that so doing may have a perceived negative impact on the Russia probe. Also, key Allies’ called to ask not to release. Therefore, the Inspector General has been asked to review these documents on an expedited basis. I believe he will move quickly on this (and hopefully other things which he is looking at). In the end I can always declassify if it proves necessary. Speed is very important to me – and everyone!”


That key ally turns out to have been the UK, according to the New York Times., which reported last September that their concern was over material which “includes direct references to conversations between American law enforcement officials and Christopher Steele,” the former MI6 agent who compiled the infamous “Steele Dossier.” We now know, of course, that Steele had extensive contact with Bruce and Nellie Ohr in 2016, while Bruce was the #4 official at the Obama DOJ, and Nellie was working for Fusion GPS – the opposition research firm hired by Hillary Clinton and the DNC to produce the infamous Steele Dossier.

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“Mr. Mueller himself may well be subject to prosecution for destroying evidence and, yes, obstruction of justice…”

Blowback Is a Harsh Mistress (Kunstler)

The Thinking Class behind the bad faith Resistance is about to be beaten within an inch of its place in history with an ugly-stick of reality as The Narrative finally comes to be fairly adjudicated. The Mueller Report was much more than just disappointing; it was a comically inept performance insofar as it managed to overlook the only incidence of collusion that actually took place: namely, the disinfo operation sponsored by the Hillary Clinton campaign in concert with the highest officials of the FBI, the Department of Justice, State Department personnel, the various Intel agencies, and the Obama White house for the purpose of interfering in the 2016 election.


It will turn out that the Mueller Investigation was just an extension of that felonious op, and Mr. Mueller himself may well be subject to prosecution for destroying evidence and, yes, obstruction of justice. John F. Kennedy once observed that “life is unfair.” It is unfair, perhaps, that a TV Reality Show huckster, clown, and rank outsider beat a highly credentialed veteran of the political establishment and that he flaunts his lack of decorum in the Oval Office. But it happens that he was on the side of the truth in the RussiaGate farrago and that happens to place him in a position of advantage going forward.

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The empire destroying lives to uphold a narrative. It no longer matters what these crazies say, and they know it. The public swallows anything thrown at them. Collusion, Assange, Butina, these are all fictional stories, but today they dictate the headlines and dominate the airwaves. Butina is accused of “Ambitious conspiracy”. When she was 22.

Marina Butina Sentenced To 18 Months In Prison (ZH)

Accused Russian spy Marina Butina has been sentenced to 18 months in prison on Friday after pleading guilty to acting as an unregistered agent of a foreign government, the Hill reports. Butina, who was arrested in 2018, pled guilty to the charges in late. 2018. She will only serve nine months, as the judge knocked nine months off her sentence for time served. Prosecutors had recommended that she serve an additional 18 months, while her lawyers had asked for no prison time and her immediate deportation. Butina wasn’t mentioned in the Mueller report. Before her sentencing hearing on Friday, Butina pleaded with the judge for leniency, RT reports.


“My parents discovered my arrest on the morning news they watch in their rural house in a Siberian village,” she told the court. “I love them dearly, but I harmed them morally and financially. They are suffering from all of that. I destroyed my own life as well. I came to the United States not under any orders, but with hope, and now nothing remains but penitence.” Butina arrived in the US on a student visa in 2016 and became active in pro-gun circles. During the investigation into Russian interference that followed Trump’s electoral triumph, she was accused of working with the Russian government to infiltrate the Republican Party and National Rifle Association. Moscow and President Putin have denied any connection with her.

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Corbyn still clings to his dreams of an independent left-wing Britain. But matters haven’t stood still for the past 3 years.

Labour Party In ‘Complete Meltdown’ Over Final Say (Ind.)

Jeremy Corbyn is under growing pressure over his party’s position on a second Brexit referendum after a leaked draft of a campaign leaflet included no mention of a Final Say vote. The Labour leader faced an angry backlash over the flyer, with MPs saying it had triggered “complete meltdown” in the party and left pro-EU MPs “utterly furious”. As the row deepened, 75 MPs and 14 MEPs wrote to Labour’s governing body to demand that “a clear commitment” to another referendum be included in the party’s manifesto for next month’s European parliament elections. Mr Corbyn’s top team is split on whether Labour should support a second referendum. Several senior shadow cabinet ministers want the party to support a public vote on any Brexit deal passed by parliament, but Mr Corbyn’s inner circle say he only supports a referendum on the government’s deal or to avoid a no-deal outcome.


Other shadow ministers oppose another public poll entirely. In their letter to the National Executive Committee (NEC), the MPs and MEPs said Labour had “a clear opportunity to win these elections” if it fully supports a Final Say vote. They wrote: “These elections are about the kind of Europe we want to live in, and we can’t make a convincing case in them without being clear about Brexit. Labour has already, rightly, backed a confirmatory public vote. The overwhelming majority of our members and voters support this, and it is the democratically established policy of the party. “Our members need to feel supported on doorsteps by a clear manifesto that marks us out as the only viable alternative to Nigel Farage’s Brexit Party.

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First, you just have a wall. The next day, you have a wall worth a million dollars.

London Extinction Rebellion Mural is a Banksy (G.)

A Banksy collector and expert believes a mural that appeared at Extinction Rebellion’s Marble Arch base overnight is an authentic piece by the Bristolian street artist. John Brandler, who owns a dozen pieces by Banksy is convinced the artwork – which features the slogan “From this moment despair ends and tactics begin” next to a young girl sitting on the ground holding an Extinction Rebellion logo – is an original because of its execution and theme. The art dealer and gallerist said: “I’m convinced about the one in London for two reasons: it’s a topic that he would support, and it’s a continuation of the Port Talbot piece that appeared in December 2018.

“The name in the corner is not important, the signature is the work. And this is a Banksy. It’s a wonderful statement and a beautiful piece.” The work appeared at the site which had been occupied by climate activists since protests began in the capital almost two weeks ago. A spokesperson for Westminster council confirmed the work was being investigated but had not been authenticated yet. “We’re aware of the possible Banksy which appeared in Marble Arch overnight. Our officers are looking into this,” he said. Banksy has not confirmed whether the painting is legitimate, and his press team did not respond to a request for comment.

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Gallup does really bad surveys.

Greeks The Most Stressed People Worldwide – Gallup (K.)

Greeks are the most stressed people in the world, according to the results of the Gallup 2019 Global Emotions report conducted on a sample of 150,000 people in 140 countries. According to the poll, which was conducted last year, 59 percent of Greeks said they “experienced a lot of stress yesterday,” putting Greece at the top of the chart for the third consecutive year. After Greece on the list are the Philippines, Tanzania and Albania. The same poll asked respondents about their negative experiences and participants from Chad, Nigeria, Sierra Leone, Iraq and Iran polled the highest. The survey also polled anger levels with Armenians topping the chart, followd by Iraqis, Iranians and Palestinians. The five countries recording the most positive experiences are Paraguay, Panama, Guatemala, Mexico and El Salvador.

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“Does anyone really think the US is going to favour Brazil?” Lula asked. “Americans think of themselves first, second, third, fourth, fifth – and if there’s any time left over they think about Americans.”

Brazil Governed By ‘Lunatics’ And US ‘Lackeys’ – Lula (G.)

Brazil is being governed by “a bunch of lunatics” and United States “lackeys” who have shattered its international reputation, former president Luiz Inácio Lula da Silva has claimed in his first interview since being jailed one year ago. Lula, Brazil’s president from 2003 and 2011, surrendered himself to police last April after being convicted on corruption charges he disputes. The 73-year-old leftist had been forbidden from giving face-to-face interviews until Friday, when two Brazilian journalists were allowed to visit him at his prison in southern Brazil following a lengthy legal battle.

Lula told them Brazil needed to undergo period of “self-reflection” after what he described as the “crazy” fake news and hate-filled election of far-right populist Jair Bolsonaro last year. “What we can’t have is this country being run governed by a bunch of lunatics. The country doesn’t deserve this and above all the people do not deserve this.” “Brazil is adrift – so far he doesn’t know what to do,” he added of Bolsonaro, who took office in January and has suffered a turbulent opening act in power. Lula said he profoundly regretted “the disaster that is taking place in this country” and criticised Brazil’s dramatic tack towards Washington under Bolsonaro.


“I’ve never seen a [Brazilian] president salute the American flag. I’ve never seen a president go around saying, ‘I love the United States, I love it!’” Lula said of Bolsonaro, who paints himself as a “tropical Trump” and last month travelled to the United States to tout his close relations with the US president. “You should love your mother, you should love your country. What’s all this about loving the United States? “Does anyone really think the US is going to favour Brazil?” Lula asked. “Americans think of themselves first, second, third, fourth, fifth – and if there’s any time left over they think about Americans. And these Brazilian lackeys go around thinking the Americans will do anything for us.”

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Jan 072019
 


Berthe Morisot Julie and her boat 1884

 

China Has a Dangerous Dollar Debt Addiction (Balding)
China Drops Hints Of Trade Pain Ahead (BV)
US and China To Resume Trade Talks With Both Eager For Compromise (G.)
May To Hold Parliamentary Brexit Vote On January 15 (R.)
Theresa May Pleads For EU To Give Ground And Rescue Brexit Deal (G.)
Germany and Ireland Step Up Efforts To Find Brexit Border ‘Fix’ (G.)
Average UK Unsecured Household Debt Hits Record £15,400 (G.)
UK Car Sales Record Biggest Fall Since Financial Crisis (R.)
France’s Macron Reeling As Tough Stance Against ‘Yellow Vests’ Backfires (R.)
The Euro: A Mindless Idea – Ashoka Mody (Spiked)

 

 

$1.2 trillion will have to be rolled over this year. There are $90 billion of offshore renminbi deposits in Hong Kong available to buy dollars. Good luck.

China Has a Dangerous Dollar Debt Addiction (Balding)

China’s foreign debt has been rising rapidly, and that’s becoming an increasingly big problem — for the country and, potentially, the world. Officially, China lists its outstanding external debt at $1.9 trillion. For a $13 trillion economy, that’s not a major amount. But focusing on the headline number significantly understates the underlying risks. Short-term debt accounted for 62% of the total as of September, according to official data, meaning that $1.2 trillion will have to be rolled over this year. Just as worrying is the speed of increase: Total external debt has increased 14% in the past year and 35% since the beginning of 2017. External debt is no longer a trivial slice of China’s foreign-exchange reserves, which stood at just over $3 trillion at the end of November, little changed from two years earlier. Short-term foreign debt increased to 39% of reserves in September, from 26% in March 2016.

The true picture may be more precarious. China’s external debt was estimated at between $3 trillion and $3.5 trillion by Daiwa Capital Markets in an August report. In other words, total foreign liabilities could be understated by as much as $1.5 trillion after accounting for borrowing in financial centers such as Hong Kong, New York and the Caribbean islands that isn’t included in the official tally. Circumstances aren’t moving in China’s favor. The nation’s companies rushed to borrow in dollars when there was a 3% to 5% spread between Chinese and U.S. interest rates and the yuan was expected to strengthen. Borrowing offshore was cheaper and offered the additional bonus of likely currency gains. Now, the spread in official short-term yields has shrunk to near zero and the yuan has been depreciating for most of the past year. Refinancing debt in dollars has become harder, and more risky.

Beijing’s policies have exacerbated the buildup of foreign debt. To promote Xi Jinping’s Belt and Road Initiative, the president’s landmark foreign policy endeavor, China has been borrowing dollars on international markets and lending around the world for everything from Kenyan railways to Pakistani business parks. With this year and 2020 being the peak years for repayments, China faces dollar funding pressure. To repay their dollar debts, Chinese firms will either have to draw from the central bank’s foreign-exchange reserves (a prospect Beijing is unlikely to allow) or buy dollars on international markets. This creates a new set of problems. There are only 617 billion yuan ($90 billion) of offshore renminbi deposits in Hong Kong available to buy dollars. If China was to push firms to bring debt back onshore, this would necessitate significant outflows that would push down the yuan’s value against the dollar.

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More trickle down fails.

China Drops Hints Of Trade Pain Ahead (BV)

While a cut in the reserve requirement ratio, China’s fifth in a year, was not surprising, the 100-basis point shift that started off 2019 was larger than anticipated. Of course, demand for cash tends to spike around this time of year, due to both the Chinese New Year holiday and tax deadlines, but the economy is cooling uncomfortably fast. Official figures may show growth slowed to 6.3% in the fourth quarter, Standard Chartered reckons. Friday’s announcement adds to other easing measures: People’s Bank of China officials last month announced a new policy tool to encourage lenders to disburse their cash more widely. The “targeted medium-term lending facility” will make cheaper funding available to banks that the PBOC judges to be doing their part by lending more to small companies.

It’s certainly not full-blown monetary stimulus yet; the central bank has not fired its heavier artillery, such as a benchmark rate cut. The market has also been kept waiting for reductions to cost of borrowing from the PBOC’s more important channel, its regular medium-term lending facility. But the overall direction of travel is clear, and both recent moves point to structural issues that worry pessimists: the extra liquidity pumped into the system does not seem to be translating into more loans for smaller companies, which may signal deeper problems with capital allocation, not to mention the private sector’s nervousness about politics in 2019.

All of this is bad news for Beijing’s trade negotiators, when they hold talks with U.S. counterparts face-to-face this week. As the pain mounts, they may be pushed to yield more in order to gain relief. They could, for example, agree to formally drop the controversial “Made in China 2025” plan, or to announce concrete measures to beef up enforcement of intellectual property rights. Trump said on Sunday that weakness in China’s economy will push officials to negotiate. He may be right.

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Tariffs rose Jan 1. It’s getting urgent.

US and China To Resume Trade Talks With Both Eager For Compromise (G.)

US officials arrived in China for the first face-to-face negotiations since a 90-day truce was declared in a trade war between Washington and Beijing, in the hope of ending a bruising confrontation between the world’s two largest economies. Hopes that the sixth round of negotiations between the two sides could yield a breakthrough helped Asian shares rise on Monday, combined with optimism about the state of the global economy on the back of strong US jobs figures on Friday. In Tokyo, the Nikkei soared more than 3% and there were also strong positive moves in Shanghai, Hong Kong and Sydney. US and Chinese trade representatives were set to hold talks on Monday and Tuesday.

After failing to reach an agreement in December when Donald Trump and Xi Jinping met, both sides agreed to suspend tariff increases while holding discussions on technology transfers, as well as intellectual property theft and cybersecurity. If no agreement is reached, US tariffs on $200bn of Chinese goods will increase in March to 25% from the current 10%. Trump said on Sunday that China was under pressure to do a deal amid signs of a slowdown in its economy. “I think China wants to get it resolved. Their economy’s not doing well. I think that gives them a great incentive to negotiate,” he said. “China’s slowdown is occurring across the board, affecting almost every industry and region,” said Scott Kennedy, a trade expert focused on China at the Center for Strategic and International Studies. “Resolving the trade war or at least finding some common ground with Washington will be needed to fully restore confidence,” he said.

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Whatever the outcome, chaos guaranteed. You can jot down next Tuesday night in your agenda for that.

May To Hold Parliamentary Brexit Vote On January 15 (R.)

Prime Minister Theresa May will hold a delayed parliamentary vote on her Brexit deal on Tuesday, January 15, the BBC reported on Monday, citing government sources. May was forced to pull the vote on her deal in December after she said it would be defeated by a large majority. The government had previously said the vote would be held in the week of January 14. May said on Sunday that Britain would be in uncharted territory if her Brexit deal is rejected by parliament, despite little sign that she has won over sceptical lawmakers.

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In case you were still wondering who will be blamed.

Theresa May Pleads For EU To Give Ground And Rescue Brexit Deal (G.)

Theresa May is preparing to make another desperate plea to EU leaders to offer a concession on the Irish backstop as she attempts to win over Brexiters who have vowed to vote down the government’s deal. The prime minister on Sunday promised to hold the meaningful vote in parliament in the week beginning 14 January despite growing opposition from Conservative backbenchers and the Democratic Unionist party, whose votes are required to push the deal through parliament. As MPs prepare to return to Westminster with the crucial Commons vote looming on the withdrawal agreement, Downing Street insisted that new compromises could still be won from Europe that would ensure the safe passage of May’s plan.

The hope of new developments came as opposition to the prime minister’s deal hardened. The hurdles facing May include: • Brexiters say the government faces a disaster if it fails to ditch the current deal, with DUP deputy leader Nigel Dodds describing the Irish backstop as “toxic”. • EU sources say talks to be held in Dublin on Tuesday between Leo Varadkar and Germany’s foreign minister, Heiko Maas, will not seek to reopen negotiations over the 585-page withdrawal agreement. • Senior MPs including Yvette Cooper and Nicky Morgan are launching a parliamentary campaign to rewrite government legislation to block a no-deal Brexit. • Chris Patten, the former Conservative Party chairman, called for a second referendum on the UK’s decision to leave the EU. • More than 200 MPs have signed a letter calling for Theresa May to rule out a no-deal Brexit. Tory ex-minister Dame Caroline Spelman, who organised the letter with Labour’s Jack Dromey, said the group had been invited to see the prime minister on Tuesday.

In an interview on Sunday, May said the vote, which was due to be held last month and postponed, would go ahead next week, as she sought further clarification from the EU to address MPs’ concerns. She also said she would look at giving parliament a greater say in how the UK’s future relationship would be negotiated, but refused to say exactly what that might be. Asked if there had been any changes she could offer to backbenchers who were expected to vote down her deal, she told BBC1’s Andrew Marr Show: “What we will be setting out over the next few days are assurances in three areas: first are measures specific to Northern Ireland; the second is a greater role for parliament as we take these negotiations forward into the next stage for our future relationship; and third – and we are still working on this – is further assurances from the European Union to address the issues that have been raised.”

Whitehall sources insisted that a compromise could still be found with the EU and that further planned announcements will be made this week that would win over MPs opposed to the deal. “We will be working flat out. There will be further contacts with the EU leaders. The issue of the backstop is not yet over,” the source said.

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“The EU cannot now give another concession ahead of the vote because if the deal isn’t ratified, it means any new concessions will simply be banked again to no benefit at all. It would be pointless.”

Germany and Ireland Step Up Efforts To Find Brexit Border ‘Fix’ (G.)

Germany’s foreign affairs minister is to fly to Dublin on Tuesday for Brexit talks as relations with Ireland intensify in an attempt to find a “fix” that will help Theresa May get the EU withdrawal agreement ratified. Heiko Maas will address an annual gathering of Ireland’s global diplomatic corps and take part in an unofficial fourth round of talks between Ireland and German leaders since Thursday. He will make the address in English, with a large German media contingent accredited, a reflection of how significant his speech is deemed back in Berlin. Last week the taoiseach, Leo Varadkar, had a lengthy telephone call with Angela Merkel. He then flew to Munich to address a meeting of her coalition partners, the CSU, and on Friday met the Germany chancellor’s successor as CDU leader, Annegret Kramp-Karrenbauer, for discussions on Brexit and the future of Europe.

The emerging Irish-German nexus on the Irish border backstop “fix” is being seen as significant in Irish political circles, where people also point to the fact that Varadkar speaks German and has a good working relationship with Merkel. They point out it was Merkel, not the taoiseach, who requested the phone call with Varadkar last Thursday. The talks lasted 40 minutes and were, according to Varadkar, “an opportunity to kind of brainstorm a bit as to what we could do to assist prime minister Theresa May in securing ratification of the withdrawal agreement”. But informed EU sources say Brexiters should not raise their hopes of a reopening of negotiations. The “fix” will be further details in the political declaration on the future relationship and not the 585-page withdrawal agreement. “That is locked,” said one EU source.

There is deep frustration that the British cannot see how far the EU went to break the impasse on the Irish border talks, yielding to May’s demands for a UK-wide customs arrangement. One EU source said: “The EU was totally opposed to this in 2017 and again in March and June in 2018. It then emerged out of the tunnel in the autumn as the solution, but the Brexiters did not see it for what it was – a major concession. [..] “They are now looking for more concessions, but they just can’t be given. The Brits banked this major concession and just did nothing with it. People can’t understand why it wasn’t sold as a victory for May. “The EU cannot now give another concession ahead of the vote because if the deal isn’t ratified, it means any new concessions will simply be banked again to no benefit at all. It would be pointless.”

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That’s about $20,000. Not including mortgages and student loans.

Average UK Unsecured Household Debt Hits Record £15,400 (G.)

Britain’s household debt mountain has reached a new peak, with UK homes now owing an average of £15,385 to credit card firms, banks and other lenders, according to the TUC. The trade union body said household debt rose sharply in 2018 as years of austerity and wage stagnation forced households to increase their borrowing. The TUC said in its annual report on the nation’s finances that the amounts owed by British households rose to a combined £428bn in the third quarter of 2018. Each household owed £886 more than it did 12 months previously, it said. The figures do not include outstanding mortgage debts but do include student loans.

The level of unsecured debt as a share of household income is now 30.4%, the highest level it has ever been at. It is well above the £286bn peak in 2008 before the financial crisis, the TUC said. That figure also included student loans, but tuition fees then were £3,000 a year compared with up to £9,250 now. [..] The TUC general secretary, Frances O’Grady, said: “Household debt is at crisis level. Years of austerity and wage stagnation has pushed millions of families deep into the red. The government is skating on thin ice by relying on household debt to drive growth. A strong economy needs people spending wages, not credit cards and loans.”

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They’re going to stay home?!

UK Car Sales Record Biggest Fall Since Financial Crisis (R.)

British new car sales in 2018 fell at their fastest rate since the global financial crisis a decade ago, hit by a slump in demand for diesel, stricter emissions rules and waning consumer confidence due to Brexit, according to an industry body. Demand dropped by nearly 7% last year to 2.37 million vehicles, the largest fall since registrations nosedived 11.3% in 2008, preliminary data from the Society of Motor Manufacturers and Traders (SMMT) showed. A nearly 30% drop in demand for diesel was the most significant factor in the decline. Diesel has been pummelled since the Volkswagen emissions cheating scandal of 2015, prompting a crackdown and higher levies.

But the industry also warned that Britain’s departure from the European Union due at the end of March risks the future of a sector which employs over 850,000 people and has been one of Britain’s few manufacturing success stories since the 1980s. “It’s still hard to see any upside to Brexit,” said SMMT Chief Executive Mike Hawes. “Everyone recognises that Brexit is an existential threat to the UK automotive industry and we hope a practical solution will prevail,” he said, calling for lawmakers to back Prime Minister Theresa May’s deal to guarantee a transition period. [..] After record highs in 2015 and 2016, demand fell in 2017 and some analysts see car demand as a leading indicator which could be a harbinger for future economic performance. Britain’s economy slowed to a crawl at the end of 2018, the housing market is stalling and lending to consumers growing at its slowest pace in nearly four years, according to data released on Friday.

Read more …

Macron is not just a fool himself, he’s surrounded by them as well. His spokesman after fleeing his office out of a back door as protesters invaded the courtyard and smashed up several cars said: “It wasn’t me who was attacked.” “It was the Republic.”.

Because the government is the Republic. The population is not.

France’s Macron Reeling As Tough Stance Against ‘Yellow Vests’ Backfires (R.)

Emmanuel Macron intended to start the new year on the offensive against the ‘yellow vest’ protesters. Instead, the French president is reeling from more violent street demonstrations. What began as a grassroots rebellion against diesel taxes and the high cost of living has morphed into something more perilous for Macron – an assault on his presidency and French institutions. The anti-government protesters on Saturday used a forklift truck to force their way into a government ministry compound, torched cars near the Champs Elysees and in one violent skirmish on a bridge over the Seine punched and kicked riot police officers to the ground.

The French authorities’ struggle to maintain order during the weekend protests raises questions not just over policing tactics but also over how Macron responds, as he prepares to bring in stricter rules for unemployment benefits and cut thousands of public sector jobs. On Sunday evening, Macron wrote on Twitter: “Once again, the Republic was attacked with extreme violence – its guardians, its representatives, its symbols.” His administration had hardened its stance against the yellow vests after the protest movement appeared to have lost momentum over the Christmas holidays.

The government would not relent in its pursuit of reforms to reshape the economy, government spokesman Benjamin Griveaux said on Friday, branding the remaining protesters agitators seeking to overthrow the government. Twenty-four hours later, he was fleeing his office out of a back door as protesters invaded the courtyard and smashed up several cars. “It wasn’t me who was attacked,” he later said. “It was the Republic.”

Read more …

“There is a Euro, which is a single currency in an incomplete monetary union, with a set of fiscal rules that are evidently economically illiterate..”

The Euro: A Mindless Idea – Ashoka Mody (Spiked)

[..] most serious of all is the notion of common economic development as a basis for Europe. It was briefly true after the Treaty of Rome in 1957, which opened up the borders, but the momentum ran out within two decades. You open borders, but once they’re open, there’s not a lot more you can do. Even the gains from the so-called Single Market are very limited beyond a certain point. Every economist understands that. On the Euro, there was never any question that it was a bad idea. Nicholas Kaldor, an economist at Cambridge University, wrote in March 1971 that a single currency was a terrible idea, both as economics and as politics. And Kaldor has been proven right time and again.

But the entire European establishment just ignores every subsequent warning from well-regarded economists, and produces defensive counternarratives. For example, I often hear that Europe needs fixed exchange rates in order to have a Single Market. Why? Germany is trading a lot with Poland, Hungary and the Czech Republic, which are in the Single Market, but have different currencies. These fluctuate, but the trade continues apace. You don’t need a single currency for a Single Market.

spiked: When did your critique of the European project emerge? Was it during your involvement in the Irish bailout? Mody: When I finished at the IMF I planned to write a book on the Euro crisis. And I began writing it as an IMF economist would – what happened before the crash, the bubble, the bubble bursting, the panic, the fact it wasn’t well managed, and so on. But I soon realised that something wasn’t right here. And so I spent two years tracing the history of the Euro, and asking the question: what brought the Euro into existence in its current form? You see, it is not just that there is a Euro. There is a Euro, which is a single currency in an incomplete monetary union, with a set of fiscal rules that are evidently economically illiterate – and nobody questions the fact that they are economically illiterate, that they lack a necessary fiscal backstop and the necessary fiscal union. So why does it exist?

Read more …

Dec 182018
 


Titian The rape of Europe 1560-62

 

It took me a while to decide which word(s) best define the past year and the next one, but I think this is pretty much it. 2018 was chaotic more than anything else, and that chaos will give rise to mayhem in 2019.

What I think is striking is that this is true across the board, in all walks of life so to speak. In finance, in politics, in energy markets, in ecological matters, and perhaps most of all in the ways all these topics are being covered by what once were trusted media.

I’m going to have to come back to all these topics separately, so it’s promising to be a very busy holiday season, but it’s also good to try and put them together in one place, if only to show how interconnected everything is. And how futile it is to look at the economy without seeing its connection to energy flows and ecosystems. And vice versa.

 

In finance and economics, we’ve seen an avalanche of falling numbers recently, in stock prices, bond prices, housing, across the globe, and obviously that evokes a lot of comments in the financial press. But that press, and bankers investors on their own, still talk about markets.

However, as I wrote in April 2018, if there is no price discovery, and there isn’t, there ARE NO markets, and it would be good and beneficial if many more people absorb that simple reality. Many more so-called traders and investors would be a start, but by no means enough. Lots more people who have nothing to do with the ‘markets’ should understand why there is no such thing anymore.

As long as you limit it to stock and bond markets, it may appear fine that people don’t understand. But as soon as you acknowledge there are no housing markets either for the exact same reasons, the story changes considerably. Because then it becomes clear that all -former- markets, bar none, have been eviscerated by central bank policies that sought to prop up banks, often highly successfully so, which they knew could only happen at the expense of communities and societies.

We’ve ended up with scores of mom and pop ‘investors’ who own hugely overpriced stocks and homes, while their pensions funds hold zillions ‘worth’ of bonds and also increasingly stocks. The link between pensions and AAA-rate assets was pulverized in the process. That looks set to continue, and worsen, in 2019. But that may be just the look of things. Because there really are no markets, there is no price discovery.

What is still there is a lot of talk about whether the Fed -and other central banks- will raise rates further or not, or will stop or continue their asset buying schemes. Central banks are the only game in town, there are no markets, nobody knows what anything is really worth because the Fed etc. took the discovery process beyond their reach.

And now all those financial ‘subjects’ are sitting on all this stuff that only appears to have value, and that value hinges exclusively on what Draghi, Kuroda, Yellen and now Jay Powell have decided things are worth. And yes, it does make matters appear okay, but because they can’t do QE forever, all of those values will need to be re-assessed by actual markets once Powell et al. are either thrown out or decide for themselves to leave the arena.

It won’t be pretty, it will be devastating. It’s impossible to say if it will come to a head in 2019, because the Fed can lower rates a bit again after its recent rate hikes and prop up the zombie for longer. Then again Draghi can’t do that anymore since he’s already in negative rate territory, and while the euro could fall to parity with the USD as a consequence, there’s a limit to that too.

Anyway, more on that later.

 

Energy and ecology seem to become more intertwined as we go along, though that may well be a trompe oeil, trick of the eye. Still, if you see and read what people have to say about things like the big COP24 event in Katowice last week, it’s obvious that the 2nd law of Thermodynamics is a hard one to internalize. Because that law seems to say that the use of energy, period, produces waste, while all these mostly well-meaning folk are merely focusing on shifting between energy sources.

There is surprisingly little attention for not using energy in the first place, which the 2nd Law appears to stipulate is the only way to stop the rot. And it’s entirely feasible to build homes that use 70-80% less power to heat and cool, or to design a transport system in a city that saves that much energy.

But the ‘leaders’, politicians and business people, prefer to address solar panels and wind turbines that allow for the amount of energy used to fall only moderately, which when combined with the economic growth that nobody questions, will lead to the use of ever more energy.

And I get that, you need to shrink your present economies, and the models they’re based on, in order to save the planet. I’m not so much talking about climate change, since the earth is a system so complex we should really be very cautious about deriving any conclusions about it from simplified models, but the species extinction reported in 2018 is another, and more immediately convincing, story.

Still, conferences like COP24, or its predecessor COP21 which I wrote about 3 years ago in CON21, are not just entirely useless, they move everything backward that all the worried boys and girls are so worried about.

The movers and shakers of the world all owe their positions to the economies, and therefore the levels of energy use, that the worried people now want to move away from. And then they turn to the same movers and shakers to make that happen. Sorry, no can do. All you’ll get is lip service from people looking for money and power, who are not interested in being proved wrong if they are.

Today’s climate discussion is a road to nowhere where down the line there’ll be nobody left to talk to and no birds singing. You yourself probably won’t be there either. There is not one politician who will volunteer to give up their power if that could save the world their children will have to live in. They’ll come up with a story where their position is save and so is that world, and they’re more than likely to believe it.

 

As for the media, the tale gets darker fast. It didn’t start in 2018, but it did become a lot more outspoken. As I’ve said before, there are three targets for the former trusted sources of impartial news, even as those sources rapidly become more partial as we move forward. And that of course has to do with their new business model I wrote about a lot: writing negative stories about Donald Trump became an obvious source of revenue well before he was president.

Once he was elected, the media doubled down. They wrote against Trump at first thinking he would be beaten in the GOP primaries, then some more when he faced Hillary, then because they didn’t like him in the White House, and finally because he turned out to be the business proposition that quite literally kept them alive. What was it, over 100,000 new subscribers for the NYT a MONTH at a certain point?! Would CNN and Rachel Maddow even exist anymore without the Donald?

But that also means that the MSM cannot report anything positive about the man, with the exception of a bombing campaign in a faraway sandbox, and that is pretty crazy. No matter where you stand politically, not even Trump can do everything wrong, but CNN, MSNBC, WaPo,NYT et al can’t say it out loud, because their new readers and viewers want negative stories.

I’m not at all a Trump fan, I find it insane that America can’t find a single person among its 320 million inhabitants who could better represent it, but I also saw well over two years ago that the reporting on Trump was so biased someone had to restore at least some balance. And if that was to be me, so be it.

It’s like the entire US -and UK- press has become the National Enquirer, where the questions of truth or accuracy have become, and/or always was, a complete afterthought, irrelevant to whatever is actually published. And the readers and viewers caught inside the echo chamber will never know any better than that that is what the world really looks like.

It’s the ‘old’ media’s response to the threat of social media, a fight they cannot possibly win in the end, but not one they will relinquish easily; it will be the end of them. So there’s Trump, and then there’s Russia and Julian Assange. And there’s a live shooting practice going on in which all three are fair game.

According to two reports published just yesterday in the NY Times and the BBC, African Americans and French Yellow Vests were targeted by Russian bots, trolls, give them a name. What these once trusted media no longer understand, or don’t care about, is that they are effectively saying that African Americans and Yellow Vests are all so stupid and so unconvinced and unconvincing in their political convictions that a bunch of poorly defined Russians made them throw their votes away from Hillary Clinton and towards Trump.

Like African Americans have no opinions and therefore in the end no functioning brains. Like their f*king robots, some inferior lifeform. Is there anything you can say that is more racist than that? I come up empty. And I understand Kanye.

And that the ‘Russians’ caused tens of thousands of Frenchmen and -women to put on a yellow vest and protest Macron’s dismantling of -very- long-standing labor rights and taxation ‘reforms’ that benefit the rich French elite. You cannot insult two such vast yet diverse groups of people, who seem to have little if anything in common, African Americans and Yellow Vests, you cannot insult them more or worse than such reports do.

And they simply don’t see it. In their view, and which they -rightly by now- trust their public will eat up like hot cakes, their 24/7 anti-Trump and anti-Russia campaigns have been so convincing that they can basically say anything at all by now. If Trump or the Russians deny, that’s just what they would do if they were guilty. Assange can’t deny anything at all, they’ve totally silenced him. They being the US deep state in liaison with the MSM.

 

That’s how we’re about to enter 2019, how we’re about to move from chaos to mayhem. It is scary not just because of what we see happening today, but even more because we’ve never seen anything remotely like it. Sure, US media, any country’s media, have always supported government strategic lies in times of warfare or other tensions.

But an overall campaign against a sitting president, comprised of dozens of articles a day consisting of mere allegations and rumors, let alone the same against a state nuclear power arguably mightier than the US itself, and a journalist who’s the only one in his profession who’s actually done what journalists should do, not the well-paid follow the party line thing going on at the MSM, all this is unprecedented.

And given what we’ve seen in 2018 in the realm of banned social media accounts, in a wider sense of the word, we can only wonder how much worse the censorship can get in the mayhem year of 2019.

Can the Automatic Earth, and for instance our friends at Zero Hedge, only continue to exist next year if we agree to increasingly become the poodles of the ruling political classes, intelligence services, and their press masters and lackeys?

It’s starting to look that way. So in closing, I want to call on you to support us by donating a Christmas gift, and preferably a recurring one all through the 2019 mayhem year, so we know we can continue to present you with an alternative to the ‘appropriate’ information you’re ‘supposed’ to be receiving.

It’s later than you think.

 

 

Nov 132018
 
 November 13, 2018  Posted by at 10:10 am Finance Tagged with: , , , , , , , , , , , , , ,  3 Responses »


Vincent van Gogh Peasant burning weeds 1883

 

Dow Plunges 600 Points As Apple Leads Tech Rout (CNBC)
The Economic Consequences Of Debt (Roberts)
The Fed Supports Capital In Its Eternal War With Labor (Hunt)
China State Banks Selling Dollars In FX Market To Arrest Yuan Losses (R.)
Goldman Sachs Down Most In 7 Years On 1MDB, ‘Fear Of The Unknown'(BBG)
Banking Consolidation In Europe Is ‘Inevitable’ – UBS Chief (CNBC)
China Scours Social Media, Erases Thousands Of Accounts (R.)
Working to Protect the World from Bananas (Epsilon)
Turkey, France Spar Over Khashoggi Killing (AFP)
US Federal, State Elections Still In Flux (R.)
Rock the Vote (Kunstler)
Crucifying Julian Assange (Chris Hedges)
Stan Lee Leaves a Legacy as Complex as His Superheroes (DB)

 

 

“..the FANG trade is dead and the market is struggling to find a replacement.”

Dow Plunges 600 Points As Apple Leads Tech Rout (CNBC)

The Dow Jones Industrial Average fell 602 points on Monday after a big decline in Apple shares, a rise in the U.S. dollar and lingering worries about global trade weighed on investor sentiment. Monday’s losses bring the Dow’s decline over the past two sessions to 804 points; it closed at 25,387.18. The tech-heavy Nasdaq Composite pulled back 2.8 percent to 7,200.87 and fell back into the correction territory it first entered during the October market rout. The S&P 500 dropped 2 percent to 2,726.22 as financials tanked, led by Goldman Sachs. In late-afternoon trading, the major indexes hit their lows of the day after Bloomberg News reported the White House was circulating a draft report on auto tariffs. Shares of General Motors turned negative following the report.

Apple shares tanked by 5 percent after Lumentum Holdings, which makes technology for the iPhone’s face-recognition function, cut its outlook for fiscal second quarter 2019. Lumentum CEO Alan Lowe said one of its largest customers asked the company to “materially reduce shipments” for its products. Shares of Lumentum plunged 33 percent. The decline in Apple pressured the broader technology sector. The Technology Select Sector SPDR dropped 3.5 percent. Alphabet and Amazon shares pulled back 2.7 percent and 4.3 percent, respectively. Amazon shares fell into bear-market territory, down about 20 percent from its 52-week high. [..] Peter Boockvar, chief investment officer at Bleakley Advisory Group, said “the FANG trade is dead and the market is struggling to find a replacement.”

Read more …

I’m partial to the last graph. It shows an undeniable long term trendline.

The Economic Consequences Of Debt (Roberts)

The relevance of debt growth versus economic growth is all too evident as shown below. Since 1980, the overall increase in debt has surged to levels that currently usurp the entirety of economic growth. With economic growth rates now at the lowest levels on record, the growth in debt continues to divert more tax dollars away from productive investments into the service of debt and social welfare. It now requires nearly $3.00 of debt to create $1 of economic growth.

Another way to view the impact of debt on the economy is to look at what “debt-free” economic growth would be. In other words, without debt, there has actually been no organic economic growth.

In fact, the economic deficit has never been greater. For the 30-year period from 1952 to 1982, the economic surplus fostered a rising economic growth rate which averaged roughly 8% during that period. Today, with the economy expected to grow at just 2% over the long-term, the economic deficit has never been greater.

But it isn’t just Federal debt that is the problem. It is all debt. When it comes to households, which are responsible for roughly 2/3rds of economic growth through personal consumption expenditures, debt was used to sustain a standard of living well beyond what income and wage growth could support. This worked out as long as the ability to leverage indebtedness was an option. The problem is that when rising interest rates hit a point where additional leverage becomes problematic, further economic cannot be achieved. Given the massive increase in deficit spending by households to support consumption, the “bang point” between rates and the economy is likely closer than most believe.

Read more …

The Fed must step back as wages rise.

The Fed Supports Capital In Its Eternal War With Labor (Hunt)

For 46 years, from 1951 to 1997, we were no more and no less rich than our economy grew. Which makes sense. That’s the neutral vision of monetary policy, where you’re not trying to pull forward future growth through leverage and easy money in order to create more wealth today. For the past 20 years, however, we have had a series of wealth bubbles – first the Dot-Com bubble, then the Housing Bubble, and today the Financial Asset Bubble – that have made us richer than our economy grows. Each of these bubbles was intentionally “blown” by the Fed through monetary policy. That’s the tried and true method of creating a wealth bubble in the modern age of fiat money – you artificially lower the cost of money to encourage borrowing and leverage, which in turn pulls future growth into the present. It’s a neat trick so long as you can keep it going.

But that’s the problem, of course. The Fed can’t keep it going, not if it wants to satisfy its raison d’etre, which is to keep inflation bottled up, particularly wage inflation. Once wage inflation starts to pick up, the Fed ALWAYS stops blowing bubbles. Why? Because the Fed, like every central bank, was created to support Capital in its eternal war with Labor. It’s in the name. They are bankers. I know that sounds all Marxist and conspiratorial and all that, but it’s really not. It’s very straightforward. It’s Alexander Hamilton, not Karl Marx. In case you haven’t noticed, wage inflation has started to pick up. The Fed has stopped blowing this Financial Asset Bubble. Then isn’t the inescapable conclusion that we are now inevitably heading back to that GDP growth line? And if that IS the conclusion, then how bad could it get for investors?

Read more …

A very ominous sign.

China State Banks Selling Dollars In FX Market To Arrest Yuan Losses (R.)

Major state-owned Chinese banks were seen selling dollars at around 6.97 per dollar in the onshore spot foreign exchange market in early trade on Tuesday, three traders said, in an apparent attempt to arrest sharp losses in the local currency. The onshore spot market opened at 6.9681 per dollar, weakening to a low of 6.9703 at one point in early deals. “Big banks were selling (dollars) to defend the yuan,” said one of the traders. The move by the state-run banks helped the yuan recover to 6.9550. The onshore spot yuan was trading at 6.9645 as of 0237 GMT.

Traders attributed the sharp morning losses in the yuan to broad strength in the U.S. dollar, which hit 16-month highs against a basket of six other major currencies. They also suspect the authorities are keen to prevent the yuan from weakening too sharply before U.S. President Donald Trump and his Chinese counterpart President Xi Jinping’s meeting later this month. The two countries’ leaders plan to meet on the sidelines of a G20 summit, in Argentina at the end of November for a high-stakes talk.

Read more …

The Squid got hungry.

Goldman Sachs Down Most In 7 Years On 1MDB, ‘Fear Of The Unknown'(BBG)

Goldman Sachs Group’s reputation is facing one of its biggest crises of the decade – and now its shares are, too. Since prosecutors implicated a trio of Goldman Sachs bankers in a multi-billion-dollar Malaysian fraud early this month, investors have endured an almost daily drip of news on the firm’s ties to the scandal. The barrage culminated on Monday (Nov 12) as Malaysia’s finance minister demanded a “full refund”, tipping Goldman’s shares into their biggest drop since 2011. Across Wall Street, analysts expressed surprise over the dive, noting the bank – which hasn’t been charged with wrongdoing – can probably stomach any payment that might be extracted in the case. Instead, some said, the decline appeared to be due to a combination of concern over the persistently harsh spotlight and uncertainty about what’s to come.

It was also a generally bad day in US markets. “It’s not so much the dollar amount,” said Mr Gerard Cassidy at RBC Capital Markets. “It’s more that we don’t know all of the facts yet; we don’t know all of the important points to the story at this time. It’s the fear of the unknown.” On Nov 1, at least three senior Goldman Sachs bankers were publicly implicated by the US Department of Justice in a multi-year criminal enterprise that included bribing officials in Malaysia and elsewhere and laundering hundreds of millions of dollars. The firm has said it’s cooperating with the investigations and may face “significant” fines. [..] The Malaysia probe focuses on the country’s scandal-plagued state investment company, 1Malaysia Development Bhd and the US$6.5 billion it raised in 2012 and 2013. Goldman Sachs handled the deals, reaping almost US$600 million in fees.

Read more …

“..technology will make the sector more “effective and more efficient.”

Banking Consolidation In Europe Is ‘Inevitable’ – UBS Chief (CNBC)

The European banking system needs consolidation and “as time goes by, it will become more and more inevitable,” the head of one of the largest banks in Europe told CNBC on Tuesday. Often investors, policy-makers and other industry experts refer to fragmentation as one of the biggest hurdles to European banks. UBS chief Sergio Ermotti told CNBC that the issue is “not sustainable.” “That’s something that as time goes by will become more and more inevitable, is part of the solutions. For sure consolidation needs to happen, in particular in Europe, where we see a lot of fragmentation that it is not sustainable,” Ermotti told CNBC’s Joumanna Bercetche. He further added that technology will make the sector more “effective and more efficient.”

Read more …

Self-media: social media not run by government.

China Scours Social Media, Erases Thousands Of Accounts (R.)

China’s top cyber authority has scrubbed 9,800 social media accounts of independent news providers deemed to have posted sensational, vulgar or politically harmful content on the Internet, it said late on Monday. China’s strict online censorship rules have tightened in recent years with new legislation to restrict media outlets, surveillance measures for media sites and rolling campaigns to remove content deemed unacceptable. The Cyberspace Administration of China (CAC) said in a statement that the campaign, launched on Oct. 20, had erased the accounts for violations that included “spreading politically harmful information, maliciously falsifying (Chinese Communist) party history, slandering heroes and defaming the nation’s image.”

CAC also summoned social media giants, including Tencent’s Wechat and Sina-owned Weibo, warning them against failing to prevent “uncivilized growth” and “all kinds of chaos” among independent media on their platforms. “The chaos among self-media accounts has seriously trampled on the dignity of the law and damaged the interests of the masses,” CAC said. The term “self-media” is mostly used on Chinese social media to describe independent news accounts that produce original content but are not officially registered with the authorities.

Read more …

Despair no more. Big Brother is here.

Working to Protect the World from Bananas (Epsilon)

The main story is the increased pace and arc of the Chinese system overall, not the ‘play-by-play’. With technology, even totalitarian surveillance technology, there typically is no ‘big bang’, just a bunch of independent systems coming on line, getting adopted over time, then getting networked together, resulting in a series of subtle shifts in personal behavior, and then a tipping point. Having watched this system come on line for nearly 20 years, the deployment of the Chinese technology-driven domestic surveillance system was pretty limited even up until 2010, but has been absolutely rip-roaring and accelerating over the last five years thanks to the same driving forces of most other tech advances since 2010:

• Ubiquitous handheld connected device • App adoption • Cheap sensors (inc. cameras) • Cheap massive data storage • Sophisticated statistical algorithms • Leaps forward in compute power and cost. All of these advances are so powerful for surveillance with its inherent big, unstructured data characteristics that I think we are now really close to an inflection point where the system is starting to really work in a functional day-to-day way, which will then lead to a behavioral tipping point. I don’t think the main story is that controversial at this point, i.e., I don’t think anyone, even the Chinese government, denies this system is being built, the intention of it, or that it is starting to work in a practical way.

Therefore, I think the more interesting story in many ways is the sub-story of the willful ignorance of the main story by the West. I was at an event last week where a new fancy think tank on AI ethics based here in San Francisco was presenting and expounding their tenet of “Working to protect the privacy and security of individuals”, whilst simultaneously welcoming Baidu into their organization. I’m sorry, but that’s like “Working to protect the world from bananas” while signing up Del Monte as a member. Bananas. With hypocritical sprinkles. And a big ignorant cherry on top.

Read more …

They’ve all heard the tapes, but not one of them talks about the content.

Turkey, France Spar Over Khashoggi Killing (AFP)

Turkey on Monday lashed out at “unacceptable” and “impertinent” comments by the French foreign minister who accused President Recep Tayyip Erdogan of playing a “political game” over the murder of Jamal Khashoggi. Erdogan said on Saturday that Turkey had shared recordings linked to the Saudi journalist’s murder last month with Riyadh, the United States, France, Britain and other allies, without giving details of the tapes’ specific content. In an interview with France 2 television on Monday, French Foreign Minister Jean-Yves Le Drian said he “for the moment was not aware” of any information transmitted by Ankara. Asked if the Turkish president was lying, he said: “It means that he has a political game to play in these circumstances.”

His comments provoked fury in Ankara. “We find it unacceptable that he accused President Erdogan of ‘playing political games’,” the communications director at the Turkish presidency, Fahrettin Altun, told AFP in a written statement. “Let us not forget that this case would have been already covered up had it not been for Turkey’s determined efforts.” Turkish Foreign Minister Mevlut Cavusoglu responded even more sharply, saying that his French counterpart’s accusations amounted to “impertinence”. “It does not fit the seriousness of a foreign minister,” he said, accusing Le Drian of “exceeding his authority”.

[..] Altun said Ankara had shared evidence linked to the murder with officials from a large number of countries and that France was “no exception”. “I confirm that evidence pertaining to the Khashoggi murder has also been shared with the relevant agencies of the French government,” he said. A representative of French intelligence listened to the audio recording and examined detailed information including a transcript on October 24, he added.

Read more …

The US is incapable of building a strong election system. How disgraceful is that?

US Federal, State Elections Still In Flux (R.)

Democrats took control of the U.S. House of Representatives in the Nov. 6 elections and Republicans held onto a majority in the U.S. Senate, but more than a dozen races remain undecided nearly a week later. The outcomes of two Senate races, 13 House seats and two governorships had yet to be settled on Monday. The results of Arizona’s U.S. Senate race became clear on Monday, when Democratic candidate Kyrsten Sinema declared victory and Republican candidate Martha McSally conceded after multiple media outlets called the race for Sinema. Florida ordered a recount in the race where Democratic Senator Bill Nelson trailed his Republican challenger, Florida Governor Rick Scott.

Florida also ordered a recount for its gubernatorial race, while the winner of the governor’s race in Georgia remained uncertain, with a December runoff still possible. In one of Mississippi’s U.S. Senate races, Republican Senator Cindy Hyde-Smith and her Democratic challenger, Mike Espy, will contest a runoff on Nov. 27 after neither won a majority. Vote tallies continue to trickle in for the 13 U.S. House races that appear too close to call, and there is no consensus among media outlets and data provider DDHQ that a victor has emerged. Democrats held narrow leads in eight of those races, according to unfinished tallies compiled by DDHQ.

Read more …

“.. C-Span will be livelier and more colorful than the WWE Wrestlemania round-robin, midget division.”

Rock the Vote (Kunstler)

It warmed my heart to read in The Wall Street Journal that Hillary Clinton is preparing to re-enter the Washington DC swamp from her deluxe exile in the woods of Chappaqua, New York, and make another run for the White House — though it’s hard to calculate how many porters in sandals and loincloths will be required to lug all her baggage around the campaign trail. Will hubbie hit the hustings with her? That would be rich. I can just imagine the pussy-hatted legions shrieking #MeToo at every stop. Surely there is no better way to put the Democratic Party out of its misery. The post-election melodramas in Georgia and Florida grind on, despite the various rules and laws about deadlines for certifying ballots and accounting for their origin.

What is a ballot after all but a mere scrap of paper, easily reproducible, and interchangeable. Sometimes, they make strange journeys out of election headquarters in trucks and SUVs, seeking fun and excitement, and they have been known to mysteriously turn up by the hundredweight in broom closets where they retreat to caucus. Only one thing is certain: the ballot fiasco is a billable hours bonanza for DC lawyers arriving on the scene to sort things out — which they may not manage anyway. If the vote count somehow remains in favor of the provisional winners — Republicans Rick Scott, Ron DeSantis (Fla), and Brian Kemp (Ga) — you can be sure we’ll be in a frenzy of sore loserdom that will make the Medieval ergot outbreaks of yore look like episodes of Peewee’s Playhouse.

If the provisional votes get overturned, the attorneys billable hours will quickly exceed the national debt, and we’ll find ourselves in a new era where the free citizens of this republic can‘t be trusted to the simple task of counting ballots, or even holding elections in the first place. [..] Meanwhile, the new Democratic majority congress prepares to ramp up its longed-for multi-committee inquisition against Trump and Trumpism, and the Republican Senate will counter-punch with binders of criminal referrals against the superstars of the Resistance. C-Span will be livelier and more colorful than the WWE Wrestlemania round-robin, midget division.

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The role of the MSM demands much more scrutiny.

Crucifying Julian Assange (Chris Hedges)

Assange was once feted and courted by some of the largest media organizations in the world, including The New York Times and The Guardian, for the information he possessed. But once his trove of material documenting U.S. war crimes, much of it provided by Chelsea Manning, was published by these media outlets he was pushed aside and demonized. A leaked Pentagon document prepared by the Cyber Counterintelligence Assessments Branch dated March 8, 2008, exposed a black propaganda campaign to discredit WikiLeaks and Assange.

The document said the smear campaign should seek to destroy the “feeling of trust” that is WikiLeaks’ “center of gravity” and blacken Assange’s reputation. It largely has worked. Assange is especially vilified for publishing 70,000 hacked emails belonging to the Democratic National Committee (DNC) and senior Democratic officials. The Democrats and former FBI Director James Comey say the emails were copied from the accounts of John Podesta, Democratic candidate Hillary Clinton’s campaign chairman, by Russian government hackers. Comey has said the messages were probably delivered to WikiLeaks by an intermediary. Assange has said the emails were not provided by “state actors.”

The Democratic Party—seeking to blame its election defeat on Russian “interference” rather than the grotesque income inequality, the betrayal of the working class, the loss of civil liberties, the deindustrialization and the corporate coup d’état that the party helped orchestrate—attacks Assange as a traitor, although he is not a U.S. citizen. Nor is he a spy. He is not bound by any law I am aware of to keep U.S. government secrets. He has not committed a crime.

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Enough controversy for ten.

Stan Lee Leaves a Legacy as Complex as His Superheroes (DB)

He was born Stanley Martin Lieber in the Bronx. For nearly 22 years, beginning almost immediately after graduating from DeWitt Clinton High School, he labored in obscurity as a writer, editor, and art director in a publishing industry just one cultural rung above pornography: comic books. And then, in 1961, he became one of the pivotal 20th century figures who elevated comics into the first draft of American pop culture. Stan Lee, who died Monday, November 12 at age 95, is synonymous with Marvel Comics. Nearly every movie released by Hollywood upstart-turned-juggernaut Marvel Studios can trace part of its creative origins to Lee. (The exceptions are the Captain America, Guardians of the Galaxy, and forthcoming Captain Marvel franchises.)

Among people who shaped the legacy of the Disney company, which purchased Marvel in 2009 for $4 billion, Lee is probably second only to Walt Disney himself. George Lucas is third because of the debts Star Wars owes to the comics creations of Lee’s greatest creative partner and bitterest foe, Jack Kirby. Lee’s legacy at Marvel is immortal. But so too is the debate and controversy over what that legacy specifically is. In some quarters in comics, and especially to devotees of Kirby, Stan Lee is a supervillain–a man who stole credit, and corresponding fortunes, from the people who truly shaped Marvel creatively in the ’60s, relegating them to also-ran obscurity.

Aspects of that critique, uncomfortably, have merit. Lee had a maestro’s instincts for what we now call branding, and it cast a shadow long enough to keep his Marvel collaborators in darkness. In press interviews, his endless public appearances, and his own writing, Lee portrayed himself as the driver of the Marvel Universe, rendering artists like Kirby and Spider-Man co-creator Steve Ditko as afterthoughts.

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Oct 122018
 
 October 12, 2018  Posted by at 9:22 am Finance Tagged with: , , , , , , , , , , , ,  8 Responses »


M. C. Escher Order and chaos 1950

 

Donald Trump is Right About the Fed (Whalen)
Stocks Could Fall 40% To 50% To Reach Fair Value – Yusko (CNBC)
4 Pillars of Debt in Danger of Collapse (Nomi Prins)
The Dollar and its Discontents (Eichengreen)
China September Exports Surge, Creating Record Surplus With US (R.)
Facebook, Twitter Purge More Dissident Media Pages (CJ)
Italian Parliament Approves Controversial New Spending Targets (AP)
Turks Had Saudi Consulate Bugged With Audio (ZH)
Journalist’s Disappearance Hardens Congress Stance On Saudi Arms Deals (R.)
More Than A Million UK Residents Live In ‘Food Deserts’ (G.)

 

 

Chris Whalen on the absence of price discovery.

Donald Trump is Right About the Fed (Whalen)

President Donald Trump has been criticizing the Federal Open Market Committee for raising interest rates. The reaction of the US equity markets is self explanatory. But while the economist love cult in the Big Media may take umbrage at President Trump’s critique of the central bank, in fact Trump is dead right. First, the Fed’s actions in terms of buying $4 trillion in Treasury debt and mortgage paper has badly crippled the value of the fixed income market as a measure of risk. The Treasury yield curve no longer accurately describes the term structure of interest rates or risk premiums. This means that the Treasury yield curve is useless as an indicator of or guide for policy. Nobody at the Federal Reserve Board understands this issue or cares.

Second, Operation Twist further manipulated and distorted the Treasury market. By selling short-term paper and buying long dated securities, the Fed suppressed long-term interest rates, again making indicators like the 10-year Treasury bond useless as an measure of risk. Without QE 2-3 and Operation Twist, the 10-Year Treasury would be well over 4% by now. Instead it is 3% and change and will probably rally to test 3% between now and year end. Third is the real issuing bothering President Trump, even if he cannot find the precise words, namely liquidity. We have the illusion of liquidity in the financial markets today. Sell Side firms are prohibited by Dodd-Frank and the Volcker Rule from deploying capital in the cash equity and debt markets. All bank portfolios are now passive. No trading, no market making. There is nobody to catch the falling knife.

The only credit being extended today in the short-term markets is with collateral. There is no longer any unsecured lending between banks and, especially, non-banks. As we noted in The Institutional Risk Analyst earlier this week, there are scores of nonbank lenders in mortgages, autos and consumer unsecured lending that are ready to go belly up. Half of the non-bank mortgage lenders in the US are in default on their bank credit lines. As in 2007, the model builders at the Fed in Washington have no idea nor do they care to hear outside opinions. If you understand that the Fed’s previous “extraordinary” policy actions have the effect of understating LT interest rates by at least a percentage point, then you know why President Trump is howling like a wounded hound. Nobody understands the danger of leverage better than a real estate developer.

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But nobody says it’ll take 70-80%. Why?

Stocks Could Fall 40% To 50% To Reach Fair Value – Yusko (CNBC)

Investors should brace themselves for a significant stock market correction, as well as a recession in the first half of next year, investor Mark Yusko warned on Thursday. In fact, he says, fair value for equities would be down about 40 percent to 50 percent. However, that doesn’t necessarily mean the stock market will have to go to fair value, Yusko said. “If interest rates keep normalizing, if liquidity keeps falling, if earnings go to where I think they are going to go, which is lower, I think we are going to have a meaningful correction,” the founder and chief investment officer at Morgan Creek Capital said on CNBC’s “Power Lunch.”

Yusko, a noted stock picker who took first place in Portfolios with Purpose’s fantasy stock-picking contest in 2016, predicts a recession in the first or second quarter of 2019. “Things are paying out now just like they did in 2000, 2001, 2002,” he said. In the back part of 2000, the stock market went down, 2001 brought a recession, and in 2002 the stock market took a big turn down. “It’s just going to be painful for a while to adjust this overvaluation,” Yusko added. [..] Yusko also questioned whether the economy is really strong. “We had one good quarter. We’ve been sub 2 percent [economic growth] for six years,” he said. Plus, forecasts are that GDP is going to be lower than expectations in the third quarter and even lower in the fourth quarter, and there are bad demographics and bad debt, he added.

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“..there’s now even less reason to believe the Fed will raise rates at the next meeting in December.”

4 Pillars of Debt in Danger of Collapse (Nomi Prins)

Last month I was in a series of high-level meetings with members of Congress and the Senate in Washington. While there’s been major news about the Supreme Court, my discussions were on something that both sides of the aisle are coming to consensus over. You see, issues that impact your own bottom line are way more about economics than they are about politics. On Capitol Hill, leaders know that. They also know that voters react to what impacts their money. That’s why, behind the scenes, I’ve been discussing issues focused on protecting the economy. Behind closed doors, we’ve been working on how to shield the economy from Too Big to Fail banks and how the U.S. can better fund infrastructure projects. These are initiatives that all politicians should care about.

Underneath the surface of the economy is a financial system that is heavily influenced by the Federal Reserve. That’s why political figures and the media alike have all tried to understand what direction the system is headed. Also last week I joined Fox Business at their headquarters to discuss the economy, the Fed and what they all mean for the markets. On camera, we discussed this week’s Federal Reserve meeting and the likely outcomes. Off camera, we jumped into a similar discussion that those in DC have pressed me on. Charles Payne, the Fox host, asked me what I thought of new Fed chairman, Jerome Powell, in general. Payne knew that I view the entire central bank system as a massive artificial bank and market stimulant.

What I told him is that Powell actually has a good sense of balance in terms of what he does with rates, and the size of the Fed’s book. He understands the repercussion that moving rates too much, too quickly, or selling off the assets, could have on the global economy and the markets. Savvy investors know that if the U.S. economy falters, because everything is connected, it could reverberate on the world. That’s why I could forecast that the Fed would raise rates by 25 basis points last week ahead of time. And they did. However, there’s now even less reason to believe the Fed will raise rates at the next meeting in December.

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Could USD lose its position in just 5-10 years?

The Dollar and its Discontents (Eichengreen)

It is worth recalling how the dollar gained international prominence in the first place. Before 1914, it played essentially no international role. But a geopolitical shock, together with an institutional change, transformed the dollar’s status. The geopolitical shock was World War I, which made it hard for neutral countries to transact with British banks and settle their accounts using sterling. The institutional change was the Federal Reserve Act, which created an entity that enhanced the liquidity of markets in dollar-denominated credits and allowed US banks to operate abroad for the first time. By the early 1920s the dollar had matched and, on some dimensions, surpassed sterling as the principal vehicle for international transactions.

This precedent suggests that 5-10 years is a plausible time frame over which the US could lose what Valéry Giscard d’Estaing, then France’s finance minister, famously called the “exorbitant privilege” afforded it by issuing the world’s main international currency. This doesn’t mean that foreign banks and companies will shun the dollar entirely. US financial markets are large and liquid and are likely to remain so. US banks operate globally. In particular, foreign companies will continue to use dollars in transactions with the US itself.

But in an era of US unilateralism, they will want to hedge their bets. If the geopolitical shock of Trump’s unilateralism spurs an institutional innovation that makes it easier for European banks and companies to make payments in euros, then the transformation could be swift (as it were). If Iran receives euros rather than dollars for its oil exports, it will use those euros to pay for merchandise imports. With companies elsewhere earning euros rather than dollars, there will be less reason for central banks to hold dollars in order to intervene in the foreign exchange market and stabilize the local currency against the greenback. At this point, there would be no going back.

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Before more tariffs kick in.

China September Exports Surge, Creating Record Surplus With US (R.)

China reported on Friday an unexpected acceleration in export growth in September and a record trade surplus with the United States, which could exacerbate an already-heated dispute between Beijing and Washington. September exports rose 14.5 percent from a year earlier, Chinese customs data showed. That blew past forecasts for an 8.9 percent increase in a Reuters poll and was well above August’s 9.8 percent gain. Growth in imports for September instead showed a moderate slowdown to 14.3 percent from 19.9 percent in August, slightly missing analysts’ forecast of a 15.0 percent growth.

China’s trade surplus with the United States widened to a record in September despite wider application of U.S. tariffs, an outcome that could push President Donald Trump to turn up the heat on Beijing in their trade dispute. The politically-sensitive surplus was $34.13 billion in September, surpassing the record of $31.05 billion in August. China’s export data has been surprisingly resilient to tariffs, possibly because companies ramped up shipments before broader and stiffer U.S. duties went into effect.

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Is it election time?

Facebook, Twitter Purge More Dissident Media Pages (CJ)

Facebook has purged more dissident political media pages today, this time under the pretense of protecting its users from “inauthentic activity”. In a statement co-authored by Facebook Head of Cybersecurity Nathaniel Gleicher (who also happens to be the former White House National Security Council Director of Cybersecurity Policy), the massive social media platform explained that it has removed “559 Pages and 251 accounts that have consistently broken our rules against spam and coordinated inauthentic behavior.”

This “inauthentic behavior”, according to Facebook, consists of using “sensational political content -regardless of its political slant- to build an audience and drive traffic to their websites,” which is the same as saying they write about controversial things, and posting those political articles “in dozens of Facebook Groups, often hundreds of times in a short period, to drum up traffic for their websites.” In other words, the pages were removed for publishing controversial political content and trying to get people to read it. Not for writing “fake news”, but for doing what they could to get legitimate indie media news stories viewed by people who might want to view it.

[..] Two of the most high-profile pages which were shut down have probably been seen at some point by any political dissident who uses Facebook; the Free Thought Project, which had 3.1 million followers, and Anti-Media, which had 2.1 million. [..] As if that wasn’t creepy enough, some of the accounts purged by Facebook appear to be getting censored on Twitter as well, bringing back memories of the August cross-platform coordinated silencing of Alex Jones. The aforementioned Anti-Media has now been suspended from Twitter just hours after tweeting about being removed from Facebook, along with one of its top writers Carey Wedler, and a Unicorn Riot activist named Patti Beers who had more than 30,000 Twitter followers has just been removed from both sites as well.

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“EU rules do not allow the ECB to help a country unless this has already agreed on a rescue “program”..

Italian Parliament Approves Controversial New Spending Targets (AP)

Italy’s parliament approved on Thursday deficit-raising spending targets, defying markets and Italy’s eurozone partners who had been pressing for changes. The parliamentary vote clears the proposals to be forwarded to the European Commission for review. But the document already has been criticized as unrealistic by the parliament’s own budget office and the Bank of Italy. The new spending targets are set to raise Italy’s deficit to 2.4 per cent of GDP next year. In a slight softening, Italy’s leaders pledged to lower the deficit in the subsequent two years. But that has done little to assuage concern over the boost in spending to meet a raft of campaign promises made by the two populist parties that formed the governing coalition, and the impact it will have on Italy’s high public debt.

Also on Thursday, five senior sources told Reuters that the European Central Bank won’t come to Italy’s rescue if its governments or bank sector run out of cash unless the country secures a bailout from the European Union. Italy has seen its borrowing costs surge on financial markets since its new government unveiled plans to increase its budget deficit, defying EU rules and reawakening concerns about its huge pile of public debt. The sources, attending an economic summit in Indonesia, said Italy could still avoid a debt crisis if its government changed course but should not count on the central bank to tame investors or prop up its banks.

This is because EU rules do not allow the ECB to help a country unless this has already agreed on a rescue “program” – political jargon for a bailout in exchange for belt-tightening and painful economic reforms, an option the Italian government has firmly rejected. Any attempt to circumvent those rules would damage the ECB’s credibility beyond repair and undermine acceptance of the monetary union in creditor countries, such as Germany, the sources said. “It’s a test-case to show Europe and its mechanisms work,” said one of the sources on the sidelines of the IMF’s annual meetings in the Indonesian resort town of Nusa Dua.

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You don’t need 15 guys to kill someone.

Turks Had Saudi Consulate Bugged With Audio (ZH)

The Washington Post has provided further details on its prior reporting that US intelligence knew full well that Saudi Arabia was seeking to lure the now disappeared and allegedly murdered journalist Jamal Khashoggi to its embassy in Istanbul in order detain or kill him. In an interesting new revelation the Post speculates based on intel sources that the whole October 2nd incident may have been an attempted “rendition” gone wrong. As more damning evidence emerges showing a Saudi “hit team” of 15 military and intelligence individuals murdered Khashoggi and chopped up his body to carry out of the country, there now appears a strong consensus that the order may have come straight from the top, most likely from crown prince Mohammed bin Salman (MbS) himself.

Middle East Eye, for example, concludes based on WaPo’s prior report, “Saudi Arabia’s Crown Prince Mohammed bin Salman, the country’s de facto ruler, ordered an operation targeting journalist and US resident Jamal Khashoggi… citing US intelligence intercepts.” What’s more is that NBC now reports that the Turks had the Saudi consulate bugged with listening devices before the disappearance and what now appears to be gruesome murder — which suggests Turkey is currently in possession of an audio recording of the alleged killing.

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Yeah, right..

Journalist’s Disappearance Hardens Congress Stance On Saudi Arms Deals (R.)

The disappearance of Saudi journalist Jamal Khashoggi has hardened resistance in the U.S. Congress to selling weapons to Saudi Arabia, already a sore point for many lawmakers concerned about the humanitarian crisis created by Yemen’s civil war. Even before Turkish reports said Khashoggi was killed at a Saudi consulate in Istanbul, Democratic U.S. lawmakers had placed “holds” on at least four military equipment deals, largely because of Saudi attacks that have killed Yemeni civilians. President Donald Trump was wary of halting arms sales over the case, saying on Thursday the kingdom would just move its money into Russia and China.

[..] An informal U.S. review process lets the top Republicans and Democrats on the Senate Foreign Relations and House Foreign Affairs Committees stall major foreign arms deals if they have concerns such as whether weapons would be used to kill civilians. Corker said he recently told a defense contractor not to push for a deal with the Saudis, even before the Khashoggi case. “I shared with him before this happened, please do not push to have any arms sales brought up right now because they will not pass. It will not happen. With this, I can assure it won’t happen for a while,” Corker said. While details of all the blocked Saudi deals were not immediately available, one was the planned sale of hundreds of millions of dollars worth of high-tech munitions to Saudi Arabia and the United Arab Emirates.

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“She occasionally gets a taxi but finds that depletes her food budget. “A taxi is a meal..”

More Than A Million UK Residents Live In ‘Food Deserts’ (G.)

More than a million people in the UK live in “food deserts” – neighbourhoods where poverty, poor public transport and a dearth of big supermarkets severely limit access to affordable fresh fruit and vegetables, a study has claimed. Nearly one in 10 of the country’s most economically deprived areas are food deserts, it says – typically large out-of-town housing estates and deprived inner-city wards served by a handful of small, relatively expensive corner shops. Public health experts are concerned that these neighbourhoods – which are often also “food swamps” with high densities of fast-food outlets – are helping to fuel a rise in diet-related conditions such as obesity and diabetes, as well as driving food insecurity.

The most deprived areas include Marfleet in Hull, Hartcliffe in Bristol, Hattersley in Greater Manchester, Everton in Liverpool and Sparkbrook in Birmingham. Eight of Scotland’s 10 most deprived food deserts are in Glasgow, and three of Wales’s nine worst are in Cardiff. The study, by the Social Market Foundation thinktank and food company Kellogg’s, says poor, elderly and disabled people are disproportionately affected, as they cannot afford or are physically unable to travel to large supermarkets.

Food deserts are defined by the report as neighbourhoods of between 5,000-15,000 people served by two or fewer big supermarkets. In “normal” areas of this size there are typically between three and seven large food stores, it says. Small shops are less likely to sell fresh or healthy food. The report cites Lisa Cauchi, a mother of eight in Salford, in the north-west of England, who said the nearest reliable source of affordable fresh fruit and vegetables was a big supermarket half an hour’s walk away. She occasionally gets a taxi but finds that depletes her food budget. “A taxi is a meal,” she said.

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Aug 192018
 
 August 19, 2018  Posted by at 8:36 am Finance Tagged with: , , , , , , , , , , , ,  3 Responses »


Pablo Picasso Portrait of Ambroise Vollard 1910

 

Anatomy of a Crisis: A Strong Dollar and Disappearing Liquidity (Palisade)
Speculators Will Make Hay From Great Australian Economic Crash (Steve Keen)
Judge Rules FBI Must Address Measures Taken To Verify Steele Dossier (ZH)
White House Counsel “Cooperating Extensively” With Obstruction Probe (ZH)
Erdogan Says US Has Launched ‘Attempted Economic Coup’ (Ind.)
No-Deal Brexit May Force Rethink Of Vote – Ex-Civil Service Head (PA)
Putin Urges Europe To Help Rebuild Syria So Refugees Can Return (AFP)
Ecuador Slams Door On Venezuelans (BBC)
The Un-Celebrity President (WaPo)
Britain Has One Last Chance To Save Endangered Species (G.)

 

 

When liquidity vanishes the dollar rises.

Anatomy of a Crisis: A Strong Dollar and Disappearing Liquidity (Palisade)

Since March – the dollar’s rallied over 7%. And it’s caused the Emerging Markets to implode. But the bigger problem is what lies ahead. And that’s a global dollar shortage – which the mainstream continues to ignore. . . I’ve touched on this a couple months back. Wondering when the mainstream would start to realize that the stronger the dollar gets – the more pressure global economies will feel. I wrote. . . “This is going to cause an evaporation of dollar liquidity – making the markets extremely fragile. Putting it simply – the soaring U.S. deficit requires an even greater amount dollars from foreigners to fund the U.S. Treasury. But if the Fed is shrinking their balance sheet, that means the bonds they’re selling to banks are sucking dollars out of the economy (the reverse of Quantitative Easing which was injecting dollars into the economy). This is creating a shortage of U.S. dollars – the world’s reserve currency – therefore affecting every global economy.”

Since then, things have only gotten worse. . . First: Jerome Powell – the Fed Chairman – issued a statement at the end of June that they would actually increase the amount of rate hikes over the next two years. This means they’re tightening even faster. Second: the U.S. Treasury increased their debt-borrowing needs to the highest since the financial crisis – which was over a decade ago. Therefore, they will need even more dollars to fund their spending. “The department expects to issue $329 billion in net marketable debt from July through September, the fourth-largest total for that quarter on record and higher than the $273 billion estimated in April [a 17% increase], the Treasury said in a report Monday. The department’s forecast for the October-December quarter is $440 billion, bringing the second-half borrowing estimate to $769 billion, the highest since $1.1 trillion in July-December 2008…”

And third: China’s growth is slowing down. Meanwhile the Emerging Markets are draining their U.S. dollar reserves even faster because of the strengthening dollar. So, in summary: as global dollar liquidity continues drying up, there will be a wave of ‘risky’ positions being dumped and ‘dollar disease’ (selling assets to raise dollars to pay back debts) worldwide. . . What we know is true from Economics-101 is that the lower the supply and the greater the demand equals a higher price. And as the pool of USD keeps drying up – then the price of the dollars must rise. This translates into higher offshore dollar funding (higher interest rates). Which is killing dollar indebted countries and corporations – like Turkey today.

[..] I think future financial historians will scratch their heads wondering why markets today continued discounting this serious dollar-shortage problem. The easy money years post-2008 fueled a massive debt bubble – causing asset prices all over to rise. But the market isn’t expecting the tight money years today to cause asset prices to fall. It’s like they think that drinking alcohol today will make them feel good – but don’t believe they’ll be hungover tomorrow. So, what’s next? I believe the U.S. dollar will continue rallying because of all that I mentioned above. As Hedge Funds, institutions, and investors continue unloading their Emerging Market positions – things will only get worse.

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Housing bubble vs stock market bubble. Pick your fave toxin.

Speculators Will Make Hay From Great Australian Economic Crash (Steve Keen)

For years, Australia has been seen as the goose which laid the golden egg for workers, migrants and investors. Ironically, as America’s casino closes, it will eventually end up as a speculator’s paradise.\ The performance of the Australian stock market relative to its American equivalent since the Global Financial Crisis (GFC) shows the difference between a country where Quantitative Easing (QE) – the buying of bonds by the central bank to drive bond prices up and interest rates down, and thus encourage firms to invest and financial institutions to buy shares – was practiced and one where it was not. It’s both a warning about what could happen when the Fed starts to unwind QE, and a perverse opportunity to profit when Australia’s central bank, the RBA (Reserve Bank of Australia) inevitably starts its own QE program.

Since Australia avoided the GFC, and its rate of economic growth has been twice as fast as America’s post-crisis (an average 2.7 percent per year, versus 1.3 percent for the US), you might expect Australia’s stock market to have done better than America’s. In fact, it’s performed much worse: the main Australian index, the ASX, still hasn’t returned to its mid-2000s peak, while the US S&P500 has more than doubled its pre-crash level, and it’s almost four times as high as it was in the deepest depths of 2009. The timing of the US stock market recovery is instructive: it began in February 2009, just three months after the Federal Reserve began “QE1” (the first of three episodes of Quantitative Easing), when it promised to net buy bonds from the financial sector to the tune of $1 trillion per year ($80 billion per month).

With the Fed buying a trillion bucks worth of bonds every year, thus giving the financial sector one trillion in cash per year in place of its interest-earning bonds, the only place the financial sector could stash that dough in search of a return was the stock market. This was the intention of the policy of course: to drive share prices higher in order to stimulate the economy. Aside from the fact it’s made the wealthier even wealthier as a direct effect of government policy, and cost far more than a direct boost to the poor would have done, it’s worked a treat: according to Robert Shiller’s “Cyclically Adjusted Price to Earnings Ratio,” it’s driven America’s stock market to its second-highest peak in history, higher than the 1929 bubble, second only to the DotCom maximum in 2000, and more than twice its long-term average.

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Can’t hide behind declassified docs.

Judge Rules FBI Must Address Measures Taken To Verify Steele Dossier (ZH)

The FBI has been dealt a major blow after a Washington DC judge ruled that the agency must respond to a FOIA request for documents concerning the bureau’s efforts to verify the controversial Steele Dossier, before it was used as the foundation of a FISA surveillance warrant application and subsequent renewals. US District Court Judge Amit Mehta – who in January sided with the FBI’s decision to ignore the FOIA request, said that President Trump’s release of two House Intelligence Committee documents (the “Nunes” and “Schiff” memos) changed everything.

Considering that the FBI offered Steele $50,000 to verify the Dossier’s claims yet never paid him, BuzzFeed has unsuccessfully tried to do the same to defend themselves in a dossier-related lawsuit, and a $50 million Soros-funded investigation to continue the hunt have turned up nothing that we know of – whatever documents the FBI may be forced to cough up regarding their attempts to verify the Dossier could prove highly embarrassing for the agency. “[I]f Mr. Steele could get solid corroboration of his reports, the F.B.I. would pay him $50,000 for his efforts, according to two people familiar with the offer. Ultimately, he was not paid.” -NYT

What’s more, forcing the FBI to prove they had an empty hand will likely embolden calls to disband the special counsel investigation – as the agency’s mercenary and politicized approach to “investigations” will be laid all the more bare for the world to see. Then again, who knows – maybe the FBI verified everything in the dossier and it simply hasn’t leaked. That said, while the FBI will likely be forced to acknowledge the documents thanks to the Thursday ruling, the agency will still be able to try and convince the judge that there are other grounds to withhold the records.

In January, Mehta blessed the FBI’s decision not to disclose the existence of any records containing the agency’s efforts to verify the dossier – ruling that Trump’s tweets about the dossier didn’t require the FBI and other intelligence agencies to act on records requests. “But then the ground shifted,” writes Mehta of Trump declassifying the House memos. “As a result of the Nunes and Schiff Memos, there is now in the public domain meaningful information about how the FBI acquired the Dossier and how the agency used it to investigate Russian meddling.” [..] “It remains no longer logical nor plausible for the FBI to maintain that it cannot confirm nor deny the existence of documents,” Mehta wrote.

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Doesn’t feel like McGahn has tons of dirt.

White House Counsel “Cooperating Extensively” With Obstruction Probe (ZH)

Update: Trump has commented on the story, saying he allowed McGahn “and all other requested members of the White House Staff” to fully cooperate with the Special Counsel. He also notes that the White House has given over one million pages of documents adding “No Collusion, No Obstruction. Witch Hunt!”

White House counsel Donald McGahn II, has been quietly cooperating “extensively” with special counsel Robert Mueller in his probe of possible collusion between the Trump campaign and Russia, according to an explosive New York Times report published Saturday afternoon. Sources told the Times that McGahn has had at least three voluntary interviews with Mueller’s team totaling 30 hours, in which he discussed accounts of multiple episodes at the center of Mueller’s probe into whether President Trump obstructed justice, as well as the president’s furor toward the Russia investigation and the ways in which he urged McGahn to respond to it. For a lawyer to share so much with investigators scrutinizing his client is unusual.

Lawyers are rarely so open with investigators, not only because they are advocating on behalf of their clients but also because their conversations with clients are potentially shielded by attorney-client privilege, and in the case of presidents, executive privilege. Among the episodes McGahn reprotedly discussed with investigators is Trump’s firing last year of former FBI Director James Comey and the president’s repeated urging of Attorney General Jeff Sessions to claim oversight of the special counsel despite his recusal from Russia probes. McGahn was also centrally involved in Trump’s attempts to fire the special counsel, Robert Mueller, himself which investigators might not have discovered without him.

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Downgrades add to the downfall.

Erdogan Says US Has Launched ‘Attempted Economic Coup’ (Ind.)

Turkey’s president has accused America of launching an “attempted economic coup” as the country’s currency continues to reel following US economic sanctions. Recep Tayyip Erdogan told thousands of supporters in Ankara: “Today some people are trying to threaten us through the economy, through interest rates, foreign exchange, investment and inflation. “We are telling them: we’ve seen your games, and we are challenging you.” And, in a clear swipe at US president Donald Trump he added: “We did not and will not surrender to those who act like a strategic partner but make us a strategic target.”

[..] As the two countries have clashed, the lira’s value has plummeted: it has now dropped 38 per cent against the dollar since the beginning of the year. On Friday, ratings agencies Standard & Poor and Moody’s downgraded Turkey’s credit rating closer to “junk” status, pointing to currency fluctuations and concerns over central bank independence. A spokesman for Standard & Poor said: “The downgrade reflects our expectation that the extreme volatility of the Turkish lira and the resulting projected sharp balance of payments adjustment will undermine Turkey’s economy. We forecast a recession next year.” He added the agency was predicting that the country’s inflation will hit a potential 22 per cent over the next four months.

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When temperatures start dropping, reality will loom.

No-Deal Brexit May Force Rethink Of Vote – Ex-Civil Service Head (PA)

Britain may have to rethink the decision to leave the EU if the government is unable to strike a Brexit deal with Brussels, a former head of the civil service has said. Bob Kerslake said the consequences of a no-deal exit would be so serious that the UK parliament would have to consider whether it could allow it to go ahead. Lord Kerslake, who has been advising Labour on preparing for government, said that at the very least the article 50 process – under which the UK is set to leave the bloc on 29 March next year – would have to be paused. In those circumstances, the European commission would almost certainly insist on some “re-examination” of the original decision to leave, he said.

His comments came as the government prepares to publish a series of technical notes on preparations for a no-deal Brexit across dozens of areas of British life, from farming to financial services. Kerslake said the measures were “too little, too late” and that the government had not allowed itself enough time to prepare for such an outcome. He told the the BBC Radio 4’s Today programme: “The consequences of a no deal would be so serious as I think parliament would have to seriously consider whether it could contemplate this. “The question people need to ask themselves is, is this a risk that they think we should be taking?

“If the government can negotiate a good deal, then so be it. But if they can’t and we end up in this position, then we have to reopen the question of whether we go forward with Brexit at all. It is not too late to do that. “A pause to reflect would certainly be necessary. I think that is a pretty high probability now. “But I think that pause would need to include – and I suspect this would be insisted on by the commission – some re-examination of the decision itself.”

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The only thing that makes sense.

Putin Urges Europe To Help Rebuild Syria So Refugees Can Return (AFP)

Russian president Vladimir Putin has called on Europe to contribute to the reconstruction of Syria to allow millions of refugees to return home. “We need to strengthen the humanitarian effort in the Syrian conflict,” he said on Saturday, ahead of a meeting with his German counterpart Angela Merkel at the government retreat of Meseberg Palace, north of Berlin. “By that, I mean above all humanitarian aid to the Syrian people, and help the regions where refugees living abroad can return to.” There were 1 million refugees in Jordan, the same number in Lebanon, and 3 million in Turkey, Putin said.

Germany has accepted hundreds of thousands of migrants since 2015 – the height of the migration crisis – which has weakened Angela Merkel politically and split the European Union. “This is potentially a huge burden for Europe,” Putin said. “That’s why we have to do everything to get these people back home,” he added, emphasising the need to restore basic services such as water supplies and healthcare.

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More refugees. Great.

Ecuador Slams Door On Venezuelans (BBC)

Ecuador has brought in new rules to stop Venezuelan migrants entering the country without a passport, leaving many stranded in neighbouring Colombia. Thousands of Venezuelans fleeing their country’s economic and political crisis have been crossing into Ecuador from Colombia using only identity cards. Most are heading south to join family members in Peru and Chile. Colombia has protested against the move, saying vulnerable people will be trapped on its side of the border. In a separate incident, residents of a Brazilian town attacked a Venezuelan migrant camp on Saturday and drove the occupants back across the border. Venezuela has suffered for years from high inflation and the chronic shortage of food and medicines.

More than a million Venezuelan migrants have entered Colombia in the past 15 months, according to official estimates, and more than 4,000 have been arriving at Ecuador’s border every day. Many have been walking or hitching rides for weeks and are exhausted by the time they reach the frontier. [..] With the flow of Venezuelan migrants causing tensions across the region, Peru’s government announced immigration measures similar to Ecuador’s on Friday. Passport requirements for Venezuelans will begin on 25 August. In February, Colombian President Juan Manuel Santos announced a tightening of border controls, resulting in thousands of Venezuelans rushing to crossing points. Brazil, which neighbours Venezuela, has also expressed concerns and temporarily closed the border earlier this month. Violence has flared in the border state of Roraima where thousands of Venezuelans live in precarious accommodation.

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“Carter has been an ex-president for 37 years, longer than anyone else in history.”He used those years to redeem himself.

The Un-Celebrity President (WaPo)

Jimmy Carter finishes his Saturday night dinner, salmon and broccoli casserole on a paper plate, flashes his famous toothy grin and calls playfully to his wife of 72 years, Rosalynn: “C’mon, kid.” She laughs and takes his hand, and they walk carefully through a neighbor’s kitchen filled with 1976 campaign buttons, photos of world leaders and a couple of unopened cans of Billy Beer, then out the back door, where three Secret Service agents wait. They do this just about every weekend in this tiny town where they were born — he almost 94 years ago, she almost 91. Dinner at their friend Jill Stuckey’s house, with plastic Solo cups of ice water and one glass each of bargain-brand chardonnay, then the half-mile walk home to the ranch house they built in 1961.

On this south Georgia summer evening, still close to 90 degrees, they dab their faces with a little plastic bottle of No Natz to repel the swirling clouds of tiny bugs. Then they catch each other’s hands again and start walking, the former president in jeans and clunky black shoes, the former first lady using a walking stick for the first time. The 39th president of the United States lives modestly, a sharp contrast to his successors, who have left the White House to embrace power of another kind: wealth. Even those who didn’t start out rich, including Bill Clinton and Barack Obama, have made tens of millions of dollars on the private-sector opportunities that flow so easily to ex-presidents.

When Carter left the White House after one tumultuous term, trounced by Ronald Reagan in the 1980 election, he returned to Plains, a speck of peanut and cotton farmland that to this day has a nearly 40 percent poverty rate. The Democratic former president decided not to join corporate boards or give speeches for big money because, he says, he didn’t want to “capitalize financially on being in the White House.” Presidential historian Michael Beschloss said that Gerald Ford, Carter’s predecessor and close friend, was the first to fully take advantage of those high-paid post-presidential opportunities, but that “Carter did the opposite.” Since Ford, other former presidents, and sometimes their spouses, routinely earn hundreds of thousands of dollars per speech. “I don’t see anything wrong with it; I don’t blame other people for doing it,” Carter says over dinner. “It just never had been my ambition to be rich.”

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One field where EU regulation is very harmful.

Britain Has One Last Chance To Save Endangered Species (G.)

Ministers may have only 12 months to rescue Britain’s degraded environment and to save its endangered birds and animals. That is the stark conclusion of Michael Clarke, chief executive of the RSPB, who has warned that parliamentary bills – to be published over the next year – will have to make crucial changes to the way our farms and fisheries are run if the wildlife and landscape of the nation are to be rescued from their dangerously depleted condition. “We are on a cusp, and if we fail to act decisively we will pay the price in coming years,” Clarke told the Observer last week. The three forthcoming bills – on agriculture, on fisheries and on the environment – will replace the EU legislation that currently controls our farming, fishing industry and the quality of our air, water and wildlife.

The government has yet to announce what these bills will contain. However, conservationists such as Clarke now fear there is a real risk that one or all of these new pieces of legislation will fail to provide the necessary powers to restore our crisis-hit environment. “Since 1980, across Europe 420 million individual birds have disappeared from the countryside thanks to the practices of modern agriculture,” said Clarke. And that staggering drop is matched by an even more catastrophic decline in insect life over the same period of time, he added. “For years, we could see the lack of insects on our windscreens on summer evenings. It was a smoking gun but there was no hard data – until recent research in Germany showed there had been a 75% decline in its flying insects, figures since matched by Dutch and some UK data. The insects have gone – and so have 420 million birds.”

[..] As to the causes of these declines, the intensification and spread of agriculture and changes in land use take most of the blame – with the EU common agricultural policy (CAP) being considered a particularly destructive agent in this process. The CAP stresses the importance of agricultural output above all else and has helped destroy the homes and food sources of countless birds, animals and insects, said Clarke. Crucially, as Britain prepares to withdraw from the CAP and the EU, the nation has a once-in-a-generation opportunity to put right this damage, said Clarke. About £3bn a year is spent on British farming through CAP, he pointed out.

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