Dec 232019
 


Mathew Brady Three captured Confederate soldiers, Gettysburg, PA 1863

 

ECB’s Knot Says Low Rate Policy Risks Becoming Counterproductive (R.)
Doomsday Debt Machine: Impeach Congress, Too! (Stockman)
Nancy Pelosi: The Woman Who Stood Up To Trump (G.)
Adam Schiff Has ‘No Sympathy’ For FBI Victim Carter Page (ZH)
SmoCo Sneaks Home Amid The Ashes Of His Government (MB)
Why Public College Should Be Free (Covert)
London Will Never Give Independence – We Must Take It (Craig Murray)
West Africa Renames CFA Franc But Keeps It Pegged To Euro (R.)
Erdogan Says Turkey Can’t Handle New Migrant Wave From Syria, Warns Europe (R.)

 

 

Central banker who makes an excellent case against central bank interference in interest rates. But he doesn’t even get it himself, so how can a petty journalist? The idea that somehow magically conditions will (re-)appear that favor raising rates is as faulty as it is dumb. There is no way back. They’ve entered a black hole, they’ve crossed the event horizon.

ECB’s Knot Says Low Rate Policy Risks Becoming Counterproductive (R.)

Interest rates in the euro zone could remain historically low for years, but the European Central Bank’s (ECB) ultra-loose monetary policy risks becoming counterproductive, ECB governing council member Klaas Knot said in an interview published on Monday. “I do not have a crystal ball, but I cannot rule out that the current low interest rate environment could last another five years”, Knot told Dutch newspaper De Volkskrant. “This worries me, because temporarily low interest rates are something quite different from persistently low interest rates.” The Dutch central bank president said the current low rates lead to excessive risk taking among investors, while younger generations on the other hand might feel forced to keep increasing their savings.


“From a macro-economic perspective that would be undesirable,” Knot said. “And it is also an example of how our low interest rate policy may eventually shoot itself in the foot. If people start saving more in response to the low interest rates, this will add further downward pressure on inflation.” Knot is a frequent critic of the ECB’s ultra-easy monetary policy, and slammed the bank’s new stimulus measures earlier this year as disproportionate. The Dutchman has repeatedly said he is looking forward to the strategic review of ECB policy, promised by its new President Christine Lagarde, and has called for the bank to adopt a more flexible inflation target. “The balance between positive and negative effects of the low interest rates is shifting in the wrong direction”, he told the paper.

Read more …

High crimes.

Doomsday Debt Machine: Impeach Congress, Too! (Stockman)

If bringing one’s country to fiscal ruin were an impeachable offense, you’d have to impeach the entire city of Washington. On December 16 the gross Federal debt breached a new level to $23.1 trillion, while the net debt after $401 billion of cash weighed in at $22.71 trillion. The latter monstrous figure is notable because on June 30, 2019 it stood at $21.76 trillion. So what has happened in the last 167 days is a $948 billion increase in the Uncle Sam’s net debt, which amounts to a gain of $5.7 billion per day – including, as we like to say, weekends, holidays and snow days.

Worse still, not a single dollar of that gain got absorbed in government trust funds. The Treasury float held by the public actually rose by $953 billion. So why in the world do the knuckleheads on bubblevision not understand where the spiking rates and ructions in the repo market came from? The law of supply and demand is still operative, and the US Treasury is literally flooding the bond pits with new supply. Even at the bottom of the Great Recession, Uncle Sam did not drain $5.7 billion per day from the bond market.


But nary a soul down in the Imperial City has noticed this borrowing eruption at the tippy-top of the business cycle, which now teeters on borrowed time at a record 127 months of age. Instead, this very day the Congress is busily engaged in what is a fair approximation of abolishing the election process at the heart of American democracy. We will address today’s hideous impeachment Gong Show below. But here we note that every talking head showing up on the screen today is claiming that the market can keep on bubbling higher because the pending impeachment of the nation’s 45th president is a great big nothingburger. Au contraire!

Read more …

It’s not easy to even imagine, but there are people who see Pelosi as a hero. That they need to quote Leon Panetta to make that case should say enough. Still, after, Russiagate, Mueller, Ukrainegate, Pelosi refusing to send article to the Senate, this is just deaf, dumb and blind.

Nancy Pelosi: The Woman Who Stood Up To Trump (G.)

In December 2018, weeks after the Democrats’ conquest of the House, the soon-to-be speaker arrived for a White House meeting with Donald Trump. The subject was a government shutdown but the subtext was a showdown between the most powerful woman in American politics and the president of the United States. In the extraordinary, televised exchange that followed, Trump sought to undermine Nancy Pelosi, whom he repeatedly addressed as “Nancy”, by reminding his audience in the Oval Office – and those watching at home – that she had yet to secure the 218 votes needed to reclaim the speakership and was “in a situation where it’s not easy for her to talk right now”. Her response was sharp and sure. “Mr President, please don’t characterize the strength that I bring to this meeting.”

It was the first test of a new power dynamic in Washington and when it ended, there was little disagreement over who had won. Pelosi emerged from the White House wearing a now-famous burnt-orange coat, sunglasses and the triumphant smile of a woman who has never forgotten the advice imparted to her by the late Louisiana congresswoman Lindy Boggs: “Darlin’, know thy power and use it.” That 15-minute Oval Office meeting marked the beginning of a struggle between Pelosi and Trump that culminated last week in the president’s impeachment by the House of Representatives for “high crimes and misdemeanors”. Pelosi, dressed in funeral black, banged down her speaker’s gavel to finalize the vote, binding together their legacies for all time.

It was not how Pelosi, who once said Trump was “not worth” impeaching, had hoped to end a year that began with her historic, second ascension to the speakership. Pelosi, the first – and only – woman ever to serve as Speaker of the House, would rather be remembered for legislative accomplishments – the Affordable Care Act above all – than for impeachment. But Trump, Pelosi said, left her “no choice”. She quoted Thomas Paine: “The times have found us.” In the wake of Trump’s impeachment, however, Democrats believe there was perhaps no leader better suited to the times. “She is, thank God, the exact right person in the right place at the right time,” said Leon Panetta, a former defense secretary and CIA director and a California native who’s known Pelosi for decades.

“I’m not sure anybody else would have had the experience or capability to be able to do what she has done.” “Donald Trump really has met his match with Nancy,” Panetta added. Her grace under fire as speaker has earned comparisons to Sam Rayburn, the country’s longest-serving speaker, who died in 1961. One Democrat called her an “as good or better” legislative leader than Lyndon Johnson, who was a Senate majority leader before he was president. And when the question is asked whether a female presidential candidate can beat Trump in 2020, the Democrats point to Pelosi, who “does it every single day”.

Read more …

It’s OK for the FBI to break the law 6 ways from Sunday because Schiff doesn’t like the guy they spied on. And it’s not even 2020 yet.

Adam Schiff Has ‘No Sympathy’ For FBI Victim Carter Page (ZH)

Rep. Adam Schiff (D-CA) says it’s hard to feel sympathetic for former Trump campaign aide Carter Page, despite the fact that he was spied on by the FBI after the agency fabricated evidence to obtain a surveillance warrant from the Foreign Intelligence Surveillance Act (FISA) court. After the FISA court denied their request, FBI attorney Kevin Clinesmith fabricated evidence to exclude the fact that Page was a CIA source, with “positive assessment,” despite the fact that the CIA informed Clinesmith of Page’s prior work for the agency. Schiff, however, has no love for Page despite DOJ Inspector General Michael Horowitz finding 16 significant ‘errors’ in the FBI’s FISA applications used to surveil Page.


“I have to say, you know, Carter Page came before our Committee and for hours of his testimony, denied things that we knew were true, later had to admit them during his testimony,” Schiff told PBS News’ Margaret Hoover. “It’s hard to be sympathetic to someone who isn’t honest with you when he comes and testifies under oath. It’s also hard to be sympathetic when you have someone who has admitted to being an adviser to the Kremlin.” Hoover countered, noting “But then was also informing the CIA,” to which Schiff replies “Yes, yes.” “Which we didn’t know about,” replied Hoover. “Who was both targeted by the KGB but also talking to the United States and its agencies and that should have been included, made clear, and it wasn’t, according to the inspector general,” Schiff responded.

Read more …

When is the last time Australia had an actual politician? How is the entire country not a province for US and UK bankers to loot?

SmoCo Sneaks Home Amid The Ashes Of His Government (MB)

There are moments in politics when everything that has come before is crystalised in a moment. Malcolm Turnbull branded himself a phony when he leapt into bed with the Coalition’s right wing. Tony Abbott captured himself when he recommended Prince Phillip be offered an Australian knighthood. Before him, John Howard made himself a political legend when he threw children overboard. Julia Gillard did it in her act of backstabbing. Kevin Rudd did it when he dumped climate change mitigation for Big Australia. Paul Keating branded himself forever with the “recession we had to have”. So on and so forth. These are moments when the truth about a leader’s character is revealed for all to see and branded that way forever more.

For Keating it was arrogance. For Howard it was opportunism. For Rudd it was narcissism. For Gillard it was illegitimacy. For Abbott it was archaic ineptitute. For Turnbull it was hollowness. That moment arrived last week for Scott Morrison. He will henceforth be remembered as SmoCo, the guy that fled to Hawaii – sand, sun and Mai Tais – as his nation burned to the ground. No doubt his minders will kid themselves that he can spin his way out of it. That the marketing guru will find a new angle to shift the blame elsewhere. They are wrong. The Morrsion Government is now covered in ash and forever will be. Over Christmas tables across the nation for the next week, SmoCo will be a combined laughing stock and object of incredulous anger.

SmoCo of the “quiet Australians” has become instead the incredible vanishing PM. In truth, it’s not all SmoCo’s fault. His party is really to blame. It has made destructive climate politics the centre of its value system for thirty years. It has unilaterally blockaded global action. It has embraced and defended carbon interests. It has ruined the debate with pseudo-science. It has trashed energy policy and twisted mitigation policy to such an extent that Australia now faces combined environmental and energy calamity. From day one, it has divided and conquered instead of uniting and acting.

Read more …

Another one of those discussions that cannot be avoided or ignored. Still, Sanders and Warren haven’t found the solution yet.

Why Public College Should Be Free (Covert)

Nearly all of the Democratic presidential candidates have plans to reduce the exorbitant cost of college. But there’s an emerging rift: On one side, candidates like Elizabeth Warren and Bernie Sanders have proposed making public college free for all; on the other, candidates like Pete Buttigieg and Amy Klobuchar want to make it free for only a slice of the population. The latter worry that by providing free college to everyone who wants it—including, in Buttigieg’s words, “the children of millionaires and billionaires”—too many resources will be squandered on the rich. In reality, we already subsidize college for kids from wealthy families, and those further down the income scale would benefit the most if public institutions were free.

In 2017, the most recent year for which we have data, all of the tuition and fees charged by public colleges came to $75.8 billion. That’s less than what the federal government spends to subsidize the cost of college. In the same year, the government disbursed about $160 billion in the form of student loans, grants, and tax breaks to help make higher education less of a burden on American families. Certainly the students who take advantage of those federal funds use them to go to a variety of higher education institutions, not just public colleges. But it would be more efficient to simply eliminate public college tuition than to spend all that money propping up institutions through a maze of grants and tax breaks.

Right now, the government’s money flows largely to well-off students. After student loans, the biggest chunk of student aid is delivered through the tax code; excluding loans, it makes up more than half of all aid. In 2012 the federal government gave $34 billion in tax breaks, a billion more than it spent on Pell Grants for those in financial need. And most of that money is going to the wealthiest families. In 2013, for example, families that made $100,000 or more a year captured more than half of the tuition and fees deduction as well as the exemption for dependent students.

Read more …

Murray is a proud Scot.

London Will Never Give Independence – We Must Take It (Craig Murray)

Yesterday the Scottish Government published “Scotland’s Right to Choose“, its long heralded paper on the path to a new Independence referendum. It is a document riven by a basic intellectual flaw. It sets out in detail, and with helpful annexes, that Scotland is a historic nation with the absolute and inalienable right of self-determination, and that sovereignty lies not in the Westminster parliament but with the Scottish people. It then contradicts all of this truth by affirming, at length, in detail, and entirely without reservation, that Scotland can only hold a legitimate Independence referendum if the Westminster Parliament devolves the power to do so under Section 30. Both propositions cannot be true. Scotland cannot be a nation with the right of self-determination, and at the same time require the permission of somebody else to exercise that self-determination.


I was trying to find the right words to discuss the document. One possibility was “schizophrenic”. The first half appears to be written by somebody with a fundamental belief in Scottish Independence, and contains this passage: “The United Kingdom is best understood as a voluntary association of nations, in keeping with the principles of democracy and self determination. For the place of Scotland in the United Kingdom to be based on the people of Scotland’s consent, Scotland must be able to choose whether and when it should make a decision about its future. The decision whether the time is right for the people who live in Scotland again to make a choice about their constitutional future is for the Scottish Parliament, as the democratic voice of Scotland, to make.”

Read more …

Colonialism takes many forms.

West Africa Renames CFA Franc But Keeps It Pegged To Euro (R.)

West Africa’s monetary union has agreed with France to rename its CFA franc the Eco and cut some of the financial links with Paris that have underpinned the region’s common currency since its creation soon World War Two. Under the deal, the Eco will remain pegged to the euro but the African countries in the bloc won’t have to keep 50% of their reserves in the French Treasury and there will no longer be a French representative on the currency union’s board. Critics of the CFA have long seen it as a relic from colonial times while proponents of the currency say it has provided financial stability in a sometimes turbulent region.

“This is a historic day for West Africa,” Ivory Coast’s President Alassane Ouattara said during a news conference with French President Emmanuel Macron in the country’s main city Abidjan. In 2017, Macron highlighted the stabilizing benefits of the CFA but said it was up to African governments to determine the future of the currency. “Yes, it’s the end of certain relics of the past. Yes it’s progress … I do not want influence through guardianship, I do not want influence through intrusion. That’s not the century that’s being built today,” said Macron. The CFA is used in 14 African countries with a combined population of about 150 million and $235 billion of gross domestic product.

However, the changes will only affect the West African form of the currency used by Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal and Togo – all former French colonies except Guinea Bissau. The six countries using the Central African CFA are Cameroon, Chad, Central African Republic, Congo Republic, Equatorial Guinea and Gabon, – all former French colonies with the exception of Equatorial Guinea. The CFA’s value relative to the French franc remained unchanged from 1948 through to 1994 when it was devalued by 50% to boost exports from the region.

Read more …

Another attack on Assad, under a different guise. We eagerly await comment from Bellingcat and the White Helmets. And what’s that smell?

Erdogan Says Turkey Can’t Handle New Refugee Wave From Syria, Warns Europe (R.)

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. Turkey currently hosts some 3.7 million Syrian refugees, the largest refugee population in the world, and fears another wave from the Idlib region, where up to 3 million Syrians live in the last significant rebel-held swathe of territory. Syrian and Russian forces have intensified their bombardment of targets in Idlib, which Syria’s President Bashar al-Assad has vowed to recapture, prompting a wave of refugees toward Turkey.

Speaking at an awards ceremony in Istanbul on Sunday night, Erdogan said more than 80,000 people were currently on the move from Idlib to Turkey. “If the violence toward the people of Idlib does not stop, this number will increase even more. In that case, Turkey will not carry such a migrant burden on its own,” Erdogan said. “The negative impact of the pressure we will be subjected to will be something that all European nations, especially Greece, will also feel,” he said, adding that a repeat of the 2015 migrant crisis would become inevitable. He also said Turkey was doing everything possible to stop Russian bombardments in Idlib, adding that a Turkish delegation would go to Moscow to discuss Syria on Monday.

[..] Turkey is seeking international support for plans to settle 1 million Syrians in part of northeast Syria that its forces and their Syrian rebel allies seized from the Kurdish YPG militia in a cross-border incursion in October. Ankara has received little public backing for the proposal and has repeatedly slammed its allies for not supporting its plans. Turkey’s offensive was also met with condemnation from allies, including the United States and European countries. “We call on European countries to use their energy to stop the massacre in Idlib, rather than trying to corner Turkey for the legitimate steps it took in Syria,” Erdogan said on Sunday, referring to the three military operations Turkey has carried out in Syria.

After a global refugee forum in Geneva last week, the United Nations refugee agency said states pledged more than $3 billion to support refugees and around 50,000 resettlement places. But, Erdogan, who attended the forum, said on Sunday that sum was not enough. U.N agencies say hundreds of people have been killed in Idlib this year after attacks on residential areas. Russia and the Syrian army, which is loyal to President Bashar al-Assad, both deny allegations of indiscriminate bombing of civilian areas and say they are fighting al Qaeda-inspired Islamist militants.

Read more …

 

 

 

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Dec 062019
 


Paul Gauguin When are you getting married? 1892

 

 

It wasn’t really the plan to make this a series, but it seems to have turned into one. Part 1 is here: The Fed Detests Free Markets. Part 3 will follow soon. And yeah, I did think perhaps I should have called this one “End The Fed” Is No Longer Enough. Because that’s the idea here. But what’s in a name?

 

 

Okay, let’s talk a bit more about finance again. Though I still think this requires caution, because the meaning of the terminology used in such conversations appears to have acquired ever more diverse meanings for different groups of people. Up to the point where you must ask: are we really still talking about the same thing here?

I’ve said multiple times before that there are no more markets really, or investors, because central banks have killed off the markets. There are still “contraptions” that look like them, like the real thing, but they’re fake. You can see this every time a Fed chief opens their mouth and every single person involved in the fake markets hangs on their lips.

They do that because that Fed head actually determines what anything will be worth tomorrow, not the markets, since the Fed buys everything up, and puts interest rates down so more people can buy grossly overpriced property and assets, and allows companies to buy their own shares so nobody knows what they’re worth anymore.

The Fed today is in the business of propping up zombies. And when I say the Fed, that also means the ECB and BOJ, western central banks. I won’t get into the PBOC here, but they’re not far behind.

Recently, Christine Lagarde, the new ECB head, said the most incredible thing (at least to my ears, I guess not to hers):

We should be happier to have a job than to have our savings protected … I think that it is in this spirit that monetary policy has been decided by my predecessors and I think they made quite a beneficial choice.

Who on earth ever claimed jobs vs savings is some necessary or inevitable “choice”? Why should it be? If this were true, isn’t that a sign that something is terribly wrong? That you can have a job, but you can’t save anything? And aren’t the central banks to blame for that then?

The entire system has been built for decades around the notion that people save, either to purchase big items, or for their old age, and that people put money into their pension systems. And now central banks come along and in no time destroy what has been valid for all these years. And they never even warned about it.

Anyway, after Lagarde’s remarks, I guess the Fed’s Jay Powell felt he couldn’t be left behind and said:

US central bankers see a “sustained expansion” ahead for the country’s economy, with the full impact of recent interest rate cuts still to be felt and low unemployment boosting household spending, Federal Reserve chairman Jay Powell said on Wednesday in remarks that brushed aside any worries of a looming slowdown.

“The baseline outlook remains favorable,” and the current level of interest rates “appropriate,” Mr Powell said in remarks prepared for delivery to the joint economic committee of congress, a panel that includes some members from the House of Representatives and Senate.

His comments tracked closely to those in his news conference last month after the US central bank cut rates for the third time this year and signaled it was likely done reducing borrowing costs absent a significant change in the economic outlook. Despite “noteworthy risks” including slowing global growth and fallout from the US-China trade war, “my colleagues and I see a sustained expansion of economic activity … as most likely,” Mr Powell said in his prepared remarks for the hearing.

Former Goldman and Bear Stearns banker, and friend of the Automatic Earth, Nomi Prins, tweeted yesterday: “Tuesday, the Fed added $95 billion in liquidity to financial markets. Today, Fed’s vice chair told Congress, “The Board’s latest [review] confirms the current health of the banking system. It depicts a stable, healthy, and resilient banking sector…” The Fed’s official for supervision and regulation told Congress, “The Board’s latest Supervision and Regulation Report… describes steady improvements in safety and soundness, with a gradual decline in outstanding supervisory actions at both the largest & smallest organizations..”

“The baseline outlook remains favorable,” Powell said. That must be why they have been pulling out all the stops and invented new ones, for a decade+. Bernanke, Yellen, the lot of them, all because the baseline has remained so favorable. Why would anyone want to listen to this guy, who so obviously dabbles in complete nonsense? Well, because he’s the one giving the money away.

I think I can tell Mr. Powell what the “full impact of recent interest rate cuts” will be, what it will feel like, and it won’t be anywhere near what he pretends it will be. I must think he knows that too, or he’s an utter fool, and I don’t think he is. He’s just doing a job, while he’s worth $100 million, and that job is very different from how it’s presented to the public.

I’ll tell you about that full impact in part 3 of this Fed essay, which I left on the shelf for a long time because I thought people would declare me nuts, but which now, with increasing chatter of a next recession, maybe can be exposed to daylight. It’s about how grave the damage is that central banks have inflicted on their economies, something I never see discussed. Powell and Draghi/Lagarde and Kuroda are not just the ones giving the money away, they’re also taking it away, just not from the same people. And that latter part is much more important to societies and economies.

A third quote, just to complete the “circle”, deals with BOJ chief Kuroda; it’s from a June 2019 Reuters article entitled How Japan Turned Against Its ‘Bazooka’-Wielding Central Bank Chief:

The direction taken by the BOJ could determine whether Japan’s banking sector avoids a hard landing and whether Abe or his successor will lean on the central bank to take the most extreme step remaining: printing money for the explicit purpose of financing a national debt that is now more than twice the size of Japan’s economy. That could risk a costly downgrade by credit rating agencies for Japan, and, by extension, Japanese corporate borrowers.

The spurning of Kuroda-nomics also has political implications. It is part of a broader public dissatisfaction with what has been labeled “Abenomics” – the prime minister’s plan to reflate the economy out of prolonged stagnation through a combination of aggressive monetary easing, bold fiscal spending and fundamental structural reforms in the economy.

“Kuroda’s radical stimulus kept interest rates low, allowing politicians to delay reforms to get Japan’s fiscal house in order,” said Koichi Haji, executive research fellow at NLI Research Institute. “The foot-dragging could cost Japan dearly. The options left for the BOJ all seem extreme.”

Options left for the BOJ will be even more extreme because Japan’s Birth Rate Has Hit Its Lowest Level Since Records Began In 1899. As a Dutch comment on that report said: “by 2050 there will be one working Japanese for every child or pensioner [..] Japan adopted a law in April designed to make it easier for foreigners to work in Japan. The goal was to attract 350,000 foreign workers. 8 months later, just 400 had arrived”.

And just this week we read that Japan is preparing another $120-$230 stimulus package. Extreme has become normal in no time. Only, the ratings agencies could lower their rating for Japan, because of this. Then again, why should they do it only for Japan? Everyone’s in “extreme” territory, or as Ben Bernanke called it in 2008, “uncharted territory”. Same difference.

 

But Lagarde is right on one thing: it is “the monetary policy decided by her predecessors” that has destroyed savings -and pensions-. How on earth she can call that “beneficial” is very hard to grasp. What is the goal, what is all these central bankers’ goal? That in the end nobody has any savings or pensions anymore, and they all must go into debt or perish? That would create entire societies made up of zombies. And that’s “policy”?

It’s policy to spin a fantasy tale so people like Jay Powell can claim that “the baseline outlook remains favorable” and “sustained expansion” lies ahead for the economy, and it’s policy to pay for that fantasy with money that belongs to savers and pensioners, and that you can then hand out to a bunch of zombie “investors”. That’s policy.

The role of today’s central bankers is possible only because the public are made to think these are very smart people that have the interest of Joe Blow at heart, and because they have “unlimited resources” to make stocks and bonds and the housing market look good. But what would happen if Joe Blow knew what is going on?

The Fed is now considering “policy” that “makes up for lost inflation”. No, stop laughing, I’m serious. Their extreme policies in uncharted territory have failed so dismally, they’ve obviously not been extreme enough.

Once they’ve gone down the path of extreme stimulus (not that they call it that), there’s no way back. Because they’ve just destroyed the markets, and then they go: let’s see how the markets react to that. Well, they don’t. They’re dead. You killed them. There are parties left who love feeding off of your free money teats, but they’re not the markets or even market participants. They’re rich socialists. But they’re also the only ones the Fed cares about.

Still, a central bank that doesn’t have the population at large, at the center of its policies, is a scourge on a society and/or country. And it should be abolished. But in the case of the Fed, ECB and BOJ, it is probably already too late for that. They have done their damage. “End The Fed” is no longer enough. Societies need to develop emergency measures to counter the damage done, or face untold misery, unrest and eventually, revolution.

People don’t see this, because these central banks -temporarily- taper over the disaster they’ve wrought with their “policies”. Time for the media to step in? No, it’s too late for that too, and besides, what media? They’ve been silent all along, why would they speak up now?

More in part 3.

 

 

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Nov 292019
 


Paul Gauguin Tahitians at rest (unfinished) 1891

 

To be completely honest, I wrote -most of- the second part of this a while ago, and then I was thinking this first part should be part of the second, if you can still follow me. But it doesn’t really, it’s fine. I wanted to write something to address how little people know and acknowledge about how disastrous central bank policies have been for our societies and economies.

Because they don’t, and they have no clue, largely and simply because of the way central banks are presented both by themselves and by the financial press that covers them. Make that “covers”. Still, going forward, we will have no way to ignore the damage done. All the QE and ZIRP and NIRP will turn out to be so destructive for us all they will rival climate change or actual warfare. That’s what I wanted to talk about.

 

You see, free markets are a great idea in theory. Or you can call it “capitalism”, or combine the two and say “free market capitalism”. There’s very little wrong with it in theory. You have an enormous multitude of participants in an utterly complex web of transitions, too complex for the human mind to comprehend, and in the end that web figures out what values all sorts of things, and actions etc., have.

I don’t think capitalism in itself is a bad thing; what people don’t like is when it veers into neo-liberalism, when everything is for sale, when communities or their governments no longer own anything, when roads and hospitals and public services and everything that holds people together in a given setting is being sold off to the highest bidder. There are many things that have values other than monetary ones, and neo-liberalism denies that. Capitalism in itself, not so much.

It’s like nature, really, like evolution, but it’s Darwin AND empathy, individuals AND groups. The problem is, and this is where it diverges from nature, you have to make sure the markets remain free, that certain participants -or groups thereof- don’t bend the rules in their own favor. In that sense it’s very similar to what the human race has been doing to nature for a long time, and increasingly so.

 

Now, if you limit the discussion to finance and economics, there would appear to be one institution that’s in an ideal place to make sure that this “rule-bending” doesn’t take place, that markets are fair and free, or as free as can be. That institution is a central bank. But whaddaya know, central banks do the exact opposite: they are the ones making sure markets are not free.

In the ideal picture, free markets are -or would be- self-correcting, and have an inbuilt self-regulating mechanism. If and when prices go up too much, the system will make sure they go lower, and vice versa. It’s what we know from physics and biology as a negative -self correcting- feedback loop. The self-correcting mechanism only activates if the system has veered too much in one direction, but we fail to see that as good thing when applied to both directions, too high and too low (yes, Goldilocks, exactly).

It’s only when people start tweaking and interfering with the system, that it fails. Negative feedback vs positive feedback are misunderstood terms simply because of their connotation. After all, who wants anything negative? But this is important in the free markets topic, because as soon as a central bank starts interfering in, name an example, housing prices in a country, the system automatically switches from negative feedback to positive -runaway- feedback, there is no middle ground and there is no way out anymore, other than a major crash or even collapse.

 

Well, we’re well on our way to one of those. Because the Fed refused to let the free market system work. They, and the banks they represent, wanted the way up but then refused the way down. And now we’re stuck in a mindless positive feedback loop (new highs in stocks on a daily basis), and there’s nothing Jay Powell and his minions can do anymore to correct it.

The system has its own correction mechanism, but Greenspan, Bernanke, Yellen and now Powell thought they could do better. Or maybe they didn’t and they just wanted their banker friends to haul in all the loot, it doesn’t even matter anymore. They’ve guaranteed that there are no free markets, because they murdered self-correction.

Same goes, again, for ECB and BOJ; they’re just Fed followers (only often even crazier). In fact since they have no petrodollar, they don’t just follow, they have to do the Fed one better. Which is why they have negative interest rates -and the US does not -yet-: it’s the only way to compete with the reserve currency. Of course today even the Fed, and “even even” the PBOC, are discussing moving to negative rates, and by now we’re truly talking lemmings on top of a cliff.

“Let’s throw $10 trillion at the wall just so home prices or stock prices don’t go down!” Yeah, but if they’ve been rising a lot, maybe that’s the only direction they can and should go. It may not be nice for banks and so-called “investors”, but it’s the only way to keep the system healthy. If you don’t allow for the negative feedback self-correction, you can only create much bigger problems than you already have. And then you will get negative feedback squared and cubed.

 

Unless, of course, you have stellar economic growth, and you find unparalleled amounts of oil, and you have a growing population with way more kids born than people dying. But in case you don’t, you’re merely making an initially relatively minor problem much much worse with QE and ZIRP.

What central banks have been doing is they’ve utterly destroyed savings and pensions, i.e. the only thing “ordinary” people had to stave off their own personal collapse and that of their communities. ZIRP and NIRP move all those savings and pensions towards the bankers. And yes, pension funds may have moved into equities from bonds, and they may look good momentarily, but the current parade of new highs in stock markets only exists because of central banks’ QE and ZIRP.

There are tons of zombie enterprises in the world, many of whom have been kept alive by central bank policies, but wait till it becomes evident that the pension funds and systems themselves have turned into zombies. That’ll wake you up. Because who’s going take care of grandma, or her daughter, in a few years’ time? One thing’s for sure, it won’t be Jay Powell.

 

This has gotten so long already I’ll leave the part 2 I mentioned above to be its own, separate, part 2. Soon.

 

 

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Oct 012019
 


Paul Gauguin Sunken lane 1884

 

Dear America, Civil War Is Not A Joke – Or A Picnic (RT)
Civil War On (Kunstler)
Impeachment…or CIA Coup? (Ron Paul)
Hillary Clinton’s Big Comeback Begins Tuesday (WT)
US Dollar Status as Global Reserve Currency Slides (WS)
No End In Sight For ECB’s Inflation Problem (MW)
Twitter Executive For Middle East Is British Army ‘Psyops’ Soldier (MEE)
Johnson Planning To Bypass Brussels In Bid For New Brexit Deal (Ind.)
UK Proposes Customs Posts On Both Sides Of Irish Border (RTE)
France’s Overtures Toward Russia (Moisi)
Assange’s Lawyers Were Under Surveillance. That’s Not The Whole Story (Canary)

 

 

Nebojsa Malic, senior writer at RT, lived through the Yugoslavia civil war.

Dear America, Civil War Is Not A Joke – Or A Picnic (RT)

Critics have reacted to President Donald Trump’s Twitter warning about his impeachment causing a civil war with both shrieks of outrage and jokes. Notably absent: any self-awareness of what such a war would be like or how to avoid it. “If the Democrats are successful in removing the president from office, I’m afraid it will cause a Civil War-like fracture in this nation from which this country will never heal,” Texas televangelist Robert Jeffress said Sunday night on Fox News. Trump quoted him in a tweet the next morning, and Twitter lost its collective mind. The typical response was to accuse Trump of calling for a new civil war, mind-reading what he must have really meant by the quote. He was “priming his base” to think of war, according to unnamed “experts of fascism,”a liberal comedian argued in just one example.

Others dismissed the very notion of a civil war as crazy, joking about bringing the potato salad and biodegradable forks – or hamberders and covfefe – to the fight, as soon as they get out of yoga class, using the hashtag #CivilWarSignup. There were also scornful takes about Americans being too fat to fight, or rural Americans being too scared to “take the subway in New York or drive in Los Angeles,” much less take a rifle and “take their country back from elite urbanites.” It’s unclear whether the people joking about bringing food to the fight were deliberately channeling the spirit of Washingtonians who turned out to the first Battle of Manassas/Bull Run, in June 1861, as if it were a picnic, bringing baskets and blankets to enjoy the show.

As anyone who’s studied that era of US history knows, their glee quickly turned to horror and panic, when the Union army lost – and they found themselves shoved aside on crowded roads leading back to Washington by the routed troops in blue. Wars never go as planned. No plan survives first contact with the enemy, who also gets a vote. If there is one ironclad rule of war through the ages, no matter the level of technology, that is it. Yet the corollary is that civilians always forget about it, and it comes back to bite them.

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“Does this sound a little like part of the origin story of RussiaGate? Is that not exactly the potential criminal matter that the current attorney general, Mr. Barr, is officially investigating?”

Civil War On (Kunstler)

Someone in Impeachmentville is not paying attention. Of course, diverting the rubes is exactly the point of the latest CIA operation to negate the 2016 election. Has nobody noticed that there is treaty between Ukraine and the USA, signed at Kiev in 1998 and ratified by the US Senate in 2000. It’s an agreement on “Mutual Legal Assistance in Criminal Matters.” Here, read the cover letter for yourself:

What part of the following do Nancy Pelosi and the news media not understand? “The Treaty is self-executing. It provides for a broad range of cooperation in criminal matters. Mutual assistance available under the Treaty includes: taking of testimony or statements of persons; providing documents, records, and articles of evidence; serving documents; locating or identifying persons; transferring persons in custody for testimony or other purposes; executing requests for searches and seizures; assisting in proceedings related to restraint, confiscation, forfeiture of assets, restitution, and collection of fines; and any other form of assistance not prohibited by the laws of the requested state… ([etc].”


How does this not permit Mr. Trump asking the president of Ukraine for “assistance” in criminal matters arising out of “collusion with Russia,” as specified within the scope of Robert Mueller’s special prosecutor activities? For instance, the matter of CrowdStrike. The cybersecurity firm was co-founded by Russian ex-pat Dmitri Alperovitch, who also happens to be a senior fellow at the Atlantic Council, an anti-Russian think tank funded by Ukrainian billionaire, Viktor Pinchuk, who donated at least $25 million to the Clinton Foundation before the 2016 election. Crowdstrike was the company that “examined” the supposedly hacked DNC servers, while somebody in the Obama administration prevented the FBI from ever seeing them. Does this sound a little like part of the origin story of RussiaGate? Is that not exactly the potential criminal matter that the current attorney general, Mr. Barr, is officially investigating?

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Obvious nonsense though it may be, people will continue to accuse me of supporting Trump. But you can’t accuse Ron Paul of that.

Impeachment…or CIA Coup? (Ron Paul)

You don’t need to be a supporter of President Trump to be concerned about the efforts to remove him from office. Last week House Speaker Nancy Pelosi announced impeachment proceedings against the President over a phone call made to the President of Ukraine. According to the White House record of the call, the President asked his Ukrainian counterpart to look into whether there is any evidence of Ukrainian meddling in the 2016 election and then mentioned that a lot of people were talking about how former US Vice President Joe Biden stopped the prosecution of his son who was under investigation for corruption in Ukraine.

Democrats, who spent more than two years convinced that “Russiagate” would enable them to remove Trump from office only to have their hopes dashed by the Mueller Report, now believe they have their smoking gun in this phone call. It this about politics? Yes. But there may be more to it than that. It may appear that the Democratic Party, furious over Hillary Clinton’s 2016 loss, is the driving force behind this ongoing attempt to remove Donald Trump from office, but at every turn we see the fingerprints of the CIA and its allies in the US deep state. In August 2016, a former acting director of the CIA, Mike Morell, wrote an extraordinary article in the New York Times accusing Donald Trump of being an “agent of the Russian Federation.”

Morell was clearly using his intelligence career as a way of bolstering his claim that Trump was a Russian spy – after all, the CIA should know such a thing! But the claim was a lie. Former CIA director John Brennan accused President Trump of “treason” and of “being in the pocket of Putin” for meeting with the Russian president in Helsinki and accepting his word that Russia did not meddle in the US election. To this day there has yet to be any evidence presented that the Russian government did interfere. Brennan openly called on “patriotic” Republicans to act against this “traitor.” Brennan and his deep state counterparts James Comey at the FBI and former Director of National Intelligence James Clapper launched an operation, using what we now know is the fake Steele dossier, to spy on the Trump presidential campaign and even attempt to entrap Trump campaign employees. Notice a pattern here?

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Too predictable to be newsworthy.

Hillary Clinton’s Big Comeback Begins Tuesday (WT)

Media attention will intensify on Hillary Clinton on Tuesday. The former first lady, senator, secretary of state and Democratic presidential candidate is ready for another round in the public arena. She has a new book arriving, written with the help of a very close relative. Behold. Here comes “The Book of Gutsy Women: Favorite Stories of Courage and Resilience” — all 464 pages of it. Indeed, the new book of essays now landing on the shelves is written by Mrs. Clinton and her daughter Chelsea Clinton, is published by Simon & Schuster. Some informed observers speculate the book could be yet another indicator — along with increased public appearances and commentary — that Mrs. Clinton pines for a political comeback.


What kind of comeback? Oh, maybe the bumper stickers will read BIDEN/CLINTON 2020, WARREN/CLINTON 2020 — or even CLINTON/CLINTON 2020. Who the heck knows? “Word on the political street now is the rumbling that the impeachment probe launched by House Speaker Nancy Pelosi may be the crack that opens the door for another presidential run by Hillary Clinton. This time, the thinking goes, Hillary would be running with vindication that the 2016 election was ‘stolen’ from her and she can ascend in 2020 to reclaim the mantle for her party and the majority of the country that voted for her,” writes Nate Ashworth, editor in chief of Election Central.

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Wolf Richter mostly manages to deny his own headline.

US Dollar Status as Global Reserve Currency Slides (WS)

If the US dollar loses its hegemony as a global reserve currency, it would be a sea change globally, and specifically for the US economy. Today, we got the next installment in that saga, via the IMF’s quarterly COFER data on foreign exchange reserves. Total global foreign exchange reserves in all currencies ticked up 1.1% from the first quarter, to $11.7 trillion. US-dollar-denominated exchange reserves rose only 0.7% to $6.79 trillion, and their share of total global foreign exchange reserves fell to 61.63%, down from 61.86% in the prior quarter. And this has been going on for years in baby steps:

The US dollar’s share of global reserve currency declines when central banks other than the Fed proportionately reduce their dollar-denominated assets and add assets denominated in other currencies. Compared to the mega-moves in the 1970s, the recent moves have been muted. Nevertheless, the current share of USD-denominated foreign exchange reserves of 61.63% is the lowest since the year-end in 2013. The bump in 2014, 2015, and 2016 has now been unwound:

These US-dollar-denominated exchange reserves are US Treasury securities, US corporate bonds, and other financial assets that central banks other than the Fed are holding in their foreign exchange reserves. The Fed’s own holdings of Treasury securities and Mortgage-Backed Securities are not included in “foreign exchange reserves.” However, the Fed’s holdings of foreign-currency denominated assets are included in the other currencies. Unlike some other central banks, the Fed holds just a smidgen in foreign currency assets – currently $20.6 billion worth, compared to, for example, China’s $3.1 trillion in foreign exchange reserves.


[..] The chart below shows the dollar’s slowly declining but still hegemonic share of foreign exchange reserves, the euro’s essentially flat share, and the other reserve currencies’ comparatively tiny share. The renminbi (RMB) is the short red line near the very bottom:

To shed some light on the tangle of currencies at the bottom of the chart above, it’s useful to look at them without the US dollar and the euro overshadowing the neighborhood:

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Inflation is not Europe’s problem. The ECB is.

No End In Sight For ECB’s Inflation Problem (MW)

Unemployment in the eurozone declined to 7.4% in September, its lowest level since August, 2008, the EU’s statistics institute Eurostat said Monday. But this good news about the European economy helps underline the predicament the European Central Bank has long struggled with: the persistent low level of inflation. The ECB has undershot its official price stability target, set at “below but close to 2%”, every year since 2013. Keeping the eurozone on that steady inflation path is the only official remit of the ECB. It hasn’t been tasked with other economic policy objectives, like the U.S. Federal Reserve on employment, or the Bank of England on supporting the government’s economic objectives.


Inflation in the eurozone stood at an annual 1% in August, according to Eurostat. The closest the ECB was to its target was last year, when inflation reached 1.8%. That was up from 1.5% in 2017, and 0.2% in both preceding years. The risk of debilitating deflation – falling prices – was the rationale behind the ECB’s first massive quantitative easing program, launched in 2015. The central bank is now citing the financial markets’ declining inflation expectations for 2021 as the main reason for its latest monetary easing package, announced on September 12: They have fallen from 1.8% to 1.5% since the beginning of this year, according to ECB chief economist Philip Lane.

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“..the 77th Brigade is giving the British military “the capability to compete in the war of narratives at the tactical level..”

Twitter Executive For Middle East Is British Army ‘Psyops’ Soldier (MEE)

The senior Twitter executive with editorial responsibility for the Middle East is also a part-time officer in the British Army’s psychological warfare unit, Middle East Eye has established. Gordon MacMillan, who joined the social media company’s UK office six years ago, has for several years also served with the 77th Brigade, a unit formed in 2015 in order to develop “non-lethal” ways of waging war. The 77th Brigade uses social media platforms such as Twitter, Instagram and Facebook, as well as podcasts, data analysis and audience research to wage what the head of the UK military, General Nick Carter, describes as “information warfare”.

Carter says the 77th Brigade is giving the British military “the capability to compete in the war of narratives at the tactical level”; to shape perceptions of conflict. Some soldiers who have served with the unit say they have been engaged in operations intended to change the behaviour of target audiences. What exactly MacMillan is doing with the unit is difficult to determine, however: he has declined to answer any questions about his role, as has Twitter and the UK’s Ministry of Defence (MoD). Twitter would say only that “we actively encourage all our employees to pursue external interests”, while the MoD said that the 77th Brigade had no relationship with Twitter, other than using it for communication.

The 77th Brigade’s headquarters is located west of London. It brought together a number of existing military units such as the Media Operations Group and the 15 Psychological Operations Group. At its launch, the UK media was told that the new unit of “Facebook warriors” would be around 1,500 strong, and made up of both regular soldiers and reservists. In recent months, the army has been approaching British journalists and asking them to join the unit as reservists.

Read more …

In reality, he’s preparing to blame everyone else for his own failures. And Dominic Cummings will blame Boris.

Johnson Planning To Bypass Brussels In Bid For New Brexit Deal (Ind.)

Boris Johnson is to attempt a last-ditch charm offensive on EU leaders to get a Brexit deal over the line, after delivering his proposals for a new withdrawal agreement to Brussels as early as the end of this week. With EU chief negotiator Michel Barnier viewed in Downing Street as a stickler for rules who will be hard to shift from the deal struck with Theresa May, Mr Johnson is keen to speak with key European leaders who may be ready to show flexibility ahead of the crunch Brussels summit on 17 October. Plans were made to fly the prime minister to the funeral of ex-president Jacques Chirac for talks in the margins with sympathetic leaders, but it was decided the opportunity did not justify breaking off his attendance at the Conservative conference in Manchester.


London believes a key to any deal will be securing the acceptance of Irish premier Leo Varadkar and German chancellor Angela Merkel. News that negotiator David Frost has finalised a legal text of the UK proposals – said by a senior government source to be “game changing” – emerged as ministers attending cabinet admitted that they were not absolutely sure what the PM plans to do if his hopes of a deal fall flat. With speculation that the plan is known only to a tiny circle around Mr Johnson and his chief adviser Dominic Cummings, housing minister Esther McVey said she did not “know what is necessarily going on in Boris’s head”, while even chancellor Sajid Javid when asked if he knew what the PM would do could say only that “I think I do”.

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And you thought they’d steer clear of hammering Good Friday…

UK Proposes Customs Posts On Both Sides Of Irish Border (RTE)

The UK has proposed the creation of a string of customs posts along both sides of the Irish border as part of its effort to replace the backstop, RTÉ News understands. The ideas, which would be highly controversial, are contained in proposals sent from London to the European Union – extracts of which have been seen by RTÉ News. The proposals would effectively mean customs posts being erected on both sides of the border, but located perhaps five to ten miles ‘back’ from the actual land frontier. This is because under British Prime Minister Boris Johnson, the UK is insisting that Northern Ireland remain completely outside the EU’s customs union for industrial goods and agri-food products.

Even more controversial is a proposal that the goods moving from a so-called “customs clearance site” on the northern side of the border to a similar site on the southern side would be monitored in real time using GPS via mobile phone data, or tracking devices placed on trucks or vans. The ideas are contained in one of four so-called ‘non-papers’ submitted by UK officials during recent technical discussions in Brussels. Under the British proposals, both the UK and EU would create what are believed to be called “customs clearance sites”, but to all intents and purposes a customs post. Traders would have a choice of either a straightforward customs declaration which would have to be lodged and cleared on either side of the border, or the so-called ‘transit’ system.

Under a transit scheme, the exporter becomes a registered ‘consigner’ at base, and the importer becomes a registered ‘consignee’. The method requires a bond from a financial institution to guarantee that the relevant customs duty, excise and VAT have been paid and that the goods do not go illegally off the beaten track en route. The UK proposals have been discussed in technical talks with the European Commission’s Brexit Task Force under Michel Barnier. However, the details of the four non-papers have not been disclosed to EU member states.

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Macron playing Napoleon again. He can’t stop himself.

France’s Overtures Toward Russia (Moisi)

French President Emmanuel Macron is convinced that now is the right time to reset relations with Russia. He has therefore made it a diplomatic priority to restore a climate of trust between Paris and Moscow. Three compelling reasons underlie this move… First and foremost, the international strategic context has changed dramatically. China is rising, while the United States, although still the world’s dominant power, is distancing itself from its global responsibilities. And Russia, with an aging, shrinking population and a huge, largely uninhabited landmass, is a natural prey for China’s long-term ambitions. European leaders should not resign themselves passively to seeing Russia, lacking any other alternative, align with China.

Instead, they should try to convince Russians that their future is with Europe, and not as China’s junior partner in a deeply unbalanced relationship. Russia’s destiny lies in the West, not the East. Moreover, although Russia is no match for China, it has returned as a serious global actor. Many current conflicts, from Eastern Europe to the Middle East, simply cannot be addressed without involving Russia. This represents a triumph of sorts for Russian President Vladimir Putin, who first came to power nearly 20 years ago pledging to restore his country’s geopolitical clout. In particular, Putin wanted the US to treat Russia not as a mere object of history, as it had done under his predecessor Boris Yeltsin, but as a real interlocutor.

And while it might be impossible to restore the bipolar world of the Cold War years, at least the US would be forced to recognize the importance of a modernized and operational Russian army that could intervene in the former Soviet sphere and beyond. This represents a triumph of sorts for Russian President Vladimir Putin, who first came to power nearly 20 years ago pledging to restore his country’s geopolitical clout. In particular, Putin wanted the US to treat Russia not as a mere object of history, as it had done under his predecessor Boris Yeltsin, but as a real interlocutor.

Read more …

If these revelations don’t stop Assange’s extradition, nothing will. And Britain will be nothing but a deep black hole.

Assange’s Lawyers Were Under Surveillance. That’s Not The Whole Story (Canary)

A private security company organised 24/7 surveillance of WikiLeaks founder Julian Assange during his stay at the Ecuadorian embassy in London. This included confidential meetings between Assange and members of his legal team. The surveillance was provided directly to the CIA. These revelations could possibly jeopardise the viability of the US extradition case. But within this story there lies another that raises serious questions about the establishment media and allegiances. According to El Pais, Spanish security firm UC Global was responsible for the surveillance of Assange when he was a guest of the Ecuadorian government at their London embassy. UC Global, a firm with an address in Jerez de la Frontera (Cádiz), was hired by Senain, the former Ecuadorian intelligence service, ostensibly to provide protection for Assange.


However, it’s now been revealed that the company’s owner David Morales passed on the results of the operations to the CIA. He even installed a video streaming service direct to the US. Also monitored were meetings between Assange and his lawyers, including Melynda Taylor, Jennifer Robinson, and Baltasar Garzón. After Rafael Correa was replaced by the right-wing Lenín Moreno as president of Ecuador in May 2017, the latter cancelled the UC Global contract. Moreno then issued a new contract to Ecuadorian company Promsecurity. Video recordings and photos taken by that firm were subsequently used in an extortion attempt.

Read more …

 

 

 

 

 

Sep 262019
 
 September 26, 2019  Posted by at 9:28 am Finance Tagged with: , , , , , , , , ,  12 Responses »


Paul Gauguin By the stream, autumn 1885

 

House To Grill Trump Intel Chief About Whistleblower Report (R.)
House Backs Release Of Trump Whistleblower Complaint 421-0 (R.)
Biden Campaign Blasts Republican Request For Classified VP Documents (Pol.)
Fury And Mistrust As The Brexit Pressure Cooker Blows Its Top (Sky)
Financial System Disappearing into Black Hole – Egon von Greyerz (USAW)
How Employees & Employers Get Bled by Health Insurance (WS)
The Disaster of Negative Interest Rates (Brown)
New Weapons for the ECB (Varoufakis)
Boeing Settles First Lion Air Lawsuits For At Least $1.2 Million Apiece (R.)
Beijing Vows To Retaliate After US Hong Kong Human Rights Bill Approved (SCMP)
Salisbury Attack Novichok Bottle Was Not Recovered For 4 Months (Ind.)

 

 

It’s time for a lot of people to take a lot of very deep breaths and count to ten a million times. The UK is imploding on rhetoric, and in the US people convince themselves they see diametrically opposed things in the exact same material, much of which they‘ve never even read or watched.

There is such a thing as the future of your country and your (grand-)children that must also be considered, guys and gals. You will all have to live together.

House To Grill Trump Intel Chief About Whistleblower Report (R.)

President Donald Trump’s top intelligence official will be grilled by U.S. lawmakers on Thursday over the administration’s handling of a whistleblower report central to an impeachment inquiry into the president. The acting director of national intelligence, Joseph Maguire, will testify to the House of Representatives Intelligence Committee after refusing to share the complaint with Congress, despite a law requiring that it be sent to lawmakers after an inspector general’s determination that it was urgent and credible. Maguire has been in his position for less than two months.


While the formal impeachment inquiry announced on Tuesday by House Speaker Nancy Pelosi is led by Democrats, some of Trump’s fellow Republicans joined them in calling on the administration to send the report to Congress. Members of the House and Senate intelligence committees were allowed to see the complaint on Wednesday. “Republicans ought not to be rushing to circle the wagons to say there’s no there there when there’s obviously lots that’s very troubling there,” Senator Ben Sasse, a Republican member of the Senate Intelligence Committee, said after reading the document.

Read more …

We agree then.

House Backs Release Of Trump Whistleblower Complaint 421-0 (R.)

The U.S. House of Representatives voted 421-0 on Wednesday for a resolution calling on President Donald Trump to release a whistleblower complaint to Congress, despite the administration letting them view the classified document at secure locations in the U.S. Capitol. Two House members voted present and 10 did not vote. The document is central to the impeachment inquiry into the Republican president announced on Tuesday by the Democratic House Speaker, Nancy Pelosi, after reports that Trump had tried to put pressure on Ukraine’s president to help smear a political rival.


The Senate passed a similar resolution by unanimous voice vote on Tuesday. Republicans joined Democrats in backing the release of the document, after many lawmakers argued that Trump’s associates were defying a law calling for whistleblower complaints to be sent to Congress if they are found to be credible.

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Doesn’t seem all that far-fetched.

Biden Campaign Blasts Republican Request For Classified VP Documents (Pol.)

The Biden campaign slammed the Republican National Committee on Tuesday night for urging former Vice President Joe Biden to release the transcripts of his calls with Ukrainian and Chinese leaders, saying it would not be legal or even physically possible for Biden to do that. “Imagine our disbelief that Republicans called for Joe Biden to break the law and release classified transcripts he doesn’t have access to or permission to release, given their track record for holding politicians who commit crimes accountable and their general ethical and moral conduct across the board,” Biden spokesman TJ Ducklo said in a statement provided exclusively to POLITICO.


On Tuesday afternoon, RNC chair Ronna McDaniel called for Biden to release the transcripts of his calls during his years as VP “while his son was conducting shady business deals in those countries.” There’s no indication that Hunter Biden did anything illegal in his business dealings in Ukraine. “With their newfound sense of transparency, will they also ask President Donald Trump to release his tax returns, something he promised to do nearly four years ago?” Ducklo added.

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What kind of country will it be, whatever happens?

Fury And Mistrust As The Brexit Pressure Cooker Blows Its Top (Sky)

Brexit has been a pressure cooker for our government, our parliament, our political parties, our MPs and for all of us too – and finally the tensions really erupted. Back in business after the Supreme Court ruled the government’s decision to suspend parliament was unlawful and therefore void, the whole place was absolutely furious from the moment Geoffrey Cox took to the dispatch box at 11.30am to the close of play nearly 12 hours later. The attorney general, the prime minister’s warm up act, he quickly set the tone. Yes this was a government which had been admonished by the Supreme Court for proroguing parliament unlawfully. But there would be no apologies, contrition or regret.

Instead the government’s top legal brain unleashed an unfettered attack on parliament, working himself into a frenzy as he raged against the “spineless” Labour frontbench and “cowardly” MPs for refusing to grant the prime minister an election. “This parliament is a disgrace,” he boomed to the jeering of opposition MPs. “This parliament is a dead parliament. It should no longer sit, It has no moral right to sit on these green benches.” He charged on: “The time is coming when even these turkeys won’t be able to prevent Christmas!” MPs raged. Labour’s Barry Sheerman shaking in anger as he accused the attorney general of having “no shame all”. “To come here with his barrister’s bluster to obsfucate the truth – a man like him, a party like this and a leader like this to talk about morals and morality. It’s a disgrace.”

With the stage set, Mr Johnson was straight into character as he arrived in the parliament, unrepentant and indignant as he tried to goad his opponents into tabling a motion of no-confidence in the government. The people versus the parliament election, Mr Johnson cast himself as the prime minister trying to deliver on the biggest popular vote in history while ‘the establishment’ – be it the parliament or the courts – block his path. The language provocative and incendiary as he sought to portray his political rivals as anti-democratic and treacherous. Parliament was “refusing to deliver on the priorities of the people” while Jeremy Corbyn and his cronies “do not trust the people. They are determined to throw out the referendum result, whatever the cost.””We will not betray the people who sent us here,” he bellowed as MPs erupted in fury.

Complaints that his inflammatory words were being cited in death threats were dismissed as “humbug”. When he told MPs that the “best way” to honour Jo Cox, who was murdered in the 2016 referendum, was to “get Brexit done”, the chamber moved past boiling point and into complete meltdown. Some MPs walked out of the chamber in protest. Others left in tears.

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“The balance sheet . . . of the Fed is going to go from around $4 trillion to $40 trillion. It is going to go to $100 trillion before this is over.”

Financial System Disappearing into Black Hole – Egon von Greyerz (USAW)

Europe is starting QE again with $20 billion a month, but that’s nothing compared to what is coming. . . . The panic that started with central banks in the summer in late July and August was, to me, the first step towards total chaos in the world that we will be seeing in the months and years to come. They (central bankers) see it clearly. They know the banking system is absolutely on the verge of collapse. They know Deutsche Bank (DB) and CommerzBank, too, are down 95%. If you show this chart to a child and ask where is that likely to go, it is likely to go to zero. DB, with their $50 trillion in derivatives, there is no chance they will survive. Of course, Germany and the ECB is panicking because that will affect the whole banking system worldwide.

This is why they have started to print money now because there is a massive liquidity problem, and that’s Germany, which is the best country in the EU from the point of economics. Then you take Italy, Spain, France and Greece and they are in a real mess. This is why the whole system is on the verge of disappearing into a black hole. . . . With the U.S., there is massive liquidity pressure there too.” The massive amount of money printing to keep the fiat system afloat is just starting. EvG contends, “This is just a practice round. This is just more money at this point. The balance sheet . . . of the Fed is going to go from around $4 trillion to $40 trillion. It is going to go to $100 trillion before this is over.

All of these bubble assets that are based on just credit and credit expansion are going to implode measured in real terms, measured in gold. I expect the stock market and the property market to lose at least 95% or more in real terms. . . . The next up cycle for gold (and silver) has started. The next phase of this market has started, and it is going to go on for a long, long time. It is going to go to levels that will be hard to believe today.

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People suffer and die.

How Employees & Employers Get Bled by Health Insurance (WS)

The annual cost of the average health insurance family plan through employers — employer and employee contributions combined – rose another 4.9% in 2019, to $20,576. This is up 255% from 20 years ago, having soared five times faster than the Consumer Price Index (+52%). Employees paid about 29% of the premium for family coverage ($6,015 annually, red portion) and employers paid about 71% ($14,561 annually, blue portion). Over the past 20 years, the employee contribution has increased by 290%. These are among the findings of the annual survey of over 2,000 companies, both small (3-199 employees) and large (200+ employees), including non-federal public employers, by the nonprofit Kaiser Family Foundation.

Employers and employees both are groaning under the relentlessly ballooning weight of health insurance costs. And the numbers are large: 153 million Americans are covered by employer sponsored health insurance. At companies with few lower-wage workers, the employee contribution for family coverage was on average $5,968 annually. But at companies with many lower-wage workers, the employee portion for family coverage was $7,047 annually. “The single biggest issue in health care for most Americans is that their health costs are growing much faster than their wages are,” KFF CEO Drew Altman said. “Costs are prohibitive when workers making $25,000 a year have to shell out $7,000 a year just for their share of family premiums.”


Many lower-wage workers cannot afford the contributions and forego the health insurance even if their companies offer it. As a result, at companies with many lower-wage workers, only 33% of the workers are covered by the employer’s health insurance, compared to 63% at the other companies. For single coverage of the employee only, the annual cost of the average health insurance premium — employer and employee contributions combined — rose 4.2% in 2019, to $7,188, with the employee paying 17% or $1,242 (up from 14% in 1999) and the employer paying 83% or $5,946 (down from 86% in 1999).

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“Before the Eurozone debt crisis of 2011-12, even the European Central Bank was forbidden to buy sovereign debt.”

The Disaster of Negative Interest Rates (Brown)

EU member governments have lost the sovereign power to issue their own money or borrow money issued by their own central banks. The EU experiment was a failed monetarist attempt to maintain a fixed money supply, as if the euro were a commodity in limited supply like gold. The central banks of member countries do not have the power to bail out their governments or their failing local banks as the Fed did for U.S. banks with massive quantitative easing after the 2008 financial crisis. Before the Eurozone debt crisis of 2011-12, even the European Central Bank was forbidden to buy sovereign debt. The rules changed after Greece and other southern European countries got into serious trouble, sending bond yields (nominal interest rates) through the roof.


But default or debt restructuring was not considered an option; and in 2016, new EU rules required a “bail in” before a government could bail out its failing banks. When a bank ran into trouble, existing stakeholders–including shareholders, junior creditors and sometimes even senior creditors and depositors with deposits in excess of the guaranteed amount of €100,000–were required to take a loss before public funds could be used. Also included in Italy were subordinated bonds that were owned not just by well-off families and other banks but by small savers who in many cases were fraudulently mis-sold the bonds as being risk-free (basically as good as deposits). The Italian government got a taste of the potential backlash when it forced losses onto the bondholders of four small banks. One victim made headlines when he hung himself and left a note blaming his bank, which had taken his entire €100,000 savings.

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Making sense.

New Weapons for the ECB (Varoufakis)

Fortunately, an effective weapon can immediately be built to all four of these standards: ECB conversion bonds. A sketch of their announcement follows: “Henceforth, whenever a eurozone government bond matures, the ECB will issue a conversion bond with a face value equivalent to the Maastricht-compliant portion of the member-state’s total public debt. The bond’s purpose is to service, at low interest rates that only the ECB can fetch, member states’ Maastricht-compliant public debt (up to 60% of GDP) – conditional on member states’ commitment to redeem the bond and afford it seniority over all other debts (presumably serviced at higher interest rates).”

To give a numerical example, if a member state’s debt-to-GDP ratio is 90%, the ECB conversion bond services €667 of each €1,000 of maturing state debt. The less the member state has exceeded its Maastricht debt limit, the larger the percentage of its public debt that will be serviced at the ultra-low ECB bond yields. Immediately, we see how this interest rate differential encourages discipline and eliminates the fear of moral hazard that the present quantitative easing program has elevated to dangerous levels. Note also that, besides minimizing moral-hazard risks, the new ECB bonds meet the other three standards. Their issuance requires no discretionary powers by the ECB as it follows directly from the existing Maastricht limits.

They would provide eurozone banks the missing safe asset they need to wean themselves off bonds issued by often-weak national governments (while creating a safe asset for foreigners to buy with their euros). Finally, ECB conversion bonds would allow interest rates in surplus countries like Germany to rebound, because the ECB would no longer need to buy German bunds as a condition for purchasing Italian bonds. [..] Technically speaking, ECB conversion bonds are the obvious replacement for the failing quantitative easing program. Only the misplaced fear of debt mutualization stands in their way.

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It seems like only yesterday that they offered $120,000. Wait, that WAS yesterday.

Boeing Settles First Lion Air Lawsuits For At Least $1.2 Million Apiece (R.)

Boeing Co has settled the first claims stemming from the crash of a Lion Air 737 MAX in Indonesia, a U.S. plaintiffs’ lawyer said, and three other sources said that families of those killed will receive at least $1.2 million apiece. Floyd Wisner of Wisner Law Firm said he has settled 11 of his 17 claims against Boeing on behalf of families who lost their relatives when a brand-new MAX crashed into the Java Sea on Oct. 29 soon after take-off, killing all 189 aboard. Boeing spokesman Gordon Johndroe declined comment. Boeing did not admit liability in its 11 settlements, Wisner said.


The claims, each representing one victim, are the first to be settled out of some 55 lawsuits against Boeing in U.S. federal court in Chicago and could set the bar for mediation talks by other Lion Air plaintiffs’ lawyers that are scheduled through next month, three people familiar with the matter said. Wisner said he could not disclose the amount of the settlements because of a confidentiality agreement with Boeing. The three people familiar with the matter said families of Lion Air victims, who were nearly all from Indonesia, are set to receive at least $1.2 million each. That amount would be for a single victim without any dependents.

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“If passed, it would, among other actions, require the US to sanction Chinese officials deemed responsible for “undermining basic freedoms in Hong Kong…“

Beijing Vows To Retaliate After US Hong Kong Human Rights Bill Approved (SCMP)

China said it would “hit back forcefully” at the United States after the US Congress officially pushed ahead with a bill to support democratic freedoms in Hong Kong by putting pressure on Chinese authorities. The Hong Kong Human Rights and Democracy Act of 2019 moved through the Senate Foreign Relations Committee and the House of Representatives Foreign Affairs Committee on Wednesday, setting the stage for votes in both chambers in the coming weeks. The bill could pave the way for diplomatic action and economic sanctions against the Hong Kong government.


If passed, it would, among other actions, require the US to sanction Chinese officials deemed responsible for “undermining basic freedoms in Hong Kong” and require the US president to review Hong Kong’s special economic status. China’s foreign ministry spokesman Geng Shuang said in a statement on Thursday that the bill was an attempt to “wantonly interfere in China’s domestic affairs” and had shown the “malicious intention of some in the US Congress to contain China’s development”.

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This must be the strangest thing I’ve read in a long time. The claim is that the Novichock used in the first (Skripal) incident was found after the second incident. But we know that bottle was sealed, and couldn’t have been used on Skripal. How is this a story then to be published today?

Salisbury Attack Novichok Bottle Was Not Recovered For 4 Months (Ind.)

Investigators took almost four months to recover the bottle which contained the deadly novichok nerve agent for almost four months after it was used in an assassination attempt in Salisbury. After it was placed on the front door of former double agent Sergei Skripal on 4 March 2018, a counterfeit Nina Ricci perfume bottle which was used to smuggle the nerve agent into the UK, was not recovered until 27 June. Police believe two Russian men, Alexander Petrov and Ruslan Boshirov, then used a secret pump to spread the nerve agent on Mr Skripal’s front door in March 2018. The former Russian military intrelligence officer and his daughter Yulia were both left seriously ill and a further six people were exposed to novichok in Salisbury, which saw large swathes of it’s town centre shut down as police investigated.


Nick Bailey, a police officer, also fell seriously ill after being exposed to the substance while investigating the case. The source of the novichok was found almost four months later, after the death of Dawn Sturgess. Ms Sturgess was given the perfume bottle as a gift by her partner Charlie Rowley, who had found it in a charity shop bin on 27 June 2018. She died from exposure to the nerve agent three days later. Mr Rowley fell seriously ill but later recovered.

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He’s getting an award.

 

 

 

 

 

Sep 132019
 
 September 13, 2019  Posted by at 9:44 am Finance Tagged with: , , , , , , , , , , ,  7 Responses »


Marc Chagall The watering trough 1925

 

The Dogs in the Street Know (Craig Murray)
Speaker Bercow Warns Boris Johnson Against Disobeying Brexit Law (BBC)
Former FBI Deputy Director Andrew McCabe Must Face Criminal Charges (CNBC)
US House Panel Wants Boeing To Allow Employee Interviews On 737 MAX (R.)
US Pressures Israel To Drop China ‘Belt And Road’ Investments (ZH)
Huawei CEO Offers To License 5G Technology To American Companies (F.)
Mnuchin Says 100-Year Treasury Bond Possible (R.)
US Justice Department To Release Name Of Shadowy Figure In 9/11 Case (R.)
Trump’s Taliban Talks Led by Neocon Operation Cyclone Agent (MPN)
Palace Revolt at the ECB, Legitimacy of Policy out the Window (WS)
The New ECB QE Is A Mistake. Here Is What It Should Have Done (Lacalle)

 

 

A Scotsman taking down the Queen.

The Dogs in the Street Know (Craig Murray)

There are some very obvious facts in British politics which nobody seems to be saying. Joanna Cherry stated in her successful court case that “the dogs in the street know” that the real reason that Boris Johnson had prorogued parliament was to prevent parliament from having an effective say on the outcome of Brexit. The documents that the government was forced to produce to the Scottish Courts proved beyond any shadow of a doubt that was indeed Johnson’s motive. So why are we expected to believe that what you knew and I knew, what Joanna Cherry knew, what the very dogs in the street knew, was not known to the Queen?

Do we really believe that the Queen was “misled” and that she and her courtiers were the only people in the entire country who actually believed that Johnson just wanted the longest prorogation for 89 years to prepare a really good Queen’s speech? Are we really expected to believe that the Queen had not noticed that Brexit was at a crucial stage and the effect that prorogation would have on parliament’s say in the process? This is obviously complete and utter nonsense. The Queen has better sources of information than any of us and knew exactly what was happening. She was not “misled” by Boris Johnson, she was his ally in a common purpose. She absolutely understood both the context and the effect of the prorogation. All this utter nonsense about the Queen being “lied to” and “misled” is part of this strange myth of the ultimate goodness of authority which is a recurring theme in human societies.

Peasants died under the knout while building the Trans-Siberian railway thinking “if only the good Tsar knew.” The Queen is not a naive figure of Christ like innocence taken in by Boris Johnson, she is an ultra wealthy woman of very conservative views embedded in a social circle dominated by very rich and reactionary people. To repeat what I have repeatedly explained, it was unconstitutional for the Queen to appoint Boris Johnson in the first place when it was plain as a pikestaff that he could not command a parliamentary majority. That initial crime (and I use the word advisedly) was compounded by the decision to prorogue parliament to enable her no majority Prime Minister to govern. In a sane world we should be getting out the pitchforks. Instead people are tut-tutting about the poor Queen being misled.

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Prior to his election to Speaker, Bercow was a longtime member of the Conservative Party.

Speaker Bercow Warns Boris Johnson Against Disobeying Brexit Law (BBC)

John Bercow has vowed “creativity” in Parliament if Boris Johnson ignores the law designed to stop a no-deal Brexit. The Commons Speaker also said in a speech that the only possible Brexit was one backed by MPs. A new law, passed before the suspension of Parliament, forces the PM to seek a delay until 31 January 2020, unless a deal or no-deal exit is approved by MPs by 19 October. The PM has said he would rather be “dead in a ditch” than ask for a delay. Delivering a lecture in London, Mr Bercow said: “Not obeying the law must surely be a non-starter. Period.” He said it would be a “terrible example to set to the rest of society”.


“The only form of Brexit which we will have, whenever that might be, will be a Brexit that the House of Commons has explicitly endorsed,” he said. “Surely, in 2019, in modern Britain, in a parliamentary democracy, we – parliamentarians, legislators – cannot in all conscience be conducting a debate as to whether adherence to the law is or isn’t required.” He called it “astonishing” that “anyone has even entertained the notion”. If the government comes close to disobeying the Act, the MP said that Parliament “would want to cut off such a possibility and do so forcefully”. “If that demands additional procedural creativity in order to come to pass, it is a racing certainty that this will happen, and that neither the limitations of the existing rule book nor the ticking of the clock will stop it doing so,” he added.

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Hmm. Should McCabe run free?

Former FBI Deputy Director Andrew McCabe Must Face Criminal Charges (CNBC)

Former FBI deputy director Andrew McCabe has failed in his efforts to convince the Justice Department not to file potential criminal charges against him for allegedly lying to federal agents, NBC News reported Thursday. Lawyers for McCabe, who has not been charged in the case, reportedly met last month with a top Justice official the U.S. Attorney for the District of Columbia and in what were believed to be talks seeking to dissuade then from filing criminal charges. The Washington Post reported last week that federal prosecutors for months have been using a grand jury to investigate McCabe, a critic of President Donald Trump.

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They have to ASK?

US House Panel Wants Boeing To Allow Employee Interviews On 737 MAX (R.)

Congress on Thursday asked Boeing Co’s chief executive to make several employees available for interviews as part of a congressional probe into the design, development and certification of 737 MAX aircraft involved in two crashes that killed 346 people. House of Representatives Transportation Committee Chairman Peter DeFazio and Representative Rick Larsen, who chairs the aviation subcommittee, said in a statement that while Boeing has provided substantial documents and shared senior management’s perspective, “it’s important to the committee’s investigation to hear from relevant Boeing employees.”

The committee plans another Boeing hearing in the coming weeks and previously asked whistleblowers to come forward with any information about the plane’s development. Boeing has provided more than 300,000 pages of documents, a person briefed on the matter said, speaking on condition of anonymity. Boeing said in a statement it was “deeply disappointed the committee chose to release private correspondence given our extensive cooperation to date. We will continue to be transparent and responsive to the committee.”

[..] CEO Dennis Muilenburg said at an investor conference on Wednesday that the company is still targeting “early fourth quarter for getting the airplane back up in the air” but added that “ultimately return-to-service timing will be determined by the regulator.” The FAA has repeatedly said it will not certify the plane to fly again until it is safe to do so. The European Aviation and Space Agency said on Tuesday it “intends to conduct its own test flights separate from, but in full coordination with, the FAA. The test flights are not scheduled yet, the date will depend on the development schedule of Boeing.”

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If they’re pressuring Israel, they much be pressuring others too.

US Pressures Israel To Drop China ‘Belt And Road’ Investments (ZH)

As China executes on its “Belt and Road” global trade scheme, more than 130 countries who have either committed to or expressed interest in the $600 billion initiative have been hard at work expanding their infrastructure to accommodate Beijing’s ambitious plan. And while President Trump has been pounding the table in an ongoing US-China trade war, progress made on Belt and Road threatens to reduce US leverage over Beijing – putting US allies such as Israel, which extended a 25-year offer for the operation of the Haifa terminal to state-controlled Shanghai International Port Group – in a tricky position, according to Bloomberg’s Ivan Levingston.

“With national elections approaching on Sept. 17, Prime Minister Benjamin Netanyahu can ill afford to alienate the Trump administration on its signature international issue. Trump has endeared himself to Netanyahu by transferring the U.S. Embassy from Tel Aviv to Jerusalem and recognizing Israeli sovereignty in the disputed Golan Heights. Netanyahu reciprocated by naming a new Golan settlement after Trump and praising the American leader for, among other things, quitting the Iranian nuclear accord. “Over the years, Israel has been blessed to have many friends who sat in the Oval Office, but Israel has never had a better friend than you,” Netanyahu told the president during a March trip to the White House. An October Pew study found that 69% of Israelis had confidence in Trump’s performance as president, and many of Netanyahu’s campaign ads prominently feature the U.S. leader.” -Bloomberg

Of note, China is currently Israel’s second-largest trading partner with around $11.5 billion in annual transactions in 2018, according to the report. Meanwhile, the United States has pressed Israel to create a buffer with China in the interest of national security – which would look something like the Committee on Foreign Investment in the US (the same one that rubber-stamped Russia’s purchase of 20% of America’s Uranium). “Israel and Israeli companies are quickly coming to the realization that it’s going to be difficult to sustain business as usual in work with China while keeping the United States as the primary partner,” said Daniel Shapiro, Barack Obama’s US ambassador to Israel.

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How is Huawei linked to Belt & Road?

Huawei CEO Offers To License 5G Technology To American Companies (F.)

Zhengfei Ren, the CEO and founder of Huawei offered an olive branch to the Trump administration: License the Chinese telecommunications giant’s 5G technology to American companies, with the caveat that the U.S. government ““the U.S. side has to accept us at some level for that to happen.” Currently, the use of Huawei equipment is banned from U.S. networks over concerns that it could be used by the Chinese government as a method to spy or disrupt telecom systems. The offer [..] would essentially allow the U.S. to finally get in the race for 5G supremacy which is now dominated by Chinese firms Huawei and ZTE, Ericsson of Sweden and Nokia from Finland.


“Huawei is open to sharing our 5G technologies and techniques with U.S. companies, so that they can build up their own 5G industry. That would create a balanced situation between China, the U.S. and Europe,” told Ren to the newspaper. [..] Ren added that the U.S. companies would be allowed to modify as they see fit the software code used to run any of Huawei’s 5G equipment or even change it and use their own. [..] Ren added that the American licensees will be able to sell their 5G equipment based on Huawei’s intellectual property anywhere in the world, except in China.

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“We are going to start with 50 years, and if the answer is, 50-years is successful, we’ll consider 100-year bonds..”

Mnuchin Says 100-Year Treasury Bond Possible (R.)

U.S. Treasury Secretary Steven Mnuchin on Thursday said the United States will issue 50-year bonds if there is “proper demand,” a moved aimed at “derisking” the government’s $22 trillion of debt and locking in low interest rates. “We are going to start with 50 years, and if the answer is, 50-years is successful, we’ll consider 100-year bonds,” Mnuchin said in an interview with New York Times’ DealBook and streamed online live, adding that he began looking into the possibility of ultra-long U.S. bonds two years ago. The longest-dated U.S. Treasury currently is 30 years.


U.S. President Donald Trump has proposed a different fix for the rising cost of the record U.S. debt, calling on Wednesday on the “boneheads” at the Federal Reserve to reduce interest rates to below zero so as to reduce interest-rate payments. The Fed is widely expected to cut interest rates by a modest quarter of a percentage point next week when U.S. rate-setters meet. Fed Chair Jerome Powell and other policymakers see U.S. economic conditions as still generally favorable despite a global slowdown and a still-unresolved U.S.-China trade war, and they have consistently pushed back against the notion of negative rates or of setting rates to cater to political pressure.

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Is something moving?

US Justice Department To Release Name Of Shadowy Figure In 9/11 Case (R.)

The U.S. Justice Department on Thursday said it would release the name of an individual sought by people who are suing the government of Saudi Arabia for alleged involvement in the Sept. 11, 2001, hijacking attacks. U.S. prosecutors in New York said in a court filing that Attorney General William Barr had decided not to invoke state secrets and will share the person’s name with attorneys involved in the case. The decision could help victims of the Sept. 11 attacks and their family members, who charge in a long-running lawsuit that the Saudi government supported the hijackers who crashed jet liners into the World Trade Center, the Pentagon and a Pennsylvania field, killing nearly 3,000 people.


The Saudi government has repeatedly denied involvement in the attacks. The Saudi embassy in Washington did not immediately respond to requests for comment on Thursday. The case, filed in 2003, received a boost in 2016 when Congress passed a law making it easier to sue foreign governments for alleged involvement in terrorism. The plaintiffs have been trying to obtain redacted material from a 2012 FBI report which indicated the agency was investigating two Saudi officials, Omar al-Bayoumi and Fahad al-Thumairy, and said there was evidence that a third, unnamed party had ordered them to help the hijackers. Attorneys will now get to learn the name of that person, though their identity will remain under seal.

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Scary people.

Trump’s Taliban Talks Led by Neocon Operation Cyclone Agent (MPN)

John Bolton wasn’t the only veteran of the conflict in Afghanistan now charged with resolving it. Nor was he the only PNAC veteran in the Trump administration. U.S. Special Representative for Afghanistan Reconciliation Zalmay Khalilzad, the top American official in the negotiations, was a PNAC charter member and has been quietly overseeing the destruction of Afghanistan for most of his political career — longer than the Taliban has existed as an organization. Khalilzad worked closely with late National Security Advisor Zbigniew Brzezinski, who took a leading role in Operation Cyclone under President Carter. The secret CIA program pumped the Afghan Mujahideen up with cash, weapons, training, and jihadist school books.

The Brooklyn-based Al-Kifah Afghan Refugee Center — a front for Maktab al-Khidamat, an organization co-founded by Osama bin Laden — would become key to this endeavor. Brzezinski’s aim, as he stated, was to give the Soviets their own Vietnam quagmire. Back then, his message to the Mujahideen fighters that would become al-Qaeda and the Taliban was: “Your cause is right and God is on your side.” Even after the devastating attacks of September 11, Brzezinski defended the decision to support the Mujahideen in the name of defeating the Soviet Union.

The United States’ support for the Mujahideen in Afghanistan, and later Bosnia, was intended to bleed the Soviet Union. It is no surprise that the same leeches — the Taliban and al-Qaeda — that were trained by the United States, would turn on their masters. In the case of the Taliban, clinging on to the U.S. for nearly two decades, slowly sucking away all the while. In the case of al-Qaeda, the attacks on the World Trade Center dealt massive blows. The end-game tactics mirror the CIA’s philosophy in training the Mujahideen against the USSR. U.S officials like Khalilzad would spend decades in luxurious buildings in and around Washington while the people of Afghanistan would continue to suffer nearly another two decades of conflict because of their policies.

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Wolf Richter sees the ECB falling to bits. Wonder what Lagarde is doing these days.

Palace Revolt at the ECB, Legitimacy of Policy out the Window (WS)

ECB President Mario Draghi, who is on his way out, will, as we’re learning more and more, do anything to push his agenda and make it stick at the ECB long after he leaves, but whatever his agenda may be, it’s clearly unrelated to the European economy which has been buckling under the consequences of his agenda: the destructive weight of negative interest rates and QE. And in the process, he is destroying the legitimacy of the ECB’s policy. The latest incident was on Thursday. During the press conference following the ECB’s policy meeting, he lied to reporters, claiming that the “consensus was so broad there was no need to take a vote,” when in fact he had a revolt on his hand during the meeting by the presidents of the national central banks that represented half of the economy of the Eurozone, and by members of the Executive Board.

Among the key policy changes the ECB announced on Thursday was the restart of QE to the tune of €20 billion a month and a tiny 10-basis point cut in its deposit rate, from the old negative -0.4% to the new negative -0.5%. The announcement also included a provision to help banks – which have been getting re-crushed by these idiotic negative interest rates – to survive those negative interest rates: the ECB would exempt part of the banks’ deposits at the ECB from negative rates in a two-tier system. It was the QE portion of the decision that had triggered the unprecedented revolt during the meeting. “Officials with knowledge of the matter” told Bloomberg that during the contentious meeting, the members of the Governing Council and of the Executive Board who vigorously opposed the restart of QE included but was not limited to:

• Jens Weidmann, President of the Bundesbank • Francois Villeroy de Galhau, Governor of the Bank of France • Klaas Knot, President of the Dutch central bank • Ewald Nowotny, Governor of the Austrian central bank • Ardo Hansson, Governor of the Bank of Estonia • Sabine Lautenschlaeger, Member of the Executive Board • Benoit Coeure, Member of the Executive Board. The countries of the five heads of the national central banks, from Weidmann to Hansson, account for about half of the economy of the Eurozone. They opposed the restart of QE, but there was no vote – which is common in ECB proceedings when there is a consensus. But there was no consensus. And Draghi simply imposed his agenda.

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Mistake perhaps. But hardly an honest one, if you read Wolf Richter’s piece above. The ECB IS the mistake.

The New ECB QE Is A Mistake. Here Is What It Should Have Done (Lacalle)

The ECB is creating a dangerous bubble and should not have cut rates by 10bps nor added a new purchase program of €20 billion per month. 1) Eurozone states are already financing themselves at negative rates. There is no need for lower rates and this disguises real risk. This has saved governments more than 1 trillion euro in interest expenses. 2) The ECB has not abandoned its stimulus. It repurchases all maturities, launched a liquidity injection (TLTRO) in March 2019 and balance sheet stands at almost 40% of eurozone GDP. 3) Excess liquidity is 1.7 trillion euro. More liquidity does not lead agents to spend/invest more. There is no higher solvent credit demand because monetary policy perpetuates overcapacity and zombifies the economy. Share of zombie companies has soared c30% since 2013 (BIS).

4) Interest rates are already negative. This has caused a 23 billion euro loss for banks (according to Scope Ratings) and a worrying rise in junk debt demand. 5) There is no evidence of a need for more credit growth. Rather the opposite. The ECB believes the eurozone problem is one of excess saving and lack of demand when it is of excess debt and oversupply. 6) Negative rates zombify the economy and are a massive transfer of wealth from savers and productive sectors to the indebted and inefficient. 7) The ECB already accumulates a disproportionate amount of sovereign debt as well as corporate bonds of issuers that never had a problem financing themselves at low rates. This disguises risk and creates an enormous bubble.

8) The problem of the eurozone is not one of lack of stimuli, but an excess of them. Governments burden the productive private sector with higher taxes and unnecessary regulations, so economic surprise falls despite massive stimulus. 9) When this fails or -even worse- explodes, central planners will likely blame “markets” or “lack of stimulus” to repeat. 10) Saying that negative rates are “demanded” by investors is a sad excuse. Financial repression leads economic agents to take more risk for lower yields and central banks go from lenders of last resort to enablers of financial bubbles.

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Sep 122019
 


Joan Miro Montroig, la iglesia y el pueblo 1918

 

 

Ok, the mailing lists still don’t work, and now the site layout is skewed too after a WordPress update. Lovely. Apologies. Working on it.

 

 

How the UK Security Services Neutralised The Guardian (Declassified)
The Consequences of the Bush-Era Assault on Civil Liberties (Taibbi)
No-Deal Brexit Papers Warn Of Shortages And Riots (BBC)
£8 Billion Bet on No Deal Crash-Out by Boris Johnson’s Leave Backers (Byline)
ECB To Turn Stimulus Taps Back On To Prop Up Ailing Economy (R.)
Ridiculous EU Commissioner Roles Show Why People Hate Brussels Bureaucracy (RT)
Trump Blasts ‘Mr. Tough Guy’ Bolton (Hill)
Three Bolton Aides Resign From Trump White House After His Exit (Hill)
Investors Concerned Over China’s Capital Controls, Lack Of Transparency (SCMP)
The Rich Can’t Get Richer Forever, Can They? (New Yorker)

 

 

Excellent from Declassified on how and why the Guardian started setting up vicious smear campaigns of Assange, Jeremy Corbyn and others.

How the UK Security Services Neutralised The Guardian (Declassified)

On 20 July 2013, GCHQ officials entered The Guardian’s offices at King’s Cross in London, six weeks after the first Snowden-related article had been published. At the request of the government and security services, Guardian deputy editor Paul Johnson, along with two others, spent three hours destroying the laptops containing the Snowden documents. The Guardian staffers, according to one of the newspaper’s reporters, brought “angle-grinders, dremels – drills with revolving bits – and masks”. The reporter added, “The spy agency provided one piece of hi-tech equipment, a ‘degausser’, which destroys magnetic fields and erases data.”

Johnson claims that the destruction of the computers was “purely a symbolic act”, adding that “the government and GCHQ knew, because we had told them, that the material had been taken to the US to be shared with the New York Times. The reporting would go on. The episode hadn’t changed anything.”

Yet the episode did change something. As the D-Notice Committee minutes for November 2013 outlined: “Towards the end of July [as the computers were being destroyed], The Guardian had begun to seek and accept D-Notice advice not to publish certain highly sensitive details and since then the dialogue [with the committee] had been reasonable and improving.” The British security services had carried out more than a “symbolic act”. It was both a show of strength and a clear threat. The Guardian was then the only major newspaper that could be relied upon by whistleblowers in the US and British security bodies to receive and cover their exposures, a situation which posed a challenge to security agencies.

[..] In 2018, however, The Guardian’s attempted vilification of Assange was significantly stepped up. A new string of articles began on 18 May 2018 with one alleging Assange’s “long-standing relationship with RT”, the Russian state broadcaster. The series, which has been closely documented elsewhere, lasted for several months, consistently alleging with little or the most minimal circumstantial evidence that Assange had ties to Russia or the Kremlin. [..] The string of Guardian articles, along with the vilification and smear stories about Assange elsewhere in the British media, helped create the conditions for a deal between Ecuador, the UK and the US to expel Assange from the embassy in April.

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Security Services rule the world.

The Consequences of the Bush-Era Assault on Civil Liberties (Taibbi)

A judge last week ruled the federal government’s Terrorist Screening Database (TSDB), which secretly categorized more than 1 million people as “known or suspected terrorists,” is unconstitutional. Like a number of “War on Terror” reforms instituted in the Bush years, the TSDB’s unconstitutionality was obvious from its inception. Indeed, the very idea that we needed to “take the gloves off” in our post-9/11 “State of Exception” was an original selling point of some of these programs.

The TSDB is cousin to the No-Fly List (a different and more restrictive list ruled unconstitutional in 2014), the Distribution Matrix (the drone assassination program also known as the “Kill List”), the STELLAR WIND warrantless surveillance program, multiple expansions of the Foreign Intelligence Surveillance Act, the broadened use of National Security Letters to obtain private data without warrant, the “Enhanced Interrogation” program the rest of the world calls torture, and countless other War on Terror initiatives that were and are clear violations of the spirit of the constitution.

[..] The Kill List, the TSDB, and all the secret surveillance programs pose the same problem: they exist more or less completely apart from meaningful public oversight. They’re bureaucratic states within states. For instance, part of the PATRIOT Act governing the issue of National Security Letters (NSLs) – by which the FBI can demand that private companies turn over subscriber information, billing records, and other private data – allows the government to place gag orders on recipients of such letters. Because of this, we only have a faint idea of what NSLs look like. In one rare case, a man named Nicholas Merrill balked and sued when his company was issued a National Security Letter. In that case, the government argued that even releasing the existence of the letter would compromise national security.

This is frightening given that a) no courts need to approve the issuance of such letters, and b) the quantity of such demands is massive. Over a ten-year period, the government reportedly issued over 300,000 NSLs, at one point reaching a pace of 60,000 issued per year. The Merrill case in 2015 represented the first time a gag order was lifted on one of these operations. The recent watchlist lawsuit should remind us we’re assassinating, torturing, snooping on, and blacklisting people all over the world, by means of a continually expanding federal bureaucracy that exists outside of any specific mission, and refuses to recognize the oversight authority of courts or congress.

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They’re ignoring Parliament. Risky strategy. Especially since a first court has now declared prorogation is unlawful. Before Supreme Court next week.

No-Deal Brexit Papers Warn Of Shortages And Riots (BBC)

Riots on the streets, food price rises and reduced medical supplies are real risks of the UK leaving the EU without a deal, a government document has said. Ministers have published details of their Yellowhammer contingency plan, after MPs voted to force its release. It outlines a series of “reasonable worst case assumptions” for the impact of a no-deal Brexit on 31 October. Labour leader Jeremy Corbyn said the paper confirmed the PM “is prepared to punish those who can least afford it”.


Michael Gove, one of Boris Johnson’s senior cabinet colleagues who has been given responsibility for no-deal planning, said “revised assumptions” will be published “in due course alongside a document outlining the mitigations the government has put in place and intends to put in place”. However, ministers have blocked the release of communications between No 10 aides about Parliament’s suspension. Mr Gove said MPs’ request to see e-mails, texts and WhatsApp messages from Dominic Cummings, Boris Johnson’s chief aide, and eight other advisers in Downing Street were “unreasonable and disproportionate”. Publishing the information, he added, would “contravene the law” and “offend against basic principles of fairness”.

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“Under the Ministerial Code, Government ministers must have “no actual or perceived conflicts of interest”.

£8 Billion Bet on No Deal Crash-Out by Boris Johnson’s Leave Backers (Byline)

From the financial data publicly available, Byline Times can reveal that currently £4,563,350,000 (£4.6 billion) of aggregate short positions on a ‘no deal’ Brexit have been taken out by hedge funds that directly or indirectly bankrolled Boris Johnson’s leadership campaign. Most of these firms also donated to Vote Leave and took out short positions on the EU Referendum result. The ones which didn’t typically didn’t exist at that time but are invariably connected via directorships to companies that did. Another £3,711,000,000 (£3.7 billion) of these short positions have been taken out by firms that donated to the Vote Leave campaign, but did not donate directly to the Johnson leadership campaign.


Currently, £8,274,350,000 (£8.3 billion) of aggregate short positions has been taken out by hedge funds connected to the Prime Minister and his Vote Leave campaign, run by his advisor Dominic Cummings, on a ‘no deal’ Brexit. Does this £8 billion bet explain why the Prime Minister has said that he would rather “die in a ditch” before asking the EU for an extension? Is it the reason why Johnson is willing to defy the Benn Act that stops a ‘no deal’ Brexit? Is the £8 billion any kind of motivation to prorogue Parliament? Under the Ministerial Code, Government ministers must have “no actual or perceived conflicts of interest”. But what could be a bigger conflict of interest than those bankrolling the Prime Minister also having a vast financial interest in a catastrophe for Britain?

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How big will Draghi be?

ECB To Turn Stimulus Taps Back On To Prop Up Ailing Economy (R.)

The European Central Bank is set to unveil fresh stimulus measures on Thursday to prop up the ailing euro zone economy, but its exact moves are far from certain and a decision that underwhelms markets risks pushing up borrowing costs. With other major central banks easing monetary policy, Germany at risk of falling into recession and inflation expectations sliding, ECB President Mario Draghi has all but promised more support, putting all of the bank’s remaining tools in play. However Draghi, who hands over the leadership of the central bank to Christine Lagarde at the end of October, will face push back from more conservative members of his Governing Council.


Some policymakers have voiced concerted, public opposition to more radical stimulus measures, particularly the restarting of bond purchases, known as quantitative easing. Also, Draghi’s dovish talk has raised investors’ expectations so high that it will be difficult to fully deliver on them, leaving the ECB at risk of disappointing. This could see market interest rates increase, rather than fall. While the ECB has a wide range of policy instruments at its disposal, each comes with complications, from questionable efficacy and big side effects.

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No, seriously, they have a “Commissioner for Protecting our European Way of Life”

Ridiculous EU Commissioner Roles Show Why People Hate Brussels Bureaucracy (RT)

Ursula von der Leyen has unveiled her new team of EU Commissioners. Their job descriptions and responsibilities are nebulous, oddly overlapping and bound to cause confusion. This is European bureaucracy at its worst.
Most Europeans pay scant attention to the detailed inner workings of Brussels politics, precisely because of the bewildering nature of its bloated bureaucracy. Von der Leyen, the EU Commission President, has gone and made it worse. The former German defense minister has steered away from traditional ministerial titles and opted for more Orwellian-sounding names – the kind you need to google to decipher what they actually mean.


Instead of getting a commissioner for dealing with defense or foreign policy, for instance, we are getting a “Commissioner for a Stronger Europe in the World.” There will also be a “Commissioner for Inter-institutional Relations and Foresight” who will apparently deal with policy-making and regulation and a “Commissioner for an Economy that Works for People.” It’s all very ‘Ministry of Truth’-esque. One particular title has backfired spectacularly. The “Commissioner for Protecting our European Way of Life” will be dealing, partially, with immigration policy. The name has already been slammed as “fascist,” “grotesque” and, my favorite, an “infelicitous semantic choice” due to the alleged implication that Europeans need to be “protected” from immigrants.

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Riddance. Good.

Trump Blasts ‘Mr. Tough Guy’ Bolton (Hill)

President Trump blasted his former national security adviser John Bolton from the White House on Wednesday, saying he had been fired after making “some very big mistakes” and that he did not get along with others in the administration. In a public rebuke of a top aide that would have been extraordinary before the Trump White House, Trump said Bolton had “set us back” and that the adviser had disagreed with the president on various national security issues. He slammed a mistake Bolton made early in his tenure at the White House when he discussed a “Libyan model” in the context of North Korea — which that country took as a sign that its leadership could meet the fate of former Libyan strongman Moammar Gadhafi.


While he insisted he had gotten along with the adviser, he also ridiculed Bolton for getting the United States involved in the Iraq War. “So, John is somebody that I actually got along with very well. He made some very big mistakes,” Trump said a day after his abrupt ousting of Bolton. He said the “Libyan model” remark had set back talks with North Korea and was “not a good statement to make.” “And it set us back, and frankly he wanted to do things — not necessarily tougher than me — You know John’s known as a tough guy. He’s so tough he got us into Iraq … but he’s actually somebody I had a very good relationship with. But he wasn’t getting along with people in the administration that I consider very important.”


Bolton to spend more time with his family

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What kind of job is that anyway?

Three Bolton Aides Resign From Trump White House After His Exit (Hill)

Three aides to national security adviser John Bolton are resigning from the White House a day after news broke of Bolton’s high-profile departure from the Trump administration, Reuters reported. According to the news agency, the White House received resignations on Wednesday from the trio of staffers, who have reportedly worked with Bolton for years: Bolton’s former spokesman, Garrett Marquis; his former communications director, Sarah Tinsley; and Christine Samuelian, who served as Bolton’s scheduler. Marquis said in a statement obtained by Reuters Wednesday that “it was an honor to serve my country, and I wish the president and the administration success moving forward.”


The Hill has not yet confirmed the departures with the White House. The departures came a day after Trump announced that he had fired Bolton via Twitter, citing disagreements they had over “many of his suggestions.” “I informed John Bolton last night that his services are no longer needed at the White House. I disagreed strongly with many of his suggestions, as did others in the Administration, and therefore I asked John for his resignation, which was given to me this morning,” Trump said in a pair of tweets on Tuesday morning.

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If you can’t get your money out, why invest?

Investors Concerned Over China’s Capital Controls, Lack Of Transparency (SCMP)

China’s biggest investment fair was intended to project the image that the country is fully open for business, but instead it has been dominated by foreign firms complaining that local governments are still making it a difficult place to operate. Delegates in Xiamen this week suggested that local governments are ignoring advice from Beijing as it aims to increase market access and level the playing field with domestic companies, meaning that the implementation of reforms to make it easier for foreign firms to operate in China still have not gone far enough. As it undergoes pressures caused in the most part by the trade war with the United States, Beijing is redoubling its efforts to woo investment by lavishing promises of fair treatment on foreign investors and giving VIP treatment to the likes of Telsa CEO Elon Musk.

But capital controls that restrict the flow of money into and out of the country, as well as lack of transparency in the bidding processes involving local governments, were among specific concerns raised during a panel discussion at the annual China International Fair for Investment and Trade. “In the past, when it comes to tenders and bidding, everyone would immediately turn to the company identity. This happened very often. This is a foreign company, that is a state company and this is a private company,” said Wang Jie, vice-president of Schneider Electric China, which manufactures and distributes electrical components. “Sometimes it’s not explicit, but it would be like, ‘This is an important project, maybe it isn’t appropriate for a foreign company.’”

[..] Zhou Bing, vice-president for Dell Greater China, said that it is important to have more flexibility in cross-border capital flows to boost trade, with China currently maintaining strict controls that can effectively shut off outflows. This can prove to be a major disadvantage for overseas investors who want to know that they can transfer their money out of China after it has been invested. “We are a typical company in the processing trade business here,” said Zhou, referring to a company that imports components into China to assemble them into finished goods before being exported. “So, it means there’s massive amount of capital flowing in and out [of China]. Right now, it’s still relatively smooth, but in the long term, do we want to keep our capital in China, do we keep our profit in China? It depends on how open the policy is.”

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It’s not just America, the whole world should think this over. Inequality doesn’t last.

The Rich Can’t Get Richer Forever, Can They? (New Yorker)

In 1831, Alexis de Tocqueville, at the age of twenty-five, was sent by France’s Ministry of Justice to study the American penal system. He spent ten months in the United States, dutifully visiting prisons and meeting hundreds of people, including President Andrew Jackson and his predecessor, John Quincy Adams. On his return to France, he wrote a book about his observations, “Democracy in America,” the first volume of which was published in 1835. Many of the observations have weathered well (he noted, for instance, how American individualism coexisted with conformism). Others have not. For example, Tocqueville, who was the youngest son of a count, was deeply impressed by how equal the economic conditions in the United States were. It was, at the time, an accurate assessment.


The United States was the world’s most egalitarian society. Wages in the young nation were higher than in Europe, and land in the West was abundant and cheap. There were rich people, but they weren’t super-rich, like European aristocrats. According to “Unequal Gains: American Growth and Inequality Since 1700,” by the economic historians Peter H. Lindert and Jeffrey G. Williamson, the share of national income going to the richest one per cent of the population was more than twenty per cent in Britain but below ten per cent in America. The prevailing ideology of the country favored equality (though, to be sure, only for whites); Americans were proud that there was a relatively small gap between rich and poor. “Can any condition of society be more desirable than this?” Thomas Jefferson bragged to a friend.

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Sep 112019
 
 September 11, 2019  Posted by at 9:22 am Finance Tagged with: , , , , , , , , ,  2 Responses »


Robert Frank White Tower, New York 1948 (Frank died yesterday, aged 94)

 

 

To everyone used to receiving Automatic Earth posts in their email, I’m sorry but since Saturday they’re suddenly bouncing again en masse. This makes me very tired by now, but I’ll look for a solution. I suspect there may be a connection between this and Google accusing me of violating their rules, without telling me what rules I’m supposed to have violated.

 

 

Trump Fires National Security Adviser John Bolton (Ind.)
‘You’re Fired!’ Trump Cuts Loose Of His Dog Of War (George Galloway)
In A Fracturing World, Central Banks Still Stuck Together (R.)
European Banks Paid ECB €23 Billion Since 2014… And Now Face Disaster (ZH)
Brexit’s Puppet Master Has More Strings To Pull (R.)
Ireland, Boris Johnson Both Eye Return To EU’s Original Brexit Backstop (Ind.)
Johnson Can’t Escape The Clutches Of May’s Zombie Brexit Deal (Behr)
Israel PM Netanyahu Vows To Annex Occupied Jordan Valley (BBC)
Netanyahu’s Jordan Valley Annexation Pledge Is a PR Stunt (RT)
California Passes Landmark Gig Economy Rights Bill (BBC)
‘One America News’ Claims Defamation In $10 Million Suit vs Rachel Maddow (ZH)

 

 

There are still people who are sad to see him go.

Trump Fires National Security Adviser John Bolton (Ind.)

Donald Trump said he fired John Bolton, writing in a tweet he “disagreed strongly with many of his suggestions” and adding he would announce a replacement for his hawkish national security adviser sometime next week. “I informed John Bolton last night that his services are no longer needed at the White House,” the president wrote on Tuesday. “I disagreed strongly with many of his suggestions, as did others in the Administration, and therefore I asked John for his resignation, which was given to me this morning.” “I thank John very much for his service,” he added. “I will be naming a new National Security Advisor next week.” Mr Bolton then tweeted a statement of his own shortly after the president’s announcement, writing: “I offered to resign last night and President Trump said, ‘Let’s talk about it tomorrow.'”


Mr Bolton also reportedly told CNN’s Robert Costa shortly after his dismissal: “Let’s be clear, I resigned, having offered to do so last night.” The reason for Mr Bolton’s departure was not immediately clear, although it has been suggested that he disagreed with the president’s aborted plan to hold peace talks with the Taliban at Camp David this week, days before the 18th anniversary of the 9/11 attacks. Mr Bolton was also an outspoken advocate of regime change in Iran. Although Mr Trump unilaterally withdrew the United States from the nuclear deal that his predecessor Barack Obama signed with Tehran, he is known to oppose military action in the Middle East.

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“So, farewell then, John Bolton. You killed a lot of folks. Thanks to God and President Trump you will kill no more.”

‘You’re Fired!’ Trump Cuts Loose Of His Dog Of War (George Galloway)

The blowing up of Donald Trump’s attempt to end the 18-year Afghan War was the straw which broke the camel’s back for the US president, who on Tuesday fired his national security adviser John Bolton.
Trump’s attempt to bring to a close the longest war in US history – longer, in fact, than their direct involvement in WWI, WWII and the Vietnam War put together – was to be his own “Camp David moment.” It would have mimicked both Carter and Clinton’s “triumphs” there with Arafat and Begin and Arafat and Rabin (neither of which have in fact turned out to be triumphs but were wonderful photo-ops).

Bolton’s rearguard action and the Taliban’s killing of a single US soldier there in the week of the summit brought the Camp David caper crashing down, much to the president’s fury, and prompted Secretary of State Mike Pompeo to boast that the US had killed a thousand Taliban in the previous 10 days. But it was not one damn thing, but one damned thing after another, which has caused the final forking of the “bureaucratic tape-worm” John Bolton, who has slithered through every right-wing administration in living memory.

[..] John Bolton, like so many others, was a “chicken-hawk,” always ready to fight to the last drop of somebody else’s blood. He evaded the draft during the Vietnam War because as he said himself “I didn’t want to die face down in a South East Asian rice paddy.” Nothing wrong with that, if he hadn’t continued to “support” the war and wave off to the paddy-fields the 58,000 Americans who did die, face-down, in the war he dodged. So, farewell then, John Bolton. You killed a lot of folks. Thanks to God and President Trump you will kill no more.


Kevin Lamarque | Reuters

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But what if they start competing?

In A Fracturing World, Central Banks Still Stuck Together (R.)

The last time major central banks shifted gears together, it was a cooperative move to keep the financial crisis of a decade ago from becoming a full-bore, worldwide depression. Now, a new round of global ratecutting risks taking on a competitive edge as policymakers try to stay ahead of rising trade tensions, a volatile investment climate, and a shift in the political mood from shared support for globalization to a more zero-sum battle over a slower-growing world economy.

[..] If the Fed and ECB do as expected at their upcoming meetings, BOJ officials will be torn between how a stressed financial system may respond to ever lower rates, and how Japanese exporters may be damaged if the yen rises in value as a result of the actions of those other central banks. European officials, disappointed that elected leaders haven’t spent aggressively to boost economic growth, are sparring over how much lower already negative rates can go without causing problems, how expansive other ECB programs should become, and what good any of it might do. At the Fed, policymakers are split over whether to cut a lot, a little or not at all.

In each case, officials are reckoning with the fact that their economies and financial systems have become so tied together that fully independent policymaking, insofar as it ever was possible, may be a thing of the past. “We really thought monetary policy had things under control,” and would be able to offset whatever programs elected leaders chose to pursue, even a trade war, said Tara Sinclair, an economics professor at George Washington University. “Does that work in a super low interest rate world and in a very integrated world?” when central banks may have lost much of their traditional influence over the domestic economy.

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What purpose does the ECB serve?

European Banks Paid ECB €23 Billion Since 2014… And Now Face Disaster (ZH)

Earlier this morning, there was an added wobble in European bond prices after an unconfirmed MNI report said the ECB could delay the launch of QE on Thursday and make it data dependent. While skeptics quickly slammed the story, saying it was just a clickbait by MarketNews … it does highlight just how sensitive the bond market is to an announcement of aggressive easing by the ECB when it meets on Thursday, Sept 12, where consensus generally expects a significant easing package, including a -20bp rate cut (followed by -10bp cut later on), coupled with roughly €30 billion in sovereign debt QE for 9-12 months, coupled with enhanced forward guidance.

There is just one problem: while it is unclear if any further easing by the ECB will do anything to stimulate the Eurozone economy, one thing is certain – further easing will only cripple Europe’s banks. In fact, as Goldman writes in its ECB preview, “further rate cuts are a very uncomfortable prospect for the [banking] sector” and estimates that a -20bp cut could lead to an aggregate €5.6bn (-6%) profit cut for 32 €-banks under the bank’s coverage; worse, a further -10bp cut, as per GS macro forecasts, increases the hit to -10% (-€8.3 bn). Overall, 19 banks in Goldman’s coverage face a >10% EPS cut, and 8 banks face as much as a 20% EPS hit.

Then there is Europe’s head on collision with a recession: the weakening rate outlook has been accompanied by >20% fall in €-bank shares (SX7E) since 2H18 and -4% cuts to their consensus Net Interest Incomes (for 2020E). According to Goldman, so far ~40% of the share price decline could be explained by NII cuts; the rest falls into the ‘other’ domain, “where political risk features notably.” Here is the problem in one sentence, and chart: since negative rates were introduced in 2014, European Banks have paid €23BN to the ECB!

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“He is one of the smartest people I have ever worked with. He thinks several steps ahead, thrives on chaos and has sat in a bunker for three years thinking about this: so what is he going to do?”

Brexit’s Puppet Master Has More Strings To Pull (R.)

Cummings, who alongside fellow campaigner Matthew Elliott, drove Vote Leave to victory in the 2016 referendum is cast by allies as a ruthless strategist who cares little for the conventions of traditional British politics. He provoked a row inside Westminster when he sacked a 27-year-old adviser to finance minister Sajid Javid. The adviser, Sonia Khan, was escorted by armed police from Downing Street without Javid’s knowledge. Former Prime Minister John Major cast Cummings as an overmighty “political anarchist” who should be sacked as Johnson’s de-facto chief of staff before he poisoned British politics beyond repair.

Cummings’s response? “Trust the people” – a slogan used by government advisers to cast Johnson’s Brexit-supporting team as the true servants of the people fighting a London political and financial elite that wants to thwart their will. Foreign Secretary Dominic Raab said on Monday that the United Kingdom was in dangerous territory as voters were concluding that parliament was hindering Brexit. He said the government would respect the law but that interpretations of the law can sometimes be complex. “At this point, our view is that resignation is the most likely,” U.S. investment bank JPMorgan said. “In our view, neither seeking to defy the law, nor encouraging the EU not to grant an extension, are likely to succeed.”

The Cabinet Manual, which sets out the laws, rules and conventions on the operation of government, says if the prime minister resigns on behalf of the government then Queen Elizabeth will invite the person who appears most likely to be able to command the confidence of lawmakers to serve as prime minister and form a government. A Conservative Party lawmaker said he thought Johnson would resign soon after the EU summit, ensuring that he is not blamed for any delay to Brexit. “The question is: what has Cummings got up his sleeve?” said a former Conservative adviser. “He is one of the smartest people I have ever worked with. He thinks several steps ahead, thrives on chaos and has sat in a bunker for three years thinking about this: so what is he going to do?”

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“..the Northern Ireland-only backstop..”

Ireland, Boris Johnson Both Eye Return To EU’s Original Brexit Backstop (Ind.)

The British and Irish governments are both eyeing a return to the EU’s original Brexit backstop plan, rejected by Theresa May, as a way of breaking the deadlock, reports suggest. The so-called “Northern Ireland-only” backstop was rejected by the former prime minister during talks because it put a customs and regulatory border down the Irish sea – a move strongly opposed by the DUP and many Tories. It was replaced in the withdrawal agreement by the current UK-wide backstop – which was rejected by Brexiteers for another reason: because it could tie the whole UK to the EU customs union indefinitely.

[..] In an interview with the Irish Times, Ireland’s EU commissioner Phil Hogan – who is set to be put in charge of trade talks with the UK – said the direction of travel was towards the old backstop. “Yes,” he replied when asked whether it was back on the agenda. “The taoiseach has indicated in the last 24 hours that the Northern Ireland-only backstop is quite an interesting idea to revisit.” He added: “I remain hopeful that the penny is finally dropping with the UK that there are pragmatic and practical solutions can actually be introduced into the debate at this stage – albeit at the eleventh hour – that may find some common ground between the EU and the UK.” British officials in Brussels flatly deny that there is any intention to return to the original backstop. A UK spokesperson said that “any deal must involve the abolition of the anti-democratic backstop”.

[..] A return to something resembling the Northern Ireland-only backstop could ultimately make sense politically for Mr Johnson, given he may no longer have to rely on DUP votes for a majority after a general election – if he wins a majority, as polls suggest is possible. The DUP’s opposition to a border in the Irish sea would no longer be as much of an issue. The change would also technically allow Mr Johnson to claim he had ditched the current backstop, which he has put down as a red line. Whether moving back to a Northern Ireland-only situation would be accepted by Tory Brexiteers as satisfactory is another matter.

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Affable Boris vs Bullying Boris.

Johnson Can’t Escape The Clutches Of May’s Zombie Brexit Deal (Behr)

One reason to suppose that Johnson is malleable on the detail is that on 29 March he voted for May’s deal – the same one he denounces as an affront to democracy. The hypocrisy is not surprising, but it does illuminate that tension in Johnson’s self-image, between the wannabe statesman and the Trump tribute act. One enjoys the hobnobbing with world leaders at global summits, the other is an accomplice in vandalising the architecture of a rules-based international order.

The same tension is expressed in domestic politics. There is affable Boris who thought he could charm his way to an elegant Brexit solution, unify his party and woo the country with a healing message. He was barged aside by bullying Boris who purges dissent from his party and stokes division in the country. One belongs to the old Tory party that venerated stability and reached out to liberal voters. The other leads a new revolutionary leaver party, recruiting admirers of Nigel Farage for a nationalist insurgency.

The Downing Street calculation appears to be that a majority is most easily won by stripping the Conservative party down and reassembling it as something unconservative. Johnson will run as a populist tribune, the man who would rather be “dead in a ditch” than surrender to tricky continentals and their Westminster collaborators. It might work. Current polling doesn’t offer much of a guide when the vital choices have been punted to the end of October. That doesn’t leave much time for the prime minister to tweak May’s Brexit deal and, in defiance of all the odds, persuade a hostile parliament to vote for it. But that doesn’t mean he has given up on the idea.

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Election time.

Israel PM Netanyahu Vows To Annex Occupied Jordan Valley (BBC)

Israeli PM Benjamin Netanyahu has vowed to annex part of the occupied West Bank if he is returned to office next week. He would apply “Israeli sovereignty over the Jordan Valley and northern Dead Sea”, a policy certain to be backed by the right-wing parties whose support he would need for a coalition. Palestinian diplomat Saeb Erekat said such annexation moves would “bury any chance of peace”. Israel has occupied the West Bank since 1967 but stopped short of annexation. Mr Netanyahu, who leads the right-wing Likud party, is campaigning ahead of general elections next Tuesday. Polls suggest Likud is neck-and-neck with the opposition centrist Blue and White party and may struggle to form a governing coalition.


Palestinians claim the whole of the West Bank for a future independent state. Mr Netanyahu has previously insisted that Israel would always retain a presence in the Jordan Valley for security purposes. In a televised speech the PM said: “There is one place where we can apply Israeli sovereignty immediately after the elections. “If I receive from you, citizens of Israel, a clear mandate to do so… today I announce my intention to apply with the formation of the next government Israeli sovereignty over the Jordan Valley and northern Dead Sea.” Mr Netanyahu also said he would annex all Jewish settlements in the West Bank, but this would need to wait until the publication of US President Donald Trump’s long-awaited plan for a peace agreement between Israelis and Palestinians.

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“..he could be indicted as early as mid-October..”

Netanyahu’s Jordan Valley Annexation Pledge Is a PR Stunt (RT)

Israeli leader Benjamin Netanyahu has been desperate to drum up voter support across various sections of the Israeli population as the September 17 election inches closer, and his most recent pledge to annex the Jordan Valley, a part of the occupied West Bank, is no more than yet another empty campaign promise, political and defense commentator Amir Oren told RT. “He cannot annex any inch of the occupied territories… the most important [reason] is that peace with Egypt and with Jordan is based upon the UN Security Council resolution 242 from November of 1967 forbidding the acquisition of territories by force.”


Netanyahu knows that risking the collapse of the entire regional security system is a “non-starter,” and his grand announcement is merely a “way to focus attention on himself,” Oren argued. The PR stunt is also aimed at helping Netanyahu to rebrand himself as a strong leader able to deal with the Iran ‘menace’ and the Palestinian issue, as most recently he has been making headlines for the allegations of corruption he faces. “He is trying to shift attention from his corruption scandals, he could be indicted as early as mid-October, he wants people to talk about himself as a world-class leader in league with Putin and Trump.”

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The gig economy is an even hollower term than the service economy.

California Passes Landmark Gig Economy Rights Bill (BBC)

Lawmakers in California have passed a law that paves the way for gig economy workers to get holiday and sick pay. Assembly Bill 5, as its known, will affect companies such as Uber and Lyft, which depend on those working in the gig economy. Some estimates suggest costs for those firms would increase by 30% if they have to treat workers as employees. But opponents of the bill say it will hurt those that want to work flexible hours. The business models of gig economy companies are already under strain – Uber lost more than $5bn in the last quarter alone.


Some estimates suggest that having to treat workers as employees, rather than independent contractors, could increase costs by as much as 30%. Uber and rival ridesharing service Lyft joined forces to push back again the bill. They suggested a guaranteed minimum wage of $21 per hour instead of the sweeping changes the bill would bring. But that pledge wasn’t enough to sway California’s Senate, and the state’s governor Gavin Newsom is expected to soon sign the bill into law.

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High time someone takes Maddow to court, but Sputnik is not a strong point.

‘One America News’ Claims Defamation In $10 Million Suit vs Rachel Maddow (ZH)

Conservative television network One America News (OAN) is suing Rachel Maddow for $10 million after she referred to the network as “paid Russian propaganda”. OAN filed the defamation suit in federal court in San Diego, according to AP. OAN is a small, family owned conservative network that is based in San Diego and has received favorable Tweets from the President. It is seen as a competitor to Fox News. OAN’s lawsuit claims that Maddow’s comments were retaliation after OAN President Charles Herring accused Comcast of censorship. The suit said that Comcast refuses to carry its channel because “counters the liberal politics of Comcast’s own news channel, MSNBC.”

It was about a week after Herring e-mailed a Comcast executive when Maddow opened her show by referring to a Daily Beast report that claimed an OAN employee also worked for Sputnik News, which has ties to the Russian government. Maddow said: “In this case, the most obsequiously pro-Trump right-wing news outlet in America really literally is paid Russian propaganda. Their on-air U.S. politics reporter is paid by the Russian government to produce propaganda for that government.” Except Maddow, likely still upset from spending 3 years trying to promulgate a Russian hoax that didn’t exist, didn’t quite get her facts straight. Big surprise.

OAN said in its lawsuit that while reporter Kristian Rouz was associated with Sputnik News, he worked solely as a freelancer for them and was not a staff employee of OAN. And the lawsuit includes a statement from Rouz stating that while he has written some 1,300 articles over the past 4 and a half years for Sputnik, he has “…never written propaganda, disinformation, or unverified information.

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Aug 262019
 
 August 26, 2019  Posted by at 9:10 am Finance Tagged with: , , , , , , , ,  11 Responses »


Marc Chagall The Smolensk newspaper 1914

 

Yield Curve Screams “Recession” as Trade War Picks Up Steam (Mish)
China’s Yuan Slumps To 11-Year Low, Stocks Fall As Trade War Escalates (R.)
Trump Says China Called Twice To Restart Trade Talks (MW)
China Willing To Resolve Trade Dispute With US Via Dialogue (R.)
Mnuchin: If China Agreed To Fair Relationship, We’d Sign ‘In A Second’ (CNBC)
Hong Kong Police Arrest 36 After Running Battles With Protesters (R.)
Australia’s Big Banks Gear Up For Capital Raising Rush (R.)
Why The Next ECB Stimulus Plan May Fail (Lacalle)
Britain Can ‘Easily Cope’ With No-Deal Brexit, Claims Boris Johnson (G.)
Has Anyone Loved Being Prime Minister As Much As Boris Johnson? (Peston)
England’s Homeless Children Problem (ZH)
English Police Could Patrol Northern Ireland Border After No-Deal Brexit (RT)

 

 

To think that until recently this was not considered possible at all.

Yield Curve Screams “Recession” as Trade War Picks Up Steam (Mish)

Futures pick up where they left off Friday with equity prices and bond yields lower. Sunday Evening Futures: • Equities Down • Gold Up • Treasury Yields Down As of 1:36 AM Central on Monday morning, the 30-year long bond is a record low 1.942%. It’s now inverted 17.8 basis points with the Fed Funds rate. The 5-year note is a whopping 78.4 basis points inverted. Few seem to believe it, but the yield curve is now screaming recession.

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“The impact of the new tariffs on China’s economic growth will be sizeable..”

China’s Yuan Slumps To 11-Year Low, Stocks Fall As Trade War Escalates (R.)

China’s yuan slumped to a fresh 11-year low against the dollar on Monday and stocks fell as the Sino-U.S. trade war sharply escalated, threatening to inflict more damage on the world’s largest economies and weigh further on global growth. In Hong Kong, a weekend flare-up in violence during anti-government protests added to pressure on share prices. The onshore yuan fell 0.6% in early trade to 7.15 per dollar, its weakest since February 2008 and its second biggest one-day drop of the month. The offshore yuan fell to a record low of 7.1850, before regaining some ground to around 7.1595.


The Chinese authorities have allowed the tightly-managed yuan to fall some 3.6% so far this month as trade tensions between Beijing and Washington worsened, sparking fears of a global currency war. It was trading around 7.1419 by 0330 GMT. On Friday, U.S. President Donald Trump announced an additional duty on some $550 billion of targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of U.S. goods. “This tit-for-tat escalation shows how unlikely a trade deal and de-escalation have become,” Louis Kuijs, of Oxford Economics, wrote in a note late on Sunday. “The impact of the new tariffs on China’s economic growth will be sizeable,” he said.

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China denies.

Trump Says China Called Twice To Restart Trade Talks (MW)

In a comment that moved financial markets, President Donald Trump on Monday said serious negotiations with China will begin after the U.S. received two “very good calls” from Beijing. “China called last night our top trade people and said let’s get back to the table,” the president said after meeting Egyptian President Abdel-Fattah el-Sissi. “I have great respect for it.” Trump said “we are going to start talking very seriously.” He says the Chinese want to make a deal and he thinks one will finally be reached. Trump says he’ll say more about China later Monday.


China’s foreign ministry meanwhile said it wasn’t aware of any such calls and that a U.S.-China decoupling will lead to market chaos, according to wire reports. After the Dow Jones Industrial Average DJIA, -2.37% dropped 623 points on Friday, U.S. stock futures were higher in the early hours of Monday morning. The dollar rose against the Japanese yen. Europe stocks were a bit weaker, with trading light with the U.K. market closed for a holiday.

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All has to be said in a way that avoids losing face.

China Willing To Resolve Trade Dispute With US Via Dialogue (R.)

Chinese Vice Premier Liu He said on Monday that China is willing to resolve its trade dispute with the United States through calm negotiations and resolutely opposes the escalation of the conflict, a state-backed newspaper reported. Liu, China’s top trade negotiator, was speaking at a tech conference in Chongqing in southwest China, the Chongqing Morning Post reported. The comments come after U.S. President Donald Trump last week announced an extra 5% duty on some $550 billion of Chinese goods, the latest tit-for-tat move announced hours after China unveiled its retaliatory tariffs on $75 billion worth of U.S. products.

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“They have free entrance into our markets, our investments, our companies and we do not have the same thing there. That’s the only reason why we are in this situation..”

Mnuchin: If China Agreed To Fair Relationship, We’d Sign ‘In A Second’ (CNBC)

American Treasury Secretary Steven Mnuchin doubled down on the White House’s latest punch in the U.S.-China trade war by calling out Beijing for unfair trade practices. “We do not have free trade with them,” Mnuchin said Sunday on the sidelines of the G-7 meeting in France. “It’s a one way street: They have free entrance into our markets, our investments, our companies and we do not have the same thing there. That’s the only reason why we are in this situation with China. If China would agree to a fair and balanced relationship, we would sign that deal in a second,” he added.


“Sometimes you’ve got to take stern measures,” White House economic advisor Larry Kudlow said alongside Mnuchin, adding that American companies should heed the president’s call to leave China. “Come home to America, we’ve got the best tax system, we’ve got the best regulatory system, it’s an easy place to make money, the best technology in the world. Come home. That’s what the president is saying,” Kudlow said. Before leaving for the G-7, U.S. President Donald Trump said he would raise existing duties on $250 billion in Chinese products to 30% from 25% on Oct. 1. Additionally, he said, tariffs on another $300 billion of Chinese goods, which start to take effect on Sept. 1, will now be 15% instead of 10%.

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Protesters are escalating because their demands are ignored.

Hong Kong Police Arrest 36 After Running Battles With Protesters (R.)

Hong Kong police said on Monday they arrested 36 people, the youngest aged 12, after violence during anti-government demonstrations escalated as protesters hurled Molotov cocktails at security forces who responded with water cannon and tear gas. Sunday’s protests saw some of the fiercest clashes yet between police and demonstrators since protests escalated in mid-June over a now-suspended extradition bill that would have allowed Hong Kong people to be sent to mainland China for trial. Police fired water cannon and volleys of tear gas in running battles with brick-throwing protesters on Sunday, the second day of violent clashes in the Chinese-ruled city.

Six officers drew their pistols and one officer fired a warning shot into the air, police said in a statement. “The escalating illegal and violent acts of radical protesters are not only outrageous, they also push Hong Kong to the verge of a very dangerous situation,” the government said in a statement.

More demonstrations are planned in the days and weeks ahead, including a rally at Hong Kong’s Cathay Pacific Airways headquarters on Wednesday to protest against perceived “white terror”, a common expression to describe anonymous acts that create a climate of fear. Cathay has emerged as the biggest corporate casualty of the protests after China demanded it suspend staff involved in, or who support, the anti-government demonstrations that have plunged the former British colony into a political crisis. The protests also pose the gravest popular challenge to Chinese President Xi Jinping since he took power in 2012, with Beijing eager to quell the unrest ahead of the 70th anniversary of the founding of the People’s Republic of China on Oct 1.

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Bubbling below the surface.

Australia’s Big Banks Gear Up For Capital Raising Rush (R.)

Australia’s biggest banks are expected to cut dividend payments and tap bond markets for more funding to cope with tougher capital requirements as regulators look to safeguard the sector from future market volatility, according to analysts and bankers. This week, Commonwealth Bank of Australia Chief Executive Matt Comyn and Chief Financial Officer Alan Docherty will finalise a roadshow with Australian equity investors before holding similar meetings in New York next month as well as London and Hong Kong. The bank traditionally meets with investors following its full-year results and the presentations have often preceded CBA tapping the bond markets. However, the meetings this year come as Australia’s banks are under increasing pressure to boost their capital.


Last week, the Australian Prudential Regulation Authority (APRA) said local banks would only be allowed to have 25% of their tier one capital – core funds held to help absorb losses – exposed to international operations or related parties from January 2021, down from the current 50%. That means banks such as Australia and New Zealand Banking Group face higher costs because they will have to fund each unit separately. The news came on top of another decision by APRA last month ruling that Australian banks would need to raise an extra A$50 billion ($33.8 billion) of so-called “tier two” bonds – riskier instruments that suffer losses before tier one capital is touched – by 2024 as part of its new total loss absorbing capital rules.

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“..all this happens amidst an unprecedented chained stimulus.”

Why The Next ECB Stimulus Plan May Fail (Lacalle)

When many analysts tell us that Europe “is not so bad” or that “it is only a slowdown,” they ignore that all this happens amidst an unprecedented chained stimulus. The results are not only extremely poor, but they are also deeply worrying. According to Morgan Stanley, the European Central Bank could be preparing a new repurchase program of between 2.2 and 3.3 billion euros. Not only buying back bonds from governments, but also from banks and companies. What for? Even Italy – in the midst of a political crisis – has negative real sovereign bond yields. The sovereign debt of all the eurozone countries shows negative yields in two-year maturity and negative as well going up to seven years. Germany has just launched a 30-year bond at -0.11%.

Is it really necessary to artificially depress yields even more? In the eurozone there are already fourteen junk bonds listed with negative yields and high-risk bonds of banks and companies are listed with ridiculous returns of 3-4%. The problem of the eurozone is not lack of liquidity, when excessive liquidity reaches 1.8 trillion euros, or low rates when they are already negative,. The eurozone problem is precisely the constant practice of using monetary policy as a perverse incentive to maintain structural imbalances. Monetary policy works as a huge transfer of wealth from savers and productive sectors of the eurozone to inefficient governments and unproductive sectors that are constantly refinanced, zombifying the economy, putting obstacles to productivity and technological change.

The stimulus chain described above can be summed up in the phrase: a huge subsidy to low productivity. Here is the debate. Why has it worked in the US and not in Europe? First, because it is not true that the United States owes its improvement to quantitative easing. In a report by Stephen Williamson for the Federal Reserve, he already warned that “there is no relationship between greater economic activity and quantitative easing.” The US economy is the most dynamic, open and least dependent on bank financing of the world’s leading countries. The Federal Reserve never accounted for 100% of the demand for government bonds, it always kept an eye on the secondary market. The ECB became seven times the bond supply, according to Deutsche Bank.

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Blaming the EU will not work.

Britain Can ‘Easily Cope’ With No-Deal Brexit, Claims Boris Johnson (G.)

Britain could “easily cope” with a no-deal Brexit, which would be the fault of EU leaders’ “obduracy”, Boris Johnson claimed at the summit of G7 countries in France, as he continued to resist mounting pressure to spell out his own plans for breaking the deadlock. “I think we can get through this, this is a great, great country, the UK, we can easily cope with a no-deal scenario,” Johnson insisted in Biarritz, as he made his debut on the international stage as prime minister with a series of bilateral meetings with world leaders including Donald Trump, the EU council president Donald Tusk and Indian prime minister Narendra Modi. Johnson said preparations for no deal were being ramped up to help secure an agreement, but also “so that if and when we are forced by the obduracy by our European friends to come out on 31 October without a deal that things are as smooth as they can possibly be”.


Johnson claimed food shortages – one of the risks outlined in the leaked Operation Yellowhammer documents on no-deal planning – were “highly unlikely”, and offered a “guarantee” that patients would be able to access medicines unhindered. The prime minister said that in the event of no deal the UK would withhold much of the £39bn financial settlement agreed by Theresa May – and insisted it was up to the EU27 to avert that eventuality. “If we come out without an agreement it is certainly true that the £39bn is no longer, strictly speaking, owed,” he said “There will be very substantial sums available to our country to spend on our priorities. It’s not a threat. It’s a simple fact of reality.”

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Robert Peston was once a serious journalist. What is this, the elites are closing ranks?

Has Anyone Loved Being Prime Minister As Much As Boris Johnson? (Peston)

I’ve learned only one thing at the G7 summit of big rich countries here in Biarritz: Boris Johnson absolutely loves being Prime Minister. There’s little of the conspicuous sense of duty that weighed on the shoulders of Theresa May, Gordon Brown and Sir John Major. Nor is there that unnerving claim to embody the spirit of a nation that Tony Blair and Margaret Thatcher perhaps made too often and believed too much. There’s a touch of David Cameron’s Old Etonian entitlement, the idea that it would be odd if he weren’t PM. But mostly Johnson simply seems to be having fun – whether by pointing a joshing finger at the imperious president of France or telling an incredulous President of the EU that they agree on absolutely everything.


Johnson’s bonhomie is all the more odd because the UK – as his advisers remind him continuously – is in the grips of the most acute peacetime crisis for generations, over how and even whether to leave the EU, and Johnson’s grip on power is almost non-existent, with no majority in Parliament and fratricide in his own Tory party as unremarkable as shaking hands. But in Johnson we have the clown prince of prime ministers, who – for the first time in years, or perhaps ever – plainly thinks he is home. His interlocutors – Emmanuel Macron, Donald Tusk, Justin Trudeau – all laugh. With him or at him? I am not sure that matters, in that he seems to cheer them up.

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Feel-good Boris.

England’s Homeless Children Problem (ZH)

New estimates from the Children’s Commissioner’s Office for England have revealed that, in addition to the official figure for child homelessness of 124 thousand, there are thought to be around 92 thousand children ‘sofa surfing’ in the country. Statista’s Martin Armstrong notes that the report, ‘Bleak Houses’ also found that the temporary accommodation of families and children is often not fit for human habitation with shipping containers, office blocks and B&Bs being re-purposed to house them.

Commenting on the findings, Children’s Commissioner Anne Longfield said: “It is a scandal that a country as prosperous as ours is leaving tens of thousands of families in temporary accommodation for long periods of time, or to sofa surf.” On the reasons for the current situation, Polly Neate, chief executive of charity Shelter blamed “a cocktail of punitive welfare policies, a woeful lack of social homes and wildly expensive private rents mean this is frighteningly commonplace.”

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Oh no.

English Police Could Patrol Northern Ireland Border After No-Deal Brexit (RT)

Despite a wealth of history suggesting that it’s a very bad idea, UK politicians have reportedly devised detailed plans to deploy English police officers in Northern Ireland in the event of a no-deal Brexit. According to a report in The Sunday Times, the plans would first see approximately 300 Scottish police drafted in to support the Police Service of Northern Ireland (PSNI) as a preliminary step. However, if tensions between the unionist and nationalist communities boil over or civil unrest erupts, officers from English forces will be deployed in the province.


A source at London’s City Hall told the newspaper: “All the police forces have agreed to give support to Northern Ireland. It is a concern. Thankfully it wouldn’t affect too many London officers, but we would be there. Imagine it: officers from the mainland in Northern Ireland. Bloody hell.” Unsurprisingly the report has triggered alarm bells in Northern Ireland and Ireland with many people worrying that it could incite anger among Irish nationalists and endanger the fragile peace in the region. “English police on the Irish border. What could go wrong? Don’t remember this on the referendum ballot paper or being debated in 2016? In the week we have remembered Mo Mowlam I despair at such a reckless attitude to hard-won peace,” Labour MP Anna Turley said.

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Aug 022019
 


Pablo Picasso Bathers with a toy boat 1937

 

The Giant Sucking Sound of Financial Repression (WS)
Dutch Bank ING Warns Against Further ECB Money Printing (R.)
Trump’s $300 Billion China Tariff Threat Sends Markets Into Tailspin (G.)
Rate Cut Odds Surge After Tariff Announcement (ZH)
US Tariffs Risk Reviving Chinese Zombies (R.)
The EU Has New People In Charge. It’s Not Good News For US Tech Firms (CNBC)
EU Governments Seek Name For IMF Head (R.)
Boris Johnson’s Commons Working Majority Cut To One (BBC)
Expecting Ireland To Be Servile Is Part Of A Long British Tradition (G.)
Irish Peace Is Too Precious To Be Squandered By The Brexit Ultras (G.)
Boeing To Change 737 MAX Flight-Control Software To Address Flaw (R.)
Rachel Maddow Ratings Tank After Collusion Narrative Implodes (Ryan)

 

 

The war on savings and pensions continues unabated. Central banks are in so deep there’s no way out anymore. But what happens when you want to, or have to, retire?

The Giant Sucking Sound of Financial Repression (WS)

It’s called interest-rate repression. Or more poetically, financial repression. It’s where central banks manipulate interest rates down to where investments with little credit risk, such as Treasury securities, FDIC-insured savings accounts and CDs, pay little or no interest, or pay less interest than the rate of inflation. People such as savers and retirees, and institutions such as pension funds, that depend on this cash flow have lost their income stream. In addition, the purchasing power of their principal is getting gradually wiped out by inflation. How much money are we talking about? In the US alone, this interest rate repression impacts nearly $40 trillion. This includes savings products, Treasury securities, municipal bonds, and high-grade corporate debt.

$40 Trillion with a T. A 2% reduction across the board cuts this income by $800 billion a year. And this has had an impact. Central banks have accomplished this interest-rate repression by pushing short-term rates to zero or below zero, and by buying bonds and other assets to push long-term rates down too. These were emergency measures during the Financial Crisis that have become the “new normal,” as it has been called. This new normal has been going on for over a decade now. Other central banks, including the ECB and the Bank of Japan, pushed their policy rates below zero. This, in addition to vast asset buying binges by those central banks, produced $13 trillion in negative yielding bonds. But that’s a different universe of idiocy that we’re not going to get into today. We’re going to stick to US conditions.

To the Fed’s credit, it is the only major central bank that has raised its policy-rate target a bit, from near-zero to a range between 2.25% and 2.5%, which are still historically low rates. But it is under immense pressure by Wall Street and by the White House to cut rates again. So now we have this situation where short-term Treasury yields are low, and long-dated Treasury yields are even lower. How much money are we talking about here? Let’s see. There are $22 trillion in Treasury securities. They’re held by individuals and institutions, including insurance companies, pension funds, and the Social Security Trust Fund. Then there is high-grade corporate debt. The category of triple-A to single-A-rated debt is about $3.3 trillion. These yields have been pushed down too.

Then there are $3.8 trillion in municipal bonds outstanding. Many of them trade below US Treasury yields. For example, the GO bonds of California, which is not exactly a paragon of fiscal rectitude. During trading last Thursday, the California 10-year yield was 1.76%. This was about one-third of a percentage point below the US Treasury 10-year yield of 2.08% on the same day. Then there are $9.4 trillion in savings products, mostly savings accounts and CDs at banks. There are also about $3 trillion in checking accounts, payroll accounts, etc., but they’re not included here. These are just savings products. So let’s add these categories up: They amount to $39 trillion.

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“There is no shortage of money in the market.”

Dutch Bank ING Warns Against Further ECB Money Printing (R.)

Ralph Hamers made his plea as central banks redouble efforts to keep the cost of borrowing at historic lows to buoy the economy, a policy that weighs on bank profits and makes it costly to hold deposits. “I don’t think QE is a recipe to support an uncertain environment,” Hamers told journalists, referring to so-called quantitative easing to print fresh money. “There is no shortage of money in the market.” Although bankers have previously made similar complaints, Hamers’ blunt comments carry weight because his bank is one of Europe’s largest, with 38 million customers. ING, the largest Dutch bank, cautioned on Thursday that rock-bottom interest rates would pressure future earnings, as it announced a 1.4 billion euro net profit in the second quarter of the year.


“Looking ahead, we expect that persistently low interest rates will put pressure on net interest income,” Hamers said, referring to the bank’s chief earnings pillar from activities such as lending. European Central Bank President Mario Draghi has all but pledged to loosen monetary policy further amid a continued economic deterioration of Europe’s euro currency bloc, still grappling with the aftermath of a debt crisis. Officials recently told Reuters that an interest rate cut in September appeared certain, while government bond buys were also likely. Draghi recently said the outlook looked bleak as a global trade war hit Europe’s manufacturers.

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Did he do it to push Powell?

Trump’s $300 Billion China Tariff Threat Sends Markets Into Tailspin (G.)

Donald Trump’s surprise decision to escalate the trade war with tariffs on another $300bn of Chinese goods has sent global financial markets into a tailspin. After sharp falls on Wall Street in the wake of the US president’s announcement on Twitter on Thursday, Asian share prices plummeted on Friday morning as growing hopes that the world’s two economic superpowers would be able to reach a deal were dashed. In Tokyo the Nikkei was down 2.3%, with a similar fall in Hong Kong and Shanghai. The Kospi was down 0.8% in Seoul while in Sydney the benchmark ASX200, which passed its pre-global financial crisis all-time high on Tuesday, fell 0.3%. On the commodities markets the price of Brent crude oil plunged 7%, its biggest fall for four years, although it recovered 2.5% on Friday to $62.01.


Trump’s decision was also likely to increase the chances of another cut in US interest rates with the prospect of worsening trade with China forcing the Federal Reserve to loosen monetary policy again in September. It follows Wednesday’s 0.25% reduction, which was widely seen as not being enough to please the president who has been very vocal in calling for lower rates to boost the economy. As a signal of lower rates to come, the 10-year US bond yield fell almost 12 basis points on Thursday to 1.902%, hitting the lowest level since Trump won the presidential election in November 2016. The US dollar also fell and stockmarkets in Europe and the US were braced for a turbulent last day’s trading of the week. The FTSE100 is set to drop 1% at the opening and the Dow 0.3%.

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“It’s very logical to conclude that if trade tensions increase, given what Powell said, that would be something he would look at to evaluate a further cut.”

Rate Cut Odds Surge After Tariff Announcement (ZH)

Earlier today, we wrote a post titled “What Would It Take For The Fed To Not Cut Again?”, with Goldman providing a stylized answer, although in retrospect, the post should have been titled “What Would It Take For The Fed To Cut Again”, as that is what the market was far more concerned about after yesterday’s hawkish Powell press conference. In any case, Goldman hinted at the one specific catalyst that could force the Fed to cut more: “We also see risks in the other direction, especially on a significant escalation of tariffs against China.” To this, we said that “if an acceleration in the trade war with China is what the Fed will need to cut more, it’s pretty clear what that means for the chances of any trade deal between Washington and Beijing, since even Trump now understands that if he keeps escalating trade war with China, Powell will have no choice but to eventually cut to 0% (and lower).”

Just a few hours later, we were proven right in suggesting that an escalation in the trade war is inevitable and imminent when Trump tweeted that he would hike tariffs on $300BN in Chinese imports to 10% starting September 1, ending the tentative ceasefire with Beijing with a bang, and sending risk prices sharply lower. And yes, while Trump did suffer a modest drop in his favorite polling indicator – i.e., the stock market – which “cratered” as much as 1.5% below its all time high – far more importantly Trump also called Powell’s bluff, and effectively forced the Fed to prepare for more rate cuts as the trade war with China – which Powell explicitly highlighted as a condition that would result in more easing – is set to escalate further.

Late today, Bloomberg confirmed as much noting that traders “fixated on a timeline in which Powell seems to suggest cooling trade tensions reduced the need for future rate reductions — and a day later Trump revs the tensions back up”, just as we said he would. “It fits the pattern of a president bent on getting the central bank to submit, many thought”, the Bloomberg authors concluded. “Powell was very careful to say that he was looking at three things, one of which was global growth and the extent to which that is risked by trade tensions,” said Ellen Hazen, senior vice president and portfolio manager for F.L. Putnam, which has $2.2 billion under management. “It’s very logical to conclude that if trade tensions increase, given what Powell said, that would be something he would look at to evaluate a further cut.” Precisely, hence our prediction first thing this morning.

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Really? Xi is going to build more bridges to nowhere?

US Tariffs Risk Reviving Chinese Zombies (R.)

President Donald Trump is threatening new levies on $300 billion of Chinese goods entering the United States, after Shanghai talks proved inconclusive this week. That might not prod Chinese officials into striking a deal, but it is likely to raise some unwelcome zombies. Trump is among those who claim the Chinese economy is on the brink of the abyss. And it’s true that as a truce in trade negotiations gets more elusive the country’s business community is being forced to price in a new status quo. Their country has stumbled into a cold war with the world’s largest economy, a nuclear-armed military colossus that controls the world’s foremost trading currency. But a $13 trillion economy growing at 6.2% is hardly imploding, and a country where private consumption makes up roughly two-fifths of nominal GDP has padding against a downturn in trade.


Tensions exacerbate economic problems of China’s own making, though. There is a massive stack of non-performing debt incurred by government banks that mis-allocated capital after the global financial crisis. And there are still plenty of inefficient state-backed companies that compete with China’s private sector, driving down profitability across the board. If the new 10% tariffs kick in on Sept. 1 as Trump threatened on Thursday, President Xi Jinping may re-open a playbook that reformist officials have been trying to close. The central government has already pushed localities to ramp up infrastructure spending, and there may be more to come. Construction investment creates jobs immediately, and the government can order banks to lend, and order state firms to build.

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Trump won’t like this.

The EU Has New People In Charge. It’s Not Good News For US Tech Firms (CNBC)

New officials at the heart of the EU will likely keep America’s big tech firms under close scrutiny, experts have told CNBC. The European Commission — the EU’s executive arm — has fined companies such as Google for disrespecting its competition rules, it’s asked Ireland to collect unpaid taxes from Apple and is currently investigating Amazon. It has also proposed different laws that seek to limit online content and there’s little evidence that anything will change under the EU’s new leadership. Dexter Thillien, a senior industry analyst at Fitch Solutions, told CNBC via telephone Wednesday that Europe is keen to continue to be seen as the global leading force in tech regulation. Thillien explained that Europe saw a loophole in global tech regulation and felt the need to act.


“Europeans have all the negatives but none of the positives,” he said, referring to the fact that Europe has not created any large tech firms but has had to deal with the presence of Silicon Valley behemoths. “The European Commission has become more assertive making big tech companies pay their fair share of taxes. If anything, the incoming Commission looks even more determined to do so,” Florian Hense, an economist at Berenberg, told CNBC via email. Ursula von der Leyen, the president-elect of the Commission, said during a speech earlier this month that “if (tech companies) are making these profits by benefiting from our education system, our skilled workers, our infrastructure and our social security, if this is so, it is not acceptable that they make profits, but they are barely paying any taxes because they play our tax system.”

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A European under Washington’s thumb.

EU Governments Seek Name For IMF Head (R.)

European Union finance ministers are set on Friday to choose the bloc’s candidate to lead the International Monetary Fund from a list of four names, a spokeswoman for the French government said. The list includes Jeroen Dijsselbloem, the Dutch former head of euro zone finance ministers; Nadia Calvino, the Spanish economy minister; Olli Rehn, the Finnish central bank governor; and Bulgaria’s World Bank chief executive Kristalina Georgieva. Mario Centeno, the Portuguese chairman of euro zone finance ministers, said on Thursday he was pulling out of the race “in this stage of the process”, adding that he would be available if needed for a compromise solution.


Britain did not field a candidate because it could not come up with a name on time, a European official said. It had been expected to name a candidate and the deadline was extended by a few hours on Thursday to allow it to do so. France is leading the process to select a European candidate. The top job at the Washington-based global lender has historically been filled by a European. Outgoing IMF head Christine Lagarde is taking over from Mario Draghi as European Central Bank president.

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is that enough to push through a no-deal Brexit?

Boris Johnson’s Commons Working Majority Cut To One (BBC)

The Liberal Democrats have won the Brecon and Radnorshire by-election, leaving new PM Boris Johnson with a Commons working majority of just one. Jane Dodds overturned an 8,038 majority to beat incumbent Conservative Chris Davies by 1,425 votes. Mr Davies stood again after being unseated by a petition following his conviction for a false expenses claim. It was the first electoral test for Mr Johnson just eight days after becoming prime minister. It is the quickest by-election defeat for any new prime minister since World War Two.


Now, with the thinnest possible working majority, he will have to rely heavily on the support of his own MPs and his confidence-and-supply partners the DUP to get any legislation passed in key votes. It was also a bad night for Labour, whose vote share dropped by 12.4% as it was beaten into fourth place by the Brexit Party. The result means the Lib Dems now have 13 MPs. Ms Dodds, who is the Welsh Liberal Democrat leader, said: “My very first act as your new MP when I get to Westminster will be to find Mr Boris Johnson, wherever he’s hiding, and tell him to stop playing with the future of our community and rule out a no-deal Brexit.”

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“Paddy should know his place..”

Expecting Ireland To Be Servile Is Part Of A Long British Tradition (G.)

Boris Johnson’s approach to Ireland is part of an ignoble tradition in British politics. At its heart is the false assumption that superiority in resources and military prowess equates to a superiority in intellectual power and moral rectitude. In short, the idea that might is right and that, ultimately, Paddy should know his place. This assumption shaped and even, at times, dominated, policy on Ireland for centuries before independence. It runs through 19th-century British depictions of the Irish as incapable of self-government, unreliable, lazy and inferior. For Benjamin Disraeli, a British prime minister who shares some personal characteristics with the current incumbent, the Irish were “wild, reckless, indolent, uncertain and superstitious”.

Most obviously, this sense of superiority and a refined “moral” stance was clearly manifest in government policy during the Great Famine of 1845-49, which caused the deaths of more than one million people on the island of Ireland. This consistently damaging strain of thought continued into the 20th century, with British military and economic power often used crudely to address deep-rooted political conflicts in Ireland, which refused, and continue to refuse, to allow for simple solutions. Ireland, the thinking went, should be the handmaiden for glorious Britannia – and this servile position is for Ireland’s own benefit and ultimately serves Irish interests.

Of course, within this particular strain of British political thought, the history of violence and tragedy in Ireland is sometimes portrayed as a product of Irish recalcitrance – a tendency towards disorder and conflict that fails to recognise the beneficence of British policy on the island. Britain, it is often suggested, is a guarantor of Irish stability, addressing and suppressing the inherent conflicts in Irish society, rather than a highly disruptive force that has often recklessly pursued its own interests at a serious cost to its nearest neighbour.

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“Tories of influence” told him privately that Leo Varadkar, Ireland’s taoiseach “isn’t bright” and “the Irish will blink”.

Irish Peace Is Too Precious To Be Squandered By The Brexit Ultras (G.)

In The Ultras, the brutal, brilliant novel by Eoin McNamee set during the Troubles, the protagonist (based on the real-life undercover British intelligence officer Robert Nairac) finds himself in the company of dangerous men like himself. The Ultras plot terrible events and create dark polities while forcing everyone else to live with their consequences. “Ultra meaning beyond,” wrote McNamee. “Ultra meaning extreme.” The so-called war cabinet formed by the new British prime minister, Boris Johnson, and whose course the maverick arch-Brexiteer Dominic Cummings now charts, of course bears no resemblance to the characters in the war of the Ultras imagined by McNamee.

But the sheer velocity and ferocity of their opening salvoes about crashing out of the EU with no deal on October 31 unless the backstop – the insurance policy to avoid a hard border in Ireland – is abolished, raise the kind of alarm that we in Ireland have not felt since the dark years of the Troubles. The political fear is that this new breed of “Brexit Ultras” (Johnson’s cabinet with Nigel Farage’s Brexit party snapping at its heels) could deliberately pursue a no-deal EU exit at the expense of a volatile Irish peace. The sabre-rattling and pre-emptive blame-shifting of course is intended to shore up political support in the UK ahead of a possible general election, but also to intimidate Ireland into abandoning the backstop while shaking the unity of the EU27.

Europe, with its own demons to face, has its red lines too and will not sacrifice the single market or its external borders, or jeopardise the wider integrity of the European project. Ireland, and the fragile peace process that has been built over the past 20 years, falls between these two positions. And while it is still early days for the Johnson premiership, we have a deteriorated state of Anglo-Irish relations following his ascent to power. How real is the damaging rhetoric emanating from London and the anti-Irish tropes spewing from much of the British media? David Yelland, the former editor of the Sun, revealed that he had been shocked when “Tories of influence” told him privately that Leo Varadkar, Ireland’s taoiseach “isn’t bright” and “the Irish will blink”. “It seems, amazingly, that this is the actual policy of HMG under Johnson,” tweeted Yelland. “They are anti-Irish, arrogant, dangerous and wrong.”

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Well, actually, they’re going to change hardware: a second flight control computer and a second angle-of-attack sensor. Both of which are altready on board, but not used.

Boeing To Change 737 MAX Flight-Control Software To Address Flaw (R.)

Boeing Co plans further changes to the software architecture of the 737 MAX flight-control system to address a flaw discovered after a test in June, two people briefed on the matter said late on Thursday. The redesign, first reported by the Seattle Times, involves using and receiving input from both flight control computers rather than one. The move comes in response to an effort to address a problem discovered in June during a Federal Aviation Administration(FAA) simulator test. This is on top of earlier announced changes to take input from both angle-of-attack sensors in the MCAS anti-stall system linked to two deadly crashes that led to a global grounding of the plane.


Boeing still hopes to complete the software redesign by the end of September to submit to the FAA for approval, the sources said. For decades, 737 models have used only one of the flight control computers for each flight, with the system switching to the other computer on the following flight, according to people familiar with the plane’s design. The FAA said in June that it had identified a new risk that would need to be addressed before the plane could be ungrounded. Under a scenario where a specific fault in a microprocessor caused an uncommanded movement of the plane’s horizontal tail, it took pilots too long to recognize a loss of control known as runaway stabilizer, a Boeing official said at the time.

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Crazy bag lady.

Rachel Maddow Ratings Tank After Collusion Narrative Implodes (Ryan)

Once a shining beacon of hope for Russiagate true believers, it looks like Rachel Maddow has left her best days behind her; MSNBC’s conspiracy queen has seen her show plummet to fifth place in cable news ratings. What happened? You rise fast and fall hard in the fickle world of television. Just last April, Maddow overtook Fox News’ Sean Hannity to claim the title of most-watched host across cable news. She had become a reliable source for Russigate aficionados to get their daily dose of crazy. Sadly for Maddow, the latest data released by Nielsen shows her show in fifth place with a total audience of 2.4877 million viewers for July – behind Hannity, Tucker Carlson, Laura Ingraham and The Five (all Fox News shows).


For context, in January this year, Maddow still boasted an audience of nearly 3.3 million, which means she shed around 800,000 viewers in just six months. Maddow was also in fifth place among viewers in the 25-54 age range – the group most-favored by advertisers. Ouch. Once dubbed “the smartest person on TV” by Forbes (really), this is certainly not the big payoff Maddow was expecting, having dedicated three years of her career to breathlessly covering every twist and turn in the anticlimactic Trump-Russia “collusion” drama.

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Ship with dolphins.Wall painting from Akrotiri, Thera island (Santorini), Greece.17th century BC.