Jun 072017
 
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Olivier Drot Morning in Downtown Athens June 7 2017

 

Spring Rally in Stocks, Bonds, Gold and Bitcoin Unnerves Investors (WSJ)
Trump’s America Is Facing a $13 Trillion Consumer Debt Hangover (BBG)
Bars Open Early Tomorrow So People Can Drink While Watching Comey Testify (BI)
Other Times Unemployment Has Been This Low, It Didn’t End Well (WSJ)
UK’s May Says She’d Rip Up Human Rights Law to Beat Terrorists (BBG)
Corbyn: UK Foreign Policy Increases Terrorism Risk. Most Britons Agree (Ind.)
Australia’s Economy Marks Record 26 Years Without Recession (AFP)
Australians Curb Spending As Household Debt Balloons (R.)
Is There A Magic Money Tree? Yes Children, But That’s The Wrong Question (G.)
Santander Buys Struggling Spanish Banco Popular For €1 (BBG)
Don’t Count on China as Next Climate Crusader (WSJ)
Gimme Shelter (Jim Kunstler)
98% Of Greeks Downbeat About Their Current Economic Situation (K.)

 

 

The inevitable result of no price discovery for years on end. Do note that no price discovery also means there are no investors.

Spring Rally in Stocks, Bonds, Gold and Bitcoin Unnerves Investors (WSJ)

Stocks, bonds, gold and bitcoin—assets that rarely move in unison—have all been surging this spring, an everything rally that leaves investors confounded about how to play the plodding U.S. expansion and vulnerable to sharp reversals in fortune. Major U.S. stock indexes have soared to records this month, reflecting some investors’ confidence in the continued U.S. economic recovery along with expectations that large technology firms will accrue further market-share gains. At the same time prices of bonds, which often decline when stocks are rising, have risen lately, as U.S. inflation readings cooled off alongside a slowdown in some key industries. Gold has gained following terror attacks in the U.K., and turmoil in U.S. politics centering on the administration’s legislative prospects and a key congressional hearing this week featuring former FBI director James Comey.

The simultaneous gains have begun to concern some investors. Many point to a wave of money that is driving up asset prices, tied in part to lower bond yields and a lower dollar—a confluence of events they say feels good while it lasts but can’t go on forever. “We do think there are distortions” in the markets, said Iman Brivanlou, who oversees high-income equities at asset manager TCW. The Dow Industrials this month have posted two record closes, their first since March, and the 30-stock index remains just 0.33% below its all-time high despite a decline Tuesday of 47.81 points to 21136.23. The Nasdaq Composite Index has hit more than three dozen new highs this year, reflecting the surge of red-hot tech stocks such as Alphabet and Amazon.com , both of which this month have surpassed $1,000 a share. Bitcoin has tripled this year, hitting a record high Tuesday.

At the same time, U.S. bond yields on Tuesday sank to their 2017 low at 2.147% and the price of gold, long viewed as a barometer of market concern about potential risks ahead, settled at $1,294.40, its highest in seven months. A Goldman Sachs Group index of financial conditions that takes into account credit spreads, equity prices and other market gauges, this month suggested the easiest conditions since early 2015, before the Federal Reserve began lifting rates. Another measure of stress in U.S. money markets fell to near its lowest in seven years, while measures of expected stock-market swings have been at the lowest in a decade.

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A global issue.

Trump’s America Is Facing a $13 Trillion Consumer Debt Hangover (BBG)

After bingeing on credit for a half decade, U.S. consumers may finally be feeling the hangover. Americans faced with lackluster income growth have been financing more of their spending with debt instead. There are early signs that loan burdens are growing unsustainably large for borrowers with lower incomes. Household borrowings have surged to a record $12.73 trillion, and the%age of debt that is overdue has risen for two consecutive quarters. And with economic optimism having lifted borrowing rates since the election and the Federal Reserve expected to hike further, it’s getting more expensive for borrowers to refinance. Some companies are growing worried about their customers. Public Storage said in April that more of its self-storage customers now seem to be under stress.

Credit card lenders including Synchrony Financial and Capital One Financial are setting aside more money to cover bad loans. Consumer product makers including Nestle posted slower sales growth last quarter, particularly in the U.S. Companies may have reason to be concerned. Consumer spending notched its weakest gain in the first quarter since the end of 2009, a problem in an economy where consumers account for 70% of spending, though analysts expect the dip to be transitory. And debt delinquencies are rising even as the job market shows signs of strength. “There are pockets of consumers that are going to be sorely tested,” said Christopher Low, chief economist at FTN Financial. “We’ve conditioned American consumers to use debt to close the gap between their wages and their spending. When the Fed hikes, riskier borrowers are going to get pinched first.”

Since the 2008 financial crisis, the Fed has kept rates low to encourage companies and consumers to borrow more and spur economic growth. Much of the gains in household debt since 2012 have come from student loans, auto debt and credit cards. Over that time, wage growth has averaged around 2.2% a year, and the pace has been slowing for much of this year. Even if economists forecast that income growth will accelerate, those pickups have remained elusive. Donald Trump won the U.S. presidential election in part by convincing voters that he understood their economic pain. Keeping up with household debt payments is still broadly manageable for consumers. As of the end of last year, the ratio of principal and interest payments to disposable income for Americans was just shy of 10%, less than the average going back to 1980 of 11.33%.

And it’s too soon to say whether growing signs of pain among borrowers are just a return to more normal levels of delinquencies or evidence of a more serious credit downturn. Loan delinquencies are creeping higher after plunging from 2010 until the middle of 2016, but are still below historical averages.

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This can only disappoint. The echo chamber is overcrowded.

Bars Open Early Tomorrow So People Can Drink While Watching Comey Testify (BI)

If you want to have a drink while watching former FBI director James Comey testify before the Senate Intelligence Committee on Thursday, you’re in luck. Bars in Washington, DC, San Francisco, and Houston, Texas, are opening early on Thursday to screen Comey’s testimony, which is scheduled to begin at 10 a.m. EST. “Come on… you know you want to watch the drama unfold this Thursday,” Shaw’s Tavern, which will be serving $5 Stoli vodka and “FBI” sandwiches, wrote on Facebook. “Grab your friends, grab a drink and let’s COVFEFE!”

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Oh boy, you can’t win, can you?

Other Times Unemployment Has Been This Low, It Didn’t End Well (WSJ)

There have been only three fleeting periods in the past half-century when the U.S. unemployment rate was as low as it is today. This would be cause for celebration but for one disturbing fact: in hindsight, each period was associated with boiling excesses that led to serious economic trouble. Low unemployment of the late 1960s preceded an inflation spiral in the 1970s. The late 1990s bred the Dot-com bubble and bust. The mid-2000s saw the buildup and collapse of U.S. housing. While there is reason to believe today’s economy isn’t boiling over as in the past, those episodes call for caution. “It’s not a matter of superstition, it’s a matter of being mindful of the history of what such a low unemployment rate usually is followed by,” said Michael Feroli, chief U.S. economist of J.P. Morgan Chase.

While initially a welcome development, low unemployment in the 1960s laid the groundwork for a buildup of wage and price pressures, spurred on by low interest rates and aggressive government spending programs. The unemployment rate dropped to 4.3% in September 1965 and then below 4%. Today’s unemployment rate, also at 4.3%, could drop below 4% in the next year if it maintains its present trajectory. Unemployment returned again to 4.3% in January 1999. This time the inflation rate remained below 2% and it seemed that, unlike the late 1960s, the economy wasn’t overheating. But asset prices—the stock market in particular—soared after what had already been a long climb. The DJIA shot above 10000 for the first time in March 1998. Highflying tech companies commanded billion-dollar valuations with no profits to report. In hindsight, an internet bubble grew out of control.

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Hoping to get the nazi vote?

UK’s May Says She’d Rip Up Human Rights Law to Beat Terrorists (BBG)

Prime Minister Theresa May said she’d be willing to tear up human rights legislation in the battle against terrorists, as security continued to dominate the final days of the U.K. election campaign. Speaking to supporters at a campaign event in Slough, west of London, the premier said she wanted to make it easier for the authorities to deport foreign terror suspects and to limit the freedoms of individuals who pose a threat but who can’t be prosecuted in court. “If our human rights laws stop us from doing it, we will change the laws so we can do it,” May said. “If I am elected as prime minister on Thursday, that work begins on Friday.” May is facing criticism over her record overseeing U.K. homeland security in the wake of two terrorist attacks in two weeks ahead of Thursday’s national vote.

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Those arms sales will be under heavy pressure no matter who wins.

Corbyn: UK Foreign Policy Increases Terrorism Risk. Most Britons Agree (Ind.)

An overwhelming majority of people agree with Jeremy Corbyn that British involvement in foreign wars has put the public at greater risk of terrorism, according to a new poll. The exclusive ORB survey for The Independent found 75% of people believe interventions in Iraq, Afghanistan and Libya have made atrocities on UK soil more likely. The poll – conducted before Saturday night’s devastating attack – comes after Mr Corbyn was lambasted for suggesting foreign policy decisions were linked to terrorism in the UK and that the “war on terror” had failed. The deadly strike at London Bridge and Borough Market, the third attack in Britain in as many months, has seen security dominate the final days of the election campaign, with cabinet ministers squabbling over whether it could have been stopped.

Theresa May’s record as Home Secretary has been questioned and she has faced a call to resign over the matter from Mr Corbyn, not to mention a former aide to ex-Prime Minister David Cameron. In the wake of the Manchester attack, which killed 22 people last month, the Labour leader highlighted the potential role foreign military interventions play in increasing the likelihood of atrocities in the UK. Despite experts like Baroness Eliza Manningham-Bullerformer, a former MI5 chief, and Baroness Pauline Neville-Jones, ex-chair of the Joint Intelligence Committee, expressing similar views, he was accused by Conservatives of making excuses for terrorism.

But the ORB survey for The Independent found three-quarters of people – taking in all age groups, political persuasions and social classes – agreed Britain’s military involvement in Iraq, Afghanistan and Libya had increased the risk of terrorist acts. Within that, some 68% of Tory voters agreed foreign wars have enhanced the risks of terrorism at home. So did 80% of Labour supporters and 79% of people that voted for the Liberal Democrats in 2015.

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This is hilarious in combination with the next article.

Australia’s Economy Marks Record 26 Years Without Recession (AFP)

Australia marked a world-record 26 years without a recession Wednesday, as the economy grew 0.3% in the first-quarter, official data showed. The Australian Bureau of Statistics put the annual rate of growth at 1.7%, down from 2.4% in the previous three months. The soft quarterly reading was widely expected by analysts amid the impact of category four Cyclone Debbie on eastern Australia in late March, weaker trade figures and tepid wages growth. “The results today demonstrate the continued resilience of the Australian economy,” Treasurer Scott Morrison told reporters. The Australian dollar rallied by a quarter of a US cent to 75.27 cents just after the data was released, as some analysts had predicted a negative first-quarter reading.

Australia last recorded two negative quarters of economic growth in March and June 1991, before enjoying 103 quarters without a recession to equal the record set by the Netherlands. Economists said the resources-rich nation’s long stretch of expansion was supported by economic reforms in the 1980s and 1990s, such as the floating of the local currency, a flexible labour market, financial sector and capital markets deregulation and lower tariffs. Australia has also benefited from China’s economic growth and hunger for natural resources, which led to an unprecedented mining investment boom and record commodity prices. But economists have warned that economic growth in the next few years may not be as rosy. “In the context of the past few years, it is still a fairly weak outcome,” JP Morgan economist Tom Kennedy told AFP of the latest figures.

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A record run without a recession entirly paid for with leveraged private debt: “They are all on a budget. Everyone’s got all their money in houses, that’s how it is.”

Australians Curb Spending As Household Debt Balloons (R.)

Australia’s economy may have achieved a remarkable winning streak, avoiding a recession for 25 years, but there are now clear signs that the consumers who have driven much of the growth are running out of puff. With cash interest rates at a record low and house prices near record highs, the nation’s household debt-to-income ratio has climbed to an all-time peak of 189%, according to the Reserve Bank of Australia (RBA). That means there are an increasing number of people who have little cash for discretionary spending – on everything from cars to electrical appliances and new clothes – as their pay packets get consumed by large mortgages and high rental payments in the country’s red-hot property market.

And it’s not as if a sudden plunge in home prices would help – it might well expose and exacerbate the problem, at least in the short run, squeezing many who have bought into the frothy market with high mortgage repayments and little equity in their homes. “We are seeing a considerable spike in stress even in more affluent households. Large mortgages, big commitments but no income growth,” said Digital Finance Analytics (DFA) Principal Martin North. “Stressed households are less likely to spend at the shops, which acts as a drag anchor on future growth.” North estimates a record 52,000 households risk default in the next 12 months and that 23.4% of Australian families are under mortgage stress, meaning their income does not cover ongoing costs. That compares with about 19% a year ago.

“People are up to their ears in mortgages,” said Brad Smith, a car sales consultant at MotorPoint Sydney which has seen a stark slowdown in sales in the past six months. “They are all on a budget. Everyone’s got all their money in houses, that’s how it is.” Australians are also facing a cash crunch because price inflation in essential items such as food, electricity and insurance is accelerating at a 3.4% annual rate at a time when Australian wages are rising at their slowest pace on record, just 1.9% in the year to March. Meanwhile, growth in retail sales, personal loans and luxury car sales are all at multi-year lows, suggesting the household sector – nearly 60% of Australia’s A$1.7 trillion ($1.3 trillion) economy – is under severe strain.

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Steve Keen’s efforts are having an effect.

Is There A Magic Money Tree? Yes Children, But That’s The Wrong Question (G.)

Does anyone who has witnessed the pomp and circumstance of the Queen’s Jubilee, the funnelling of public money into Syrian airstrikes, or the systematic cutting of taxes for the rich really think we’re not paying nurses properly because we simply don’t have the money? Absolutely not: we don’t pay nurses properly because the government makes a choice not to. This fact calls to mind the words of the Texan minister Robert Fulghum: “It will be a great day when our schools have all the money they need, and our air force has to have a bake-sale to buy a bomber”. But the magic money tree is not a just daft expression in terms of how governments spend public money, it’s also misleading in terms of how the economy works as a whole.

Since 2008, we’ve been encouraged to see the economy like a household budget: if households spend too much money, they need to cut down on living costs so they don’t get into too much debt. To that end, the magic money tree says that if we spend too much money, we can’t just simply grow more. But actually, a country’s whole economy can grow more money if it needs to. Since 2009 the Bank of England has created £453bn of new electronic money to buy debt from the private sector using a mechanism called quantitative easing. Yes, you read that right: the Bank of England has created £453,000,000,000 of new money in the last eight years. Turns out the magic money tree is pretty big. Growing money is possible because an economy is nothing like a household budget. In a household, money comes in via people’s wages and goes out via living costs.

But in an economy, we all pay each other’s wages. Money doesn’t just travel in one direction in the economy, it circulates around. It’s the difference between one car driving in one end of a tunnel and out of the other, and lots of cars zigzagging around Spaghetti Junction. The issue isn’t whether we can grow money or not (we can – that’s just a fact), it’s where the money goes once it’s been grown. And the problem is that it doesn’t go to nurses, teachers or the public services they work for. It goes to institutions such as banks. The nurse in the BBC debate was highlighting a problem that exists across the whole economy: real wages haven’t increased for more than a decade, and this has meant more people have been relying on credit cards, with personal debt now higher than it was before the 2008 crash.

In other words, the fact that the nurse hasn’t had a pay rise is not just bad for her, it’s bad for all of us – because if that nurse is not earning enough, she won’t be spending money. And if she does spend money, she’ll do it by getting into unsustainable debt – which is itself outrageous considering the important, skilled work nurses do.

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Raise €7 billion to buy a bank for €1.

Santander Buys Struggling Spanish Banco Popular For €1 (BBG)

Banco Popular Espanol has been taken over by Santander after European regulators deemed that the bank was likely to fail. Popular will continue to operate under “normal business conditions” after all the bank’s shares and capital instruments were transferred to Santander, said the EU’s Single Resolution Board. The purchase price was €1, according to a statement. Santander plans to raise about €7bn (£6.1bn) of capital as part of the transaction. Popular had been looking for a buyer or a possible share sale after its balance sheet was battered by soured real estate loans that eroded its capital.

Its shares have dropped 53pc since the beginning of last week. In a statement, the ECB, which oversees the largest banks in the eurozone, said: “The significant deterioration of the liquidity situation of the bank in recent days led to a determination that the entity would have, in the near future, been unable to pay its debts or other liabilities as they fell due. “Consequently, the ECB determined that the bank was failing or likely to fail and duly informed the Single Resolution Board (SRB), which adopted a resolution scheme entailing the sale of Banco Popular Espanol to Banco Santander.”

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That Paris accord is a hoax.

Don’t Count on China as Next Climate Crusader (WSJ)

For years, a wide spectrum of groups in the U.S. lectured, cajoled and entreated China to go green. Multinationals and nonprofits teamed up with Chinese environmental groups to promote eco-friendly causes; Coca-Cola restored forests in the upper Yangtze. U.S. labs offered scientific support. Academics collaborated on research. The former Treasury secretary, Hank Paulson, championed China’s disappearing wetlands, a haven for migratory birds. The well-funded effort amplified voices within China demanding the government take action. It was, says Orville Schell, a longtime China watcher and environmentalist, “the most effective missionary work in the past couple hundred years.” So it’s an irony of historic proportions how the roles have reversed: China, the world’s worst polluter by far, is now a convert on climate change while the White House under Donald Trump has turned apostate.

In pulling out of the 2015 Paris climate-change agreement, Mr. Trump has repudiated a signal accomplishment of the Obama presidency: persuading Beijing to become a partner in the effort to prevent the planet from heating up to the point of no return. Without China’s support, the Paris deal might have fallen apart. Mr. Paulson issued a statement saying he was dismayed and disappointed. “We have left a void for others to fill,” he said. When it comes to the environment, China is still torn by conflicting priorities. It has installed more solar and wind capacity than any other nation—and plans to invest another $360 billion in renewable energy between now and 2020. The economy is rebalancing away from heavy industry and manufacturing toward much cleaner services and consumption.

Coal consumption has declined for three straight years. On current trends, many scientists expect that China will reach peak carbon emissions well before its target date of 2030 under the Paris accord. Yet Beijing remains committed to rapid growth. And coal is still king. Just ask the residents of Beijing. Whenever economic policy makers set out to boost growth, spending flows to new real-estate and infrastructure projects, the steel mills around the capital fire up their coal furnaces—and commuters reach for their face masks. This winter was particularly hard on the lungs. A spending splurge meant that Beijing’s average pollution levels last year were double the national standard set by the State Council.

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“How could they fail to come up with a video of the Donald and Vladimir swatting each other playfully with birch switches in a Moscow banya?”

Gimme Shelter (Jim Kunstler)

“Have you all lost your mind?” Vladimir Putin replied to one of Megyn Kelly’s thrusts about alleged Russian perfidy toward the US in the gala interview that debuted her new Sunday Night star-chamber on NBC. Old Vlad put his finger on something there. His view of the late goings-on in America is like that of the proverbial detached Martian observer of strange Earthly doings, rattling his antennae and clicking his mouth-parts in mirth. To which retort, by the way, one would have to answer, ”Yes, absolutely.” The toils of slow economic collapse, accompanied by the ceaseless effort by various arms of the Deep State to spin “the narrative” around the voting public’s collective head, has driven the polity insane. And this, of course, is on view in the bedlam that US politics has become, Trump and all.

I’m waiting for The New York Times to run the three-column headline that says Russia Racist, Misogynist, and Islamophobic to finally bring together the programmed paranoia of NeoCon / DemProg alliance with the esprit de corp of the new collegiate Red Guard. Mr. Putin does not have to lift a finger to detonate the groaning garbage barge of US domestic affairs. It’s already ignited and is faring toward a very peculiar species of civil war. You can be sure that the NeoCon/DemProg axis is determined to get rid of Trump at all costs. Impeachment requires some sort of high crime or misdeamenor. So far, going on a year, they haven’t come up with any evidence that the Golden Golem of Greatness acted as a Russian agent in some fashion, and that itself has got to be a little suspicious, considering the thousands of clerks in the spinning mills of those legendary seventeen Intel outfits the government runs.

How could they fail to come up with a video of the Donald and Vladimir swatting each other playfully with birch switches in a Moscow banya? Five TV sitcom writers could surely come up with an angle — as long as it was a plausible entertainment. In the meantime, Trump prevails, the mad bull elephant of the Republican herd, majestically swinging his trunk against everything breakable in the political china shop while trumpeting “Covfefe! Covfefe!” Last week it was the Paris Climate Accords. The op-ed writers in the usual places bounced off the walls of their virtual rubber room in response. Paul Krugman had to be dragged down to hydrotherapy at the NYT after he set his hair on fire. And Rachel Maddow practically popped a carotid artery in her muscular neck from all that shrieking.

I’m a bit more sanguine about the US withdrawal. To me, the Paris Accords were just another feel-good PR stunt enabling politicians to pretend that they could control forces that are already way out-of-hand, an international vanity project of ass-covering. The coming economic collapse will depress global industrial activity whether anybody likes it or not, and despite anyone’s pretense of good intentions — and then we will have a range of much more practical problems of everyday life to contend with.

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It’s getting time to rise up.

98% Of Greeks Downbeat About Their Current Economic Situation (K.)

Greeks are among the most pessimistic people in the world, according to the findings of a survey by the Pew Research Center which found that many Europeans as well as Japanese and Americans feel better about their national economies now than before the global financial crisis nearly a decade ago. Questioned about their national economy, only 2% of Greeks were upbeat, the lowest rate among the 32 countries polled. The Dutch, Germans, Swedes and Indians see their national economies in the most positive light, with more than 80% expressing optimism. The Pew survey also detected widespread concern about the future. A median of just 41% said they believed that a child in their country today would grow up to be better off financially than their parents. The most pessimistic about prospects for the next generation are the French (9%), the Japanese (19%) and the Greeks (21%).

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Jun 062017
 
 June 6, 2017  Posted by at 6:41 pm Finance Tagged with: , , , , , , , , , ,  5 Responses »
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Joseph Mallord William Turner Wreckers, Coast of Northumberland 1834

 

Is it sheer hubris, or is it just incompetence? It’s a question often asked when it comes to politics. And regularly, the answer is both. Still, what the ruling British political class has put on display recently seems to exist in a category all its own. Less than a year go, then-PM David Cameron lost the Brexit referendum that he called himself and was dead sure he would win by a landslide.

His successor Theresa May, Cameron’s Home Secretary and a staunch Remain advocate, lost the Brexit vote as much as her PM did, but stayed on, was promoted, and acted for 11 months like Downing Street 10 was hers by Divine Decree. Then she did the exact same thing Cameron did: she looked at polling numbers and decided to go for the jugular: more power through a snap vote.

In the process, May has succeeded in accomplishing the remarkable feat of rejuvenating her main opponent Jeremy Corbyn and his Labour party, who had been left for infighting dead until she called the election, while at the same time dividing her own Tories so much they now resemble Labour from just weeks ago.

The thing that sort of irks is that the speed and intensity with which it all came down would have been way more impressive if she had meant to do it. Oh, and what also irks is that despite a performance worthy of the Comedy Capers, May may still win, since there was always little time, there’s so little time left till Thursday and there have been terror attacks.

A nice addition to the comedy sphere, and I mean no disrespect to any of the terror victims, they’ve gotten enough of that from May et al, is the story behind the PM’s refusal to appear in public debates with Corbyn and perhaps others. When I first saw a few weeks ago that she had announced that refusal, I immediately thought she did not make that decision. She doesn’t have the savvy for that kind of thing.

Someone did it for her. I presumed there had been American advisers added to her team, but I didn’t read anything about that. Until a few days ago, when I saw that political -presumed- heavyweights like Australian Lynton Crosby and American Jim Messina had joined around the time of the snap election announcement on April 18.

And now of course I can’t help thinking that these guys are responsible for the epic failure that May has been over the past six weeks. But that might be giving them too much honor, she’s quite capable of screwing up the way she has all on her own.

And yes, it’s hard to escape a comparison with Hillary here. It’s not about gender, it’s about competence. And if you manage to -almost or entirely- lose to the likes of Trump and Corbyn, despite having a huge lead in the polls, as both ladies had, you’re simply in the wrong place at the wrong time. Not that Corbyn has won yet, at least not in the election.

Guys like Crosby and Messina get paid the big bucks for their expertise in both clean and dirty tricks. They have plenty experience in both. They don’t have opinions, but they make up voters’ opinions for them. Messina was Obama’s 2012 re-election campaign leader, Crosby did elections in Australia, New Zealand, Canada. Funny thing is if you check their records, they have lost quite a few of these campaigns. Even funnier would be if they lose this one too.

 

But you’re right, it’s not right to be laughing. This past weekend saw another attack on Britain, and another -to put it mildly- far below par performance by Theresa May in its wake. If after this the Britons still hand her a win in Thursday’s general election, give up the country for lost. Stick a fork in it.

May was the one who as Home Secretary was responsible for an investigation into the foreign funding of extremist Islamist groups in the UK that was set to be released a year ago. Instead, we saw last week, she’s actively suppressing its release now that she’s PM, ostensibly because the report mentions Saudi Arabia as a source of such funding, and May recently used her position to help UK arms manufacturers sell billions worth of additional weapons to the Saudi’s.

She’s even on record as saying that arms sales to the House of Saud make Britain more safe, though the report apparently fingers that same House of Saud as funding the very terrorism her country was hit by, three times in a row now, during her stint as PM.

Where does terrorism originate? May won’t admit it’s Saudi Arabia, so she tried, in her first post-attack speech, to deflect the obvious by blaming ‘the internet’. But the internet doesn’t sell arms to countries that support terrorism. Theresa May does.

 

 

As people understandably call for more protection after three hits in a row, May has another thing to suppress: as Home Secretary she has been responsible for cutting some 22,000 jobs in the police force, 20,000 in the army, and 60,000 in the healthcare system. And if she would win on Thursday, more of all that is in the offing. At least, that was what was planned; she may make yet another U-turn on that one.

It’s really quite amusing to see a candidate trying to hide from the very elections she herself called, but -again-, given the short time-frame this hide-and-seek tactic might actually work. Moreover, if the British media and his own Labour MPs had not turned against Jeremy Corbyn the way they did until very recently, would May be anywhere near having a shot at victory? It looks unlikely.

There are already bets going that even if she wins the election, which if it happens is sure to be a very narrow win, she’ll be replaced as PM by Boris Johnson before July 1. But he’s as much of a clown as all other major Tory figureheads are today.

 

 

The problem of course is that the problems for Britain won’t stop on Thursday, no matter who wins. The problems haven’t even started blooming yet, let alone flowering.

If Corbyn might win, he’s have the entire Conservative entitlement class on his back, and that would turn ugly fast. If May wins, she’ll be ousted in no time, she did far too bad of a job. And then in just a few weeks’ time the Brexit negotiations begin. But with what? With a country that’s been divided to the bone, that’s what.

As things are, Corbyn may yet succeed where Bernie Sanders was rejected and suppressed by his own party. The world today needs people like them, not because it needs ‘socialism’ that much, but because the political landscape has been thrown too far out of balance. If the left gets co-opted by neo-liberalism as much as the right is, there is no left left.

And a sound political system needs representation for the people, the poor(er), as much as representation for the richer ruling classes. It’s not about ideology, but about balance. If you allow either one side or the other of the political equation to run rampant, you will inevitably end up with a dysfunctional society.

 

And that is what Britain is today. There are plenty slogans out there after yet another terror attack that say things like ‘Britain Stands United’, “London is United” , but it doesn’t and they are not. It’s not terrorism that has divided the country, it’s the political class. It’s not terrorism that has ‘crippled democracy’, it’s the sense of entitlement that many -on both sides of the aisle- have brought to Whitehall.

You would think that at least Jeremy Corbyn could do something about that if he wins. But he would then face an EU negotiating team that operates with a very similar sense of entitlement. And they’re going to come after the British people the same way they have in Greece. Not exactly an enviable position.

And that’s just Brussels. Then there are the terrorist attacks, and there’s little reason to think they will stop. What Britain refuses to recognize until now, and has for hundreds of years as I said before, is that these attacks in London and Manchester are not where it has all started. They don’t come out of the blue, and they don’t come from people who ‘hate us for our freedom’.

The first step is the UK et al spreading terror in Libya and Syria and Iraq, bombing away and selling weapons to ‘friendly’ regimes, creating utter chaos as a political power tool. If you don’t stop that you don’t stop terrorism. The only way to stop terror directed at you is to stop directing it at others.

Stop bombing these countires with impunity, and use the money you save with that to rebuild what you’ve destroyed. That will take away the main reason why there is terrorism in our streets. It will likely go a long way towards solving the refugee problems as well.

All this seems a long way away. It’ll recede further if the entitlement-laden establishment win on Thursday. But whichever way the vote goes, Britain will face a decade or more of deepening hardship, don’t underestimate that; there is no easy way out, not for the people.

Oh wait, I totally forgot to mention that the housing bubble is going to burst too. Oh, well, when it rains…

 

 

Mar 152017
 
 March 15, 2017  Posted by at 9:46 am Finance Tagged with: , , , , , , , , ,  Comments Off on Debt Rattle Ides of March 2017
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Russell Lee Proprietor of small store in market square, Waco, Texas 1939

 

MSNBC’s Non-Story: Trump Made $150 Million, Paid 25% Tax Rate (ZH)
The Most Important Chart To See Before The Dutch Election (Ed Harrison)
Fragmentation Is the Solution, Not the Problem (CHS)
Economists Are Political Actors (Sapir)
One Chart That Captures the Debate Over Quantitative Easing (BBG)
Fed Expected To Raise Rates As US Economy Flexes Muscle (R.)
Britain Is Politically Dead From The Neck Down (Monbiot)
Turkish Paradoxes (K.)
World’s Spiders Eat More “Meat” Than All Of Mankind (G.)
Monsanto Accused of Ghostwriting Papers on Roundup Cancer Risk (BBG)
Monsanto Colluded With EPA, Could Not Prove Roundup Doesn’t Cause Cancer (ZH)
Greece: A Year of Suffering for Asylum Seekers (HRW)
As Greek Crisis Grinds On, Children Pay Price (K.)

 

 

Boomerang.

MSNBC’s Non-Story: Trump Made $150 Million, Paid 25% Tax Rate (ZH)

While Rachel Maddow drones on with the coherence of Janet Yellen, losing thousands of viewers by the minute, the MSNBC anchor was promptly scooped not only by the White House which revealed her “secret” one hour in advance, but also by the Daily Beast which reported that its contributor David Cay Johnston had obtained the first two pages of Trump’s 2005 federal income tax return, allegedly receiving them in the mail, and posted his “analysts” on his website, DCReport.org. According to the documents, Trump and his wife Melania paid $38 million in total income tax, consisting of $5.3 million in regular federal income tax, and an additional $31 million of “alternative minimum tax,” or AMT.

The White House statement confirmed the finding: “Before being elected President, Mr. Trump was one of the most successful businessmen in the world with a responsibility to his company, his family and his employees to pay no more tax than legally required,” the White House said in a statement. “That being said, Mr. Trump paid $38 million dollars even after taking into account large scale depreciation for construction, on an income of more than $150 million dollars, as well as paying tens of millions of dollars in other taxes such as sales and excise taxes and employment taxes and this illegally published return proves just that.” As the Beast notes, 2005 was the year that Trump, then a newly minted reality star, made his last big score as a real-life real estate developer, when he sold two properties, one on Manhattan’s west side and one in San Francisco, to Hong Kong investors, accounting for the lion’s share of his income that year.

“It is totally illegal to steal and publish tax returns,” the White House statement concluded. “The dishonest media can continue to make this part of their agenda, while the President will focus on his, which includes tax reform that will benefit all Americans.” But the real story here is that there is no story: what MSNBC confirmed is that Trump made more money than some of his critics said he made in the period in question, and more importantly, that he paid a generous effective income tax rate, well above the 14.1% rate paid by Mitt Romney, and even higher than the 13.5% federal tax rate paid by Bernie Sanders in 2014.

Read more …

Three articles in a row that deal with decentralization, each from their own angle. Most important chart I don’t know, but a good indicator of the entire west moving away from traditional parties. The majority of votes may go to new parties, not established ones.

The Most Important Chart To See Before The Dutch Election (Ed Harrison)

The present Prime Minister of the Netherlands, Mark Rutte, is the first Prime Minister from a party other than the two traditional centrist parties, the PvdA and the CDA, and their predecessor parties since the Dutch constitution and voting system was fundamentally changed in 1917. Clearly, we are seeing a change in voting patterns. But what is even more remarkable is that right now poling for parties that have always been in opposition is almost half of the vote for this election. Why it matters: We are in the midst of an economic upswing in Europe and globally as well. By all macro accounts, the Dutch economy is performing well. Yet, between them, previous ruling coalition parties —the VVD, PvdA, CDA, D66 and CU — are projected to only get 52% of the vote.


Source: Legatum Institute

They could even get fewer votes than the parties that have never been in government during the 100 years of the modern Dutch electoral system. People talk about voters turning to populists. But what happens to electoral patterns in a recession — or another sovereign debt crisis? And how would more populist platforms or parties in Europe deal with the existing economic orthodoxy, dominated by the stability and growth pact’s 3 and 60% deficit-debt hurdles? The next coalition in the Netherlands could be unstable, as it is likely to be cobbled together to exclude the PVV. Overall, the political risks in Europe may be high right now, but depending on how the economy does, the risks can rise further still.

Read more …

As I’ve addressed many times. Centralization is in the past.

Fragmentation Is the Solution, Not the Problem (CHS)

The fragmentation of political consensus (i.e. the consent of the citizenry) is presented by the Powers That Be and their media servants as being a disaster. The implicit fear is real enough: how can we rule the entire nation-empire if it fragments?\ As I noted the other day, fragmentation terrifies the Establishment of racketeers and insiders, for when the centrally-enforced rentier skims and scams collapse, those who own and control the rentier skims, scams and rackets will lose the source of their wealth and power. To understand why fragmentation is the solution rather than the problem, we have to look at how power is leveraged in centralized government. Let’s take the recent increase in a common pinworm treatment from $3 to $600: Pinworm prescription jumps from $3 to up to $600 a pill (via J.F.).

In a top-down, centralized hierarchy of political power (i.e. the central state), the pharmaceutical company only needs to lobby a few authorities in the central state to impose its rentier skim/scam on the entire nation. Lobbying/bribing a relative handful of federal officials and elected representatives is remarkably inexpensive: a financier or corporation only needs to focus on these few key players, and smoothing the PR pathway via a highly concentrated corporate media. A mere $5 million spent in the right places guarantees $100 million in future profits– profits earned not from open competition in a transparent market, but profits plundered as rentier skims: the product didn’t get any better or effective when the price leaped from $3 to $600, and competition was squelched by regulatory capture and high barriers to entry.

Now imagine if the pharmaceutical company had to lobby/bribe officials in each of America’s 3,142 counties to impose its rapacious rentier skim on the populace of each county. The lobbying/bribing effort will be orders of magnitude more costly and complex, and the national corporate media is less effective at the local level, where community groups and local media have some influence. If we look at the source of the 2008 Global Financial Meltdown, we find that the centralization of capital and power were the primary enablers of the meltdown. If the financial system were composed of 1,200 local banks, each of which had to comply with local and state regulations instead of five behemoth banks that had the capital and klout to buy Washington D.C.’s approval of their leverage and shady dealings, some hundreds of the smaller banks might have failed–but the system would have survived.

Read more …

Sapir is interesting. But economics is still not a science. Also addresses decentralization.

Economists Are Political Actors – Sapir (AHT)

[..] economists have appropriated a power that is not theirs. They have indeed penetrated the inner workings of the ruling apparatus. This is true at the State level, as to that of major international organizations, whether it is in the European Union, the OECD or the WTO. They are thus increasingly inclined to intervene on all social and political problems. But when they occur, it is by mixing an experts position and a position of political actors. This poses an immediate problem. For, if the expert is legitimate to speak on behalf of an acquaintance, the political actor must comply with the rule of democratic debate. By having it both ways, economists are exonerated from the problem of verification. The problem, therefore, is to know in which space one speaks, in that of pure competence or in that of political choices. If it is in the latter, it is no longer possible to accept that the “expertise” alone can decide the debate, expertise which can no longer be verified because any judgment would combine elements of competence and political values.

If one is in the political space, then the question of legitimacy arises. Now, this question immediately refers to the higher-level issue of sovereignty. In the space of politics, one asks first who is legitimate, and who is sovereign. But there is a problem that is deeper. The scientific credibility they claim to be is far from being indisputable, or undisputed. There are very serious reasons for this, which I explained in a book dating back to the early 2000s [1]. The very way in which the majority of the profession, the economists of the mainstream, understands the object of its work, is today debated and strongly criticized [2]. The methods used by these economists, the models on which they are based, are openly contested. [..] In fact, economists do politics, what nobody ever thinks to reproach them for, but they do politics by pretending not to do so, and by delegitimizing in advance any critical discourse. This is, of course, a serious attack on democracy.

[..] It is wrong here to speak of “Europe” as if it were an institution or a federation. The only reality of Europe is a historical reality, diverse, and above all a cultural reality. If you go to Vladivostok in Russia, you are in a European city. What is now a problem for democracy is the existence of the European Union, which is an institution and of which we can follow the evolution from the origin, that is to say the Maastricht Treaty. Indeed, the evolution of the European Union since 2007-2009 is a real problem. There, yes, unquestionably, we are in the presence of a structure that tends to develop itself without control or responsibility. The statements of Jean-Claude Juncker in the Greek election of January 2015 testify it [37].

The behavior of the EU and the institutions of the Euro zone call for an overall reaction because these institutions contest this freedom that is sovereignty [38]. Let us remind here the quotation from Mr. Jean-Claude Juncker, the successor of the ineffable Barroso at the head of the European Commission: “There can be no democratic choice against European treaties”. This revealing statement dates from the Greek election of January 25, 2015, which precisely saw the victory of SYRIZA. In a few words, everything is said. It is the quiet and satisfied affirmation of the superiority of non-elected institutions over the voting of voters, of the superiority of the technocratic principle over the democratic principle.

Read more …

The mother of all asset bubbles.

One Chart That Captures the Debate Over Quantitative Easing

Not all price increases are created equal. Goldman Sachs raises questions about the success of the efforts by the Federal Reserve and its peers to spark inflation in the wider economy with a chart showing what’s happened with prices in the largest developed economies since the start of 2009. A replication of their analysis shows a big spread in gains. While wages would never show swings on par with the likes of high-yield bonds, the chart does illustrate how well financial markets recovered from the 2007 to 2009 meltdowns. By contrast, consumer price inflation, incomes and other such gauges of the “real” economy have put in muted performances. For politicians, the chart sums up the frustrations that have helped propel the populism that Brexiteers and Donald Trump rode to victory.

Few would question that the real economy would have been in much worse shape without the Fed, ECB and Bank of Japan’s determination to avert a financial-industry meltdown last decade, an effort that saw their balance sheets balloon by trillions of dollars. [..] Economic growth and wage increases have disappointed in recent years, depressed by poor productivity gains and historically low labor-force participation – dynamics that lie outside the purview of central banks. Now that monetary policy makers are leaving the onus on governments to address growth, and contemplating the easing off of stimulus, the big question for investors is how resilient markets will be. For now, optimism prevails – everything from corporate-bond premiums to emerging-market bonds are flashing confidence. It’s perhaps no wonder: though the Fed has ended its QE, continuing programs at the ECB and BOJ are driving almost $200 billion of purchases a month, according to Deutsche Bank estimates.

Read more …

Yawn…

Fed Expected To Raise Rates As US Economy Flexes Muscle (R.)

The Federal Reserve is expected to raise interest rates for the second time in three months on Wednesday, encouraged by strong monthly job gains and confidence that inflation is finally rising to its target. A rate hike at the conclusion of the Fed’s latest two-day policy meeting is already baked into bond yields and financial markets overall, with investors putting the likelihood of such a move at 95%, according to CME Group’s FedWatch program. Attention is turning instead to whether the U.S. central bank will signal an even faster pace of monetary tightening this year than the current three rate hikes that it projected at the December policy meeting.

“Expectations have some catching up to do regarding the Fed’s need to ‘lean into the wind’ of rising inflation, strong growth, robust sentiment, easy financial conditions, and the likelihood of fiscal stimulus in 2018,” analysts from Goldman Sachs wrote ahead of the meeting. They said they regarded a fourth rate increase this year as a “close call.” A rate increase on Wednesday would push the Fed’s target overnight lending rate to a range of between 0.75% and 1.00%, still low but approaching the range that the central bank has typically operated within. The Fed is scheduled to release its latest policy statement along with updated economic forecasts at 2 p.m. EDT. Fed Chair Janet Yellen is due to hold a press conference half an hour later.

Read more …

“Will my family and I truly be better off by going it alone? Will we really be more safe and secure?”

Britain Is Politically Dead From The Neck Down (Monbiot)

Here is the question the people of Scotland will face in the next independence referendum: when England falls out of the boat like a block of concrete, do you want your foot tied to it? It would be foolish to deny that there are risks in leaving the United Kingdom. Scotland’s economy is weak, not least because it has failed to wean itself off North Sea oil. There are major questions, not yet resolved, about the currency it would use; its trading relationship with the rump of the UK; and its association with the European Union, which it’s likely to try to rejoin. But the risks of staying are as great or greater. Ministers are already trying to reconcile us to the possibility of falling out of the EU without a deal.

If this happens, Britain would be the only one of the G20 nations without special access to EU trade – “a very destructive outcome leading to mutually assured damage for the EU and the UK”, according to the Commons foreign affairs committee. As the government has a weak hand, an obsession with past glories and an apparent yearning for a heroic gesture of self-destruction, this is not an unlikely result. On the eve of the first independence referendum, in September 2014, David Cameron exhorted the people of Scotland to ask themselves: “Will my family and I truly be better off by going it alone? Will we really be more safe and secure?” Thanks to his machinations, the probable answer is now: yes.

In admonishing Scotland for seeking to protect itself from this chaos, the government applies a simple rule: whatever you say about Britain’s relationship with Europe, say the opposite about Scotland’s relationship with Britain. In her speech to the Scottish Conservatives’ spring conference, Theresa May observed that “one of the driving forces behind the union’s creation was the remorseless logic that greater economic strength and security come from being united”. She was talking about the UK, but the same remorseless logic applies to the EU. In this case, however, she believes that our strength and security will be enhanced by leaving. “Politics is not a game, and government is not a platform from which to pursue constitutional obsessions,” she stormed – to which you can only assent.

Read more …

“And the last of the paradoxes is that Turkish electoral law prohibits pre-election rallies abroad..”

Turkish Paradoxes (K.)

What Turkish President Recep Tayyip Erdogan is trying to accomplish is perfectly clear: He wants to win the April 16 referendum on constitutional reform and thus gain the enhanced powers his ambitious nature so covets, some of which he already enjoys after turning last summer’s failed coup into an opportunity. His strategy is also clear: criminalizing any opposition, be it in actions or mere words, mainly at the expense of journalists and the Kurds, as well as condemning in summary fashion anyone perceived as being pro-Gulen. The second part of his strategy involves exporting his edginess and bullying rhetoric, first and foremost to the Aegean at the expense of Greece, and then to the European Union in a bid to win favor among Gray Wolves voters.

The Turkish president is also trying to strong-arm Western Europe into recognizing his prerogative (and that of his subordinates, though only those who vote his way next month) to a right that he himself openly scorns and denies his opponents. History is full of such paradoxes. Another is that while Erdogan accuses the West of Islamophobia, he is doing everything in his power to strengthen this sentiment because it will benefit him at the polls, as for years he has been cultivating the myth that he is the leader of all of Islam, both in the East and the West. In contrast to Erdogan, what the EU is trying to achieve vis-a-vis Ankara is not so clear, neither in terms of strategy nor even in tactics. Overall, it’s hard to know what it’s thinking about Turkey’s “European prospects” and, more specifically right now, about the pre-election speeches of Turkish pro-Erdogan officials in EU member-states.

Pre-election anxiety strengthened by the rising popularity of anti-systemic, anti-migrant, far-right forces, has been instrumental in Europe as well, especially in the Netherlands and Germany. It has resulted in bans against Turkish officials that demonstrate fear rather than faith in the strength of democracy, even when it is exposed to the test of regimes which are hardly democratic, such as Turkey. Meanwhile, fears that the European Union’s refugee deal with Turkey may collapse have prevented the German and Dutch leaderships from openly condemning the human rights violations in Turkey, resulting in them basically swallowing profound insults from Erdogan and some of his ministers referring to fascists and Nazis. Here’s another paradox: Turkey, which didn’t exactly shine in the war against Nazism, condemning the Netherlands, a victim of Nazism.

And the last of the paradoxes is that Turkish electoral law prohibits pre-election rallies abroad.

Read more …

I’d be interested to see a study like this done for bats. They eat a lot of insects. And there are lots of them: 1/3 of all mammals is a bat I recall reading.

World’s Spiders Eat More “Meat” Than All Of Mankind (G.)

The world’s spiders eat 400-800m tonnes of insects every year – as much meat and fish as humans consume over the same period, a study said Tuesday. In the first analysis of its kind, researchers used data from 65 previous studies to estimate that a total of 25m metric tonnes of spiders exist on Earth. Taking into account how much food spiders need to survive, the team then calculated the eight-legged creatures’ annual haul of insects and other invertebrates. “Our estimates … suggest that the annual prey kill of the global spider community is in the range of 400-800m metric tons,” they wrote in the journal The Science of Nature. This showed just how big a role spiders play in keeping pests and disease-carriers at bay – especially in forests and grasslands where most of them live.

“We hope that these estimates and their significant magnitude raise public awareness and increase the level of appreciation for the important global role of spiders,” the study authors wrote. For context, the study points out that humans consume about 400m tonnes of meat and fish every year, while whales feed on 280-500 tonnes and seabirds about 70m tonnes of seafood. There are about 45,000 known spider species, all of them meat-eating. And the critters can travel far to feed, swinging from place to place on silken threads that allow them to cover up to 30km (19 miles) in a day. Spiders are found everywhere from the Arctic to the most arid of deserts, in caves, on ocean shores, sand dunes and flood plains, the study authors said.

Read more …

Unbelievable.

Monsanto Accused of Ghostwriting Papers on Roundup Cancer Risk (BBG)

Monsanto was accused in court documents of ghostwriting scientific literature that led a U.S. regulator to conclude a key chemical in its Roundup weed killer shouldn’t be classified as carcinogenic. Lawyers suing the company on behalf of farmers and others, who claim exposure to glyphosate caused their non-Hodgkin’s lymphoma, alleged in a court filing which was partially blacked out until Tuesday that the Environmental Protection Agency “may be unaware of Monsanto’s deceptive authorship practice.” The filing was made public by a federal judge in San Francisco handling the litigation. The judge said last month he’s inclined to require a retired EPA official to submit to questioning by plaintiffs’ lawyers who contend he had a “highly suspicious” relationship with Monsanto.

The former official oversaw a committee that found insufficient evidence to conclude glyphosate causes cancer and left his job last year after his report was leaked to the press. The plaintiff lawyers said in the filing that Monsanto’s toxicology manager and his boss were ghost writers for two of the reports, including one from 2000, that the EPA committee relied on to reach its conclusion. Among the documents unsealed Tuesday was a February 2015 internal e-mail exchange at the company about how to contain costs for a research paper. The plaintiff lawyers cited it to support their claim that the EPA report is unreliable, unlike a report by an international agency that classified glyphosate as a probable carcinogen.

“A less expensive/more palatable approach” is to rely on experts only for some areas of contention, while “we ghost-write the Exposure Tox & Genetox sections,” one Monsanto employee wrote to another. The names of outside scientists could be listed on the publication, “but we would be keeping the cost down by us doing the writing and they would just edit & sign their names so to speak,” according to the e-mail, which goes to on say that’s how Monsanto handled the 2000 study.

Read more …

And this is even more unbelievable. After 25 years of Roundup being on the market, not one cancer study has been done.

Monsanto Colluded With EPA, Could Not Prove Roundup Doesn’t Cause Cancer (ZH)

newly unsealed court documents released earlier today seemingly reveal a startling effort on the part of both Monsanto and the EPA to work in concert to kill and/or discredit independent, albeit inconvenient, cancer research conducted by the World Health Organization’s International Agency for Research on Cancer (IARC)….more on this later. But, before we get into the competing studies, here is a brief look at the ‘extensive’ work that Monsanto and the EPA did prior to originally declaring Roundup safe for use (hint: not much). As the excerpt below reveals, the EPA effectively declared Roundup safe for use without even conducting tests on the actual formulation, but instead relying on industry research on just one of the product’s active ingredients.

“EPA’s minimal standards do not require human health data submissions related to the formulated product – here, Roundup. Instead, EPA regulations require only studies and data that relate to the active ingredient, which in the case of Roundup is glyphosate. As a result, the body of scientific literature EPA has reviewed is not only primarily provided by the industry, but it also only considers one part of the chemical ingredients that make up Roundup.” Meanwhile, if that’s not enough for you, Donna Farmer, Monsanto’s lead toxicologist, even admitted in her deposition that she “cannot say that Roundup does not cause cancer” because “[w]e [Monsanto] have not done the carcinogenicity studies with Roundup.”

[..] In early 2015, once it became clear that the World Health Organization’s IARC was working on their own independent study of Roundup, Monsanto immediately launched their own efforts to preemptively discredit any results that might be deemed ‘inconvenient’. That said, Monsanto, the $60 billion behemoth, couldn’t possibly afford the $250,000 bill that would come with conducting a legitimate scientific study led by accredited scientists. Instead, they decided to “ghost-write” key sections of their report themselves and plotted to then have the independent scientists just “sign their names so to speak.”

Finally, when all else fails, you call in those “special favors” in Washington D.C. that you’ve paid handsomely for over the years. And that’s where Jess Rowland, the EPA’s Deputy Division Director for the Office of Chemical Safety and Pollution Prevention and chair of the Agency’s Cancer Assessment Review Committee, comes in to assure you that he’s fully exploiting his role as the “chair of the CARC” to kill any potentially damaging research…”if I can kill this I should get a medal.”

Read more …

Even HRW has moved to using the politically correct ‘asylum seekers’. for refugees.

Greece: A Year of Suffering for Asylum Seekers (HRW)

The EU-Turkey deal has trapped thousands of people in abysmal conditions on the Greek islands for the past year, while denying most access to asylum procedures and refugee protection, Human Rights Watch said today. This assessment of conditions is released ahead of the first anniversary of the agreement, signed on March 18, 2016. To carry out the deal, the Greek government has adopted a containment policy, keeping asylum seekers confined to the islands, including in the so-called refugee hotspots and other reception facilities, to facilitate speedy processing and return to Turkey. But continued arrivals, the mismanagement of aid funding, and the slow pace of decision-making, as well as the positive decisions of Greek appeals committees rejecting summary returns to Turkey as unsafe, have led to overcrowded and abysmal conditions on the Greek islands.

These factors, combined with the Greek authorities’ failure to properly identify vulnerable asylum seekers for transfer to the mainland, have resulted in deteriorating security conditions, unnecessary suffering, and despair. “The EU-Turkey deal has been an unmitigated disaster for the very people it is supposed to protect – the asylum seekers trapped in appalling conditions on Greek islands,” said Eva Cossé, Greece researcher at Human Rights Watch. “Greek authorities should ensure that people landing on Greece’s shores have meaningful access to asylum and put an end to the containment policy for asylum seekers. The deal’s flawed assumption that Turkey is a safe country for asylum seekers would allow Greece to transfer them back to Turkey without considering the merits of their asylum claims.

But in the months after the deal was completed, Greek asylum appeals committees have rightly ruled in many instances that Turkey does not provide effective protection for refugees and that asylum applications should be admitted for regular examination on their merits in Greece. Following EU pressure, however, Athens changed the composition of the appeals committees in June, and the restructured committees have ruled in at least 20 cases that Turkey was a safe country, even though it excludes non-Europeans from its refugee protection. That finding was challenged by two Syrian asylum seekers at Greece’s highest court, the Council of State, which heard their case on March 10. No one has yet been forcibly returned to Turkey on the grounds that their asylum application was inadmissible because they could obtain effective protection in Turkey. But if the Council of State turns down the appeal, it could pave the way for mass returns of asylum seekers to Turkey.

Read more …

Boy, the sadness…

As Greek Crisis Grinds On, Children Pay Price (K.)

In Greece’s grinding economic crisis, a home for abused children is now taking in those whose parents are struggling to feed them. It is perhaps the darkest sign of economic devastation in Greece, where traditionally strong family ties are starting to crumble after years of depression. A quarter of Greece’s workforce is unemployed and a quarter of its children live in poverty, according to United Nations figures, forcing parents to depend on grandparents for handouts. But pensions too have been cut a dozen times. In Athens, the Model National Nursery, set up a century ago for orphans of war, can hardly keep up with the number of parents turning to it for help. Unable to cover their basic needs, parents leave their children in the home all week.

Iro Zervaki, its head, says at least 40 children are on the waiting list, four times as many as a couple of years ago. The home sleeps 25 in a bare room with rows of beds draped in blue blankets, and lacks the staff and funds to increase capacity, she said. Most places are for abused children. Dozens of other children, all aged two to five, come in daily, but the days away from their parents are long. “We had incidents where children even attempted to leave, to run away, to go to their mother,” Zervaki said. In the buzzing playground, a little girl tugged the social worker’s blouse and yelled: “Miss! When will I go to my mum?” “They can’t tell the days apart so every day they ask: ‘Is it Friday?’” Anthoula Zarmakoupi, the social worker, said. “They know mum will pick them up at the weekend.”

Read more …

Oct 232016
 
 October 23, 2016  Posted by at 7:55 pm Finance Tagged with: , , , , , , ,  Comments Off on Ungovernability
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Inge Morath Street Corner at World’s End London 1954

 

Over the summer I introduced a two-fold assertion: 1) global economic growth is over (and has been for years and won’t come back for many more years) and 2) the end of growth marks the end of all centralization, including globalization. You can read all about these themes in “Globalization Is Dead, But The Idea Is Not” and “Why There is Trump” There are also extensive quotes of the second essay in wicked former UK MI6 spymaster Alastair Crooke’s “‘End of Growth’ Sparks Wide Discontent”.

When I say ‘the end of growth’, I don’t mean that in a Limits to Growth kind of way, or peak oil or things like that. Not because I seek to invalidate such things, but because I mean economics, finance only. Our economies simply ceased growing, and quite a few years ago. The only reason that is not, and very widely, recognized is the $21 trillion and change that central banks have conjured up ostensibly to kickstart a recovery that always remains just around the corner.

That those $21 trillion will have massive negative effects on all of us is not my point either right now. Just that growth is gone. And that’s hard enough to swallow for a system that’s based uniquely on that growth. That is what this ‘essay’ is about: what consequences that will have.

All that said, I don’t have the idea that too many people are willing to accept the notion of the end of eternal economic growth (let alone right this minute), nor of globalization’s demise. Which may be partially understandable, but not more than that. Instead, quite a few people may honestly feel that the end of growth will make ‘leaders’ try for more, not less, centralization/globalization, but that, if it happens, is temporary. Unless, as I wrote earlier, we see dictators in the west.

Because, as I said in those articles, the overbearing principle is, and must be, that when centralized power ceases to deliver benefits to people, they will no longer accept that decisions about their – ever poorer- lives are taken by people hundreds or thousands of miles away from where they live. People allow that only when they reap sufficient benefits from it. With growth gone, there are no such benefits left. Look at Greece and Italy and Brexit, and look at why Trump is where he is.

 

Since it will apparently take a while for the above to sink in – which is not because I’m wrong-, I’m a little hesitant to introduce the next assertion, which is very closely related to the other two and takes it a step further. That assertion is that there are multiple countries in the western world -and perhaps beyond- today that run a serious risk of becoming de facto ungovernable. I’ll refrain from using the term anarchy.

I’ve been playing around in my head for a while with the thought that it is striking that the last two major global powers, which together have dominated world politics and economics for over 200 years, look well on their way towards becoming ungovernable. It is perhaps even more striking that nobody appears to understand or even contemplate this.

Both Britain and America are caught in an apparent trap in which various groups of their citizens blame each other for everything that’s going wrong with their lives -which admittedly is plenty-. But that’s where the end of growth and globalization comes in: societies are in urgent need of new ways of organizing themselves, of formulating new goals, priorities and policies.

And since nary a soul recognizes that the old ways have expired, this is bound to be a very difficult process. Before formulating anything new, we will first see (well, we already do) forces, movements and individuals rise to the fore whose claim to fame is kicking against the existing grain without providing much in the way of -coherent- ideas of what should come next.

In fact, most of these ‘transitory forces’ don’t even realize or acknowledge the need for any novel paradigms; they -often hugely- gain in popularity basing themselves on talk of tweaking existing paradigms, on the notion of pretty much leaving things as they are but with a few different focus points here and there. Re-arranging deckchairs.

And if anyone would try on ‘real change’, they’d likely be voted down in record numbers, because the end of growth will mean loss of wealth and prosperity everywhere. And neither the people nor the times are ready for that message. Let alone the media machine or the establishment it serves. Which would rather go to war than admit they lost and give up their profits.

 

Before moving on to the most prominent and perhaps urgent examples, the US and UK, let’s take a look at a handful or so European countries. By the way, the European Union is a prime example of an entity that is caught blinded on the way towards being ungovernable like a deer in 27/28 pairs of headlights. No growth, no EU.

In the same way that, as I explained in the earlier articles, all supranational entities face the fate of the dodo. Or at least the existing ones do, with their structures geared towards ever increasing centralization of power and money. Countries, societies, people will always find ways to trade and cooperate, and they will again, but the next time they do it will be only if and when they keep control over decisions that concern what’s important to them.

But on to those European countries on their way towards challenging existing power structures and governability. Italy has a -constitutional- referendum on December 4, and it looks right now like PM Renzi will lose that, opening the way for our friend Beppe Grillo and his M5S Five Star movement to take over. Beppe wasn’t against the euro when we met in 2010, but he is now. And M5S has since grown hugely, into a solid national force.

In the rich core of the EU, there are general elections in Holland in March 2017, France in April and Germany in September 2017. Holland’s traditional parties have been losing clout for a long time, and Geert Wilders’ anti-Islam anti-EU pro-Freedom party scores big in the polls. And that in a country that says it’s doing great, talks about raising wages across the board and is stuck in a massive housing bubble.

France has a president, Hollande, who’s polling lower numbers (a while ago it was 6%) than any US president probably ever did in history, and that’s saying something. France has new crown princes on Hollande’s Socialist side in PM Manuel Valls and Economy Minister Emmanuel Macron, but they are badly tainted by Hollande’s ‘achievements’.

They have old crown princes for the Republican conservative party in ex-PM Sarkozy and the for some reason very popular Alain Juppé, but both can really only try and steal votes from Marine Le Pen’s Front National by leaning ever further right. Which leaves Le Pen, who has sworn to take France out of the EU, as the no. 1 contender.

Given what might happen in Italy, Holland and France, one must wonder what the September 2017 German elections will even matter anymore when they happen. Unless an M5S type movement stands up there, Merkel will have no choice but to pull sharply to the right to try and hold off the right wing AfD from getting into a kingmaker position. Germany’s once proud and strong left wing movement looks bound for near extinction.

Belgium and Spain don’t have elections scheduled for 2017, but both have recently endured long periods without functioning governments, and both look no closer to solving the issues than they were before. Just look at Wallonia blocking the CETA trade deal between the EU and Canada. One might say they already are, for all intents and purposes, on the verge of being ungovernable.

Grillo, Wilders, Le Pen and Spain’s Podemos are very different people and movements, but what they have in common is they can produce such a backlash in their respective countries, win or lose, that they can render the existing political structures obsolete and thereby their countries ungovernable. Maybe, then, those structures are already obsolete, and maybe that’s why they’ve gained such popularity?!

 

Plenty of candidates in Europe for governmental chaos; and I haven’t even touched on many countries, including in Eastern Europe, where the end of growth will shatter many dreams and promises of better lives that have been put on hold indefinitely. Even as many Czechs and Polish workers risk being sent back home from countries like Britain. Europe truly is a continent full of powder kegs. Even before you add refugees.

However, I still think the US and UK are first in line when it comes to the risk of being rendered ungovernable. Partly simply because of timing, and partly because the differences between various ‘groups’ and movements are as pronounced as they are already today. Both countries are running out of carpet to sweep their dirt under.

A conspicuous part in all this is played by the nations’ respective media, who seem to have given up all attempts at pretending to be neutral, a.k.a. ‘journalistic’. Traditional media, newspapers and radio and TV channels, used to have reporters and then, separately, they would have opinion columns, and the difference would be clear. But that’s all gone, every single article is now an opinion piece, which goes a long way towards explaining why people turn their backs on them.

The MSM media are digging their own graves. Or, rather, their graves were being digitally dug anyway, and they’re greatly speeding up the process of their own demise. What America and Britain would need right now is a ‘traditional media outlet’ -just one- that is actually objective; the first one that tries that approach could make a killing, but all are scared of being killed in the process.

Moreover, most ‘reporters’ have fooled themselves into thinking that they ARE objective; that ‘objective’ means Trump and Brexit MUST be condemned, as well as everyone and everything that has anything to do with the two, and some that don’t, like Putin. Which happens to play a major role into how both countries inexorably slide down into a state of chaos.

Their traditional political parties are self-immolating as we speak, and yet in neither country is there space for new parties to stand up. That seems to be a major difference (perhaps it’s an Anglo thing?) from countries in continental Europe, and even there things are screaming out of hand. The post-growth model appears to be: new parties or not, the incumbents are toast. Plenty room for big gaping holes.

 

Post Brexit, the UK has the Tories, who lost the Brexit vote but for some reason are still in power, just with a different figurehead. But they are hopelessly divided in pro-Brexit and pro-EU factions, and they appear so far to be messing up anything at all having to do with Brexit. All the egos collide too, of course; egos are all that politics has left to provide us.

Then there’s the Labor Party, which is equally hopelessly divided into the pro-Corbyn camp and the anti-Corbyn ‘Blairites’, which have conducted a kind of guerrilla warfare that might put the Viet Cong to shame. The Blairites have made such a fuss over Corbyn not being electable that they made their wishes come true like a boomerang. But that’s the MPs, not the voters or even the party members, who are behind Corbyn in massive droves.

The UK doesn’t have a general election scheduled until 2020, but with all the infighting and even more importantly the ‘real’ start of Brexit that’s supposed to come in early 2017, and/or a potential parliamentary vote seeking to make the referendum null and void, it’s hard to see how the country could NOT descend into total chaos way before 2020.

The people who were comfortable before June 23 blame it all on ‘Brexiteers’, but they conveniently forget that before that date they completely ignored the people who did vote to Leave the EU, and are therefore now grasping at straws when it comes to explanations. The term ‘deplorables’ has been patented by the Hillary camp, but it seems to express quite well how Remain feels about Brexit voters today. And that’s toxic for any society.

This is just not good enough. Brexit voters from what I can see are a mix between those who have been hit hardest by former PM Cameron and his goon squad (and ignored by Remainers), and those who really find the EU a failed experiment, an aspect I rarely see discussed in Britain. They should be elated to be rid of Brussels, but it’s all only about how much money they will have short term, not about identity or pride or anything.

A country full of people pointing fingers at others, while remaining blind to their own failures. The mote and the beam, a recipe for mayhem. So you have this entire godawful political mess, and now imagine throwing in the end of growth, and deteriorating economic circumstances from here on in.

Britain had better start some kind of National Conversation first on where it wants to go, hire something in the vein of a bunch of National Therapists to tell people it’s not okay to blame everything on somebody else, whether they’re Brits or foreigners, or, with Scotland planning another independence vote, we could be back all the way to Braveheart.

 

That leaves the US. The country that has elections before any of the other ‘basket cases’. And, this being America, the land that’s better than anyone at painting pictures of itself as tempting as they can be false, the antagonism is dripping off the walls and through the streets. The land that discusses which lives matter.

It’s glaringly obvious that the majority of the US media would like you to believe that when it comes to ungovernability, a Trump victory would be a sure bet to lead the US into political mayhem. That may be true, though it’s by no means guaranteed, they make it up as they go along, but a Hillary win may well end up being even worse.

As I wrote mid-September in “Hillary Became Unelectable Long Ago”, Mrs. Clinton faces a ton of unanswered questions that will not just go away just because she might win a vote. If anything, scrutiny may well increase, and a lot, if she wins on November 8. And that’s not just because the Donald is a sore loser (which also may or may not be true).

There are a lot of intelligence (FBI) voices protesting the decision to not charge Hillary for her email shenanigans. There are plenty of serious issues related to the capture of the DNC by Hillary’s campaign, and the subsequent ousting of Bernie Sanders and all his supporters. The campaign went so far as to pay people to -violently- disrupt Trump events. Now spell democracy for me.

What may play an even bigger role going forward is the unrelenting blame game played by the campaign on Russia and Vladimir Putin, a litany of allegations for which precious little proof, if any, has been presented. Trying to link Putin to Trump to Julian Assange may have seemed a winning election strategy, and it may prove to be one, crazy as it is, but on November 9 the world will still keep turning and-a churning. And where are they all then?

Trump will not forget this. The Republicans won’t. The FBI won’t. All the people who support Wikileaks won’t. Vladimir Putin won’t. And neither will the leaders of a lot of other countries. They have now seen that sovereign nations and their leaders can be used as cannon fodder in a US election, or any other US political purposes, and that’s going to make them feel queasy, and then some, for a long time.

It’s very hard to see how Hillary and her people, as well as the American media, can climb down from the stance they’ve taken. It’s not exactly something you can easily apologize for after the fact. So the only thing to do would be to dig in and persevere.

 

For the media, as I said, it’ll be merely another step towards irrelevance. Just a bit steeper. For Hillary and her supporters, it won’t be that smooth of a way down. When they dig in deeper into their trenches, all that’s left them is to try and escalate the Russia tension.

But while an attack on Russia may go down reasonable well in American minds, Hillary would need to involve NATO, and there are plenty of member countries, and their citizens, who will not accept anything of the kind, no matter what their leaders say. The fact that NATO relies on unity would become a liability instead of an asset, in the same way that the EU will experience.

NATO would fall apart if the US under a Hillary presidency attacks Russia. So would the EU, which will fall apart anyway. And that’s just on the international front.

Domestically, the Obama reign has been ‘saved’ by those trillions from the Fed, by the crazy growth in debt, both public and private, and by a list as long as your arm of questionable ‘official’ data, unemployment numbers, personal ‘wealth’, that sort of thing. While we all know that there would not be a Trump if those numbers reflected Americans’ real lives.

Trump may go away, though it won’t be in silence, but what he represents will not. And what he represents is 180º squarely removed from Hillary. And it’s not going to be subdued, silent or obedient. Blaming that on Trump, or on things he says, misses the point by a mile.

Given what the Hillary campaign has perpetrated, given the links to the Clinton Foundation, and given a ton of other things, it’s not all that crazy that Trump says he may not accept an election result off the bat. And given what many voices in the Democratic party, including Obama, have said in the past about elections and systems being rigged, it’s nonsense to try and demonize him for suggesting that.

Of course American elections can be rigged. Hanging chads or not. As long as people have to wait in line for hours in certain districts to cast their vote, and as long as Diebold machines are used, they can be rigged. But you can’t say it out loud?

 

Look, if Trump wins, how docile will the Democrat crowd be, given the propaganda machine targeted at Putin and Assange and anyone else (Bernie!) who dared stand in Hillary’s way? If the result is close, will Hillary accept it without a single protest or question? She won’t. But if Trump says he’ll keep you in suspense about the exact same thing, he’s a threat to democracy itself?

Points of view and belief are so far apart that indeed, democracy is under threat. But not because of Trump. That threat goes back to times long before him.

Hillary owes her position, and her wealth, to the Saudis and Qataris and Wall Street banks and US industrial/military neocons. And they will all demand that she return the favor. But they want something completely different than the people who vote for her. And since the economy is shrinking, she will have to take whatever it is they demand in return for putting her on her pedestal, away from the people who voted for her.

And no matter how much propaganda is unleashed upon Americans, as they see their lives deteriorate, they will be on to this, more and more. And they will lean towards Trump or Bernie Sanders -or someone else in the future-, anyone they feel expresses their frustration.

Hillary won’t be able to ‘cure’ the economy any more than Obama has, she won’t have the Fed’s virtual trillions to help her veil the real state of the economy, and she’s already close to the lowest ‘likeability’ rate in history to begin with.

I’m thinking Trump would probably be an awful president, but he perhaps wouldn’t be the worst option. And I’m saying that from the point of view of keeping America governable going forward, something he may well screw up yuugely, but at least he’s not certain to.

It’ll be hard to keep America quiet in the years to come whoever wins, and I’m going to have to think about this more, I just wanted to say for now that what many people think and claim is a given, is not. And that is a big thing given that the elections are only 16 days away.

Sep 262016
 
 September 26, 2016  Posted by at 9:33 pm Finance Tagged with: , , , , , , , ,  10 Responses »
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Dorothea Lange Family of rural rehabilitation client, Tulare County, CA 1938

 

It’s over! The entire model our societies have been based on for at least as long as we ourselves have lived, is over! That’s why there’s Trump.

There is no growth. There hasn’t been any real growth for years. All there is left are empty hollow sunshiny S&P stock market numbers propped up with ultra cheap debt and buybacks, and employment figures that hide untold millions hiding from the labor force. And most of all there’s debt, public as well as private, that has served to keep an illusion of growth alive and now increasingly no longer can.

These false growth numbers have one purpose only: for the public to keep the incumbent powers that be in their plush seats. But they could always ever only pull the curtain of Oz over people’s eyes for so long, and it’s no longer so long.

That’s what the ascent of Trump means, and Brexit, Le Pen, and all the others. It’s over. What has driven us for all our lives has lost both its direction and its energy.

We are smack in the middle of the most important global development in decades, in some respects arguably even in centuries, a veritable revolution, which will continue to be the most important factor to shape the world for years to come, and I don’t see anybody talking about it. That has me puzzled.

The development in question is the end of global economic growth, which will lead inexorably to the end of centralization (including globalization). It will also mean the end of the existence of most, and especially the most powerful, international institutions.

In the same way it will be the end of -almost- all traditional political parties, which have ruled their countries for decades and are already today at or near record low support levels (if you’re not clear on what’s going on, look there, look at Europe!)

This is not a matter of what anyone, or any group of people, might want or prefer, it’s a matter of ‘forces’ that are beyond our control, that are bigger and more far-reaching than our mere opinions, even though they may be man-made.

Tons of smart and less smart folks are breaking their heads over where Trump and Brexit and Le Pen and all these ‘new’ and scary things and people and parties originate, and they come up with little but shaky theories about how it’s all about older people, and poorer and racist and bigoted people, stupid people, people who never voted, you name it.

But nobody seems to really know or understand. Which is odd, because it’s not that hard. That is, this all happens because growth is over. And if growth is over, so are expansion and centralization in all the myriad of shapes and forms they come in.

Global is gone as a main driving force, pan-European is gone, and whether the United States will stay united is far from a done deal. We are moving towards a mass movement of dozens of separate countries and states and societies looking inward. All of which are in some form of -impending- trouble or another.

What makes the entire situation so hard to grasp for everyone is that nobody wants to acknowledge any of this. Even though tales of often bitter poverty emanate from all the exact same places that Trump and Brexit and Le Pen come from too.

That the politico-econo-media machine churns out positive growth messages 24/7 goes some way towards explaining the lack of acknowledgement and self-reflection, but only some way. The rest is due to who we ourselves are. We think we deserve eternal growth.

And of course it’s confusing that the protests against the ‘old regimes’ and the growth and centralization -first- manifest in the rise of faces and voices who do not reject all of the above offhand. That is to say, the likes of Marine Le Pen, Donald Trump and Nigel Farage may be against more centralization, but none of them has a clue about growth being over. They don’t get that part anymore than Hillary or Hollande or Merkel do.

So why these people? Look closer and you see that in the US, UK and France, there is nobody left who used to speak for the ‘poor and poorer’. While at the same time, the numbers of poor and poorer increase at a rapid clip. They just have nowhere left to turn to. There is literally no left left.

Dems in the US, Labour in the UK, and Hollande’s ‘Socialists’ in France have all become part of the two-headed monster that is the political center, and that is (held) responsible for the deterioration in people’s lives. Moreover, at least for now, the actual left wing may try to stand up in the form of Jeremy Corbyn or Bernie Sanders, but they are both being stangled by the two-headed monster’s fake left in their countries and their own parties.

Donald Trump, and I say this mere hours before the first debate, may still lose the election, but it doesn’t truly matter. He’s just the figure head -dare we say bobble head?- for a development, even a revolution, that he doesn’t control any more than you and I do. He’s got a role to play but he didn’t write it.

If he wins, his program too, like all the others, will be targeted towards more growth, and there’s no such thing available. And while in a no-growth scenario it’ll be a good thing for America to bring jobs back home, as is trump’s message, they won’t spell anything that even comes close to growth.

‘Leaders’ such as Trump and Le Pen can only be seen as intermediate figures necessary for nations, and indeed the world, to adapt to an entirely different paradigm. One that is at best based on consolidation, on trying not to lose too much, instead of trying to conquer the world.

But also one that is likely to lead to warfare and mayhem, because nobody’s been willing to address even the possibility of no more growth, and therefore everyone will be looking to squeeze growth out of any available place, starting with their neighbors, and the globe’s weakest. It’s the Roman empire all over again, where the core strangled the periphery ever harder until the Barbarians and the Visigoths decided it was enough and then some.

That is the meaning of Donald Trump, and of Brexit. You’re not going to understand these things without taking a few steps back, and without looking at history, and especially without acknowledging the possibility that, in economics, perpetual growth may indeed be what physics has always said it was: an impossible pipedream.

Trump has a role to play in this whether he wins the election or not. He’s the big red flashing American warning sign that the increase in poverty that has so far been felt only among those who it has hit, will shake the familiar political landscape on its foundations, and that this landscape will never return.

Look at European political parties established for decades and you see the exact same thing. Only there you often have other ‘escape valves’, because new parties are easier to form and get onto national forums. But it’s still the same thing.

Centralization, globalization, UN, NATO, IMF, all these ‘principles’ and organizations will see their influence and support dwindle, and rapidly. It’s really over. Debt did it. Or rather, our doomed mission to hide our downfall behind a veil of ever more debt did.

And Donald Trump has a role to play in that. If Hillary wins, it’ll only be more, and ever more, and spastically more, attempts to convince everyone that more globalization is the way to go, and that going to war with Putin and sending young Americans into battle in fields lost before they enter is the way of the future.

Both will be failures. All we really get to do is try to decide who may be the lesser failure.

But anyway, that’s where Trump comes from, and he doesn’t understand the half of it. Trump is there because everything else failed. And he will fail too, win or lose.

 

 

May 082015
 
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Jack Delano Long stairway in mill district of Pittsburgh, Pennsylvania 1940

We at the Automatic Earth always try to steer clear of elections as much as possible, because there are no functioning democracies left in the west -no more than there are functioning markets-, and no journalists reporting on them either. Interesting question, by the way: how can a journalist report on a democracy that isn’t there? And where in that setting does news turn to mere opinion, and where does opinion then become news ?

Still, of course we caught some bits of the UK elections along the way regardless. The decisive moment for us must have been when Jeremy Paxman interviewed David Cameron at the BBC, and asked him if he knew how many foodbanks had been added in Britain since he took office 5 years ago.

Cameron, well duh obviously, had no idea, and instead of answering the question he started a flowery discourse praising the many volunteers who work in the foodbanks he didn’t know existed. Paxman cut him short and said there were 66 when Cameron came to power, and 421 now. Apparently in Britain, volunteers are needed to take care of the needy, they’re not going to pay people to do that. You would think that takes care of Cameron’s candidacy, but you couldn’t be more wrong.

At least Paxman seemed to try, but interviews like his should take place on the eve of an election, not 6 weeks before them like this one. That leaves far too much time for spin doctors to repair damage done by their candidate’s ignorance and gullibility. It’s crazy enough that party leaders can refuse to discuss each other, let alone the public, in public. Then again, that too would only be significant if there would be an actual democracy in Britain.

As things are, they might as well have put the royal baby in charge as soon as she was born, or for that matter the newborn macaque in Japan that ‘stole’ her name (at least there was an honest public ballot for that). Or perhaps the adorable little monkey can take over polling in the UK, since we can’t imagine any British pollsters still being employed tomorrow morning, not with the degrees to which they missed any and all election outcomes today.

A whole bunch of ‘leaders’ will leave too, but there’s plenty of shades of dull grey humanoids waiting in the wings to replace them. Besides, though Nigel Farage has often been dead on in describing, in the European Parliament, the inherent failures of Brussels, at home he’s never been more than a sad lost clown. I had to think hard about LibDem Clegg’s first name, even needed to look it up -it’s Nick- , and that sort of says it all: he would do well to change his name to Bland.

And perhaps Ed Milibland should do the same. Can anyone ever really have believed that this lady’s underwear salesman could have won this election? Or did they all just fudge the numbers so they had material to print? Ed Milibland never stood a chance. And Russell Bland can now go lick his wounds from supporting the guy, and no, Russell, saying now that you’re just a comedian won’t do the trick. You’ve been tainted. If it’s any consolation, you screwed up the same way Springsteen did when he played Obama’s support act. No surrender, no excuses.

Milibland, by the way, had one last no-no to offer in stepping down. He tweeted: “I am grateful to the people who worked on our campaign and for the campaign they ran. The responsibility for the result is mine alone.” Sorry, boyo, but that just ain’t so. The responsibility lies at least as much with the people who put you in the leader’s chair that doesn’t fit you, and with those who kept you in that chair throughout the campaign.

All Brits should feel blessed that they’re not in America, where these campaigns, which are equally hollow and devoid of democratic principles, last ten times as long. If your blessings are few, do count them.

But then, we all get what we deserve. If the Brits want to be governed and gutted by the same people who raised the number of foodbanks the way they have, by a factor of seven in five years, and who fabricated the pretense of a functioning economy by blowing the biggest bubble in British history in selling off London town to monopoly money printing Chinese, Russian expat oligarchs and other such impeccable and blameless world citizens, if that’s what the Brits want, then let them have it.

One things’s for sure: Cameron and his ilk, now that they have a majority, will let them have it. And then some. In reality, though, even if they deserve what they get, there’s no vox populi here: the people have not spoken, the people have done what the press told them to do. Like in so many countries, there effectively is no press anymore in Britain, at least not in the sense that we used to knowl; the press no longer asks questions. Which begs yet another question: what is first to go, the media or the democratic values?

Peter Yukes wrote this for Politico just before the election:

The British Press Has Lost It

For months polls have put Conservatives and Labour close with about third of the vote each, and smaller parties destined to hold some balance of power. But there has been no balance in the papers. Tracked by Election Unspun, the coverage has been unremittingly hostile to Ed Miliband, the Labour challenger, with national newspapers backing the Conservative incumbent, David Cameron over Labour by a ratio of five to one.

Veteran US campaign manager David Axelrod finds this politicization of the print media one of the most salient differences with the US. “I’ve worked in aggressive media environments before,” he told POLITICO, “but not this partisan.” Axelrod may have ax to grind as he advises the Labour Party, but even a conservative commentator and long-serving lieutenant of Rupert Murdoch has been shocked. “Tomorrow’s front pages show British press at partisan worst,” Andrew Neil, former editor of the Sunday Times rued. “All pretense of separation between news and opinion gone, even in ‘qualities.’”

Excuse me, but how is ‘this politicization of the print media one of the most salient differences with the US’? Which US paper has not long been grossly politicized? It’s a shame Yukes devalues his article with such statements.

And that’s the difference. The whole newspaper industry seems to be affected by the tabloid tendentiousness trade-marked by Murdoch’s best-selling the Sun when it roared, in 1992, “It’s the Sun Wot Won It.” The Daily Mail specializes in political character assassination and the ‘Red Ed’ tag was predictable. But when the paper went on from attacking Miliband’s dead father to a hit-job on his wife’s appearance, the politics of personal destruction sank from gutter to sewer.

In this precipitous race to the bottom, perhaps the Daily Telegraph had the steepest fall. Known as a bastion of the Tory thinking, it had long been respected for separating fact from comment. During this election cycle is was caught sourcing its front pages direct from Conservative Campaign HQ, seeming to confirm the parting words of its senior political commentator, Peter Oborne, that it was intent on committing “a fraud on its readership.”

Well, at least it’s no surprise that the Telegraph does what it’s always done. Nobody expects them to be impartial.

The paper of record, The Times, fared a little better, in that there has been two vaguely positive front pages about Miliband — compared to 18 for Cameron.Meanwhile, the publication that arose in rebellion to Murdoch’s acquisition of the Times in the 80s, The Independent, shocked most its staff and readership by backing a continued Lib Dem/Tory Coalition. Reports said the endorsement was a ‘diktat’ from the wealthy Russian-born owner, Evgeny Lebedev, causing many to mock its original ad slogan “The Independent: It’s Not. Are You?” or renaming it ‘The Dependent’.

Even the sober, tight-lipped Financial Times, which once supported Blair and endorsed Obama, lost credibility. The paper said it backed another Conservative-led coalition because Ed Miliband was too “preoccupied with inequality.” But that magisterial tone was undermined when it emerged the leader writer, Jonathan Ford, was pictured in the notorious 1987 photo of Oxford’s elite hard drinking Bullingdon Club next to the Tory mayor Boris Johnson and just below David Cameron.

A bigger problem would seem to be that Milibland can’t have been far from that club; he attended much of the same educational institutions the other ‘leader elites’ did. Yukes is on to something, but he’s missing the point.

Therein lies the problem, and an indication the newspaper world is a microcosm of a wider malaise. The Conservative politician John Biffen once said “whenever you find a senior politician and a powerful media owner in private conclave, you can be certain that the aims of healthy, plural democracy are not being well-served.” This election that conclave looks like an exclusive club.

Rarely have the economic interests of the handful of wealthy men who own most the press (nine men own 90% of all national and regional titles) appeared so brutally transparent. Most of the conservatives among them don’t like Cameron’s modernizing project, or the fact he looks set to fail to get a majority for a second time. But they fear Miliband with a passion because he threatens their power in several ways.

They fear(ed) Milibland? I don’t believe that for a second. I think it’s much more likely that they’ve all intentionally exaggerated Milibland’s poll numbers to make it look like there was an actual race going on. That they were only too happy to have a guy run against theirs that everybody could see from miles away would never be a contender (maybe if his first name would have been Marlon? or Stanley?)

Plus they have the outdated and somewhat inane electoral system, in which for instance the Green Party got – roughly – one million votes and 1 seat, while the Conservatives accumulated 10 million votes and 331 seats. If you can work that system in your favor, you’re half way home. Moreover, if and when you hire the cream of the crop American spin doctors, as the Cons have certainly done, who love purchasing media, you’re way past halfway.

The system can certainly be given some sort of name, but a functioning democracy it’s not. If anything, a democracy is “A system of government in which power is vested in the people”. Makes us wonder how many clients of the 421 foodbanks and counting have voted Con. and figured they were proudly doing their democratic duty.

Oct 262014
 
 October 26, 2014  Posted by at 12:12 pm Finance Tagged with: , , , , , , , ,  6 Responses »
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John Vachon Beer signs on truck, Little Falls, Minnesota Oct 1940

25 European Banks Fail Stress Test (NY Times)
Testing Europe’s Stress Tests (Bloomberg)
Europe Stess Tests Tests Could Trigger A Near-Term Crisis (MarketWatch)
America Stems Flow Of Funds As China Stalls And Eurozone Retreats (Observer)
Don’t Buy A Home (MarketWatch)
Brazilians Vote for Leader as Polls Show Nation Divided (Bloomberg)
Ukraine Votes in Wartime Ballot Set to Back Pro-EU Forces (Bloomberg)
Stagnant Paychecks for US Workers Underlies Voter Discontent (Bloomberg)
Record Number Of Britons In Low-Paid Jobs (Guardian)
Nearly A Third Of British Voters Prepared To Support Ukip (Observer)
1 Million Italians Rally in Rome to Protest Labor Rules Change (Bloomberg)
IMF Sets 0.05% Floor on Interest Rate on Special Drawing Right (Bloomberg)
China State Economist Sees 2015 Growth Slowest in Over 2 Decades (Bloomberg)
MH-17: The Untold Story (RT)
You’re Powered By Quantum Mechanics. No, Really… (Observer)
Nurse Held at N.J. Airport Calls US Reaction to Ebola ‘Disorganized’ (Bloomberg)

As expected. 9 banks in Italy alone is a big number.

25 European Banks Fail Stress Test (NY Times)

Banks in Europe are €25 billion, or about $31.7 billion, short of the money they would need to survive a financial or economic crisis, the European Central Bank said on Sunday. That conclusion was a result of a yearlong audit of eurozone lenders that is potentially a turning point for the region’s battered economy. The E.C.B. said that 25 banks in the eurozone showed shortfalls in their own money, or capital, after a review devised to uncover hidden problems and to test their ability to withstand a sharp recession or other crisis. The review looked at banks’ books through the end of 2013. Of the 25 banks, 13 have still not raised enough capital to make up the shortfall, the central bank said. The highly anticipated assessment of European banks was intended to remove a cloud of mistrust that has impeded lending in countries like Italy and Greece and left the eurozone struggling to avoid lapsing back into recession. By exposing a relatively small number of sick banks — of the 130 under review — the central bank aims to make it easier for the healthier ones to raise money that they can lend to customers.

Italy had by far the largest number of banks that failed the review, with nine, of which four must raise more capital. Monte dei Paschi di Siena, whose troubles were well known, must raise €2.1 billion, the central bank said, the largest of any individual bank covered by the review. Greece’s banking system was also hard hit, with three banks found short of capital. One, Piraeus Bank, has since raised enough capital to satisfy regulators. The other two are Eurobank, which must raise €1.76 billion, and National Bank of Greece, which must raise €930 million. The overall capital shortfall for the banks under review was in the middle of analyst estimates. However, the review also uncovered €136 billion in troubled loans that banks had not previously reported. In addition, banks had overvalued their other holdings by €48 billion, the E.C.B. said.

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Stress tests may have failed 25 banks, but they’re not nearly strict enough.

Testing Europe’s Stress Tests (Bloomberg)

On Sunday, the European Central Bank will publish the results of stress tests designed to restore much-needed confidence in the euro area’s financial system. To succeed, the ECB must convince investors that it has truly forced banks to recognize their losses and raise enough capital to be healthy. What would a really tough stress test look like? Research by economists at Switzerland’s Center for Risk Management at Lausanne offers an indication. By simulating the way the market value of banks’ equity tends to behave in times of stress, they estimate how much capital banks would need to raise in a severe crisis. The answer, as of Oct. 17, for just 37 of the roughly 130 banks included in the ECB’s exercise: €487 billion ($616 billion). Deutsche Bank, three big French banks and ING Groep NV of the Netherlands are among those with the largest estimated shortfalls. Here’s a breakdown by bank:

And here’s a breakdown by country, as a percentage of gross domestic product:

The economists’ approach, based on a model developed at New York University, isn’t perfect. It could, for example, overestimate capital needs if the quality of banks’ management and assets has improved in ways that the market has yet to recognize. And, because crises are rare, the modelers had scant historical data with which to build estimates of how banks might fare in future disasters. That said, this relatively simple model has some important advantages over the ECB’s much more labor-intensive stress tests. The Swiss group’s approach is free of the political considerations that constrain the ECB, which can’t be too harsh for fear of reigniting the European financial crisis. In addition, the model implicitly includes crucial contagion effects, such as forced asset sales and credit freezes, that the ECB’s exercise ignores.

A bit of back-testing suggests that the economists’ approach works relatively well. The NYU model’s projection for the largest U.S. banks’ stressed capital needs before the 2008 crisis, for example, comes pretty close to the roughly $400 billion that the banks actually had to raise. If the ECB’s number is a lot smaller than the figure the model comes up with — as early indications suggest it will be — that won’t be a good sign.

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If only these tests were credible.

Europe Stess Tests Tests Could Trigger A Near-Term Crisis (MarketWatch)

The European Central Bank is preparing a diagnosis of the eurozone’s banking. woes. Unfortunately, it has no power to write a prescription. In fact, the Sunday release of the results of new stress tests and the ECB’s Asset Quality Review could do more near-term harm than good, says Carl Weinberg, chief economist at High Frequency Economics. ECB President Mario Draghi’s 2012 pledge to do “whatever it takes” to preserve the euro and the ECB’s subsequent creation of a never-yet-utilized emergency bond-buying program put the debt crisis on the back burner. European stocks outperformed in the second half of last year as investors and commentators cheered a temporary pickup in growth. But the crucial area of lending across the eurozone remains lackluster. Many banks are nursing bruised balance sheets, and the degree to which lenders are hurting is likely to become more evident with this latest batch of tests.

Overall industrial and economic output remain below pre-crisis levels and unemployment across much of southern Europe remains at levels, unfathomable in the U.S., even during the worst of the Great Recession. The region is stumbling back toward recession, led by a German slowdown. Now, discussions of Europe’s long-running economic woes regularly use the term “depression,” Weinberg has been using the dreaded D-word for years. There isn’t a single accepted definition of a depression, but economists have usually described the phenomenon as one in that lasts several years and is characterized by a large rise in unemployment, falling credit and a big drop in economic output. The eurozone’s current woes appear to tick all those boxes. When it comes to the stress tests, the hope is that a more rigorous review led by the ECB will reassure investors that the region’s banking sector is in relatively solid shape. Of course, to be credible, some banks will have to fail, which will require them to scramble to shore up capital.

Bloomberg, citing a draft communique on Friday, reported that the ECB was set to fail 25 lenders. Weinberg worries that the tests could trigger a near-term crisis. The problem isn’t that the banks are being scrutinized, it’s that there’s no credible plan to fill in capital shortfalls and allow the banks to repair themselves via retained earnings. There is, for example, no equivalent to the controversial but successful Troubled Asset Relief Program, or TARP, that saw U.S. taxpayers effectively take temporary stakes in crippled banks that were eventually bought back from the Treasury. “If the AQR would get banks recapitalized and make them better able to lend, I would be delighted and that would be the end of this six-year-going-on-seven-year depression,” Weinberg said in an interview. Instead, the exercise is “nothing more than an evaluation.”

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Emerging markets set to stop emerging.

America Stems Flow Of Funds As China Stalls And Eurozone Retreats (Observer)

There is growing unease as the US central bank prepares to turn off its printing presses. Over five years the Federal Reserve has pumped almost $4.5 trillion into the US economy, in a desperate effort to counter the effects of recession and the collapse of hundreds of banks following the financial crash. Next week the Federal Reserve chief Janet Yellen will allocate the last tranche of new money, having wound down from a regular $85bn of quantitative easing (QE) a month to a final $15bn. Some analysts believe the decision to stop the extra spending is a reflection of the US economy’s robust recovery. Falling unemployment, a return to health across the banking sector and consistently strong manufacturing growth all conjure thoughts of a return to pre-recession normality. Given the huge amounts of money that poured into the US stock market last year, triggering a rise in the S&P 500 of almost 30%, most investors thought the same. But they have proved more cautious in 2014, restricting the S&P 500 to a 6% increase so far.

Disturbed by the lack of similar action in Brussels and in Frankfurt – home of the European Central Bank – investors fear that the eurozone is sliding ever closer to recession. They are also worried about a sharp slowdown in China, following moves by the ruling People’s party to tackle escalating state sector debts. Wild price swings in global stock markets earlier this month were a signal that investors remain ready to pull their funds at a moment’s notice. In this febrile atmosphere, the Fed’s next move could be crucial. Yellen appears ready to maintain the $4.5tn cache of bonds and mortgage-backed securities that make up the bulk of the Fed’s balance sheet. As the bonds mature, she will buy new ones to keep the balance steady. But she may be edging away from raising interest rates from 0.25%, a move pencilled in by many economists for February.

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Best advice there is.

Don’t Buy A Home (MarketWatch)

After an extended drought of credit available to consumers, it’s going to get easier to buy a home. The Federal Housing Finance Agency this week polished off a new set of guidelines that will allow government backing of loans that it had shunned since the mortgage crisis. And in a surprise move, the guidelines include a provision to consider some mortgages without down payments. And Mel Watt, the FHFA director, said earlier this week that Fannie Mae and Freddie Mac are planning to guarantee some loans with down payments of as little as 3%. That should help underwater homeowners. Let’s begin by saying that’s not necessarily a bad thing. There are instances where loans should be available to borrowers without the means to place a down payment. It’s just that I can’t think of any.

The FHFA and the Obama administration are both worried about the amount of credit available to the average American. It’s an epidemic problem. About a third of housing sales were to cash buyers in the first quarter, according to the National Association of Realtors. As I’ve written before, this is extraordinarily high, indicative of a housing market that favors the wealthy. So by lowering the standards of what types of loans are acceptable to the big mortgage giants, it’s obvious that the FHFA’s effort is about encouraging banks to provide more loans. The government is essentially saying: “Go ahead and lend; we’ll hold the paper.” But in trying to ease credit and turn a mythic housing recovery into a real one, the FHFA may be overreaching. That’s because you know exactly who’s going to be taking out those loans: people who can’t afford them. And because there will always be some people who believe that because they can borrow, they can afford these loans, you know how this new policy is going to play out.

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Dark economic days ahead in Brazil no matter who wins. A stronger dollar and higher rates will hit it like a sledgehammer.

Brazilians Vote for Leader as Polls Show Nation Divided (Bloomberg)

Brazilians vote today in a national election that pits President Dilma Rousseff, who says she wants to protect social gains achieved during 12 years of her Workers’ Party rule, against challenger Aecio Neves, who says the incumbent has driven the economy into recession. Voting stations open at 8 a.m. today and close at 5 p.m. in each of Brazil’s three time zones. Some opinion polls published yesterday showed Rousseff statically tied with Neves of the Brazilian Social Democracy Party, while others indicated either the incumbent or challenger with the lead.

Neves proposes to cut spending, slow inflation to target and attract more private investment, while keeping social welfare programs such as cash transfers to the poor and low-cost housing. While the economy in 2014 slipped into recession for the first time since 2009, Rousseff has gone on the attack, saying Neves’s policies jeopardize record-low unemployment and programs that lifted 35 million people out of poverty. “Brazil’s consumer-led consumption model has run its course and needs to be replaced with one based on investment and quality public services,” said Paulo Sotero, director of the Brazil Institute at the Washington-based Woodrow Wilson International Center for Scholars. “Those who benefited from that model, and they weren’t few, feel that change could put at risk those advances.”

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If Ukraine if serious about not letting Luhansk and Donetsk secede, how can it hold elections that do not include the regions, and still pretend to derive legitimacy from them?

Ukraine Votes in Wartime Ballot Set to Back Pro-EU Forces (Bloomberg)

Ukrainians voted today in an election that’s being shaped by their nation’s conflict with pro-Russian insurgents and Vladimir Putin’s land grab in Crimea. Polling stations opened at 8 a.m. and will close at 8 p.m., after which exit polls are due. Backing for billionaire President Petro Poroshenko’s party and the Popular Front of his Prime Minister Arseniy Yatsenyuk tops 40%, while the Regions Party of deposed leader Viktor Yanukovych isn’t running. Poroshenko wants to build a coalition with other pro-European parties. “We’re likely to see a fairly stable majority” in an alliance led by Poroshenko’s bloc, Yuriy Yakymenko, an analyst at the Kiev-based Razumkov Center for Economic and Political Studies, which has tracked Ukrainian elections for two decades, said last week by phone. “

Lawmakers will unite behind plans for Ukraine’s future accession to the European Union.” The snap vote will vanquish the legislature elected under Russian-backed Yanukovych as Poroshenko seeks support to end the war, tackle the deepest recession in five years and revive the world’s worst-performing currency. Ukraine’s crisis has fixed the nation on a pro-EU trajectory and driven a wedge between Russia and its former Cold War foes.

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It’s not as if they have any real alternatives to vote for. Both parties will squeeze them dry.

Stagnant Paychecks for US Workers Underlies Voter Discontent (Bloomberg)

Eleven days before midterm elections comes fresh evidence of why voters are unhappy: even those with a full-time job are probably making less than they did before the recession. The typical American worker’s weekly earnings, adjusted for inflation, were lower during the July through September quarter than in the third quarter of 2007, the last such measurement before the recession started, Labor Department data released yesterday showed. Even as the unemployment rate dropped to 5.9% in September from a peak of 10% and a soaring stock market brought financial gains for the wealthy, there has been only sluggish improvement in the living standards of middle-class Americans during President Barack Obama’s administration.

The Labor Department said median usual pay for Americans employed full-time was $790 per week in the third quarter. That’s about a dollar less per week than in the third quarter of 2007, using the department’s adjustment for inflation. There’s been no net gain for those workers since 1999. The Labor Department pay data captures the experience of ordinary American full-time workers. Unlike some other income data reported by the government, it excludes the impact of joblessness, public assistance, investment income and workers forced to take part-time jobs because they cannot find full-time employment. In September, 7.1 million Americans worked part-time for economic reasons, down from a peak of 9.2 million in March 2010, though still higher than the 4.5 million who did so in November 2007, on the eve of the recession.

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Combine this with the next article.

Record Number Of Britons In Low-Paid Jobs (Guardian)

A record 5 million workers are now in low-paid jobs, according to a new report, sparking calls for government action to help tackle the problem. The Resolution Foundation said the numbers earning less than two thirds of median hourly pay – equivalent to £7.69 an hour – increased by 250,000 last year to reach 5.2 million. The increase partly reflected growth in employment, but there was also a reverse in the previous year’s slight fall in low-paid work, said the thinktank. The report said there was a serious problem of people being stuck in low-paid jobs, with almost one in four minimum wage employees still on that rate for the last five years. Workers in Britain are more likely to be low paid than those in comparable economies such as Germany and Australia, said the Resolution Foundation.

The thinktank’s chief economist, Matthew Whittaker, said: “While recent months have brought much welcome news on the number of people moving into employment, the squeeze on real earnings continues. While low pay is likely to be better than no pay at all, it’s troubling that the number of low-paid workers across Britain reached a record high last year. “Being low paid – and getting stuck there for years on end – creates not only immediate financial pressures, but can permanently affect people’s career prospects. A growing rump of low-paid jobs also presents a financial headache for the government because it fails to boost the tax take and raises the benefits bill for working people.

“All political parties have expressed an ambition to tackle low pay. Yet the proportion of low-paid workers has barely moved in the last 20 years. A focus on raising the minimum wage can certainly help the very lowest paid workers in Britain, but we need a broader low-pay strategy in order to lift larger numbers out of working poverty. “Economic growth alone won’t solve our low-pay problem. We need to look more closely at the kind of jobs being created, the industries that are growing and the ability of people to move from one job or sector to the other, if we’re really going to get to grips with low pay in Britain today.”

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Combine his with the preceeding article.

Nearly A Third Of British Voters Prepared To Support Ukip (Observer)

The phenomenal rise in support for Ukip is underlined by a new Opinium/Observer poll which shows almost one-third of voters would be prepared to back Nigel Farage’s party if they believed it could win in their own constituency. While the survey, which puts the Conservatives and Labour neck-and-neck on 33%, shows a substantial boost for the Tories (up five points on a fortnight ago), the rise of Ukip will be deeply alarming to the main parties. With just over three weeks to go before a crucial byelection in the normally safe Tory seat of Rochester and Strood, which Ukip threatens to seize, the poll puts Ukip on 18% of the national vote, with the Lib Dems on 6% and the Greens on 4%.

If the Ukip candidate Mark Reckless, who defected from the Tories last month, wins the byelection, the Conservatives fear there could be a rush of defections as MPs conclude that their chances of re-election are higher under Ukip colours. When asked to respond to the statement “I would vote for Ukip if I thought they could win in the constituency I live in”, 31% of voters said they agreed. This includes 33% of Tory voters, 25% of Liberal Democrats and 18% of Labour supporters. Voters were equally divided on whether a vote for Ukip was a wasted one, with 40% saying it was, and 37% saying it was not.

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Renzi wants IMF-style reforms.

1 Million Italians Rally in Rome to Protest Labor Rules Change (Bloomberg)

Italians staged a massive rally in Rome to protest Prime Minister Matteo Renzi’s proposed overhaul of labor market rules. Italian television RAI said several hundred thousand people took part in the demonstration, while news agency Ansa cited CGIL union organizers as saying the number was closer to 1 million. Many of the protesters carried red balloons and waved red union banners under bright sunny skies. CGIL chief Susanna Camusso told the demonstrators the union is ready to continue its protest “with all necessary means” including a general strike. She shouted to the cheering crowd at the end of her speech in Piazza San Giovanni “onward to work, to the struggle!”

CGIL called the rally to protest Renzi’s Jobs Act, which includes measures to ease firing rules and make the labor market more flexible. Renzi has said that the plan is a way to attract investments at a time when youth unemployment was at a record high 44.2% in August. His proposals, which were approved by the Senate in a confidence vote this month, will have to be passed by the Chamber of Deputies. The Rome demonstration follows a separate 24-hour strike that disrupted air and ground transport in the country’s biggest cities yesterday. More disruptions are expected Nov. 14, when Alitalia’s staff and Easyjet’s flight attendants will go on strike, according to a statement posted on the Italian Transport Ministry’s website.

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Special Drawing Rights should be abolished. So should the IMF itself.

IMF Sets 0.05% Floor on Interest Rate on Special Drawing Right (Bloomberg)

The International Monetary Fund is setting a 0.05% floor on the interest rate used to determine borrowing costs for some of its loans. The executive board modified rules today to make the change, according to a statement today in Washington. The IMF’s Special Drawing Right, based on a basket of the dollar, yen, euro and pound, is the fund’s unit of account that serves as a supplemental reserve asset and was designed to improve global liquidity. The SDR interest rate was quoted on the IMF website at 0.03% today compared with 0.13% in April and more than 3% in August 2008, before central banks slashed borrowing costs to zero to boost growth in the aftermath of the financial crisis. The rate will be 0.05% on Oct. 27, the IMF said.

The board also approved changing the rounding convention for calculating the SDR rate to three decimal points from two, the statement said. The SDR interest rate is used to calculate interest charged to member nations for non-concessional loans and SDR allocations, and the rate paid to members for SDR holdings. It is calculated from a weighted average of the short-term money market rates of the SDR basket currencies. A floor will prevent the SDR rate from going negative, in the event that money market interest rates on some of the currencies in the underlying basket themselves go negative, an IMF official told reporters on condition of anonymity. The fund has no legal basis for charging a negative rate on SDRs.

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China is not growing anywhere near 7% anymore, but it may take years before that is admitted.

China State Economist Sees 2015 Growth Slowest in Over 2 Decades (Bloomberg)

China’s economic growth is expected to be at 7% in 2015 unless the central government imposes stronger-than-expected stimulus measures, according to Fan Jianping, chief economist at a state research institute. A decrease in exports and property development, two “engines” fueling China to be the world’s second-largest economy, will be the main cause of a slowing of growth, Fan, who works at the State Information Center under the National Development and Reform Commission, told an industry conference today. Fan’s forecast is in line with a median estimate of 51 analysts in a Bloomberg News survey as Chinese leaders have signaled they will tolerate a weaker expansion, leaving the economy heading for the slowest full-year growth since 1990. Chinese leaders will set a gross domestic product growth target of about 7% for 2015, according to 13 of 22 analysts polled by Bloomberg.

“I don’t rule out that we will see on-year expansion lower than 7% in some single quarters next year,” Fan said. He said his forecast was based on his agency’s research, which uses China’s industrial production as a key indicator to the economic growth. Fan’s remarks may cool down an improved sentiment in Chinese economy as GDP expanded by a better-than-forecast 7.3% in the third quarter from a year earlier. While the government has relaxed home-purchase controls and pumped liquidity to lenders, the economy also got support from a pickup in exports in September. “In at least six months, economic growth is unlikely to pick up remarkably,” Fan said in Shanghai. GDP expansion in three months from October is seen at 7.2 to 7.3%, which will lead the full-year growth to about 7.3% as reading in the fourth quarter has bigger weighting, he said. China set 2014 GDP growth target at 7.5%.

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RT video seeking to make the case for a second plane – a Ukraine figher jet – near MH17.

MH-17: The Untold Story (RT)

Three months after Malaysia Airlines Flight MH17 was violently brought down from the skies over Ukraine, there are still no definitive answers to what caused the tragedy. Civil conflict in the area prevented international experts from conducting a full and thorough investigation. The wreckage should have been collected and scrupulously re-assembled to identify all the damage, but this standard investigative procedure was never carried out. Until that’s done, evidence can only be gleaned from pictures of the debris, the flight recorders or black boxes and eye-witnesses’ testimonies. This may be enough to help build a picture of what really happened to the aircraft, whether a rocket fired from the ground or gunfire from a military jet.

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As we’ve known for 100 years.

You’re Powered By Quantum Mechanics. No, Really… (Observer)

Every year, around about this time, thousands of European robins escape the oncoming harsh Scandinavian winter and head south to the warmer Mediterranean coasts. How they find their way unerringly on this 2,000-mile journey is one of the true wonders of the natural world. For unlike many other species of migratory birds, marine animals and even insects, they do not rely on landmarks, ocean currents, the position of the sun or a built-in star map. Instead, they are among a select group of animals that use a remarkable navigation sense – remarkable for two reasons. The first is that they are able to detect tiny variations in the direction of the Earth’s magnetic field – astonishing in itself, given that this magnetic field is 100 times weaker than even that of a measly fridge magnet. The second is that robins seem to be able to “see” the Earth’s magnetic field via a process that even Albert Einstein referred to as “spooky”. The birds’ in-built compass appears to make use of one of the strangest features of quantum mechanics.

Over the past few years, the European robin, and its quantum “sixth sense”, has emerged as the pin-up for a new field of research, one that brings together the wonderfully complex and messy living world and the counterintuitive, ethereal but strangely orderly world of atoms and elementary particles in a collision of disciplines that is as astonishing and unexpected as it is exciting. Welcome to the new science of quantum biology. Most people have probably heard of quantum mechanics, even if they don’t really know what it is about. Certainly, the idea that it is a baffling and difficult scientific theory understood by just a tiny minority of smart physicists and chemists has become part of popular culture. Quantum mechanics describes a reality on the tiniest scales that is, famously, very weird indeed; a world in which particles can exist in two or more places at once, spread themselves out like ghostly waves, tunnel through impenetrable barriers and even possess instantaneous connections that stretch across vast distances.

But despite this bizarre description of the basic building blocks of the universe, quantum mechanics has been part of all our lives for a century. Its mathematical formulation was completed in the mid-1920s and has given us a remarkably complete account of the world of atoms and their even smaller constituents, the fundamental particles that make up our physical reality. For example, the ability of quantum mechanics to describe the way that electrons arrange themselves within atoms underpins the whole of chemistry, material science and electronics; and is at the very heart of most of the technological advances of the past half-century. Without the success of the equations of quantum mechanics in describing how electrons move through materials such as semiconductors we would not have developed the silicon transistor and, later, the microchip and the modern computer.

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Every single step takes in the US with regards to ebola seems ‘confused’. Or should that read ‘complacent’?

Nurse Held at N.J. Airport Calls US Reaction to Ebola ‘Disorganized’ (Bloomberg)

A nurse who tested negative for Ebola said officials at Newark Airport in New Jersey appeared confused and disorganized, and gave her only a granola bar to eat while she was detained for more than six hours after arriving from Sierra Leone. In a first-person account in the Dallas Morning News, Kaci Hickox criticized the treatment she received after returning from a monthlong assignment with Doctors Without Borders in the country, one of three West African nations at the center of the current outbreak. “No one seemed to be in charge,” Hickox wrote in the account yesterday. “No one would tell me what was going on or what would happen to me.” Hickox said she was detained at the airport upon her arrival at 1 p.m. on Oct 24. At the time, her temperature was recorded at 98 degrees. Three hours later, after a confusing series of interactions with officials, her temperature was recorded at 101 degrees using a forehead scanner.

Hickox said she told officials that her skin temperature could have been elevated because her face was flushed with anxiety and asked them to test again using a more accurate oral thermometer. She was left alone for another three hours without her temperature being taken again before being transported with a police escort to a hospital. At the hospital, after being placed in an isolation tent, an oral thermometer recorded her temperature at a normal 98.6 degrees. Her blood was tested for Ebola, and came back negative. All the same, Hickox remains in quarantine for 21 days under rules imposed this week by New York and New Jersey officials. “I am scared about how health-care workers will be treated at airports when they declare that they have been fighting Ebola in West Africa,” Hickox wrote. “I am scared that, like me, they will arrive and see a frenzy of disorganization, fear and, most frightening, quarantine.”

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