Feb 182019
 


Pablo Picasso Face female study 1925

 

Yellow Vests Mark 3 Months of Marches, France investigates Antisemitism (AP)
Two Trump Cabinet Officials Were “Ready To Support” 25th Amendment Coup (ZH)
Trump To Veto Disapproval Of Emergency (AP)
Tories Under Fire For Dismissing March For 2nd Brexit Referendum (Ind.)
New Zealand To Target Online Giants With Digital Tax (R.)
Facebook Labelled ‘Digital Gangsters’ By UK Report On Fake News (G.)
UK Must Investigate Foreign Influence And Voter Manipulation In Brexit Vote (Ind.)
Australia Claims Foreign Government Hacked Major Political Parties (R.)
Varoufakis: ECB Profits Should Be Used For A European Poverty Fund (KTG)
Venezuela Denies EU Lawmakers Entry Given ‘Conspiratorial Motives’ (R.)
Virtual Fences, Robot Workers, Stacked Crops: Farming In 2040 (O.)
Return Of Wolves To Germany Pits Farmers Against Environmentalists (G.)
UK Plans To Make Plastic Packaging Producers Pay For Waste Disposal (R.)
Plastic Chemicals Discovered Inside Bird Eggs From Remote Arctic (Ind.)

 

 

How state propaganda works (and is disseminated by sympathetic media).

“The scene was a vicious verbal interlude..” “The verbal attack on Finkielkraut could risk further eroding the movement’s initially strong public support. “The yellow vest movement [..] is now marked by growing divisions within its ranks.”

In reality, the French see young people with their eyes missing due to Macron-ordered rubber bullets. The only support that’s eroding is that for Macron.

Yellow Vests Mark 3 Months of Marches, France investigates Antisemitism (AP)

Paris judicial authorities opened an investigation Sunday into anti-Semitic remarks hurled at a noted philosopher during a yellow vest protest, an incident that raised national concerns about the movement’s ascendant radical fringe. The Paris prosecutor’s office said the investigation was being conducted into “public insult based on origin, ethnicity, nationality, race or religion.” A band of men taunted philosopher Alain Finkielkraut on the sidelines of a protest through the French capital Paris on Saturday. “Go back to Tel Aviv,” ”Zionist,” and “France is our land” were among the insults captured on video. Finkielkraut, a member of the prestigious Academie Francaise, told French television station LCI on Sunday he doesn’t intend to file a complaint.

The scene was a vicious verbal interlude as thousands of protesters made their way through the Left Bank for the 14th Saturday in a row of demonstrations by the yellow vest movement. Several thousand protesters gathered again in Paris on Sunday to mark the three-month anniversary of the yellow vest movement’s protests, which started Nov. 17 with nationwide protests of fuel tax increases. [..] The verbal attack on Finkielkraut could risk further eroding the movement’s initially strong public support. The yellow vest movement [..] is now marked by growing divisions within its ranks. One yellow vest protester who has tried to put together a candidates list for the European Parliament election was heckled Sunday by detractors.

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Government officials vs a newly elected president. Must be a first. Patriots vs voters.

Two Trump Cabinet Officials Were “Ready To Support” 25th Amendment Coup (ZH)

Two Trump Cabinet officials were “ready to support” a DOJ scheme to invoke the 25th Amendment to remove President Trump, according to Bloomberg and Fox News, citing closed-door testimony from the FBI’s former top lawyer, James Baker – who said that the claim came from Deputy Attorney General Rod Rosenstein. “The testimony was delivered last fall to the House Oversight and Judiciary Committees. Fox News has confirmed portions of the transcript. It provides additional insight into discussions that have returned to the spotlight in Washington as fired FBI Deputy Director Andrew McCabe revisits the matter during interviews promoting his forthcoming book.” -Fox News

While Baker did not identify the two Cabinet officials, he says that McCabe and former FBI lawyer Lisa Page approached him to relay their conversations with Rosenstein, including their discussions of the 25th Amendment scheme. “I was being told by some combination of Andy McCabe and Lisa Page, that, in a conversation with the Deputy Attorney General, he had stated that he – this was what was related to me – that he had at least two members of the president’s Cabinet who were ready to support, I guess you would call it, an action under the 25th Amendment,” Baker told the Congressional committees. The 25th Amendment allows for the removal of a sitting president from office through various mechanisms – including the majority of a president’s Cabinet agreeing that the commander-in-chief is incapable of performing his duties.

Rosenstein – who is slated to leave the Justice Department in the near future, has denied the claims. Baker said McCabe was cool, calm and collected throughout the discussions, telling lawmakers: “At this point in time, Andy was unbelievably focused and unbelievably confident and squared away. I don’t know how to describe it other than I was extremely proud to be around him at that point in time because I thought he was doing an excellent job at maintaining focus and dealing with a very uncertain and difficult situation. So I think he was in a good state of mind at this point in time.” McCabe, meanwhile told “60 Minutes” in an interview set to air Sunday night that Rosenstein was concerned about Trump’s “capacity.”

According to McCabe, Rosenstein “raised the issue and discussed it with me in the context of thinking about how many other cabinet officials might support such an effort,” adding that Rosenstein was “definitely very concerned about the president, about his capacity and about his intent at that point in time.” “Rosenstein was actually openly talking about whether there was a majority of the cabinet who would vote to remove the president?” asks CBS News anchor Scott Pelly, to which McCabe replied: “That’s correct. Counting votes or possible votes.”

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Inevitable, so let’s have it.

“..there do not yet appear to be enough votes to override a veto by the president.”

Trump To Veto Disapproval Of Emergency (AP)

President Donald Trump is prepared to issue the first veto of his term if Congress votes to disapprove his declaration of a national emergency along the U.S.-Mexico border, a top White House adviser said on Sunday. White House senior adviser Stephen Miller told “Fox News Sunday” that “the president is going to protect his national emergency declaration.” Asked if that meant Trump was ready to veto a resolution of disapproval, Miller added, “He’s going to protect his national emergency declaration, guaranteed.” The West Wing is digging in for fights on multiple fronts as the president’s effort to go around Congress to fund his long-promised border wall faces bipartisan criticism and multiple legal challenges.

After lawmakers in both parties blocked his requests for billions of dollars to fulfill his signature campaign pledge, Trump’s declared national emergency Friday shifts billions of federal dollars earmarked for military construction to the border. California Attorney General Xavier Becerra told ABC’s “This Week” that his state would sue “imminently” to block the order, after the American Civil Liberties Union and the nonprofit watchdog group Public Citizen announced Friday they were taking legal action. Democrats are planning to introduce a resolution disapproving of the declaration once Congress returns to session and it is likely to pass both chambers. Several Republican senators are already indicating they would vote against Trump — though there do not yet appear to be enough votes to override a veto by the president.

Read more …

“The next demonstration will be staged in London on Saturday 23 March, just six days before the UK’s scheduled departure from the EU.”

Tories Under Fire For Dismissing March For 2nd Brexit Referendum (Ind.)

Senior Tories were accused of “sniping” at the huge numbers of campaigners set to take part in a march for a fresh Brexit referendum, a day after it was announced. A Brexit minister, Martin Callanan, came under fire after he branded next month’s Put It To The People march – part of The Independent’s Final Say campaign – “desperate stuff”. James Cleverly, a Conservative vice-chairman, tweeted sarcastically: “The only thing that might make me change my mind is a bloke in a blue hat with yellow stars shouting ‘Stop Brexit’. Yep, that might do it.” The reaction came despite last October’s demonstration attracting up to 700,000 people in London alone – and fuelling support for a new referendum at Westminster.

Anna Turley, a Labour supporter of the People’s Vote campaign, said the two men were “sniping at the huge numbers of people in this country who want to make their voice heard”. “Ministers should listen to the calls of those who feel betrayed by broken Brexit promises, worried about the damage caused by either this deal or no deal, as well as those who just want clarity and closure about our country’s direction – rather than years more of argument and division,” she said. The next demonstration will be staged in London on Saturday 23 March, just six days before the UK’s scheduled departure from the EU.

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Meaningless without including other taxes, income, wealth, tec.

New Zealand To Target Online Giants With Digital Tax (R.)

New Zealand said on Monday that it plans to update its laws so it can tax revenue earned by multinational digital firms such as Google, Facebook and Amazon, extending a global effort to bring global tech giants into the tax net. Prime Minister Jacinda Ardern said the cabinet had agreed to issue a discussion document about how to update the country’s tax framework to ensure multinational companies pay their fair share. “Our current tax system is not fair in the way it treats individual tax payers, and how it treats multinationals,” Ardern told reporters at her weekly post-cabinet news conference.

Highly digitalized companies, such as those offering social media networks, trading platforms, and online advertising, currently earn a significant income from New Zealand consumers without being liable for income tax, the government said in a statement released after the announcement. The value of cross-border digital services in New Zealand is estimated to be around NZ$2.7 billion ($1.86 billion). The revenue estimate for a digital services tax is between NZ$30 million and NZ$80 million, Finance Minister Grant Robertson said in the statement. Digital services taxes (DST) are generally charged at a flat rate of two to three percent on the gross revenue earned by a multinational company in that country. A number of countries including the U.K, Spain, Italy, France, Austria and India have enacted or announced plans for a DST. The EU and Australia are also consulting on a DST.

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Anything here that money won’t buy?

Facebook Labelled ‘Digital Gangsters’ By UK Report On Fake News (G.)

Facebook deliberately broke privacy and competition law and should urgently be subject to statutory regulation, according to a devastating parliamentary report denouncing the company and its executives as “digital gangsters”. The final report of the Digital, Culture, Media and Sport select committee’s 18-month investigation into disinformation and fake news accused Facebook of purposefully obstructing its inquiry and failing to tackle attempts by Russia to manipulate elections. “Democracy is at risk from the malicious and relentless targeting of citizens with disinformation and personalised ‘dark adverts’ from unidentifiable sources, delivered through the major social media platforms we use every day,” warned the committee’s chairman, Damian Collins.

The report:
• Accuses Mark Zuckerberg, Facebook’s co-founder and chief executive, of contempt for parliament in refusing three separate demands for him to give evidence, instead sending junior employees unable to answer the committee’s questions.
• Warns British electoral law is unfit for purpose and vulnerable to interference by hostile foreign actors, including agents of the Russian government attempting to discredit democracy.
• Calls on the British government to establish an independent investigation into “foreign influence, disinformation, funding, voter manipulation and the sharing of data” in the 2014 Scottish independence referendum, the 2016 EU referendum and the 2017 general election.

The committee argues that, had Facebook abided by the terms of an agreement struck with US regulators in 2011 to limit developers’ access to user data, the scandal would not have occurred. “The Cambridge Analytica scandal was facilitated by Facebook’s policies,” it concludes. The 108-page report makes excoriating reading for the social media giant, which is accused of continuing to prioritise shareholders’ profits over users’ privacy rights. “Facebook continues to choose profit over data security, taking risks in order to prioritise their aim of making money from user data,” the report states, accusing the company of covering up leaks of user data. “It seems clear to us that Facebook acts only when serious breaches become public.”

Zuckerberg is also personally criticised by the committee in scathing terms, with his claim that Facebook has never sold user data dismissed by the report as “simply untrue”. “Mark Zuckerberg continually fails to show the levels of leadership and personal responsibility that should be expected from someone who sits at the top of one of the world’s biggest companies,” Collins added in a statement. Watson agreed. “Few individuals have shown contempt for our parliamentary democracy in the way Mark Zuckerberg has,” he said. “If one thing is uniting politicians of all colours during this difficult time for our country, it is our determination to bring him and his company into line.”

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I know you thought this was about the CIA. But no, it’s Russia again.

UK Must Investigate Foreign Influence And Voter Manipulation In Brexit Vote (Ind.)

Theresa May must launch an independent investigation into “foreign influence and voter manipulation” in the Brexit vote, a committee of MPs says today, amid growing evidence of lawbreaking by Leave campaigners. A highly critical report – which warns “democracy is at risk” from rogue practices on social media – turns its fire on the prime minister for the failure to probe their effect on the referendum result. No wide-ranging investigation has taken place, despite the main Vote Leave campaign, fronted by Boris Johnson and Michael Gove, being found by the Electoral Commission to have broken the law. The National Crime Agency, meanwhile, has launched a separate investigation into evidence of “multiple” criminal offences committed by Arron Banks and the Leave.EU campaign.

But Downing Street has fought off calls for a “Mueller-style” inquiry, on the scale of the US probe into alleged collusion with Russia by Donald Trump’s presidential campaign. Now the Digital, Culture, Media and Sport Committee has insisted an inquiry must be carried out, also looking into the 2017 general election and the 2014 Scottish referendum. It would establish “what actually happened with regard to foreign influence, disinformation, funding, voter manipulation, and the sharing of data, so that appropriate changes to the law can be made and lessons can be learnt for future elections and referenda”. Damian Collins, the committee’s Conservative chair, urged the prime minister to come clean about whether “Russian interference in UK politics” was being probed.

“We want to find out what was the impact of disinformation and voter manipulation on past elections including the UK referendum in 2016, and are calling on the government to launch an independent investigation,” he said. [..] The crisis emerged after the Brexit referendum, leading to the finding against Vote Leave which has been referred to the police for busting spending limits Crucially, the cash was used to pay data firm Aggregate IQ and – a whistleblower and an Oxford professor argue – potentially enabled it to precisely target enough voters on social media to have swayed the Brexit result. Mr Banks, Nigel Farage’s ally, could receive a two-year prison sentence if he is found to have “knowingly concealed” that an Isle of Man company handed up to £8m to Leave.EU – which would have been outlawed as a foreign donation.

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Saw that headline and though: elections must be coming up. And yes.

Australia Claims Foreign Government Hacked Major Political Parties (R.)

A cyber attack on Australian lawmakers that breached the networks of major political parties was probably carried out by a foreign government, Prime Minister Scott Morrison said on Monday, but did not name any suspects. As Australia heads for an election due by May, lawmakers were told this month told to urgently change their passwords after the cyber intelligence agency detected an attack on the national parliament’s computer network. The hackers breached the networks of major political parties, Morrison said, as he issued an initial assessment by investigators. “Our cyber experts believe that a sophisticated state actor is responsible for this malicious activity,” he told parliament.

“We also became aware that the networks of some political parties, Liberal, Labor and Nationals have also been affected.” Morrison did not reveal what information was accessed, but he said there was no evidence of election interference. Investors are still securing local networks, said Alastair MacGibbon, head of the Australian Cyber Security Centre, the government department responsible for online security. “Our political institutions represent high-value targets,” MacGibbon told reporters in the capital, Canberra.

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Problem is he doesn’t stand a chance of winning anything.

Varoufakis: ECB Profits Should Be Used For A European Poverty Fund (KTG)

The enfant terrible of euro-economics and former Greek Finance Minister Yanis Varoufakis reloaded his gun and shot: Profits from the European Central Bank should be used for a European Poverty Fund. Speaking at an event of his party DiEM25 in Thessaloniki, he said about the “New Deal in Europe and the World”, that Europe is currently facing four crises: public-private debt, very low investment, banking system and rising poverty. Especially about poverty, Varoufakis, revealed that last year the European Central Bank had profits of €91 billion, which are distributed to the finance ministries of countries with surplus. “A Fund to Combat Poverty could be founded tomorrow morning, in order to support the poor European family and this would be an integrative move and the fight against intolerance and anti-Europeanism and fascism.”

Addressing his Greek audience, he said “in DieM25/MeRA25 we are deeply European, we are criticizing the euro, we want to upgrade it, we are the only ones that have proposals to change the architecture of the euro. We want to restructure the euro. We do not propose exit from the euro, we are not threatening to exit the euro. This is a fact. He criticized the economic policies of his former SYRIZA comrades saying ‘“It is impossible at this time to have any recovery in Greece when small and medium-size businesses pay 75% of their profits to the state. You can not have a 100% pre-payment of the tax. You do that in a country when it is to destroy it.” [..] “Every eurozone country should have a parallel payment system,” he underlined.

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Well, they did vote to recognize Guiado as head of state.

Venezuela Denies EU Lawmakers Entry Given ‘Conspiratorial Motives’ (R.)

Venezuela denied a group of European Parliament deputies entry into the country on Sunday, arguing they had “conspiratorial motives” for flying to Caracas in the throes of a political crisis. The European Parliament last month joined a slew of Western nations in recognizing Venezuelan opposition chief Juan Guaido as interim head of state after President Nicolas Maduro won a second term in an election last year that critics denounced as a sham. The four deputies from the center-right European People’s Party (EPP) were traveling to Venezuela to meet with Guaido, one of them said in a video distributed via social media.

“They have retained our passports, they haven’t communicated the reason for our expulsion,” Esteban González Pons said. Venezuelan Foreign Minister Jorge Arreaza said on his Twitter account that the lawmakers had been advised several days ago they would not be allowed entry into the South American country. Venezuela would “not permit the European extreme right to disturb the peace and stability of the country with another of its rude, interventionist actions,” he wrote.

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Wonder how much money Monsanto has paid into the report.

..new biotech production techniques not only help preserve crops but also make them more nutritious.

..opportunities for British food and farming to increase productivity ..

Virtual Fences, Robot Workers, Stacked Crops: Farming In 2040 (O.)

It is 2040 and Britain’s green and pleasant countryside is populated by robots. We have vertical farms of leafy salads, fruit and vegetables, and livestock is protected by virtual fencing. Changing diets have seen a decline in meat consumption while new biotech production techniques not only help preserve crops but also make them more nutritious. This is the picture painted in a report from the National Farmers Union which attempts to sketch out what British food and farming will look like in 20 years’ time. “The Future of Food 2040 report is a catalyst to encourage us all to start the debate about our food and our future so we can plan ahead,” said Andrea Graham, NFU’s head of policy services and author of the report, who interviewed 50 experts across Britain’s food chain to gauge their views.

“It is also a reminder for government, at a critical time in British history, to make domestic food production a strategic priority in all policy making.” While some of the predictions may seem a long way off, others are already in their infancy. “Even now, there are technologies being developed that can care for crops on a plant-by-plant basis or control the grazing of cattle without physical fences, and by 2040 this technology will be commonplace in farming,” Graham said. The British farming sector will need to be more efficient if it is to meet a key NFU goal of producing net zero greenhouse gas emissions by 2040. “Over the next 20 years we will face potentially seismic changes in all aspects of society,” Graham added. “An increase in the global population and the need to mitigate climate change will provide opportunities for British food and farming to increase productivity and reduce its impact on the environment.”

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Food must come from sterile enviroments. No life allowed.

Return Of Wolves To Germany Pits Farmers Against Environmentalists (G.)

More than a century ago, wolves were hunted to extinction in Germany. These days, they’re back – and their presence is a source of political strife. Wolf attacks on livestock increased drastically in 2017, according to government statistics released at the weekend: they carried out 472 attacks, an increase of 66% over the previous year. The number of killed, injured or missing livestock – mostly sheep and goats – rose 55%, to 1,667. The issue of how to deal with wolves is pitting farmers who want to protect their livestock against environmentalists who prioritise the protection of vulnerable species. Julia Klöckner, the agriculture minister, said the latest figures proved the government needed to act.

Germany should shift its regulations to make it legal to remove individual wolves from a pack, she told the Neue Osnabrücker Zeitung. For more than a century, wolves were extinct in Germany. In recent years, however, especially since the country’s reunification in 1990, the animals have been reintroduced and are slowly making a comeback. They are especially prevalent in the former East German states, since many have crossed the border with Poland. Though environmentalists have lauded the return of the wolf, not everyone is happy that they are back – or that they have been awarded protected status. EU regulations outlaw the killing of wolves, allowing exceptions only when there is “no satisfactory alternative” or if people are in danger.

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Instead of simply saying don’t make the stuff anymore. London must think Brits are incredibly stupid people.

UK Plans To Make Plastic Packaging Producers Pay For Waste Disposal (R.)

Britain is to set out plans to overhaul its recycling system on Monday, including making plastic packaging producers pay the full cost of dealing with their waste and introducing a deposit return scheme for cans and bottles. The plans, which also aim to make household rubbish collections more consistent around the country, will be introduced by Environment Secretary Michael Gove and go out for consultation for three months. “We will introduce a world-leading tax to boost recycled content in plastic packaging, make producers foot the bill for handling their packaging waste, and end the confusion over household recycling,” Gove said in a statement. The tax will be payable by producers who fail to use enough recycled material.

At present, producers pay only around 10 percent of the cost of dealing with plastic packaging waste, the environment ministry said. Under an Extended Producer Responsibility (EPR) system, the industry will pay higher fees if its packaging is harder to reuse or recycle. EPR for packaging will raise between 800 million and one billion pounds a year for recycling and disposal, the ministry said. Government will seek views on two options for how a deposit return scheme might work for cans and glass or plastic bottles, it added. The first would target a large amount of drinks on the market, irrespective of container size. The second, known as the “on-the-go” model, would concern smaller container sizes – those most often sold for consumption outside the home.

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These birds spend most of their lives feeding at sea, returning to their nests only to breed.

Plastic Chemicals Discovered Inside Bird Eggs From Remote Arctic (Ind.)

Chemicals from plastics have been found inside the eggs of seabirds living in remote Arctic colonies, in the latest sign of pollution contaminating the furthest reaches of the planet. Scientists were concerned by the traces of phthalates, hormone-disrupting chemicals that have been banned from children’s toys due to their potential “gender-bending” effects. These substances are routinely applied to many plastic products, and probably came from the bottle tops and cigarette butts these seabirds often eat after mistaking them for food. The eggs were taken from northern fulmars living on an island in Lancaster Sound, more than 100 miles away from the nearest human settlement.

In a preliminary study, Dr Jennifer Provencher of the Canadian Wildlife Service tested the eggs of five fulmars and found phthalates in one, but warned the problem is likely to be far more pervasive. “These are some of the birds who have the lowest levels of accumulated plastic,” explained Dr Provencher. If fulmar colonies were tested in the North Sea, where levels of plastic consumption are far higher, she said the results could be far more dramatic. “Now the thing is to look at other populations and to see if they have the same chemicals, or other chemicals,” she said. In another study, Dr Provencher and her colleagues examined the eggs of both fulmars and black-legged kittiwakes, and found traces of more chemicals known as UV stabilisers and antioxidants. “We are finding multiple plastic-derived contaminants that are maternally transferred to the egg,” she said. “It’s really tragic.”


Scientists studied the eggs of northern fulmars from an Arctic island in Canada’s Lancaster Sound (Getty/iStock)

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Feb 162019
 


Marcel Duchamp The king and queen surrounded by swift nudes 1912

 

Over 60% Of All New Debt Created Globally In Past Decade Was In China (NYFed)
Worms Turning (Jim Kunstler)
FBI Created, Covered Up “Chart” Of Potential Hillary Clinton Crimes (ZH)
Mueller Discloses Evidence Roger Stone Communicated With Wikileaks (G.)
Are Russian Trolls Saving Measles From Extinction? (RFE)
Democrats’ Coveted 2020 Prize? An Endorsement From Ocasio-Cortez (G.)
The Green New Deal, Capitalism and the State (CP)
Corbyn To Hold Brexit Talks With EU’s Barnier And Verhofstadt (G.)
When The Swabian Hausfrau Saves (Steve Keen)
9/11 Fund Running Out Of Money For Those With Illnesses (AP)
Subsidies to Amazon Are Uneconomical, Un-American, and Unconstitutional (PM)

 

 

As Trump flunks his emergency, Xi flunks his economy. I’ll wait for the shouting match over the first to settle over the weekend.

This is from the New York Fed’s Liberty Street Economics. The second graph is not from their piece, but very much to the point. After all that new debt, China’s transition to a consumer economy is faltering. So people are clamoring for rate cuts and more stimulus. But do they realize how much stimulus China has already neede to get where it is today?

Over 60% Of All New Debt Created Globally In Past Decade Was In China (NYFed)

Although there has been a notable deceleration in the pace of credit growth recently, the run-up in debt in China has been eye-popping, accounting for more than 60 percent of all new credit created globally over the past ten years. Rising nonfinancial sector debt was driven initially by an increase in corporate borrowing, which surged in 2009 in response to the global financial crisis. The most recent leg of China’s credit boom has been due to an important shift toward household lending. To better understand the rise in household debt in China and its implications for financial stability and China’s economic performance, it is important to examine the expansion in household credit, how the rise in debt compares to international experience, and the associated risks.

The growth of China’s household debt reflects a natural evolution in financial sector deepening and has grown in two waves. The first occurred during the late-1990s following major financial reforms and the privatization of China’s housing stock. The second wave began in the wake of the global financial crisis and has witnessed much more rapid growth, with debt increasing by nearly $5.7 trillion, or nearly 30 percent of China’s GDP. In fact, household lending overtook corporate borrowing in early 2018 to become the largest driver of aggregate loan growth in China. New household lending now accounts for roughly half of new loans.

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Glad someone’s keeping count.

Worms Turning (Jim Kunstler)

[..] late this week, William Barr was confirmed as a new Attorney General, meaning the extreme case of bureaucratic constipation in that department may be resolving in a shitstorm of counter-revelations and prosecutions in what amounted to an attempted coup d’etat. A lot of the evidence for that is already public and overwhelming. It includes:

• Using FBI counter-intelligence assets improperly and illegally.
• Using fabricated “opposition research” provided by Mrs. Clinton to obtain warrants to spy on her election opponent, and failing to verify it as evidence (according to strict “Woods” procedures) submitted to FISA court judges.
• Recruiting Britain’s MI6 to spy on US citizens as a work-around from US laws prohibiting US Intel from spying on Americans.
• Setting up the notorious Trump Tower meeting to entrap Donald Trump Jr., using a Russian lawyer, Natalia Veselnitskaya, in the employ of Fusion GPS, Mrs. Clintons oppo research contractor.
• Orchestrating leaks of secret FBI proceedings to the news media to feed a Russia collusion hysteria.
• Malicious prosecutions by Special Counsel Robert Mueller and egregious political conflicts-of-interest among Mr. Mueller’s team of prosecutors.
• Coverup of the Uranium One scheme facilitated by Robert Mueller and Deputy Attorney General Rod Rosenstein.
• A scheme to surreptitiously and illegally record conversations with Mr. Trump once he became president.
• Conspiring to bury multiple inquires into illegal conduct of Mrs. Clinton, her employees and associates by failing to obtain evidence and allowing it to be destroyed.
• Misconduct in office by former CIA chief John Brennan, former National Security Director James Clapper, former AG Loretta Lynch, and members of President Obama’s White House inner circle.

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Tie in this one with Jim Kunstler’s list above.

FBI Created, Covered Up “Chart” Of Potential Hillary Clinton Crimes (ZH)

The top brass of the Obama FBI went to great lengths to justify their decision not to recommend charges against former Secretary of State Hillary Clinton for mishandling classified information, according to Judicial Watch, which obtained evidence that the agency created a ‘chart’ of Clinton’s offenses. The newly obtained emails came in response to a court ordered Freedom of Information Act (FOIA) request that the DOJ had previously ignored. Via Judicial Watch: “Three days after then-FBI Director James Comey’s press conference announcing that he would not recommend a prosecution of Mrs. Clinton, a July 8, 2016 email chain shows that, the Special Counsel to the FBI’s executive assistant director in charge of the National Security Branch, whose name is redacted, wrote to Strzok and others that he was producing a “chart of the statutory violations considered during the investigation [of Clinton’s server], and the reasons for the recommendation not to prosecute…”

[..] On May 15, 2016, James Rybicki, former chief of staff to Comey, sends FBI General Counsel James Baker; Bill Priestap, former assistant director of the FBI’s counterintelligence division; McCabe; Page; and others an email with the subject line “Request from the Director.” Rybicki writes: By NLT [no later than] next Monday, the Director would like to see a list of all cases charged in the last 20 years where the gravamen of the charge was mishandling classified information. It should be in chart form with: (1) case name, (2) a short summary for content (3) charges brought, and (4) charge of conviction. If need be, we can get it from NSD [National Security Division] and let them know that the Director asked for this personally. Please let me know who can take the lead on this. Thanks! Jim

Page forwards to Strzok: FYSA [For your situational awareness] Strzok replies to Page: I’ll take the lead, of course – sounds like an espionage section question… Or do you think OGC [Office of the General Counsel] should? And the more reason for us to get feedback to Rybicki, as we all identified this as an issue/question over a week ago. Page replies: I was going to reply to Jim [Rybicki] and tell him I can talked [sic] to you about this already. Do you want me to?

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Mueller gets nuttier, and the Guardian gladly collaborates. On nothing new. We already knew WikiLeaks told Stone to take a hike. Most importantly, Mueller continues his cowardice vs Assange, because without his empty accusations of Assange, he really has nothing left on collusion. And if Assange could talk, he’d have even less left. And people tell me he’s not a coward.

Under US law, people have the right to defend themselves. Under Robert Mueller’s law, Julian Assange does not. Is that stating it clear enough?

As for Stone, Aaron Maté tweeted about this article: “LOL. The “communications of Roger Stone with Wikileaks” were revealed a year ago. They show WL urging Stone to stop making “false claims of association” between them.”

Mueller Discloses Evidence Roger Stone Communicated With Wikileaks (G.)

The US Special Counsel, Robert Mueller, disclosed for the first time on Friday that his office has evidence of communications between Roger Stone, a longtime adviser to President Donald Trump, and WikiLeaks related to the release of hacked Democratic party emails. In a court filing on Friday, Mueller’s office said it had gathered that evidence in a separate probe into Russian intelligence officers who were charged by Mueller with hacking the emails during the 2016 US presidential campaign and staging their release. In an email criticising media coverage of Mueller’s filing on Friday, Stone said the evidence was “innocuous Twitter direct messages” that have already been disclosed to the House Intelligence Committee and “prove absolutely nothing”.

Also on Friday, a federal judge placed some limits on what Stone and his lawyers can say publicly about his criminal case brought by the special counsel in the Russia investigation. But the US district judge, Amy Berman Jackson, stopped short of imposing a broad ban on public comments by the outspoken political operative, issuing a limited gag order she said was necessary to ensure Stone’s right to a fair trial and “to maintain the dignity and seriousness of the courthouse and these proceedings”. Stone was indicted last month for lying to Congress about his communications with others about the hacked emails. Mueller did not say at the time that he had evidence of communications with WikiLeaks. Stone, an ally of Trump for 40 years, has pleaded not guilty to the charges.

Stone has previously acknowledged brief exchanges with both WikiLeaks and Guccifer 2.0 but maintains he never had advance knowledge about the release of hacked emails. But Friday marked the first time Mueller indicated he had obtained related evidence, although it remained unclear if the evidence is more substantial than what is publicly known. “The government obtained and executed dozens of search warrants on various accounts used to facilitate the transfer of stolen documents for release, as well as to discuss the timing and promotion of their release,” Mueller’s team wrote in a filing to the US district court in Washington DC. “Several of those search warrants were executed on accounts that contained Stone’s communications with Guccifer 2.0 and with Organization 1.”

[..] WikiLeaks and Guccifer 2.0 each published emails and other documents from the Democratic party in 2016 in an operation that Mueller alleges was part of a Kremlin-backed effort to tip the election in favour of then Republican nominee, Donald Trump.

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Radio Free Europe presents Russiaphobia on steroids.

Let’s ask Mueller what he thinks.

Are Russian Trolls Saving Measles From Extinction? (RFE)

Scientific researchers say Russian social-media trolls who spread discord before the 2016 U.S. presidential election may also have played an unintended role in a developing global health crisis. They say the trolls may have contributed to the 2018 outbreak of measles in Europe that killed 72 people and infected more than 82,000 — mostly in Eastern and Southeastern European countries known to have been targeted by Russia-based disinformation campaigns. Experts in the United States and Europe are now working on ways to gauge the impact that Russian troll and bot campaigns have had on the spread of the disease by distributing medical misinformation and raising public doubts about vaccinations.

Studies have already documented how cybercampaigns by the Internet Research Agency – a St. Petersburg “troll farm” that has been accused of meddling in the U.S. 2016 presidential election – artificially bolstered debate on social media about vaccines since 2014 in a way that eroded public trust in vaccinations. Now, the World Health Organization (WHO) is warning that “vaccination hesitancy” has become one of the top threats to global health. It notes a 30 percent rise in measles globally and a resurgence of measles in countries that had once been close to eradicating the disease.

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You heard it here first in The Great Discontent.

A communications director says: “She’s built a profile with a savvy way beyond her years..”, but it’s the other way around. Anyone older can not build a profile the way she has because she’s 29 and grew up with social media; it’s not an acquired taste for her.

Democrats’ Coveted 2020 Prize? An Endorsement From Ocasio-Cortez (G.)

Welcome to the AOC primary. At 29 years old, Congresswoman Alexandria Ocasio-Cortez – already known as “AOC” for short – is too young to be eligible to run for US president. But her phenomenal impact on American politics means that she could play an outsized role in deciding who does. As her fellow Democrats jostle for position ahead of the 2020 primary elections, an endorsement from Ocasio-Cortez is likely to be a widely coveted prize, a guaranteed shot of adrenaline sure to energise her army of millennial voters. But it could also come with perils in the later presidential contest, especially for so-called “centrist” candidates hoping to draw independents and moderate Republicans away from Donald Trump.

In little more than a month, Ocasio-Cortez, whose New York district includes parts of the Bronx and Queens, has taken Washington by storm, overshadowing career politicians who have spent years labouring in the 435-member House of Representatives. Her proposals – among them a Green New Deal to combat climate change and a 70% tax rate on earnings over $10m to tackle economic inequality – have reset terms of debate in the early stages of the Democratic contest. “This is a race to the left,” said Dave Handy, a New York-based political consultant and organiser. “Even if people don’t like her or her policies, they will be racing to get her endorsement because it’s a progressive check mark. She embodies the general direction the party is going in.”

[..] Ocasio-Cortez is also a social media sensation. She has in excess of 3 million followers on Twitter with more engagement than Donald Trump, Barack Obama or Vermont senator Bernie Sanders. Last week a video clip in which she quizzed ethics experts about government corruption became the most watched political video ever posted on Twitter with 37.5m views. It was another demonstration of astonishing clout. Neil Sroka, communications director of the progressive group Democracy for America, said: “She’s built a profile with a savvy way beyond her years, but she also has an agenda that feels right for the moment. AOC does not exist without the bold, inclusive, populist agenda she’s pushing. The vitriol she has inspired speaks to how afraid everyone is; Republicans see her as representing a country they don’t even know how to speak to.”

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“The American plan is to burn the oil. All of it.”

The Green New Deal, Capitalism and the State (CP)

Unbeknownst to most Americans, the nation’s forests were clear-cut from coast to coast in the mid-late nineteenth century. Photographs from the era show denuded landscapes— no trees, no animals, and streams still poisoned from the runoff in the present, for as far as the eye can see. The scars from nineteenth and twentieth century strip mining in Pennsylvania draw direct geographical and historical lines to the mountaintop removal that is taking place in West Virginia today. These natural resources produced the bounty of American capitalism every bit as much as the manufacturing prowess of the Second Industrial Revolution. In turn, this combination of low-cost resources, manufacturing prowess and natural borders (the oceans) produced the military might that defines America in the present.

The logic of weapons and weaponry pervades American capitalism. Death and destruction, domination and control, are what America does. The thought that these resources were ever ‘free’ illustrates the power of ideology. With a body count of at least one-hundred million human beings— including genocide against the indigenous population, murdered slaves, coal miners in Appalachia who died from black lung disease, mill workers in Massachusetts and North and South Carolina who died from inhaling cotton fibers, and those killed in American wars for resources, the human toll of American capitalism is staggering.

[..] In the present, the introduction of a Green New Deal as a nonbinding resolution, rather than the creation of a select congressional committee, clarifies the political form of official resistance to environmental resolution. The public pronouncement itself is a call to arms, implying both that the need for environmental resolution is urgent and that it won’t be led from above. Its authors were right to take their case to the people, from whom something akin to a revolutionary movement is required. Complaints over its limited scope miss that until there is such a movement, little progress toward environmental resolution will be made. Current bipartisan American machinations toward Venezuela illustrate the conundrum. Venezuela has the largest proven oil reserves in the world. The U.S. is using state power to ‘liberate’ this oil for the benefit of nominally private multinational oil corporations. The American plan is to burn the oil. All of it.

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And why not? It must get messier still.

Corbyn To Hold Brexit Talks With EU’s Barnier And Verhofstadt (G.)

Jeremy Corbyn will hold talks in Brussels next week with Michel Barnier, the EU’s chief negotiator, as he seeks to break the Brexit impasse and persuade Theresa May to sign up to a customs union. The visit is likely to be highly unwelcome in Downing Street, and risks accusations that Labour is pursuing its own shadow negotiations, undermining the prime minister’s hopes of fresh EU concessions. May will be in Brussels in the same week to meet the European commission president, Jean-Claude Juncker. The UK attorney-general, Geoffrey Cox, is expected to travel with her. During a whistle-stop tour of the central figures in the Brexit talks on Thursday, Corbyn is also due to meet the European parliament’s Brexit coordinator, Guy Verhofstadt.

He will also hold talks with senior figures in the socialist group in the European parliament, including Labour MEPs. EU sources said Corbyn was expected to provide further details on his recent conditional offer of support for the prime minister’s deal along with an update on the cross-party talks. Earlier this month, the Labour leader said his party would back the withdrawal agreement, containing the Irish backstop, if May renegotiated the accompanying political declaration on the future relationship. Labour is seeking a permanent and comprehensive UK-wide customs union, a close alignment with the single market and protection for standards and workers’ rights.

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Steve wants to abolish the word ‘savings’ with regards to a government. It makes no sense at all.

When The Swabian Hausfrau Saves (Steve Keen)

Savings is promoted as a private virtue that should be practiced at a national and international level as well. What happens to the economy when it is implemented? Keen explains one of the great economic fallacies: that a government needs to manage its finances like a household, and if the government consistently spends more than it receives in income, the nation’s debt will ultimately become unsustainable, and the nation will go broke. Furthermore he will address why the predominant Neoclassical economic model of banking is dangerously misleading as a guide to how a capitalist economy actually works and was thus incapable of predicting the Great Financial Crisis of 2007.

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Hoe much more American does it get?

9/11 Fund Running Out Of Money For Those With Illnesses (AP)

The compensation fund for victims of 9/11 is running out of money and will cut future payments by 50 to 70 percent, officials announced Friday. September 11th Victim Compensation Fund special master Rupa Bhattacharyya said she was “painfully aware of the inequity of the situation” but stressed that awarding some funds for every valid claim would be preferable to sending some legitimate claimants away empty-handed. “I could not abide a plan that would at the end of the day leave some claimants uncompensated,” Bhattacharyya said.

Nearly 40,000 people have applied to the federal fund for people with illnesses potentially related to being at the World Trade Center site, the Pentagon or Shanksville, Pennsylvania, after the 2001 terror attacks there, and about 19,000 of those claims are pending. Nearly $5 billion in benefits have been awarded out of the $7.3 billion fund. Bhattacharyya said fund officials estimate it would take another $5 billion to pay pending claims and the claims that officials anticipate will be submitted before the fund’s December 2020 deadline. Absent that funding, officials determined that pending claims submitted by Feb. 1 would be paid at 50 percent of their prior value. Valid claims received after that date will be paid at just 30 percent.

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Idea is good, argumentation less so. You can’t expect to be taken too seriously when you write lines like this one: A recent paper shows that companies are more likely to receive subsidies when they make financial contributions to political candidates in the state.

Subsidies to Amazon Are Uneconomical, Un-American, and Unconstitutional (PM)

Corporate subsidies are a negative-sum game. They foster crony capitalism, hurt productivity growth and inflict great harm on product market competition.

As soon as Amazon announced the location of its new headquarters, an intense media battle started on the rationality of the fiscal subsidies offered by the two chosen states to attract the new headquarters. Was it a good idea for New York and Virginia to offer $1.5 billion and $573 million respectively to stir Amazon’s decision? In each of the two chosen locations Amazon was to invest billions in infrastructure, employ as many as 25,000 people directly (and many more indirectly), and bring billions in new tax revenues. Even the generous fiscal benefits offered by the two locations seem small vis-à-vis the additional fiscal revenues the winning states will enjoy. After all, had Amazon chosen New Jersey over New York, the Empire State would have lost up to $14 billion in new tax revenues over the next 25 years.

Why shouldn’t a state pay a fraction of these enormous benefits to secure Amazon’s headquarters? While appealing, this argument is flawed and—as it turns out—self-defeating. When companies compete for customers, they have to offer better products or lower prices. They are forced to innovate and improve efficiency in production. In economist lingo, product market competition is not a zero-sum game (my gains are equal to your losses), but a positive-sum game (my gains exceed your losses). By contrast, corporate competition for state subsidies is a zero-sum game. Amazon is not going to be more productive in New York than in New Jersey –it will only pay fewer taxes. If companies are successful in pitting one state against another, they will end up paying no state taxes.

As a result, the economy will not be one iota more efficient, and the rest of us will end up paying more taxes to make up for the revenue shortfall. Competition for subsidies also fosters crony capitalism and hurts productivity growth. It fosters crony capitalism because it favors companies that are well-connected, rather than companies that are more efficient.

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Feb 152019
 


Pablo Picasso Three women at the edge of the beach 1924

 

NBC Issues Latest Reminder That Mueller Report Might Disappoint (ZH)
Trump Will Sign Spending Bill, Declare Emergency Over Border – McConnell (MW)
Russians Told To ‘Prepare For The Worst’ As US Proposes New Sanctions (Ind.)
Theresa May Suffers Embarrassing Defeat As Tories Rebel Over No-Deal (Ind.)
Dutch PM On Brexit: UK Is A Waning Country Too Small To Stand Alone (G.)
German Economy Narrowly Avoids Recession As Weaker Exports Take Toll (G.)
BBC Producer’s Syria Bombshell: Douma “Gas Attack” Footage “Was Staged” (ZH)
As Amazon Drops New York City Project, Progressives Claim A Major Coup (R.)
White Supremacy Is a Key Driver of the Venezuela Coup (Palast)
How The US Has Hidden Its Empire (Immerwahr)
School Climate Strikes: ‘The Beginning Of Great Change’ (G.)
100s Of Endangered Animals At Risk Of Extinction Due To Wildlife Trade (Ind.)

 

 

They’re inventing a narrative as we speak that Mueller may have proof of collusion, but not enough for a criminal case, and therefore that proof may remain hidden. Which would give NBC plenty material for more empty allegations right up until the 2020 elections. In the media, it’s no longer about what you can prove, it’s about what wiggle room you have to smear and accuse. They’ll never give up: the Senate committee comes up nothing, and they prepare their audience for the Mueller probe doing the same, but somehow that means nothing. No matter what happens, the verdict is already there.

NBC Issues Latest Reminder That Mueller Report Might Disappoint (ZH)

“Millions of Americans may be sorely disappointed” by the Mueller report – or lack thereof, according to NBC News. Yes, after nearly three years of DOJ investigation, FBI spying, and what appears to have been a setup involving a mysterious Maltese professor who bragged about his ties to the Clinton Foundation – it looks like that “the public may never learn the full scope of what Mueller and his team has found.” The NBC report comes days after a bipartisan Senate investigation found no collusion between Trumpworld and Russia, and the same day as former Deputy FBI Director Andrew McCabe admitted that he rushed to open the Russia probe out of fear of being fired.

Unless Mueller files a detailed indictment charging members of the Trump campaign with conspiring with Russia, the public may never learn the full scope of what Mueller and his team has found — including potentially scandalous behavior that doesn’t amount to a provable crime . The reason: The special counsel operates under rules that severely constrain how much information can be made public. -NBC News And while the Attorney General will be required to notify Congress of Mueller’s findings, those reports must amount to “brief notifications, with an outline of the actions and the reasons for them.” “Expectations that we will see a comprehensive report from the special counsel are high. But the written regulations that govern the special counsel’s reporting requirements should arguably dampen those expectations,” said former federal prosecutor Chuck Rosenberg.

[..] When asked about making the Mueller report public, newly minted Attorney General, William Barr, has said “My goal will be to provide as much transparency as I can consistent with the law,” adding “I can assure you that, where judgments are to be made, I will make those judgments based solely on the law and I will not let personal, political or other improper interests influence my decision.” Sen. Dianne Feinstein (D-CA) said in January that her vote on Barr’s nomination is contingent upon whether he will release the report publicly. “My vote really depends on whether I believe that that report will come out as written,” said Feinstein. “I served for a long time on the Intelligence Committee, and I know redaction can be excessive.”

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TEXT

Trump Will Sign Spending Bill, Declare Emergency Over Border – McConnell (MW)

President Donald Trump will sign a spending bill to keep the government open and at the same time declare a national emergency at the border, Senate Majority Leader Mitch McConnell said Thursday. McConnell spoke from the Senate floor after Trump said on Twitter he was reviewing the bill with his team at the White House. Trump has discussed using an emergency declaration to build a proposed wall along the U.S. border with Mexico, a move that’s certain to provoke a brawl with Congress and perhaps in the courts.

White House press secretary Sarah Sanders said in a statement that Trump would sign the bill and “take other executive action — including a national emergency — to ensure we stop the national security and humanitarian crisis at the border.” “The president is once again delivering on his promise to build the wall, protect the border, and secure our great country,” Sanders said. The measure passed the Senate on Thursday afternoon by an 83-16 vote, and the House approved it Thursday night with a 300-128 tally. Republicans including Ted Cruz of Texas and Marco Rubio of Florida voted against it.

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As RT states: “Even the most cursory observer will notice the bill treats alleged Russian meddling abroad and “illicit and corrupt activities” of the Russian president as established, proven facts (they are not).”

Russians Told To ‘Prepare For The Worst’ As US Proposes New Sanctions (Ind.)

Moscow has reacted to a proposed new package of United States sanctions with of mix of anger and resignation. As an influential former minister urged Russians to prepare for the worst, the Kremlin accused the US of “racketeering”. “We see clear symptoms of emotional Russophobia,” Kremlin spokesperson Dmitry Peskov told journalists. “But behind the emotions … is an entirely pragmatic, assertive trade calculation, and … nothing less than an attempt to engage in dishonest competition.” The new round of sanctions, proposed in the Defending American Security from Kremlin Aggression Act on Wednesday evening, would target Russia’s security service, sovereign debt, and its financial and energy sectors.

The sanctions package is awaiting congressional approval. m According to the bill’s authors, the measures have been proposed in response to two developments: Russian “interference in democratic processes abroad” and its “aggression against Ukraine”, including the seizing of Ukrainian warships in the Kerch strait in November. On Thursday, the proposed sanctions were met with a predictably angry response by Russian state television and more media-hungry parliamentarians. Perhaps the most memorable response was filed by Frants Klintsevich, the prominent, if excitable, member of the Defence and Security Committee of Russia’s upper house. He described the new sanctions as a “dangerous habit” akin to “smoking a pipe before breakfast, poisoning all those around”.

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In the future, this headline will sow much confusion about the date it applies to. May suffers embarrassing defeats almost every day.

Theresa May Suffers Embarrassing Defeat As Tories Rebel Over No-Deal (Ind.)

Theresa May’s Brexit plans have been dealt a body blow following a “fiasco” in the House of Commons, which saw dozens of Tories inflict an embarrassing defeat on their leader. Eurosceptic Conservatives refused to back a motion reiterating support for the prime minister’s negotiating strategy, deeply suspicious that she might try and use it to rule out a no-deal Brexit. The loss brutally exposes how trust between Ms May and her backbenchers has hit rock bottom, with many still furious over comments made by her chief negotiator in a Brussels bar this week which also appeared to exclude a no-deal scenario. But the defeat has also laid bare the extreme fragility of parliamentary support for her approach, with her ministers having claimed only last week that she had secured a “strong mandate” from the Commons.

On another dramatic night in parliament, Ms May was nowhere to be seen as the result was read out to cheers from the Labour benches. The government motion was defeated by 258 votes to 303. One leading Tory described the night as a “fiasco”, Jeremy Corbyn said the country was heading for a “catastrophe”, and a senior source in Brussels said: “There goes the strong mandate.” The Brexit fault line also cut through Mr Corbyn’s party on Thursday, with a significant number of Labour MPs apparently defying their leader’s will in a separate vote amid suspicions that some are close to breaking away. But the spotlight was firmly on the prime minister’s ailing administration as it contorted in an attempt to avoid defeat on what did not have to be a difficult night for Ms May.

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Rutte is an all-out neo-liberal globalist. The kind that control Brussels today. But will that still be the case after the May EU elections?

Dutch PM On Brexit: UK Is A Waning Country Too Small To Stand Alone (G.)

Britain is a “waning country” and too small to stand alone on the world stage, the Dutch prime minister, Mark Rutte, has claimed in a withering assessment of the UK’s exit from the EU. Rutte, who has emerged as a key player in the talks over the past two years, also warned in an interview that the UK looked to be sliding off the “precipice” towards a “devastating” no-deal Brexit. “Who will be left weakened by Brexit is the United Kingdom,” he said. “It is already weakening, it is a waning country compared to two or three years ago. It is going to become an economy of middling size in the Atlantic Ocean. It is neither the US nor the EU. It is too small to appear on the world stage on its own.”

Rutte, who also claimed the Dutch would replace the UK in the bloc as the pre-eminent voice for free trade, has been regularly consulted by Theresa May on progress in the Brexit negotiations. The Netherlands is one of the EU member states that will be most affected by the barriers to trade that will emerge after the UK leaves the bloc, although it has been the beneficiary of some relocations by big businesses. Figures released last week by the Dutch investment agency revealed 42 companies had relocated to the Netherlands in 2018, citing Brexit as a reason, resulting in the movement of 1,923 jobs. Asked whether a Brexit deal was likely, Rutte said in an interview with European media outlets, including the Spanish newspaper El País: “My impression is that the ball is heading towards the precipice and everyone screams to stop, but nobody does anything to stop it, at least, from the British side.”

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When is Berlin going to start pumping money in?

German Economy Narrowly Avoids Recession As Weaker Exports Take Toll (G.)

Germany narrowly avoided falling into recession in the second half of last year as weaker exports dragged Europe’s largest economy to stalling point during the final three months of 2018. The German economy recorded zero growth in the fourth quarter, managing to just avoid a technical recession after reporting a contraction of 0.2% in the third quarter amid a slump in industrial output. Several economists had previously warned that Germany was on the brink of recession because of consecutive monthly declines in factory output, with the country suffering from weaker levels of global demand and disruption at factories.

Tensions between the US and China have acted as a handbrake on global goods trade, while growth is slowing in the Chinese economy after years of rapid expansion. Sales of cars in China dropped last year for the first time in almost 30 years, affecting manufacturers across Europe. New vehicle emissions tests introduced after the VW emissions scandal have also caused disruption to factories across Europe, including in Britain. Manufacturing accounts for about a fifth of the Germany economy, about double the size of Britain’s industrial base. Overall growth for 2018 in Germany was 1.5%, marginally above the 1.4% expansion recorded in Britain.

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How things we’ve all know for years can still be bombshells.

BBC Producer’s Syria Bombshell: Douma “Gas Attack” Footage “Was Staged” (ZH)

Now approaching nearly a year after the April 7, 2018 alleged chemical attack in Douma, Syria — which the White House used as a pretext to bomb Syrian government facilities and bases throughout Damascus — a BBC reporter who investigated the incident on the ground has issued public statements saying the “Assad sarin attack” on Douma was indeed “staged”. Riam Dalati is a well-known BBC Syria producer who has long reported from the region. He shocked his nearly 20,000 twitter followers on Wednesday, which includes other mainstream journalists from major outlets, by stating that after a “six month investigation” he has concluded, “I can prove without a doubt that the Douma Hospital scene was staged.”

The “hospital scene” is a reference to part of the horrid footage played over and over again on international networks showing children in a Douma hospital being hosed off and treated by doctors and White Helmets personnel as victims of the alleged chemical attack. The BBC’s Dalati stated on Wednesday: “After almost 6 months of investigations, I can prove without a doubt that the Douma Hospital scene was staged. No fatalities occurred in the hospital.” He noted he had interviewed a number of White Helmets and opposition activists while reaching that conclusion.

He continued in a follow-up tweet: “Russia and at least one NATO country knew about what happened in the hospital. Documents were sent. However, no one knew what really happened at the flats apart from activists manipulating the scene there. This is why Russia focused solely on discrediting the hospital scene.” Dalati’s mention of activists at the flats “manipulating the scene there” is a reference to White Helmets and rebel activist produced footage purporting to show the deadly aftermath of a chemical attack inside a second scene — a bombed out apartment showing dozens of dead bodies.

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Yes, Amazon is the company that paid $0 in income taxes. And then people say progressives stand in the way of progress. Some progress.

As Amazon Drops New York City Project, Progressives Claim A Major Coup (R.)

U.S. Representative Alexandria Ocasio-Cortez wasted no time on Thursday in calling Amazon’s decision to scrap plans to build a major New York outpost with nearly $3 billion in city and state incentives a big victory for progressive politicians. The democratic socialist congresswoman has become the face of the Democratic Party’s ascendant left wing, thanks in part to her upset victory last year in a district near the proposed Amazon.com Inc development. “Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world,” Ocasio-Cortez wrote on Twitter.

Amazon blamed local opposition for its abrupt reversal, which some saw as the latest evidence of the progressive movement’s surging influence ahead of the battle for the Democratic presidential nomination next year. “They have shown sufficient power to back off the largest corporation in the world,” Douglas Muzzio, a professor at Baruch College in New York and an expert on city politics and public opinion. “They killed Amazon, the biggest beast around.”

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“Guaidó’s supporters, like Carmona’s, know they can’t win an election given the overwhelming fact of the newly empowered Mestizo majority. So Guaidó has skipped the idea of an election altogether..”

White Supremacy Is a Key Driver of the Venezuela Coup (Palast)

Four centuries of white supremacy in Venezuela by those who identify their ancestors as European came to an end with the 1998 election of Hugo Chavez, who won with the overwhelming support of the Mestizo majority. This turn away from white supremacy continues under Maduro, Chavez’s chosen successor. In my interviews with Chavez for BBC beginning in 2002, he talked with humor about the fury of a white ruling class finding itself displaced by a man who embraced his own Indigenous and African heritage. In Venezuela, as in the USA, poverty and race are locked together. Why did so many Mestizo, poor Venezuelans love Chavez? As even the CIA’s surprisingly honest Fact Book states:

“Social investment in Venezuela during the Chavez administration reduced poverty from nearly 50% in 1999 to about 27% in 2011, increased school enrollment, substantially decreased infant and child mortality, and improved access to potable water and sanitation through social investment.” But, just as Maduro took office, the price of oil began its collapse, and the vast social programs that oil had paid for were now supported by borrowing money and printing it, causing wild inflation. The economic slide is now made impossibly worse by what the UN rapporteur for Venezuela compared to “medieval sieges.” The Trump administration cut off Venezuela from the oil sale proceeds from its biggest customer, the US.

Everyone has been hurt economically, but the privileged class’s bank accounts have become nearly worthless. So, knowing that the Mestizo majority would not elect their Great White Hope Guaidó, they simply took to the streets — often armed. (And yes, both sides are armed.) I’ve seen this movie before. When I look at today’s news reports of massive demonstrations against the so-called “dictatorship” of Venezuela’s left government, it looks awfully like 2002, when I was first in Caracas reporting for BBC Television. [..] In 2002, George W. Bush’s State Department cheer-led the coup. The plotters kidnapped Chavez and held him hostage. The coup was led by an oil industry leader and head of the Chamber of Commerce, Pedro Carmona, who had seized the nation’s White House, and, like Guaidó today, declared himself president.

Carmona told me proudly about the fancy inaugural ball held by the nation’s elite and attended by Bush’s ambassador. But the Bush/Carmona coup collapsed when a million mostly Mestizo, Indigenous and Black Venezuelans flooded the capital and forced the plotters to return their hero, the supposedly unpopular Chavez, to Miraflores, the presidential palace. “Presidente” Carmona fled. Today, Guaidó’s supporters, like Carmona’s, know they can’t win an election given the overwhelming fact of the newly empowered Mestizo majority. So Guaidó has skipped the idea of an election altogether, simply replacing running for office with the “recognition” from Trump and allies which Guaidó can’t get from Venezuelans.

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Wonderful summary of upcoming book.

How The US Has Hidden Its Empire (Immerwahr)

There aren’t many historical episodes more firmly lodged in the United States’s national memory than the attack on Pearl Harbor. It is one of only a few events that many people in the country can put a date to: 7 December 1941, the “date which will live in infamy,” as Franklin D Roosevelt put it. Hundreds of books have been written about it – the Library of Congress holds more than 350. And Hollywood has made movies. But what those films don’t show is what happened next. Nine hours after Japan attacked the territory of Hawaii, another set of Japanese planes came into view over another US territory, the Philippines. As at Pearl Harbor, they dropped their bombs, hitting several air bases, to devastating effect.

The attack on Pearl Harbor was just that – an attack. Japan’s bombers struck, retreated and never returned. Not so in the Philippines. There, the initial air raids were followed by more raids, then by invasion and conquest. Sixteen million Filipinos – US nationals who saluted the stars and stripes and looked to FDR as their commander in chief – fell under a foreign power. Contrary to popular memory, the event familiarly known as “Pearl Harbor” was in fact an all-out lightning strike on US and British holdings throughout the Pacific. On a single day, the Japanese attacked the US territories of Hawaii, the Philippines, Guam, Midway Island and Wake Island. They also attacked the British colonies of Malaya, Singapore and Hong Kong, and they invaded Thailand.

At first, “Pearl Harbor” was not the way most people referred to the bombings. “Japs bomb Manila, Hawaii” was the headline in one New Mexico paper; “Japanese Planes Bomb Honolulu, Island of Guam” in another in South Carolina. Sumner Welles, FDR’s undersecretary of state, described the event as “an attack upon Hawaii and upon the Philippines”. Eleanor Roosevelt used a similar formulation in her radio address on the night of 7 December, when she spoke of Japan “bombing our citizens in Hawaii and the Philippines”. That was how the first draft of FDR’s speech went, too: it presented the event as a “bombing in Hawaii and the Philippines”. Yet Roosevelt toyed with that draft all day, adding things in pencil, crossing other bits out.

At some point he deleted the prominent references to the Philippines. Why did Roosevelt demote the Philippines? We don’t know, but it’s not hard to guess. Roosevelt was trying to tell a clear story: Japan had attacked the US. But he faced a problem. Were Japan’s targets considered “the United States”? Legally, they were indisputably US territory. But would the public see them that way? What if Roosevelt’s audience didn’t care that Japan had attacked the Philippines or Guam? Polls taken slightly before the attack show that few in the continental US supported a military defense of those remote territories.


The Greater United States as it was in 1941

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Get them when they’re young. They dragged this girl over to Davos, letting her think that means something. Well, it did, it meant she became a puppet. Davos, Brussels; kids, you’re being used. You’re now part of a propaganda campaign that says ‘leaders’ actually give a damn. But they just want your future vote.

School Climate Strikes: ‘The Beginning Of Great Change’ (G.)

Greta Thunberg is hopeful the student climate strike on Friday can bring about positive change, as young people in more and more countries join the protest movement she started last summer as a lone campaigner outside the Swedish parliament. The 16-year-old welcomed the huge mobilisation planned in the UK, which follows demonstrations by tens of thousands of school and university students in Australia, Belgium, Germany, the United States, Japan and more than a dozen other countries. “I think it’s great that England is joining the school strike in a major way this week. There has been a number of real heroes on school strike, for instance in Scotland and Ireland, for some time now. Such as Holly Gillibrand and the ones in Cork with the epic sign saying ‘the emperor is naked’,” she told the Guardian.

With an even bigger global mobilisation planned for 15 March, she feels the momentum is now building. “I think enough people have realised just how absurd the situation is. We are in the middle of the biggest crisis in human history and basically nothing is being done to prevent it. I think what we are seeing is the beginning of great changes and that is very hopeful,” she wrote. Thunberg has risen rapidly in prominence and influence. In December, she spoke at the United Nations climate conference, berating world leaders for behaving like irresponsible children. Last month, she had similarly harsh words for the global business elite at Davos. She said: “Some people, some companies, some decision-makers in particular, have known exactly what priceless values they have been sacrificing to continue making unimaginable amounts of money. And I think many of you here today belong to that group of people.”

The movement she started has morphed and grown around the world , and, at times, linked up with older groups, including Extinction Rebellion, 350.org and Greenpeace. Next week she will take the train – having decided not to fly due to the high carbon emissions of aviation – to speak at an event alongside Jean-Claude Juncker, the president of the European commission, in Brussels, and then on to Paris to join the school strikes now expanding in France. Veteran climate campaigners are astonished by what has been achieved in such a short time. “The movement that Greta launched is one of the most hopeful things in my 30 years of working on the climate question. It throws the generational challenge of global warming into its sharpest relief, and challenges adults to prove they are, actually, adults. So many thanks to all the young people who are stepping up,” said Bill McKibben, the founder of 350.org.

Read more …

Eh, school strikers?

100s Of Endangered Animals At Risk Of Extinction Due To Wildlife Trade (Ind.)

Hundreds of animal species are at risk of extinction because wildlife trade restrictions are taking too long to come into effect, a major new study warns. Over a quarter of animals on the International Union for the Conservation of Nature (IUCN) red list – the world’s most critically endangered – are not protected by Cites (the Convention on International Trade in Endangered Species of Wild Fauna and Flora). Cites is regarded as the primary international framework for preventing species extinction due to international wildlife trade. It came into force in 1975 in order to coordinate and regulate trade in wildlife products, and can put into effect bans on sales of certain species or their body parts.

The research also revealed the long wait species have to gain recognition by Cites. Even among IUCN’s red-list species, 62 per cent of those protected by Cites had waited as long as 19 years for recognition or are still waiting to be listed up to 24 years after being first considered. “It’s absolutely critical that policymakers allow science to inform a speedy protection process,” said Eyal Frank, co-author of the study and an assistant professor at the University of Chicago. He said: “New trends in wildlife trade can develop quickly, with some species going from common to near extinction in just a few years.

Read more …

Jan 092019
 


René Magritte Where Euclid walked 1955

 

Trump Calls Illegal Immigration A ‘Crisis,’ Doesn’t Declare Emergency (AP)
House Democrats To Test Republicans On Trump’s Wall Demand (R.)
Cross-Party Alliance Of MPs Tells May: We Will Stop No-Deal Brexit (G.)
May May Have To Draw Up New Brexit Plan Three Days After Commons Defeat (G.)
Brexit Moment in 80 Days, No One Knows What’ll Happen (DQ)
China’s Stability Is at Risk (Christopher Whalen)
China To Introduce Policies To Strengthen Domestic Consumption (R.)
Apple Cuts Q1 Production Plan For New iPhones By 10% (R.)
Tim Cook Says Apple’s ‘Ecosystem Has Never Been Stronger’ (MW)
Germany Heads for a Technical Recession (WS)
France Moves To Ban All Protests, Major Crackdown On Yellow Vests (ZH)

 

 

Trump should be careful about doing underwhelming speeches. But America’s political problems are clear, and will not be solved anytime soon. That is, too many old people in charge. Limit number and length of terms in Washington. Get rid of Schumer and Pelosi.

PS: CNN reports Rod Rosenstein is stepping down.

Trump Calls Illegal Immigration A ‘Crisis,’ Doesn’t Declare Emergency (AP)

In a somber televised plea, President Donald Trump urged congressional Democrats to fund his long-promised border wall Tuesday night, blaming illegal immigration for the scourge of drugs and violence in the U.S. and framing the debate over the partial government shutdown in stark terms. “This is a choice between right and wrong,” he declared. Democrats in response accused Trump appealing to “fear, not facts” and manufacturing a border crisis for political gain. Addressing the nation from the Oval Office for the first time, Trump argued for spending some $5.7 billion for a border wall on both security and humanitarian grounds as he sought to put pressure on newly empowered Democrats amid the extended shutdown.

Trump, who will visit the Mexican border in person on Thursday, invited the Democrats to return to the White House to meet with him on Wednesday, saying it was “immoral” for “politicians to do nothing.” Previous meetings have led to no agreement as Trump insists on the wall that was his signature promise in the 2016 presidential campaign. Responding in their own televised remarks, Democratic House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer accused Trump of misrepresenting the situation on the border as they urged him to reopen closed government departments and turn loose paychecks for hundreds of thousands of workers. Negotiations on wall funding could proceed in the meantime, they said. Schumer said Trump “just used the backdrop of the Oval Office to manufacture a crisis, stoke fear and divert attention from the turmoil in his administration.”

Read more …

Better negotiate. Digging in doesn’t help.

House Democrats To Test Republicans On Trump’s Wall Demand (R.)

As a partial U.S. government shutdown neared the three-week mark, Democrats on Wednesday were set to test Republicans’ resolve in backing President Donald Trump’s drive to build a wall on the border with Mexico, which has sparked an impasse over agency funding. House of Representatives Speaker Nancy Pelosi and her fellow Democrats who took control of the chamber last week plan to advance a bill to immediately reopen the Treasury Department, the Securities and Exchange Commission and several other agencies that have been in partial shutdown mode since Dec. 22. Democrats are eager to force Republicans to choose between funding the Treasury’s Internal Revenue Service – at a time when it should be gearing up to issue tax refunds to millions of Americans – and voting to keep it partially shuttered.

In a countermove, the Trump administration said on Tuesday that even without a new shot of funding, the IRS would somehow make sure those refund checks get sent. But it was the Republican president’s insistence on a massive barrier on the border that dominated the Washington debate and sparked a political blame game. In a nationally televised address on Tuesday night, Trump asked: “How much more American blood must be shed before Congress does its job?” referring to murders he said were committed by illegal immigrants.

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79 days to go. The real mess starts now.

Cross-Party Alliance Of MPs Tells May: We Will Stop No-Deal Brexit (G.)

Theresa May faces a concerted campaign of parliamentary warfare from a powerful cross-party alliance of MPs determined to use every lever at their disposal to prevent Britain leaving the EU without a deal in March. The former staunch loyalist Sir Oliver Letwin signalled that he and other senior Conservatives would defy party whips, repeatedly if necessary, to avoid a no-deal Brexit, as the government suffered a humiliating defeat during a debate on the finance bill in the Commons. Letwin and 16 other former government ministers were among 20 Conservatives who banded together with the home affairs select committee chair, Yvette Cooper, and the Labour leadership to pass an anti no-deal amendment.

They defeated the government by 303 votes to 296 – a majority of seven – making May the first prime minister in 41 years to lose a vote on a government finance bill. The move came after the PM conceded to senior ministers she was on course to lose next week’s historic Brexit vote, as the first cabinet meeting of the new year exposed deep divisions about the best way out of the deadlock. May told her cabinet she would respond swiftly with a statement to the House of Commons if she failed to win MPs’ backing for her deal next Tuesday. But cabinet sources said it was unclear what course she planned to take – and the general mood was of how “boxed in” the government was.

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If/when she loses next Tuesday.

May May Have To Draw Up New Brexit Plan Three Days After Commons Defeat (G.)

MPs will attempt to force the government to return with an alternative to Theresa May’s Brexit deal within three days of her plan being defeated in parliament. Another five-day debate leading up to a vote on May’s deal on 15 January will start on Wednesday, opened by the Brexit secretary, Stephen Barclay. Before that, MPs must approve a business motion to allow the debate and vote to go ahead, which a cross-party group of MPs, led by the Conservative Dominic Grieve, hope to amend if the Speaker allows it. The amendment says that following defeat of the government’s plan, which is widely anticipated, “a minister of the crown shall table within three sitting days a motion … considering the process of exiting the European Union under article 50”.

Other MPs who have signed the amendment include the former Tory cabinet minister Sir Oliver Letwin and ex-Tory ministers Jo Johnson, Guto Bebb and Sam Gyimah. It has also been backed by Labour MPs including Stephen Doughty and Chris Leslie. Sarah Wollaston, the Conservative chair of the health select committee, who also signed the amendment, said the aim was to prevent the government “running down the clock” towards no deal. Previously, the Commons had mandated the government to make a statement within 21 days.

“If and when the PM’s plan is voted down on Tuesday, MPs can’t be made to wait potentially until 12 Feb for the next vote. The situation is too urgent now,” Leslie said. A previous amendment by Grieve that the Commons voted through before Christmas means that any statement the government brings forward after a defeat is in itself amendable – allowing MPs to put forward their own alternatives for the future of the Brexit process.

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$1 trillion to leave London, but that still leaves $7-8 trillion.

Brexit Moment in 80 Days, No One Knows What’ll Happen (DQ)

With just 80 days remaining until Brexit Day, March 29, nerves are fraying on both sides of the English Channel. Nowhere is this more true than in the City of London where the Square Mile’s dominance of the global financial industry faces its biggest threat in decades. In the City’s worst-case scenario — a crash-out Brexit on March 29 — London-based firms that have not prepped properly for this outcome could be cut off from the continent altogether. Since moving key operations and staff across the channel is a costly, complex, timely undertaking, many companies have preferred to play a waiting game. But the clock continues to tick down, and as the risk of a disorderly exit grows, inaction is becoming a risky strategy.

Since the EU Referendum in June 2016, only 36% of the financial services companies in London have said they are considering or have confirmed relocating operations and/or staff to Europe, according to the latest edition of Ernst&Young’s Brexit Tracker (which monitors 222 financial services firms in the UK). This rises to 56% (27 out of 48) among universal banks, investment banks, and brokerages. A total of 20 companies have already announced a transfer of assets out of London to Europe. “Not all firms have publicly declared the value of the assets being transferred, but the Brexit Tracker has followed public announcements worth around £800 billion ($1 trillion),” the report says.

This figure echoes findings by a study published in November by German trade group Frankfurt Main Finance (FMF), which estimated that London is poised to lose €800 billion ($900 billion) in balance-sheet assets by March 29. According to German Bank Helaba, Frankfurt alone has attracted 25 lenders looking to move part of their operations out of the City of London, including Barclays, Lloyds Banking Group, Citigroup, Morgan Stanley, Credit Suisse, UBS, Nomura and Standard Chartered Bank.

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“Contrary to the positive foreign narrative about “growth” in China, CBB contends that deflation is the bigger threat compared to inflation.”

“The CCP is happy to tolerate or even encourage wealth creation, but only so long as it does not become a problem.”

China’s Stability Is at Risk (Christopher Whalen)

The western view of China’s political economy is driven partly by anecdote, partly by accepting Beijing’s propaganda/economic data as fact. Foreign investors have convinced themselves that the Chinese Communist Party (CCP) is superior in terms of economic management, this despite ample evidence to the contrary, thus accepting the official view is easy but also increasingly risky. In a December 15 speech , Renmin University’s Xiang Songzuo warned that Chinese stock market conditions resemble those during the 1929 Wall Street Crash. He also suggested that the Chinese economy is actually shrinking. But this apostate view was quickly rejected by legions of captive western economists and investment analysts whose livelihood depends upon “selling China” to credulous foreign audiences.

Facts aside, the perception of China is what matters to global investors, part of a larger pathology of hope-based investment allocation that eschews those rare bits of hard data that disagree with the positive narrative. China growth, Tesla profitability, or the mystical blockchain all require more credulity than ever before. For example, in the first half of 2016 global capital markets stopped due to fear of a Chinese recession. Credit spreads soared and deal flows disappeared. But was this really a surprise? In fact, the Chinese government had accelerated official stimulus in 2015 and 2016 to counter a possible slowdown and, particularly, ensure a quiet domestic scene as paramount leader Xi Jinping was enshrined into the Chinese constitution.

Today western audiences are again said to be concerned about China’s economy and this concern is justified, but perhaps not for the reasons touted in the financial media. The China Beige Book (CBB) fourth-quarter preview, released December 27, reports that sales volumes, output, domestic and export orders, investment, and hiring fell on a year-over-year and quarter-over-quarter basis. Headed by Leland Miller, CBB is a research service that surveys thousands of companies and bankers on the ground in China every quarter.

Contrary to the positive foreign narrative about “growth” in China, CBB contends that deflation is the bigger threat compared to inflation. “Because of China’s structural problems, deflation has very clearly emerged as the bigger threat in a slowing economy than inflation. Consumer demand has weakened, and you see that reflected in retail and services prices,” CBB Managing Director Shehzad Qazi said in an interview.

Read more …

Groundhog Day. China’s been promoting domestic stuff for years, but that only really ever worked in real estate loans. Domextic spending is even falling right now.

China To Introduce Policies To Strengthen Domestic Consumption (R.)

China plans to introduce policies to boost domestic spending on items such as autos and home appliances this year, state television CCTV quoted a senior state planning official as saying on Tuesday. Ning Jizhe, vice chairman of National Development and Reform Commission (NDRC), said in an interview with CCTV that the policies will be part of wider efforts to strengthen domestic consumption in China, the world’s second largest economy. The state planner will also introduce policies in house leasing and services, as well as elderly and child care, with plans to also lower investment barriers in other sectors such as culture and sports. He also said that the NDRC planned to move ahead with a second batch of major foreign-invested projects in the first quarter of 2019, which could include new energy ventures, according to an interview transcript published by state news agency Xinhua.

Read more …

China mobile phone shipments down 16%.

Apple Cuts Q1 Production Plan For New iPhones By 10% (R.)

Apple, which slashed its quarterly sales forecast last week, has reduced planned production for its three new iPhone models by about 10 percent for the January-March quarter, the Nikkei Asian Review reported on Wednesday. That rare forecast cut exposed weakening iPhone demand in China, the world’s biggest smartphone market, where a slowing economy has also been buffeted by a trade war with the United States. Many analysts and consumers have said the new iPhones are overpriced. Apple asked its suppliers late last month to produce fewer-than-planned units of its XS, XS Max and XR models, the Nikkei reported, citing sources with knowledge of the request. The request was made before Apple announced its forecast cut, the Nikkei said.

Read more …

Tim, credibility is a big issue in your position. Be careful. Besides, just because you talk to Jim Cramer doesn’t mean you have to sound like him.

Tim Cook Says Apple’s ‘Ecosystem Has Never Been Stronger’ (MW)

Apple Inc. stock has taken a beating in recent months, but Chief Executive Tim Cook defended his company Tuesday, and expressed optimism that trade tensions with China would soon ease. Apple shares have fallen by more than one-third since their peak on Oct. 3, and tumbled further last week after the tech giant warned of disappointing iPhone sales in its holiday quarter. But in an interview Tuesday with CNBC’s Jim Cramer, Cook said the company was still going strong, and its naysayers were full of “bologna.” “Here’s the truth, what the facts are,” Cook said about reports of slow iPhone XR sales, according to a CNBC transcript.

“Since we began shipping the iPhone XR, it has been the most popular iPhone every day, every single day, from when we started shipping, until now. . . . I mean, do I want to sell more? Of course I do. Of course I’d like to sell more. And we’re working on that.” Slower sales in China also contributed to Apple’s lowered forecast, and Cook said Tuesday he believes that situation to be “temporary.” “We believe, based on what we saw and the timing of it, that the tension, the trade-war tension with the U.S. created this more-sharp downturn,” he said. Cook said he’s “very optimistic” a trade deal between the U.S. and China will be reached. “I think a deal is very possible. And I’ve heard some very encouraging words,” he said.

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On top of Merkel stepping down.

Germany Heads for a Technical Recession (WS)

OK, this is embarrassing in the land of super-stimulus via the ECB’s negative-interest-rate policy and years of QE that were supposed to perform miracles: Production in Germany’s industry, which includes construction, dropped 1.9% in November from the prior month (seasonally adjusted), the German statistical agency Destatis reported this morning. This drop is also embarrassing because economists polled by The Wall Street Journal had expected a 0.3% gain. The agency also downwardly revised October, to a monthly decline of 0.8%. This makes three months in a row of declines. In November, compared to a year earlier (adjusted for inflation and calendar differences, but not for seasonality), the production index dropped an ugly 4.7%:

Production was down in all major segments, including energy and construction which are focused on Germany itself, rather than exports. [..] Industrial production is a big power in the German economy. And the trend is not good. Germany’s GDP already declined in the third quarter:

The declines in production in October and November put Germany a step closer to “negative economic growth,” as it’s called euphemistically, for two quarters in a row. If this occurs, it would be a technical recession. And it’s not going to get a lot better soon: Destatis reported yesterday that new orders in manufacturing – a harbinger for future production – dropped 4.3% in November from a year ago (adjusted for inflation and calendar differences); and it revised down October’s orders to a year-over-year drop of 3.0%.

[..] this economic slowdown is occurring despite, or perhaps because of, the mother of all stimuli engineered by a major central bank – negative interest rates and massive QE – that has benefited a few hedge funds who were able to front run the ECB’s bond buys and make a quick buck, and bond traders for a while, as bond prices were rising due to falling yields. And it has allowed even junk-rated companies to borrow money for a song from beaten down investors, savers, and pension funds. But this stopped a year ago.

Read more …

France does everything wrong.

France Moves To Ban All Protests, Major Crackdown On Yellow Vests (ZH)

France is signaling it’s making preparations for a massive new crackdown on the gilets jaunes or “yellow vests” anti-government protests that have gripped the country for seven weeks. A new law under consideration could make any demonstration illegal to begin with if not previously approved by authorities, in an initiative already being compared to the pre-Maiden so-called “dictatorship law” in Ukraine. In the name of reigning in the violence that has recently included torching structures along the prestigious Boulevard Saint Germain in Paris, and smashing through the gates of government ministry buildings, the French government appears set to enact something close to a martial law scenario prohibiting almost any protest and curtailing freedom of speech.

Prime Minister Edouard Philippe presented the new initiative to curtail the violence and unrest while targeting “troublemakers” and banning anonymity through wearing masks on French TV channel TF1 on Monday. He said the law would give police authority crack down on “unauthorized demonstrations” at a moment when police are already arresting citizens for merely wearing a yellow vest, even if they are not directly engaged in protests in some cases. PM Philippe said the government would support a “new law punishing those who do not respect the requirement to declare [protests], those who take part in unauthorized demonstrations and those who arrive at demonstrations wearing face masks”.

Philippe’s tone during the statements was one of the proverbial “the gloves are off” as he described the onus would be on “the troublemakers, and not taxpayers, to pay for the damage caused” to businesses and property.

Read more …

Oct 032017
 
 October 3, 2017  Posted by at 9:28 am Finance Tagged with: , , , , , , , ,  12 Responses »


Fan Ho Obsession 1964

 

Who Will Be There To Buy When Everyone Wants To Sell? – Howard Marks (FuW)
The Pricing of Risk is Kaput (WS)
Art Cashin: “I’ve Never Seen Anything Like Today’s Market Before” (ZH)
What You Are Not Being Told About The Economy – Steve Keen (RT)
An Accountant Smells a Rat in Our Global Credit Bubble (WS)
26 Recession-Free Years Hide a Darker Picture for Australia (BBG) >
Russia’s Rush For Gold Sees Record Reserves For Putin Era (II)
Fall of the Great Pumpkin (Jim Kunstler)
Spain’s Crisis Deepens as Catalonia Secession Clock Ticks Down (BBG)
Catalonia Set For General Strike Over Independence Poll Violence (AFP)
100,000s Of Puerto Ricans To Flee To Florida, New York (ZH)

 

 

 

 

A point I made again recentlly “It will continue to go up, but I will get out in time.» People overestimate their ability to get out in time. Who will be there to buy when everyone wants to sell? That’s wishful thinking.”

Who Will Be There To Buy When Everyone Wants To Sell? – Howard Marks (FuW)

It would be a dangerous bet to say interest rates are going to stay low forever, but I don’t see many people taking that bet. And you see, even if interest rates were to stay where they are, that would argue for P/E ratios to stay where they are. And if they do, then stocks will only appreciate at the same rate as earnings, which is not really fast; there would be no multiple expansion. This market is not built on some euphoric view of the future, but mainly on the unwillingness to accept zero or negative returns on cash and safe instruments. It’s based on the view that there is no alternative: people are afraid to be out of the market. But then again, a perceived lack of alternatives is not a good argument for chasing yield and taking big risks. That’s why I think this is the time to turn cautious.

It’s not smart, but people think that’s what they have to do now. You remember Chuck Prince, the CEO of Citigroup, who in July of 2007 said «when the liquidity dries up, this will end badly, but as long as the music is playing, you have to dance?» What does that even mean? People always say they’ll stay in the market, thinking it has further to go, but if it starts to turn down they will get out. Maybe that’s what people are thinking in today’s stock market: «It will continue to go up, but I will get out in time.» People overestimate their ability to get out in time. Who will be there to buy when everyone wants to sell? That’s wishful thinking.

[..] I see a lot of worries. One example: What’s going to happen when central banks start unwinding their balance sheets? We have no clue. There is no historical precedent for the measures they used to stimulate the economies in the past years, so we don’t know what will happen when they unwind them. If QE was stimulative, won’t the unwinding of it be the opposite of stimulative? I don’t know where the money came from for the QE programs, and I don’t know where the money will go to next. We don’t know what it will mean for interest rates and inflation.

Another worry is the low economic growth, combined with politics. All these right-wing populist movements – what are the implications of that? This is not imaginary. Where will the person with a low education level get a job in ten or twenty years, when all the cars are self-driving and all the stores have no clerks? I don’t know what the solution is. But I see a lack of political leadership around the world. Another worry concerns our pension systems. In the US and in other countries, defined benefit systems are hundreds of billions of dollars in the red. What’s going to happen to the people who expect to get their promised retirement payments? But today, nobody’s talking about the problems in our pension systems.

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“..when markets can no longer price risks, they cannot price anything at all because the price of risk underlies all prices in the financial markets.”

The Pricing of Risk is Kaput (WS)

US Treasury Securities with longer maturities fell this morning, with the 10-year Treasury yield rising above 2.37% early on and currently trading at 2.34%. This is still low by historical standards, and it’s still in denial of the Fed’s monetary tightening: Four rate hikes since it started this cycle, and the QE unwind has commenced as of today. But it cannot hold a candle to the Draghi-engineered negative-yield absurdity still unfolding in the Eurozone. The average yield of junk bonds denominated in euros hit a new all-time record low at the close on Friday of 2.30%. Let that sink in a moment. These euro corporate bonds are rated below investment grade. Companies, unlike the US, cannot print their own money to prevent default.

There is little liquidity in the junk bond market, and selling these bonds when push comes to shove can be hard or impossible. The reason they’re called “junk” is because of their high risk of default. And yet, prices of these junk bonds have been inflated by the ECB’s policies to such a degree that their yield, which falls as prices rise, is now lower than that of 10-year US Treasury securities that are considered the most liquid securities with the least credit risk out there. The average yield of the euro junk bonds is based on a basket of below-investment-grade corporate bonds denominated in euros. Issuers include junk-rated American companies with European subsidiaries – in which case these bonds are called “reverse Yankees.”

They include the riskiest bonds. Plenty of them will default. Losses will be painful. Investors know this. It’s not a secret. But they don’t mind. They’re institutional investors plowing other people’s money into these bonds, and they don’t need to mind, but they have to buy these bonds because that’s their job. This chart, based on BofA Merrill Lynch Euro High Yield Index Effective Yield via the St. Louis Fed, shows that the average euro junk bond yield is on the way to what? Zero?

During the peak of the Financial Crisis, the average junk bond yield hit 25%. During the dog days of the euro debt crisis in the summer of 2012, when Draghi pronounced the magic words that he’d do “whatever it takes,” these bonds yielded about 9%. The yield dropped below 5% in October 2013, for the first time ever. This juxtaposition of the already low 10-year US Treasury yield and the even lower euro junk bond yield creates one of the most fascinating WTF-charts for our amusement at central-bank absurdist policies – and we’d be laughing at these bond investors gone nuts, if it weren’t so serious:

.. this is Draghi’s ultimate accomplishment in his nutty bailiwick: The total destruction of the market’s risk-pricing mechanism at the expense of other people’s money – this includes pension funds and life insurance companies that play a large role in Europe’s private pension system. They have to buy corporate bonds. Their beneficiaries that paid into the systems will have to bear the costs in future years. And then there’s the comforting thought that when markets can no longer price risks, they cannot price anything at all because the price of risk underlies all prices in the financial markets.

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“..when we had the taper tantrum they hadn’t even done anything yet, they’d just threatened to taper..”

Art Cashin: “I’ve Never Seen Anything Like Today’s Market Before” (ZH)

Market veteran Art Cashin, the head of NYSE floor operations for UBS, made an interesting observation earlier today just minutes before the close, as US stocks headed for another record finish after shrugging off the worst mass shooting in US history. Asked by CNBC’s Kelly Evans to explain how US stocks have continued to outperform while the 10-year Treasury yield has remained anchored below 2.5%, Cashin acknowledged that, during a career that’s spanned more than six decades, he’s never seen anything like today’s market. “I’ve been doing this for over 50 years and I’ve never seen anything like it so it is rather odd.” And given global stocks’ strong performance this year, with markets weathering a series of political crises, natural disasters, terror attacks and other nominally destabilizing events (with a little help from central banks, of course) – Cashin says the outlook isn’t as dire as some would believe.

“Right now, Europe’s doing all right emerging markets are okay, and maybe they’re not going to take away the punchbowl that quickly – so we’ll see,” Cashin said. In September, the Fed suggested that while it would likely raise interest rates more quickly than previously believed during the coming quarters, median forecasts for the Fed funds rate in 2019, as well as the longer-run median target, declined compared with a set of forecasts released in July. Looking ahead to the fourth quarter, the most pressing questions that investors should be asking themselves is ‘is this the quarter where tapering – or the expectation of further tapering – finally triggers a market correction.

“What’s really going to be interesting to watch in this final quarter, is will there be an impact of quantitative tightening. As Peter Boockvar points out…it’s only going to be a token amount. But when we had the taper tantrum they hadn’t even done anything yet they’d just threatened to taper. When asked what it would take to spark a meaningful correction in stocks, Cashin said he expects investors will take notice once the 10-year yield climbs above 3%. “I think we’ve got to get a bit higher. Probably up around 3% you start to get everybody’s attention and you’ll start to hear that in the conversation more and more.”

Read more …

Are you rational? Economics is not.

What You Are Not Being Told About The Economy – Steve Keen (RT)

As Karl Marx’s ‘Das Kapital’ turns 150 and the global financial crisis enters its tenth year, we ask why it is that we are still no closer to creating an economy that actually works. Perhaps more importantly, why do mainstream economists continue to miss the fundamental drivers of financial instability? Host Ross Ashcroft talks about what’s next for the global economy with Professor Steve Keen, an economist who correctly predicted the financial crisis and the author of ‘Debunking Economics.’

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“Economists can’t see it. They can’t model money and credit. ”

An Accountant Smells a Rat in Our Global Credit Bubble (WS)

Twenty years ago Doug Noland was so worried about imbalances surrounding the dot.com boom that he began to title his weekly reports “The Credit Bubble Bulletin. Years later, he warned the world about the impending 2008 crisis. However a coming implosion, he says, could be the biggest yet. “We are in a global finance bubble, which I call the grand-daddy of all bubbles,” said Noland. “Economists can’t see it. They can’t model money and credit. However, to those outside the system, the facts are increasingly clear.” Noland points to inflating real estate, bond and equity prices as key causes for concern. According to the Federal Reserve’s September Z.1 Flow of Funds report, the value of US equities jumped $1.5 trillion during the second quarter to $42.2 trillion, a record 219% of GDP.

Noland may be right. A report by the International Institute of Finance released in June estimated that global government, business and personal debts totaled $217 trillion earlier this year. That’s more than three times (327%) higher than global economic output. Adding to the complexity is the fact that not all debts are fully recorded. For example, according to a World Economic Forum study, the world’s six largest pension saving systems – the US, UK, Japan, Netherlands, Canada and Australia – are expected to experience a $224 trillion funding shortfall by 2050. Noland’s warnings come during a time of exceptional public trust in governments, central banks, regulators and other institutions. Market volatility is trending at near record lows. In June, Federal Reserve Chair Janet Yellen spoke for many when she said that she did not see a financial crisis occurring “in our lifetimes.”

So why would Noland, who during his day job runs a tactical short book at McAlvany Wealth Management, see things that government, academic, and central bank economists don’t? One possibility is because Noland, who studied accounting and finance in college and began his career as a CPA at Price Waterhouse, is not an economist. He is thus not burdened with the “dismal science’s” limitations. Although Noland eventually completed an MBA and some doctoral studies, he was never forced to buy into the econometrics groupthink that plagues the profession. Noland is thus free to incorporate historical, financial, geographical and other data into his analyses. Another possible reason is that Noland (unlike almost all professional economists who missed both major market implosions/recessions of the last two decades) doesn’t hide it when he makes a bad call.

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But Australians won’t believe it until it hits them in the head.

26 Recession-Free Years Hide a Darker Picture for Australia (BBG)

The global crown for the longest stretch of uninterrupted economic growth is within sight for Australia. But it’s limping to the line as policy paralysis weighs on the nation’s prospects. Twenty-six years without recession have put Australia within two years of overtaking the Netherlands’ record growth streak and government, central bank and economist forecasts all suggest it’ll take the mantle. After all, the economy has a head start with 2.5% growth virtually baked in – 1.5% from population gains that are among the developed world’s quickest and 1% from resource exports feeding Asia’s giant economies. Yet the reliance on rapid immigration is straining infrastructure, while mining profits fuel riches for stakeholders but do little for the vast majority of Australians living in major cities.

Meantime, wages are barely growing, households carry some of the world’s heaviest debt loads, and productivity gains from the economic reforms of the 1980s and early 1990s have petered out. There’s been no major economic reform since the turn of the century, with just about every attempt reversed or cannibalized by toxic politics. And the impact is starting to show. Just when the economy needs growth drivers outside of mining, a slide in global rankings for innovation and education suggest living standards could decline. The miracle economy that shrugged off the global recession is turning mediocre. “Now that we don’t have the benefit of the mining boom, there’s nothing really that replaces it in terms of driving economic activity,” said Jeremy Lawson, chief economist at Aberdeen Standard Investments in Edinburgh and a former Reserve Bank of Australia economist.

“The really big task of governments over the next 5 to 10 years is to deal with these big structural issues that Australia is facing. Potential growth is relatively weak.” A decade of political infighting has seen the nation change prime ministers five times since 2007 and sidelined substantive policy debate. Meanwhile, attempts at reform have been held hostage by populists and single-issue parties who’ve harnessed voter frustration with mainstream politicians to take the balance of power in parliament’s upper house. That political dysfunction is threatening the nation’s prospects. A policy vacuum around energy has seen electricity prices surge to among the highest in the world, despite Australia holding some of the largest coal and gas reserves on the planet.

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“The gold rush is allowing the Bank of Russia to continue growing its reserves while abstaining from purchases of foreign currency for more than two years. ”

Russia’s Rush For Gold Sees Record Reserves For Putin Era (II)

Vladimir Putin is doing his part to keep the upswing in gold alive. Since the Russian president went on a geopolitical offensive in Ukraine in 2014, the haven asset had its first annual gain in four years in 2016 and is on track for another in 2017. A beneficiary of economic and political perils from North Korea to Brexit, it’s among the top-performing commodities this year. Meanwhile, the Bank of Russia has more than doubled the pace of gold purchases, bringing the share of bullion in its international reserves to the highest of Mr Putin’s 17 years in power, according to World Gold Council data. In the second quarter alone, it accounted for 38pc of all gold purchased by central banks. The gold rush is allowing the Bank of Russia to continue growing its reserves while abstaining from purchases of foreign currency for more than two years.

It’s one of a handful of central banks to keep the faith as global demand for the precious metal fell to a two-year low in the second quarter. But what may matter most is that gold is as geopolitics-proof an investment as any in the age of sanctions and a deepening rift with the US. “Gold is an asset that is independent of any government and, in effect, given what is usually held in reserves, any Western government,” said Matthew Turner, metals analyst at Macquarie Group in London. “This might appeal given Russia has faced financial sanctions.” Besides being the largest official buyer of gold, Russia is also among the world’s three biggest producers, with the central bank purchasing from domestic miners through commercial banks and not in the open market. Since starting to accelerate bullion purchases in 2007, Russia’s holdings have more than quadrupled to 1,556 tonnes at the end of June, just behind China and more than Turkey, India and Mexico combined, bringing its share in Russia’s $427bn (€361bn) reserves to near 17pc.

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“Trump travels there this week. That may be exactly the moment that the Deep State moves to take him down.”

Fall of the Great Pumpkin (Jim Kunstler)

Welcome to the witching month when America’s entropy-fueled death-wish expresses itself with as much Halloween jollity and merriment as the old Christmas spirit of yore. The outdoor displays alone take on a Babylonian scale, thanks to the plastic factories of China. I saw a half-life-size T-Rex skeleton for sale at a garden shop last week surrounded by an entire crew of moldering corpse Pirates of the Caribbean in full costume ho-ho-ho-ing among the jack-o-lanterns. What homeowner in this sore-beset floundering economy of three-job gig-workers can shell out four thousand bucks to decorate his lawn like the set of a zombie movie? The overnight news sure took on that Halloween tang as the nation woke up to what is probably a national record for a civilian mad-shooter incident.

So far, fifty dead and two hundred wounded at the Las Vegas at the Route 91 Harvest Festival (one up in fatalities from last year’s Florida Pulse nightclub massacre, and way more injured this time). The incident will live in infamy for maybe a day and a half in the US media. Stand by today as there will be calls far and wide, by personas masquerading as political leaders, for measures to make sure something like this never happens again. That’s rich, isn’t it? Meanwhile, the same six a.m. headlines declared that S &P futures were up in the overnight markets. Nothing can faze this mad bull, apparently. Except maybe the $90 trillion combined derivatives books of CitiBank, JP Morgan, and Goldman Sachs, who have gone back whole hog into manufacturing the same kind of hallucinatory collateralized debt obligations (giant sacks of non-performing loans) that gave Wall Street a heart attack in the fall of 2008.

Europe’s quaint doings must seem dull compared to the suicidal potlatch of life in the USA, but, believe me, it’s a big deal when the Spanish authorities start cracking the heads of Catalonian grandmothers for nothing more than casting a ballot. The video scenes of mayhem at the Barcelona polls looked like something out of the 1968 Prague uprising. And now that the Catalonia secession referendum passed with a 90% “yes” vote, it’s hard to imagine that a good deal more violent mischief will not follow. So far, the European Union stands dumbly on the sidelines. (For details, read the excellent Raul Ilargi Meijer column on today’s TheAutomaticEarth.)

[..] Finally — well, who know what else may pop up now — there is the matter of Puerto Rico. Halloween there is not like New England, with our nippy fall mornings, steaming mugs of hot cider, and quickening fall color. It will remain 90-degrees-plus down there in the fetid, stinking ruins, with lots of still-standing water, broken communications, shattered supply lines, and very little electricity. FEMA and the US Military may be doing all they can now, but they must be on watch for the ominous blossoming of tropical disease epidemics. The story there is far from over. Trump travels there this week. That may be exactly the moment that the Deep State moves to take him down.

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Catalonia wants to talk. But it will no longer accept many of the things it would have before Sunday.

Spain’s Crisis Deepens as Catalonia Secession Clock Ticks Down (BBG)

In Madrid, Barcelona, Bilbao and beyond, the question is the same: Now what? Sunday’s vote for independence in Catalonia, one of Spain’s most populous and prosperous regions, has thrust the country into its gravest political crisis since the days of the dictator Francisco Franco. Few see an easy way out. The results of the referendum give Prime Minister Mariano Rajoy stark choices – try to deal a blow to the independence movement by suspending Catalonia’s semi-autonomous status, or meet the secessionists halfway and start talks with Catalan President Carles Puigdemont. Puigdemont said the vote, rejected by the central government as illegal, justifies a unilateral declaration of independence. That could come by the end of the week, if the regional parliament agrees.

The European Union refused to recognize the rebel region’s bid, but Spanish bonds and stocks fell Monday as the risks of a breakaway rose. The clash puts Rajoy in a tight corner. Head of a minority government that relies on support from regional parties to rule, he has pledged to protect Spain’s territorial integrity. His main ally in parliament, Ciudadanos party leader Albert Rivera, called on the prime minister to invoke a never-before-used article of the 1978 constitution and pull Catalonia’s special regional standing, which gives it certain administrative powers. “It’s the moment to act with calm but with firmness,” said Rivera, who is Catalan, after meeting with Rajoy on Monday. Rivera said an independence declaration may be 72 hours away and suggested invoking Article 155 would cut off any attempt to make such a move.

But Pedro Sanchez, head of the main Socialist opposition party, said after his own meeting with Rajoy that the central government should hold talks with the secessionists. While Sanchez made no mention of Article 155 in the statement he issued, socialists in Catalonia said the party wouldn’t support the prime minister taking that step. That means Rajoy will have little political cover if he opts to suspend Catalan self-government – the most powerful card he has left. The crisis has already caused him problems: Last week, he had to withdraw plans to present his 2018 budget after allies in the Basque PNV party withheld their support as they criticized his position on Catalonia.

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The Guardia Civil will have to leave Catalonia at some point. And what then?

Catalonia Set For General Strike Over Independence Poll Violence (AFP)

Large numbers of Catalans are expected to observe a general strike on Tuesday to condemn police violence at a banned weekend referendum on independence, as Madrid comes under growing international pressure to resolve its worst political crisis in decades. Flights and train services could be disrupted as well as port operations, after unions called for the stoppage to “vigorously condemn” the police response to the poll, in which Catalonia’s leader said 90% of voters backed independence from Spain. Barcelona’s public universities are expected to join the strike, as is the contemporary art museum, football club FC Barcelona and the Sagrada Familia, the basilica designed by Antoni Gaudi and one of the city’s most popular tourist sites. “I am convinced that this strike will be widely followed,” Catalan leader Carles Puigdemont said ahead of the protest.

The central government has vowed to stop the wealthy northeastern region, which accounts for a fifth of Spain’s GDP, breaking away from Spain and has dismissed Sunday’s poll as unconstitutional and a “farce”. Violent scenes played out in towns and cities across the region on Sunday as riot police moved in on polling stations to stop people from casting their ballots, in some cases charging with batons and firing rubber bullets to disperse crowds. UN rights chief Zeid Ra’ad Al Hussein said he was “very disturbed” by the unrest while EU President Donald Tusk urged Madrid to avoid “further use of violence”. The European Parliament will hold a special debate on Wednesday on the issue. “We call on all relevant players to now move very swiftly from confrontation to dialogue. Violence can never be an instrument in politics,” European Commission spokesman Margaritis Schinas said, breaking weeks of virtual EU silence on the Catalan issue.

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“Florida Gov. Rick Scott has declared a state of emergency in Florida..”

100,000s Of Puerto Ricans To Flee To Florida, New York (ZH)

As mayors of cities with large Puerto Rican populations continue to advocate for federal assistance to help with the resettlement of hundreds of thousands of Puerto Ricans who are expected to temporarily seek shelter with friends and families in the US, Florida Gov. Rick Scott has declared a state of emergency in Florida, allowing state agencies to take extraordinary measures to assist families that will soon be arriving in droves to cities like Orlando and Miami, both of which feature large Puerto Rican populations. The Orlando Sentinel reports that Scott announced that disaster relief centers will be set up at Orlando International Airport and in Miami to help those seeking refuge in Florida. “Puerto Rico is absolutely devastated and so many families have lost everything,” Scott said in a released statement.

“Our goal is to make sure that while [Puerto Rican] Governor [Ricardo] Rosselló is working to rebuild Puerto Rico, any families displaced by Maria that come to Florida are welcomed and offered every available resource from the state.” The relief center at OIA, and two others at Miami International Airport and the Port of Miami, open Tuesday, according to a release from Scott’s office, just days after Puerto Rican airports reopened following the devastation caused by Hurricane Maria. [..] Scott’s emergency order will allow state agencies broad autonomy to waive regulations and do whatever is necessary to help Puerto Ricans. Importantly, it could also help bring more federal funding to help the state cope with aid efforts.

State lawmakers have said they expect at least 100,000 Puerto Ricans to flee to Florida because of Maria, forcing the state to step up its education, housing and job-placement offerings. It’s expected that some of those displaced by the storm could resettle permanently, as the reconstruction effort in Puerto Rico is expected to take months, if not years. State Rep. Carlos Guillermo Smith, D-Orlando, said the Legislature should hold a special session, as he estimates hundreds of thousands of Puerto Ricans are coming to Florida. The 2018 regular session starts in January. “FL needs 2 deal w/humanitarian crisis + over 100K Boricuas who’ll seek refuge here right now, not in Jan.,” he tweeted.

We now wait to hear from New York Gov. Andrew Cuomo and New York City Mayor Bill De Blasio. NYC officials have said more than 100,000 Puerto Ricans could arrive in NYC alone.

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Jul 212016
 


DPC City Hall and Market Street and west from 11th, Philadelphia 1912

S&P Issues ‘Crexit’ Warning as Corporate Debt to Swell to $75 Trillion (CNBC)
The Entire Market is Driven by a “Once in History” Bubble About to Burst (P.)
Bank Of England Report Finds Economy Has Not Slowed Since Brexit Vote (G.)
US Links Malaysia PM, Wolf of Wall Street to Millions Stolen From 1MBD (WSJ)
Singapore Finds UBS, DBS, StanChart ‘Failings’ in 1MDB Probe (BBG)
Erdogan Declares State Of Emergency, Warns S&P ‘Don’t Mess With Turkey’ (ZH)
Wikileaks, About To Expose Turkish ‘Coup’, Under ‘Sustained Attack’ (TAM)
Reports Of Turkish Commandos In Greek Aegean Put Athens On Alert (Kath.)
A Turkey of a Coup (Dmitry Orlov)
More Pain Seen For US Crude As Product Glut Adds To Gloom (R.)
New Zealand House Bubble Warning Will ‘Shake Government’ (NZH)
Greek Brain Drain Amounted To 223,000 People In 2008-2013 (Kath.)
Warmer Water, Not Air, Drives Antarctic Peninsula Glacier Melt (CB)

 

 

Too late to take away the punch bowl. It’s set to end up on the floor in a thousand pieces when someone knocks it over.

S&P Issues ‘Crexit’ Warning as Corporate Debt to Swell to $75 Trillion (CNBC)

Corporate debt is projected to swell over the next several years, thanks to cheap money from global central banks, according to a report Wednesday that warns of a potential crisis from all that new, borrowed cash floating around. By 2020, business debt likely will climb to $75 trillion from its current $51 trillion level, according to S&P Global Ratings. Under normal conditions, that wouldn’t be a major problem so long as credit quality stays high, interest rates and inflation remain low, and there are economic growth persists. However, the alternative is less pleasant should those conditions not persist. Should interest rates rise and economic conditions worsen, corporate America could be facing a major problem as it seeks to manage that debt.

Rolling over bonds would become more difficult should inflation gain and rates raise, while a slowing economy would worsen business conditions and make paying off the debt more difficult. In that case, a “Crexit,” or withdrawal by lenders from the credit markets, could occur and lead to a sudden tightening of conditions that could trigger another financial scare. “A worst-case scenario would be a series of major negative surprises sparking a crisis of confidence around the globe,” S&P said in the report. “These unforeseen events could quickly destabilize the market, pushing investors and lenders to exit riskier positions (‘Crexit’ scenario). If mishandled, this could result in credit growth collapsing as it did during the global financial crisis.” In fact, S&P considers a correction in the credit markets to be “inevitable.” The only question is degree.

[..] “Central banks remain in thrall to the idea that credit-fueled growth is healthy for the global economy,” S&P said. “In fact, our research highlights that monetary policy easing has thus far contributed to increased financial risk, with the growth of corporate borrowing far outpacing that of the global economy.” Between now and 2020, debt “flow” is expected to grow by $62 trillion – $38 trillion in refinancing and $24 trillion in new debt, including bonds, loans and other forms. That projection is up from the $57 trillion in new flow S&P had expected for the same period a year ago. [..] China is expected to account for the bulk of the credit flow growth, with the nation projected to add $28 trillion or 45% of the $62 trillion expected global demand increase. The U.S. is estimated to add $14 trillion or 22%, with Europe adding $9 trillion, or 15%.

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“Buying stocks for their yield because bonds are at their lowest yields in 5000 years is like switching to cigarettes from crack for health purposes.”

The Entire Market is Driven by a “Once in History” Bubble About to Burst (P.)

Since QE 3 ended in October 2014, stocks have traded in a large range between roughly 2,130 and 1800 on the S&P 500.

During this time, whenever stocks began to breakdown in a serious way, a clear intervention was staged in which someone manipulated the markets higher. Regardless of whether you are a bull or a bear, none of those rallies felt normal or sane in any way. No one panic buys every single day at the exact same time for days on end. Which brings us to today. Stocks have broken out of the trading range to the upside hitting new all-time highs.

They are doing this despite the US entering a recession, China continuing to devalue the Yuan, Italy facing a banking crisis, etc. The explanation the bulls are giving for the breakout is that stocks supposedly hitting all time highs because with $13 trillion in bonds posting negative yields, stocks’ 2.4% or so in dividends are extremely attractive from a yield perspective. Yes, we’ve reached the point at which investors are buying stocks for yield and bonds for capital gains. This is extremely problematic in that it implies that all equity purchases are being driven by a “once in history” bond bubble.• German bond yields are negative out to nearly 10 years. • Japanese bond yields are negative out to 10 years. • Swiss bond yields are negative out to 50 years.

These are completely unsustainable developments. Buying stocks for their yield because bonds are at their lowest yields in 5000 years is like switching to cigarettes from crack for health purposes. At some point something will break in the bond markets. Central Banks are attempting to corner the asset class that is the benchmark for the risk-free rate globally. Put another way, investors are willing to PAY for the right to lend to these Governments for up to and even over a decade. At some point something is going to break here. When it does, stocks will implode below the 2008 lows. It’s only a matter of time.

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It’s not fair! They promised us the sky would fall…

Bank Of England Report Finds Economy Has Not Slowed Since Brexit Vote (G.)

Theresa May’s new administration has received a significant boost from a Bank of England report showing that the economy has been resilient in the first few weeks since the Brexit vote and displays no general signs of slowing down. The monthly survey by the Bank’s regional agents – considered to be the “eyes and ears” of policymakers in Threadneedle Street – found that a majority of firms questioned were not planning to mothball investment or change hiring plans. Even so, City analysts said the Bank was still likely to announce fresh stimulus measures for the economy next month in anticipation that the better-than-expected economic news since the referendum would not last.

Howard Archer, chief UK economist at IHS Global Insight, said: “While there may be some relief that the economy may have dodged an immediate sharp slowdown from the Brexit vote, the danger is still very much there given the major uncertainty that is apparent – and there seems a compelling case for the Bank of England to deliver a substantial package of measures at its August meeting to try and bolster business and consumer confidence” The agents’ report was released at the same time as the Office for National Statistics reported that the labour market remained solid in the period from March to May, the first three months of the referendum campaign, with the jobless rate falling to its lowest level in more than a decade.

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Question: why did this talke so long?

US Links Malaysia PM, Wolf of Wall Street to Millions Stolen From 1MBD (WSJ)

U.S. prosecutors have linked the prime minister of Malaysia, a key American ally in Asia, to hundreds of millions of dollars allegedly siphoned from one of the country’s economic development funds, according to a civil lawsuit seeking the seizure of more than $1 billion of assets from other people connected to him. The Justice Department filed lawsuits Wednesday to seize assets that it said were the result of $3.5 billion that was misappropriated from 1Malaysia Development Bhd., or 1MDB, a fund set up by Prime Minister Najib Razak in 2009 to boost the Malaysian economy. The move sets up a rare confrontation between U.S. prosecutors and an important partner in the fight against terrorism.

The moderate Muslim nation is also a counterpoint to China’s rising ambitions in Asia. Among the Justice Department’s assertions: That some $1 billion originating with 1MDB was plowed into hotels; luxury real estate in Manhattan, Beverly Hills and London; fine art; a private jet and the 2013 film “The Wolf of Wall Street.” Among those behind the spending, the lawsuit alleges, was Riza Aziz, stepson of Mr. Najib. No criminal charges were filed. The Malaysian people were defrauded on an enormous scale, said Deputy FBI Director Andrew McCabe at a news conference announcing the complaints. The asset seizure would be the largest ever by the Justice Department’s anticorruption unit.

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Excuse me, but how did Goldman Sachs end up not being mentioned?

Singapore Finds UBS, DBS, StanChart ‘Failings’ in 1MDB Probe (BBG)

Singapore vowed to take action against four banks for failures in anti-money laundering controls and said it seized S$240 million ($177 million) in assets linked to alleged fraud at the Malaysian state investment company known as 1MDB. Preliminary findings uncovered “instances of control failings” in UBS’s Singapore branch, Standard Chartered’s local unit and DBS, as well as “substantial breaches” of anti-money laundering regulations at Falcon Private Bank in the city-state, the Monetary Authority of Singapore said in a statement Thursday. The regulator’s probe, which started in March 2015, is part of global investigations into 1Malaysia Development Bhd. that stretch across Abu Dhabi, Switzerland, the Caribbean, Hong Kong and the U.S.

More than $3.5 billion was misappropriated from the Malaysian firm, and about $1 billion laundered through the U.S. banking system, the U.S. Justice Department said Wednesday as it launched what could potentially be its biggest ever seizure for such ill-gotten gains. “Supervisory examinations of financial institutions with 1MDB-related fund flows have revealed a complex international web of transactions involving multiple entities and individuals operating in several jurisdictions,” the Singapore central bank said. “Certain financial institutions in Singapore were among those used as conduits for these transactions” and MAS will be taking actions against them, it said.

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It’s really years too late to blame ratings agencies for one’s troubles.

Erdogan Declares State Of Emergency, Warns S&P ‘Don’t Mess With Turkey’ (ZH)

Having warned earlier of the possibility, Turkish President Tayyip Erdogan on Wednesday announced a three-month state of emergency, saying this would enable the authorities to take swift and effective action against those responsible for last weekend’s failed military coup. He explicitly focused on the effort across his nation to “effectively tackle the Gulen movement,” as Erdogan stated that there might be more plans to continue coup attempts. The state of emergency, which comes into force after it is published in Turkey’s official gazette, will allow the president and cabinet to bypass parliament in passing new laws and to limit or suspend rights and freedoms as they deem necessary. The decision has immediately raised fears of more arbitrary arrests, killings and disappearances.

“The aim of the declaration of the state of emergency is to be able to take fast and effective steps against this threat against democracy, the rule of law and rights and freedoms of our citizens,” the president said. Erdogan, who has launched mass purges of state institutions since the July 15 coup attempt by a faction within the military, said the move was in line with Turkey’s constitution and did not violate the rule of law or basic freedoms of Turkish citizens. The president added that “citizens should have no concerns for democracy,” and warned ratings egency S&P “not to mess with Turkey” and comforted his citizens that a “state of emergency does not mean military rule” and that the decision was not against the constitution.

Erdogan said regional governors would receive increased powers under the state of emergency, adding that the armed forces would work in line with government orders. But most amusingly, Erdogan promptly warned S&P, which earlier today downgraded Turkey to BB, “not to mess with Turkey” and that the decision to downgrade the country was political. Finally, he lashed out at Europe, “which he said does not have the right to criticize this decision,” anticipating expressions of “concern” from the European Union, which has become increasingly critical of Turkey’s rights record and has urged restraint as Ankara purges its state institutions since the abortive coup.

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Ther are people who think they can shut down WikiLeaks? What do they think the US has been trying to do for years?

Wikileaks, About To Expose Turkish ‘Coup’, Under ‘Sustained Attack’ (TAM)

Wikileaks claimed Monday it was under attack after it announced it would release hundreds of thousands of documents related to Turkey and the failed military coup attempted Friday, CNET reported. The organization, which has released information on everything from war crimes to Hillary Clinton’s email scandal, announced Sunday it would be releasing 100,000 documents related to Turkey’s “political power structure,” some of which detail the “leadup” to the coup.

ANNOUNCE: Get ready for a fight as we release 100k+ docs on #Turkey’s political power structure. #TurkeyCoup #Soon
— WikiLeaks (@wikileaks) July 18, 2016

Wikileaks anticipated the release would be censored in Turkey, cautioning in a three-part tweet posted Monday: “Turks will likely be censored to prevent them reading our pending release of 100k+ docs on politics leading up to the coup. We ask that Turks are ready with censorship bypassing systems such as TorBrowser and uTorrent and that everyone else is ready to help them bypass censorship and push our links through the censorship to come.” The Turkish government, headed by President Recep Tayyip Erdogan, has increasingly ramped up censorship efforts against journalists, lending credibility to Wikileaks suspicions their release may not fully reach Turkish citizens—especially considering the latest leak concerns his ruling party, AKP.

As CNET noted: “Facebook, Twitter and YouTube were reportedly blocked in Turkey during the attempted coup Friday, but many residents appear to have gotten around the blocks, posting messages and videos, likely using VPNs or other anonymizing services.”
Throughout Monday, Wikileaks continued to promote the release. (“Turks ask whether WikiLeaks is pro or anti-AKP. Neither. Our only position is that truth is the way forward. 100k+ docs serves all sides. – WikiLeaks (@wikileaks) July 18, 2016”). They then tweeted that instead of 100,000 documents, they would actually be releasing far more. “Our pending release of 100k docs on Turkish political power? Just kidding. The first batch is 300k emails, 500k docs,” they announced.

But just hours later, they alerted followers their website was being attacked. “Our infrastructure is under sustained attack,” they tweeted, alongside the hashtag, #TurkeyPurge. “We are unsure of the true origin of the attack. The timing suggests a Turkish state power faction or its allies. We will prevail & publish,” Wikileaks tweeted shortly after.

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Greece will be nervous.

Reports Of Turkish Commandos In Greek Aegean Put Athens On Alert (Kath.)

Reports that a group of Turkish military commandos tried to cross from Turkey to the island of Symi, in the southeastern Aegean, put the Greek armed forces on alert on Wednesday amid fears that ties between Greece and Turkey could be tested in the wake of a failed coup in the neighboring country. The Greek Coast Guard was on alert from around 11 a.m. when a group of inflatable dinghies and other vessels were seen departing from Datca, on the Turkish coast, in the direction of Symi. Confused intelligence referred to the presence of around 20 Turkish commandos on those vessels. Athens had been anticipating a possible attempt by participants in the failed coup to come to Greece and so took the reports seriously.

Later in the day, citing Turkish military officials, Reuters reported that Turkish F-16 fighter jets were scrambled to check reports that missing Turkish coast guard vessels had appeared in Greek waters in the Aegean. Some Turkish military hardware was stolen and used in the failed coup but Turkish government officials have insisted that no military equipment remains unaccounted for. Later on Wednesday, the Turkish interior ministry denied claims that rebel soldiers might have “hijacked” a vessel to flee to Greece, Reuters reported. Sources of the Hellenic Air Force confirmed that two Turkish F-16s had conducted patrols but they said they remained in Turkish air space. The Greek Coast Guard monitored the movements of the Turkish vessels, which remained in Turkish waters. Also, a contingent of the Greek Police was dispatched to Symi to conduct checks there.

The developments came after a statement by Foreign Minister Nikos Kotzias on the anniversary of the Turkish occupation of Cyprus prompted a terse reaction by Ankara. “Greece does not and will never accept the consequences of the Turkish invasion,” Kotzias said. “It has made it clear to all sides that the elimination of the anachronistic system of guarantees and the withdrawal of all Turkish occupation forces – which, as the recent events in Turkey confirmed, undermine rather than ensure constitutional order and democratic normalcy – are an integral part of the solution of the Cyprus problem.” The Turkish Foreign Ministry responded that linking the Cyprus situation to recent events in Turkey was “ill-intentioned” and “unfortunate,” and called on Athens to avoid trying to benefit from the events and to display good neighborly behavior.

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Orlov contends that Erdogan is simply not that smart.

A Turkey of a Coup (Dmitry Orlov)

A lot of words have already been said in the past few days about the Turkish coup that couldn’t fly, but strangely enough some rather obvious things went unmentioned, so I’ll try to fill in a few gaps. Specifically, a lot of the things that have been said range from feeble-minded to utterly preposterous. If this is propaganda, then it sounds like very bad, weak propaganda. Still, there is no shortage of people endlessly repeating these talking points, whether because they get paid to or because they don’t know better. They are the ones I want to address.

Idiotic Theory #1: Erdogan staged his own coup in order to consolidate his power. Prior to the putsch, Erdogan went on vacation, which is traditionally the best time to overthrow a leader. For example, Gorbachev’s tenure as “president” of USSR was ended by a putsch in August 1991 while he was on vacation. People who are busy staging a putsch to consolidate their power don’t go on vacations; they are too busy plotting and orchestrating. Erdogan attempted to fly back to Turkey, only to find that he couldn t land at Istanbul Ataturk, then found himself chased by hostile F-16s. He then flew toward Europe and requested political asylum in Germany, which was refused (bye-bye, Germany!). At some point it dawned on him that most of the army and virtually all of the people in Turkey were on his side, and so he called upon them to take to the streets in defense of the legitimate government.

He did this using an improvised public communications technique that was almost a mockery of itself: his face on a cell phone held in front of a television camera. What followed wasn’t some peaceful, timid demonstration in support of the status quo but gonzo political action, complete with civilians laying down in front of tanks and getting crushed, followed by other civilians jumping on top of tanks and slitting the drivers’ throats. The putsch crumbled. The optics of all of this are hard to misread. He went on vacation; he tried to flee; he begged his people for help over a cell phone. He ended up looking like a very weak and confused leader in a region where leaders either look strong or they don’t stay leaders for long. Do you still think that he planned all this? I don’t.

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Demand.

More Pain Seen For US Crude As Product Glut Adds To Gloom (R.)

A glut of refined products has worsened the already-grim outlook for U.S. crude oil for the rest of the year and the first half of 2017, traders warned this week, as the spread between near-term and future delivery prices reached its widest in five months. A stubborn, massive supply overhang punished crude over the winter as U.S. oil futures hit 12-year lows in February. As supply outages and production cuts increased, crude rallied and spreads tightened significantly in May. But the unusually large amount of gasoline and oil in storage, combined with expectations of a ramp-up in crude production, has made traders more bearish on the price outlook for late 2016 and early 2017.

West Texas Intermediate (WTI) futures for delivery in September traded at a discount of as much as $2.23 to those for delivery in December on Wednesday, the biggest this year. Turnover in that spread soared, touching a record high of more than 19,000 contracts, or about 19 million barrels of oil. December spreads, which are the most actively traded, have also blown out in the past month. The discount of the WTI December 2016 contract to December 2017 widened to $4.11 last week. On Wednesday it traded as wide as $3.92 with over 15,000 lots traded. In May that spread had narrowed to just 50 cents, the tightest since November 2014.

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The craziest thing of all is foreign buyers often get credit from foreign banks, so New Zealand can only do so much; other than ban foreign buyers outright.

New Zealand House Bubble Warning Will ‘Shake Government’ (NZH)

A top banker’s dire warning about New Zealand’s overheated house prices shows the market is in crisis and an immigration rethink is needed, Labour says. In a strongly worded opinion piece, ANZ chief executive David Hisco has warned Auckland property prices are over-cooked and the end would likely be messy. He has joined several leading establishment figures in calling for stronger action on housing, and warns yesterday’s Reserve Bank lending restrictions did not go far enough. Hisco’s comments come after Finance Minister Bill English and Housing Minister Nick Smith signalled they expected property values to slow or drop.

Both told first home buyers to ride the bubble out before buying. Labour finance spokesman Grant Robertson said Hisco’s message reflected the fact the housing market was in crisis. “This is the kind of warning from inside the system that should, if nothing else, shake the Government.” Labour policy is to ban foreign buyers, extend the “bright line” test to five years so investment properties on-sold within five years have to pay a tax on the capital gains achieved, fast-track the building of affordable homes and begin consultation on ending negative gearing.

[..] NZ First leader Winston Peters said Hisco’s warning of a “messy end” was totally predictable and avoidable but had been ignored by the Government and others for too long. “There will be a correction. It is going to be enormously painful for hundreds of thousands of New Zealanders and that’s the sad part about it. Many people will lose their equity. But any conception such a build up in the house price bubble could go on shows what enormous denial the political system is in.” Peters said English and Smith were trying to stave off the inevitable. He did not believe the Reserve Banks’ moves this week to increase loan to value radios for investors from 30 to 40 per cent deposits would have much impact. “It’s crude, it’s blunt and not helpful.”

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Note: this is well before the ‘Greece crisis’, and well before Syriza was elected.

Greek Brain Drain Amounted To 223,000 People In 2008-2013 (Kath.)

A special study by the Bank of Greece on Wednesday showed that 223,000 young people left the country from 2008 to 2013 in search of a better future abroad, constituting the so-called “brain drain.” The results of recent research point to the vast majority of people aged between 25 and 39 years who left the country in the first five years of the Greek recession being single and with a university degree. The young Greeks left not only due to unemployment and adverse economic conditions but also because of state’s failure to provide and generate opportunities for professional evolution.

The Bank of Greece study revealed that the momentum and magnitude of the phenomenon makes it essential to record its characteristics and to investigate the factors that are in play before analyzing the negative consequences for the local economy. The main characteristic identified is that it mainly concerns the section of the workforce that is healthy, educated and specialized, and has high mobility and employability rate. The central bank also attributed the growth of the brain drain to the failure of the local education system to produce high-quality human capital and to the inability of the domestic economy to hold on to and attract talented workers.

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It’s not the air.

Warmer Water, Not Air, Drives Antarctic Peninsula Glacier Melt (CB)

The Antarctic Peninsula is a long, relatively narrow limb extending 800 miles out from West Antarctica, and is home to hundreds of glaciers. These rivers of ice ooze their way down through the Peninsula’s rocky mountain range and into the ocean, powered by gravity and their own weight. But of the 674 glaciers on the Peninsula’s western side, almost 90% are retreating. This happens when their ice melts faster than new snowfall can replenish it. The prevailing theory has been that warming air are melting the glaciers. But a new study, just published in Science, finds that the main cause is actually rising ocean temperatures. As the Peninsula’s glaciers are among the main contributors to sea level rise, knowing how and why they’re changing will help make predictions more accurate, the lead author tells Carbon Brief.

The Antarctic Peninsula is one of the fastest warming regions on Earth. Temperatures have risen by more than 3C over the past 50 years. The warming atmosphere has caused some remarkable changes to the eastern side of the Peninsula. The Larsen ice shelf, a floating sheet of ice formed from glaciers spilling out onto the cold ocean, has lost two of its four sections in recent decades. Larsen-A collapsed in 1995, followed by its neighbour, Larsen-B, in 2002. Rising air temperatures are also contributing to the thinning of Larsen-C, which is now at risk of collapse. Over on the western side of the Peninsula, around 600 small glaciers of various shapes and sizes have also been melting.

Scientists had thought that warming air temperatures were the likely cause of these retreating glaciers, says lead author Dr Alison Cook, a research fellow at the Durham University. She explains to Carbon Brief: “Few of these glaciers had been studied in detail and it was thought that their retreat was in response to the atmospheric warming, which has been the predominant driver on the eastern side.” However, recent research suggests the glaciers are retreating even more quickly than can be explained by just the warming atmosphere. Cook’s study finds that the main cause of glacier melt actually lies deep in the ocean – several hundred metres beneath the surface.


Average ocean temperatures (at a depth of 150m) and change in glacier size (in % per year) for 1945-2009 on the Antarctic Peninsula. The size and colour of the dots indicates glacier change – the larger, red dots showing the largest decrease, and the blue dots show stable glaciers that aren’t retreating. Ocean circulation and types of water mass are labelled as follows: Circumpolar Deep Water (CDW), Shelf Water (SW), Bransfield Strait Water (BSW), and Antarctic Circumpolar Current (ACC). Source: Cook et al. (2016)

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