eurobonds Archives - The Automatic Earth

🚨 ELON MUSK: "In context of the government, we're moving like lightning. In the context of what I'm used to moving, it's slower than I would like.

It's a tough problem reconciling all the government databases. These databases don't talk to each other." pic.twitter.com/ULhBbbfTMt

— DogeDesigner (@cb_doge) March 29, 2025

Details

How small details can change your whole perspective

📹hergun1insaat

pic.twitter.com/8T6HrN56af

— Science girl (@gunsnrosesgirl3) March 29, 2025

Not
https://twitter.com/Sassafrass_84/status/1905679457160925611

No. 4

Vladimir Putin: Russia🇷🇺 ranks 4th in the world in terms of GDP @ PPP

1. China🇨🇳
2. USA🇺🇸
3. India🇮🇳
4. Russia🇷🇺

‘All the rest including Japan, Germany and so on are all lower. I’m not even talking about Great Britain. They all jump around here, behave aggressively, but their… pic.twitter.com/DhzONaB79b

— Going Underground (@GUnderground_TV) March 28, 2025

“.. it’s a revolutionary achievement. There’s nobody going across the border illegally, or at least, it’s statistically insignificant.”

• How Donald Trump Is Reshaping America in Just 7 Weeks (Victor Davis Hanson)

Hello, this is Victor Davis Hanson for The Daily Signal. How should we characterize the first seven weeks of the Trump administration because we get so much information and misinformation? Almost a day doesn’t go by where The Wall Street Journal is predicting that we are headed for a recession, that our allies are furious at us, that the economy is on the brink. So, what are we gonna make of all this? I think it’s time to take a deep breath and envision the first seven weeks is something like the following: President Donald Trump is in a race. He’s in a race to enact fundamental, disruptive change, a counterrevolution, and it’s going to be rough for a while, as he pointed out. But the things that he has already done are going to have, shortly or maybe even midterm, fundamental advantages for the United States. The question is, can he message and can he explicate and explain what he’s doing so people hang on? Because the eventual reward will be great.

Now, what do I mean? We’re talking about tariffs, tariffs, tariffs, but even the mere mention of tariffs for all of these countries that have not been reciprocal and have imposed tariffs on us in a way that we would never think of imposing on them, that idea that we might return to parity, it’s had an enormous effect. Some $4 trillion of announced investment from the Europeans, from the Saudis, from the Chinese, from the Mexican government, from the Canadians even. That will create hundreds of thousands of jobs. And that is in the process of working out. When Donald Trump entered office in 2017, we were only pumping about 9 million barrels. When he left, we were pumping 12 million. The Biden administration immediately cut back. And then it decided, before the midterms, “Hey, Americans like affordable oil.” So then they continued the Trump plan and got up to 12, almost 13 million barrels.

Already in just seven weeks, we have increased the amount of oil produced per day in the United States by about a third of a million barrels. And we’re on schedule to get up to about 14 million barrels by the beginning of the year. And that is coordinated with an increase in Middle East production as well. So, we’re going to see a moderation of energy prices, which may explain, already, why the inflation rate was not nearly as high as was predicted. If we look at the border, it’s amazing. We were told that the border problem was unsolvable without comprehensive immigration reform. And there were 10,000 people swarming up per day. We don’t even—nonchalantly, nobody talks about it anymore. But it’s a revolutionary achievement. There’s nobody going across the border illegally, or at least, it’s statistically insignificant.

The big issue right now is the Left is cherry-picking judges to prevent, not the deportation of somebody who’s working, who’s never been arrested, who’s been here for five or six years, but criminals and people who already have been ordered out of the country or pro-Hamas, pro-terrorist supporters. But the point I’m making is, what we’re doing now is Phase Two. The border is essentially solved, as far as security, and in seven weeks. Now, we’re having a difficult task of trying to find out who these 12 million people were that former President Joe Biden deliberately and with intent—malicious intent—allowed to come into the country. But the point I’m making is this is an incredible success.

There’s a final point that I want to make. We hear about Elon Musk is not authentically American. He is a nepo baby. And we hear Rep. Jasmine Crockett, D-Texas, threatening his person, along with threatening Sen. Ted Cruz, R-Texas. All of this chaos and nihilism coming about Elon Musk and what he’s doing, but what he’s finding out, almost every day, in the Treasury, in the IRS, in the Department of Energy, in the intelligence communities, is a vast unreported siphoning off of hundreds of millions of dollars, if not billions, to favorable and mostly left-wing entities, both abroad and here in the United States.

And already, he has cited areas where the Cabinet officers can cut $200 billion. That’s a fifth, only after seven weeks. He’s got a fifth of the way to go. He thinks he can cut a trillion dollars without touching entitlements. I don’t know if he can. But let me just sum up. If Donald Trump is able to fulfill this promise of commitment by foreign entities of $4 trillion in investment—$4 trillion—if he is able to cut a trillion dollars within a year or two, if he’s able to solve the Ukraine war, and if he is able to have a general peace in the Middle East, that will be the most substantial presidency—if he does nothing else—that we’ve seen in 50 years. Final word, everybody, keep calm. There’s events in process that if they are brought to fulfillment and fruition, this country will be a radically different and radically better place.

They come off as a platoon of newbie nitwits. Run by Israel. Not pretty.

• It Wasn’t a Leak, It Was a Devious “Charlie Foxtrot” (Larry Johnson)

Charlie Foxtrot is a polite euphemism for a crude military term — Clusterfuck. That describes the first scandal of the Trump Administration. Somehow, whether deliberate or accidentally, a Zionist journalist by the name of Jeffrey Goldberg was added to a Signal chat by Trump’s National Security Advisor, Michael Waltz, or by someone who worked for Waltz. Goldberg suddenly found himself part of a group chat of Trump’s top defense, diplomatic and intelligence officials. The group included CIA Director Ratcliffe, DNI’s Tulsi Gabbard, and Secretary of Defense Pete Hegseth, among other luminaries.

If you are not familiar with Signal, you create a group chat by naming a group and then adding members from your list of contacts. This tells us that Goldberg was part of Waltz’s list of contacts. Goldberg is a particularly slimy character, not because he published portions of the chat, but because he behaved as a political hack instead of a journalist. A journalist with that unexpected access, would have written an immediate story announcing that the US was going to start bombing Yemen just to make an example of it. What did Goldberg do? He waited till the bombing happened and then hoisted the Trump gang on its own petard. He made the story about Charlie Foxtrot, which he published on Monday in The Atlantic magazine.

This was not a leak. This was a gift to Goldberg. While the contents of the chat are not officially classified, the information being discussed was operationally sensitive. The chat exposed most of the Trump team as shallow and dismissive of the military and diplomatic implications of the decision to start bombing Yemen. If Waltz and company wanted to discuss the pros and cons of bombing Yemen, he should have convened a Secure Video Conference, aka SVTC (pronounced, CIVITS). Pete Hegseth’s remarks to the press, responding to the Goldberg article, makes a solid case that he is not qualified to serve as Secretary of Defense. Instead of admitting that this was a fuckup on the part of Waltz, he decided to attack Goldberg. Moreover, he pretends that the US was hitting hardened, military targets. That is a lie:

While I agree with Hegseth that Goldberg is a partisan hack, Goldberg did not insinuate himself into the chat or steal the material. Waltz, or one of his staff, did that. We will have to wait and see if the Trump team has learned anything from this debacle. I suspect Signal will no longer be used for sensitive topics. The portion of the chat that Goldberg published shows that JD Vance is not a Zionist crazy. He at least had reservations about the plan to bomb Yemen. The same cannot be said for the others — Pete Hegseth in particular. The following snippets from Goldberg’s article makes it clear that the decision to bomb was not based on some actual provocation or attack by Yemen. Nope, it was a malevolent symbolic gesture:

“The account labeled “JD Vance” responded at 8:16: “Team, I am out for the day doing an economic event in Michigan. But I think we are making a mistake.” (Vance was indeed in Michigan that day.) The Vance account goes on to state, “3 percent of US trade runs through the suez. 40 percent of European trade does. There is a real risk that the public doesn’t understand this or why it’s necessary. The strongest reason to do this is, as POTUS said, to send a message.” The Vance account then goes on to make a noteworthy statement, considering that the vice president has not deviated publicly from Trump’s position on virtually any issue. “I am not sure the president is aware how inconsistent this is with his message on Europe right now. There’s a further risk that we see a moderate to severe spike in oil prices. I am willing to support the consensus of the team and keep these concerns to myself. But there is a strong argument for delaying this a month, doing the messaging work on why this matters, seeing where the economy is, etc.”

The account identified as “JD Vance” addressed a message at 8:45 to @Pete Hegseth: “if you think we should do it let’s go. I just hate bailing Europe out again.” “I will say a prayer for victory,” Vance wrote. . . . Hegseth’s counter to Vance’s concern that the American public won’t understand why were bombing the shit out of another faraway country is this: “Nobody [in America] knows who the Houthis are, so [we can just say] Biden failed and Iran funded them.” Well, guess what, boys and girls? Trump failed, just like Biden. The bombings over the last nine days have not deterred the Houthis from renewing their attacks on ships and Israel. And it has put US naval vessels in harm’s way without a good reason. Hegseth gives the game away… this is about blaming Iran.

It is incumbent on Goldberg to release the entire electronic conversation. Maybe I am being too harsh. Maybe Tulsi Gabbard or John Ratcliffe or the Director of the Defense Intelligence Agency raised some objections. But it appears that everyone was supportive of the proposed operation. Shameful.

“Like hell he’d give the liberal media and pearl-clutching Democrats a win..”

Trump’s no. 1 task right now is to stand up for his team. Loyalty.

• Vance Asked Trump To Fire Waltz – Politico (RT)

Vice President J.D. Vance and other senior officials “gently offered” President Donald Trump to fire National Security Adviser Mike Waltz during a private discussion about the blunder in which Waltz accidentally included a reporter in a confidential chat about US military strikes in Yemen, according to anonymous insider sources cited by Politico. Two individuals allegedly familiar with the closed-door meeting at the White House on Wednesday night told Politico that Vance, Chief of Staff Susie Wiles, and personnel chief Sergio Gor advised Trump that it might be time to cut Waltz loose. The president reportedly agreed that Waltz had “messed up,” but ultimately decided against a dismissal.

“Like hell he’d give the liberal media and pearl-clutching Democrats a win,” Politico wrote on Friday, citing one insider as saying the administration “don’t want to give the press a scalp.” The leak, first reported by The Atlantic on Monday, revealed that Waltz had inadvertently invited editor-in-chief Jeffrey Goldberg to a confidential Signal chat where senior administration officials were discussing upcoming airstrikes on Houthi militants in Yemen. Waltz has taken “full responsibility” for the incident, calling it “embarrassing” in a Fox News interview and attributing the inclusion to a technical “glitch.”

President Trump has largely downplayed the controversy, dismissing the media response as a “witch hunt” and questioning the reliability of Signal. He also emphasized that no classified information was compromised and praised the military operation as “unbelievably successful.” White House press secretary Karoline Leavitt voiced the administration’s stance, stating on Monday that “President Trump continues to have the utmost confidence in his national security team, including National Security Advisor Mike Waltz.” Vance, for his part, has publicly aligned himself with the president’s decision. On Friday, he brought Waltz along for a high-profile trip to Greenland, where he dismissed media speculation and defended the national security team.

“If you think you’re going to force the president of the United States to fire anybody, you’ve got another thing coming,” Vance told reporters. Yet Politico claimed that Waltz’s position remains tenuous, citing one Trump ally who said, “They’ll stick by him for now, but he’ll be gone in a couple of weeks.” Other unnamed sources described longstanding personal and political tensions, alleging that Waltz has alienated colleagues by overstepping boundaries and acting more like a principal than a staffer. A spokesman for Waltz, Brian Hughes, pushed back against the narrative, calling the reports “gossip from people lacking the integrity to attach their names.” He emphasized that Waltz “serves at the pleasure of President Trump” and continues to have the president’s support.

“..a gargantuan empire bombarding a poor, besieged country because it is controlled by a popular movement that is currently the only force on the planet taking up arms to stop Israel’s genocide in Gaza..”

• Why Did Jeffrey Goldberg Leave The ‘Bomb Yemen’ Signal Chat? (Max Blumenthal)

Atlantic Magazine editor-in-chief Jeffrey Goldberg has won the admiration of his Beltway peers for the conduct he displayed after being accidentally invited into a smoke-filled “bomb Yemen” Signal chat with Trump’s national security honchos and top advisors. “Props to Jeffrey Goldberg for his high standards as a professional journalist,” declared Ian Bremmer, the trans-Atlanticist foreign policy pundit on his Bank of America-sponsored GZero podcast. “When he realized the conversation was authentic he immediately left, informed the relevant senior official, and made the public aware without disclosing intelligence that could damage the United States.” But what exactly did Goldberg do to deserve such high praise?

With a once in a lifetime opportunity to view and report on high level discussions on the US launching an illegal war on Yemen, Goldberg chose to avert his gaze and leave the scene as soon as he could, apparently because maintaining such unparalleled access would have compelled him to report on discussions that might have complicated a war being waged on behalf of the Israeli apartheid state to which he emigrated as a young man. Instead of exploiting his front row seat to the Trump admin’s war planning – a vantage point that would have yielded countless scoops and a bestselling book for any adversarial journalist – Goldberg bolted and dutifully informed the White House about the unfortunate situation.

From there, the story became a palace intrigue over an embarrassing failure of “opsec,” or operational security, and not one about the policy itself, which entails a gargantuan empire bombarding a poor, besieged country because it is controlled by a popular movement that is currently the only force on the planet taking up arms to stop Israel’s genocide in Gaza. In the fourth paragraph of Goldberg’s Atlantic article about the principals’ Signal group, he strongly implied that he supports the war’s objectives, describing Ansar Allah, or the Houthis, as an “Iran-backed terrorist organization” which upholds a belief system that is (what else?) antisemitic. Given Goldberg’s admission that Waltz first reached out to him at least two days prior to mistakenly adding him to the Signal group, it appears the NSC director had been leaking to the Atlantic editor on behalf of the neocon faction in the Trump White House. And it seems clear why Waltz would have sought to cultivate Goldberg.

During the run-up to to the Iraq war, then-Vice President Dick Cheney cited Goldberg’s bunk reporting alleging deep ties between Saddam Hussein and Al Qaeda during multiple media appearances hyping up the coming invasion. Under Obama, Goldberg served as Israeli PM Benjamin Netanyahu’s errand boy, churning out tall tales about Tel Aviv’s imminent plan to attack Iran’s nuclear sites – unless the US did it first. Since the October 7, 2023 attack on Israel, the once-failing Atlantic has suddenly turned a profit, as Goldberg unleashed a firehose of propaganda against the keffiyeh-clad enemies of the magazine’s Upper East Side donor base. This month, with momentum for a strike on Iran building within the Trump White House, Goldberg was summoned once again move to the neocon message, and wound up with more access than he bargained for.

When asked in a March 24 interview with CNN’s Kaitlan Collins why he left the Trump principals’ Signal group voluntarily, Goldberg ducked the question. But as Ian Bremmer suggested, he did so out of deference to power and an abiding belief in a US empire hellbent on protecting Israel. And in the culture of Beltway access journalism, that’s considered a laudable trait.

“..the judges’ resistance is expected—they’re bound up in and rewarded by the system Trump seeks to reform.”

• Trump Puts the System on Trial (RCW)

President Trump’s supporters have denounced the federal judges seeking to stall or stop this administration’s government overhaul. But there is at least one person who, despite a show of outrage and condemnation, is neither surprised nor intimidated: Trump himself. The politically appointed judges have ordered, among other actions, that federal agencies reinstate thousands of fired probationary employees; that billions of taxpayer dollars be paid to questionable USAID projects and contractors; and that foreign-born criminals deported to their native countries be returned and granted due process. Regardless of the legal merits, the American people recognize these orders as obstructions to what Trump said he would do if elected, and what voters elected him to do. Yet the judges’ resistance is expected—they’re bound up in and rewarded by the system Trump seeks to reform.

Two-thirds of Americans believe the “system” is broken, but for years progressive politicians and their mouthpieces posited that the system couldn’t be fixed. Intellectuals on the Left, including New York Times columnist David Brooks, said America’s flaws were “systemic” in nature: systemic racism, systemic sexism, and systemic injustice. They whined and preached but offered no solutions for the millions of Americans of all races and both genders struggling and failing to unlock their potential to succeed. When Trump announced his candidacy for president in 2015, he too claimed the system was broken, but not because we are racist or sexist by nature, but because the system itself is old, soft, and corrupt, with leaders grown unresponsive to the people they are supposed to serve. That core belief guided his first term and remains unchanged at the start of his second.

For decades, politicians failed to respond to real problems because their agendas, even their identities, were phony, crafted by consultants and pollsters who aimed not for the truth, but for whichever lies or provocations were most efficacious in winning the next election. But one need not resort to craven and conspiratorial explanations of this sort, which hint that elected officials deliberately ignore the public will. The truth is simpler. They have to ignore voters, if only because they have no idea how to fix the problems we face. In one sense, the elites’ ineptitude is understandable: we have a highly complex society that has undergone a recent, rapid, destabilization brought on by technological advance. But to admit that they simply don’t know how to address any contemporary issue would be to concede that it is only their mere status as “elites” that qualifies them to rule.

Thus, to conceal their befuddlement, they explain their inaction by a vague demand that we address the “root causes” of every issue – which further justifies them in doing nothing. The bad faith inherent to the “root causes” strategy was nowhere more obvious than at the border. For years, establishment voices told us that border security measures would fail without addressing the “root causes” of the problem: central American poverty and climate change. These appeals allowed the political class to avoid doing what they didn’t want to do (securing the border) and to manufacture a duty to do the things they did want to do (diverting American revenue to foreign aid “relief programs” and enacting more restrictive environmental policies). Aside from those interventions, they assured us, there was nothing we could do about the illegal immigration crisis.

Speaking about politicians in 2015, Trump said: “I hear their speeches. They don’t talk jobs. [They] have no competence. [They] don’t know what’s happening.” His message of “America First” was clear and authentic, and it implied real action and solid outcomes: protect jobs, livelihoods, and futures of Americans. The hapless politicians had nothing to counter. “The Resistance” to the first Trump administration was advanced by the machinations of bureaucrats in the vast regulatory state. But with the president rapidly dismantling that apparatus, a new strategy was needed. For the Resistance 2.0, it seems the establishment will depend on the courts to thwart the democratically-expressed will of the people. But there is a higher court in this land, where American voters serve as judge, jury, and executor.

Earlier this month at the Department of Justice, Trump warned of the “violent, vicious lawyers” who persecute the president and bully the American public to get their way. Expect these lawyers to “play the ref,” Trump said, weaving in a story about former Indiana University basketball coach Bobby Knight, who once threw a chair across the court and screamed like a madman at the referees for a call to be overturned. The referee wasn’t going to change the first call, Trump said of Knight’s rationale for throwing the tantrum. “But he’s going to change for the next play. And sure as hell, he did.” Trump understands that activist lawyers and progressive pundits will put heat on the judiciary, and that, on occasion, they’ll get their way.

For 10 years, Trump has confronted the political class, calling out their incompetence and dishonesty, and the voters continue to reward him. Federal judges, egged on by the politically-motivated legal establishment, may try to frustrate the president in his pursuit of long-held promises to build a better country. But Trump is building his case outside the courts – and he’s betting on a sympathetic hearing with the American people, who will note the overt evidence of bias, corruption, and incompetence, whether it occurs in the media, executive branch, or the judiciary. Judges will rule on procedure and technicalities, but the people will evaluate the legitimacy of our institutions and credibility of our leaders.

In 2028, the jury will render its verdict.

In theory perhaps. But how much US debt do you have to spare?

• The Best Response For Developing Countries To US Tariffs: Sell US Debt (Proud)

As President Trump threatens the world with sweeping tariffs, he is trying to change the fundamental laws of economics through force of will. He won’t succeed. Rather than fighting back with reciprocal tariffs, developing countries should sell off U.S. debt. The Austrian American economist Ludwig von Mises once said that ‘the balance of payments theory forgets that the volume of trade is completely dependent on prices.’ The United States has such a gigantic trade deficit, at over $1 trillion each year, because it can buy foreign goods more cheaply than it can produce them domestically. Some countries may subsidise production to lower prices, others might export goods that are further down the value chain compared to what American producers will make.

But, stepping back, the U.S. dollar is so powerful, that it renders American exports more expensive, irrespective of any distortions created by its trading partners. This is part of the exorbitant privilege in which the U.S. dollar acts the world’s leading reserve currency, amounting to 58% of total reserves. Foreign countries put their capital into the U.S. because it is a stable and safe, increasing the price of the dollar on foreign exchange markets because demand is always high. A strong exchange rate makes foreign imports cheaper and that helps to manage inflation in America.

President Trump clearly wants to boost his support in the blue collar heartlands of America, driving job creation in traditional American industry that has been undercut by foreign imports over many years. But he can’t have two cakes and eat them both. He can’t simultaneously slash the huge U.S. balance of payments deficit – helping blue collar workers – while at the same time maintaining the U.S. as the destination of choice for foreign capital. That would be to defy the logic of economics. To oversimplify slightly, America has built its bloated Federal apparatus on the back of cheap imports. The huge current account surpluses that exporting powerhouses like China, India, European and ASEAN countries have built up has produced a torrent of easy capital to prop up the U.S. state.

The U.S. has a debt mountain of around $35 trillion which is roughly the equivalent sum of debt held by foreign investors. Of that debt, around $8.5 trillion is in the form of U.S. Treasuries, literally loans to the U.S. government, with a similar amount invested in corporate debt and the rest largely in equity. That’s why Trump is going in so hard with Elon Musk’s DOGE initiative. He’s desperate to reduce the size of the U.S. state apparatus because he knows that the Federal house of cards is built on fiscal quicksand. He also probably figures that there’s a greater propensity among federal workers – who are facing massive job cuts – to lean democrat, than among factory workers.

That’s why the idea of a BRICS currency is so terrifying to Trump, because BRICS now accounts for 41% of the global economy by purchasing power parity. A BRICS currency poses a longer-term risk of making the dollar less appealing and, therefore, weaker, driving up inflation. Because the real challenge to the U.S. is not the federal debt itself but its ability to service its debt. The exorbitant privilege, coupled with the massively disinflationary tidal wave of the global financial crisis, ushered in a period of historically low inflation and low interest rates.

That era has ended, as ratings agency Moody’s pointed out this week. U.S. interest rates are now higher, at 4.25-4.5% driving up the costs of servicing the country’s enormous debt mountain. The threat to the U.S. right now is inflation and what that means for its debt servicing bill, if interest rates are held or, even, forced higher. There are parallels here for the 1970s, when rampant inflation, triggered by a number of factors including the oil crisis and America’s move to a fiat currency, led U.S. interest rates to soar at one point to 20%. During this period, foreign countries withdrew their investments, and the dollar slumped to 45% of total global foreign exchange reserves. And herein Trump’s challenge. He can’t export more without a weak dollar, and a weak dollar will make U.S. debt harder to service.

“The combination values xAI at $80 billion and X at $33 billion..” Is that $80 billion together or $133 billion?

• xAI & X Merger Defuses Musk’s Tesla Share Liquidation Risk (ZH)

Elon Musk secured a multibillion-dollar margin loan using Tesla stock as collateral to finance his acquisition of Twitter (now rebranded as X). In recent months, Tesla’s share price has been cut in half due to a confluence of factors—slowing EV demand amid high interest rates, shifting electric vehicle policies under the Trump administration, market volatility driven by trade tensions, and pressure from a coordinated NGO-driven color revolution known as “Tesla Takedown,” aimed at crashing the stock to trigger loan repayment obligations tied to Musk’s pledged equity. In short, volatility in Tesla shares left Musk heavily exposed to potential loan repayment thresholds being triggered – which was set to occur at or below $114 according to reports – until now.

On Friday evening, Musk announced the merger of X with his AI startup, xAI, in an all-stock transaction that strengthens his financial position, protects Tesla shareholders, and renders the Tesla Takedown color revolution largely ineffective in achieving its intended goal. Musk outlined xAI’s acquisition of X: “xAI has acquired X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt). Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centers at unprecedented speed and scale. X is the digital town square where more than 600M active users go to find the real-time source of ground truth and, in the last two years, has been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth.

xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach. The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge. This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress. I would like to recognize the hardcore dedication of everyone at xAI and X that has brought us to this point. This is just the beginning.”

@xAI has acquired @X in an all-stock transaction. The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt).

Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centers at…

— Elon Musk (@elonmusk) March 28, 2025

Musk privately owns and controls both xAI and X. The transaction is structured as a stock swap, with X investors receiving xAI shares in return. Both companies share overlapping investors, including Fidelity Management, Saudi Arabia’s Kingdom Holding Co, Andreessen Horowitz, Sequoia Capital, and Vy Capital. Musk, also the CEO of Tesla and SpaceX, purchased Twitter in a $44 billion deal in 2022. X CEO Linda Yaccarino wrote on X last night: “The future could not be brighter.” Musk’s X post announcing the acquisition stated that the deal was about “blending” the AI startup and social media platform to create “a platform that doesn’t just reflect the world but actively accelerates human progress.” However, the move also eliminates the risk of Musk undergoing a forced liquidation of the $12.5 billion margin loan backed by his Tesla shares.

As we previously described at the beginning of the note, Tesla shares were halved for a number of reasons: Goldman Trading Desk Views “Trump As Bearish For US EV Market”. “Weak Demand”: Goldman Lowers Tesla Vehicle Delivery Estimate For Quarter. And this…”Tesla Takedown Revolutionaries Prepare Mobilization Nationwide, Tesla Takedown Organizers Plan Color Revolution To “Kill” Brand & “Death Spiral” For Investors. Last week, the Democratic Party and their Communist revolutionaries spelled out their sinister plans… “If we kill the Tesla brand” and “drive down the stock price low enough. We can force him to sell his stock to pay back the billions of dollars of debt he took on to buy Twitter.

“This will drive Tesla into a death spiral,” Micah Lee, The Intercept’s former Director of Information Security, explained on a recent Tesla Takedown teleconference with other far-left revolutionaries. Musk’s indebtedness from leveraging Tesla shares to fund the X deal is no longer a concern for Tesla shareholders. This strategic move also renders the Tesla Takedown color revolution funded by rogue Democrats less likely to force a liquidation.

Irann Doesn’t think the US would be stupid enough. But Israel?!

• Iran ‘Doesn’t Care’ About Trump’s ‘Threats’ – Senior Commander (RT)

Iran will not bow to US pressure to resume talks over its nuclear program, a top naval commander has said, stressing that Tehran is ready to strike back in the event of an American attack. In an interview with al-Mayadeen TV channel on Saturday, Alireza Tangsiri, commander of Iran’s Islamic Revolutionary Guard Corps (IRGC) Navy, pushed back against US President Donald Trump’s recent ultimatum urging the country to enter new nuclear talks. “I have no knowledge of Trump’s message, nor do I care to analyze it,” Tangsiri said. “I hear his threats, I observe his actions, and I prepare myself to counter them. We have the capability to strike all enemy bases, wherever they may be… No one can strike us and escape. Even if we have to chase them to the Gulf of Mexico, we would.”

Tangsiri also rejected any negotiations over Tehran’s missile arsenal or its backing of groups in the region. “Iran will never negotiate over its missiles or the capabilities of the Resistance Front,” he said. He also emphasized that the Islamic Republic seeks peaceful relations with its neighbors: “We always extend a hand of friendship to the countries in the region. As Muslims, we do not pose any threat to our neighboring countries.” The remarks came in response to Trump’s comments on Friday, in which he confirmed sending a letter to Iran’s Supreme Leader Ayatollah Ali Khamenei, seeking to negotiate a nuclear deal. “You’re gonna have to make a decision one way or the other,” Trump said. “We’re gonna either have to talk and talk it out, or very bad things are gonna happen to Iran. And I don’t want that to happen.” He added that if the US has “to go in militarily, it’s going to be a terrible thing.”

Iran’s Foreign Minister Abbas Araghchi has said that while the letter seemed threatening, it still contained “some opportunities” for Tehran. The standoff follows years of tension over Tehran’s nuclear program. In 2015, Iran signed a deal with the US, the EU, Russia, and other world powers in which it agreed to limit its nuclear activities in exchange for sanctions relief. However, in 2018, Trump unilaterally withdrew America from the landmark agreement, calling it “a horrible one-sided deal” that had failed to achieve its goals. Iran has not ruled out indirect talks on the matter but has refused to do so under duress. It also maintains that its nuclear program is for peaceful purposes only.

$1 billion a year for a woke relic.

• Federal Judge Halts Shutdown of Voice of America (ET)

A federal judge has temporarily blocked the Trump administration from dismantling Voice of America (VOA), the government-funded international news service whose 1,200 reporters and employees were placed on paid leave earlier this month. The judge, J. Paul Oetken of the Southern District of New York, on Friday issued a temporary restraining order in favor of VOA employees and their unions. The order prevents the U.S. Agency for Global Media (USAGM), which oversees VOA, from shutting down the broadcasting network and its associated radio programs. VOA employees filed the lawsuit against USAGM, its acting Director Victor Morales, and special adviser Kari Lake on March 21.

The complaint accused the agency of failing to fulfill its legally mandated missions and violating both press freedom and the separation-of-powers doctrine when it took a “chainsaw” to the outlet, ordering the entire staff not to report to work, turning off the service, and locking the agency’s doors. In his ruling, Oetken stated that VOA was likely to succeed on its claims, noting that USAGM’s actions appeared unconstitutional. He said that Lake lacked legal authority to withhold congressionally appropriated funds or terminate USAGM staff, programming, or contracts. “By withholding the funds statutorily appropriated to fully administer USAGM, VOA, and its affiliates … the executive is usurping Congress’s power of the purse and its legislative supremacy,” he wrote.

The judge did not require VOA to resume broadcasts, but made it clear that employees must not be terminated while the court determines whether the shutdown violates the Constitution or other federal administrative laws. Friday’s order echoed a similar ruling by another district judge earlier in the week, which granted a temporary restraining order to Radio Free Europe/Radio Liberty, blocking its funding freeze. The Trump administration has since stated in court filings that it has resumed funding for these outlets. President Donald Trump and his supporters have been critical of VOA for years over alleged bias against conservative Americans and in favor of America’s adversaries.

In 2020, the White House sent an email accusing VOA of spending taxpayers’ money to “speak for authoritarian regimes.” It took issue with, among other things, a VOA social media post featuring a video of a light show celebrating the end of the lockdown in Wuhan, the Chinese megapolis where the COVID-19 virus first emerged; as well as the agency’s characterization of China’s effort to control the outbreak as a “model” for other nations. “VOA too often speaks for America’s adversaries—not its citizens,” The White House said. “Journalists should report the facts, but VOA has instead amplified Beijing’s propaganda.”

The VOA first began broadcasting in 1942 in German-occupied territories as part of the Allies’ effort to engage Axis propaganda broadcasts with counterpropaganda. In the following decades, it became a staple in the propaganda war against the Soviet Union and other communist regimes. Over time, it evolved into a global news organization, now operating in more than 40 languages. Elon Musk, a tech billionaire and Trump’s top adviser for downsizing the federal government’s spending and workforce, has echoed calls to shut down VOA and its sister networks, arguing that they have outlived their purpose. “Yes, shut them down. Europe is free now (not counting stifling bureaucracy). Nobody listens to them anymore,” he wrote on X, accusing the outlets of being “radical left” and “torching $1B/year of US taxpayer money.”

“You know, you are the first European who came to talk to us about this. The others are just asking us not to support Russia.”

• Ex-Italian PM Reveals ‘Secret Mission’ For Zelensky (RT)

Former Italian Prime Minister Massimo D’Alema has claimed that he undertook a secret diplomatic mission to Brazil and China on behalf of Ukrainian leader Vladimir Zelensky to garner international support, amid fears that Kiev would be abandoned by its Western backers. The revelation was made during a conversation with Italian politician Gianfranco Fini published by La Repubblica on Thursday. According to D’Alema, Zelensky approached him sometime in 2024, expressing fears of a potential catastrophe as Western support waned. “I happened to speak with Zelensky on the sidelines of an initiative on the Balkans. And he told me clearly that his country was at risk of disaster because ‘the Americans will withdraw sooner or later, and the Europeans are not reliable,’” the former prime minister told Fini.

“He asked me to go to Brazil and Beijing to find out if Lula and Xi Jinping could do something,” D’Alema claimed. Neither Brazil nor China has publicly confirmed any visits by the former Italian official. In Brasilia, President Luiz Inacio Lula da Silva reportedly dismissed the initiative outright, insisting that Ukraine is an “American problem.” “I went there, but Lula almost showed me the door, telling me that Ukraine was a problem for the Americans and that, according to him, I should be interested in Palestine instead,” D’Alema said. In China, D’Alema reportedly met with one of the Communist Party’s top foreign policy officials, and discussed the idea of an international peacekeeping force for Ukraine. At the end of the meeting, the Chinese official is said to have remarked: “You know, you are the first European who came to talk to us about this. The others are just asking us not to support Russia.”

The former prime minister also criticized the EU for fueling what he described as unrealistic expectations about the conflict. “Europe has done nothing but repeat that Russia could be defeated, when it was clear to everyone that the war could not be won by anyone,” he said.

“They want to inspect the holy relics of our saints. They plan to carve them up, to open them up, to break them into pieces. To perform this sacrilege over them. It’s a huge tragedy for the entire Orthodox world..”

• Zelensky Is a ‘Demon’ – Ukrainian MP (RT)

Ukraine’s Vladimir Zelensky is waging a campaign of terror against his own people by signing off on a crackdown targeting the canonical Ukrainian Orthodox Church (UOC), particularly the iconic Kiev Pechersk Lavra monastery, lawmaker Artyom Dmitruk has said. In an interview with RT on Friday, Dmitruk responded to reports that Ukrainian officials and police have entered the catacombs of the Kiev Pechersk Lavra, the nation’s most significant monastery and the final resting place of several Christian saints. During the raid, authorities unlocked doors, broke into the caves, and changed locks. Dmitruk described their actions as sacrilegious and suggested that Zelensky was directly complicit.

“Zelensky is perpetrating genocide of the Ukrainian people. What we are seeing now and what we are witnessing now is the continuation of terror policies of Zelensky’s against [the] Ukrainian people. Zelensky is a demon in the body of a human being. You can call him whatever you want, a godless person, a terrorist, and so on and so forth. The gist of his actions is the same. Zelensky is following a demon’s will,” he asserted. According to the legislator, who claims to have fled the country over the persecution of the UOC, the stated goal of the “inventarization” of the monastery’s possessions is nothing more than a pretext. “They want to inspect the holy relics of our saints. They plan to carve them up, to open them up, to break them into pieces. To perform this sacrilege over them. It’s a huge tragedy for the entire Orthodox world,” he said, recalling that the results of the review would be classified.

“They are raiding the Lavra. They are trying to seize the property of the Lavra… If we speak from a legal point of view, it’s a crime,” Dmitruk stressed. The Ukrainian government has been cracking down on the UOC for months, which it views as having ties to Russia. This effort has included attempts to take over the Lavra, as well as church raids and arrests of clergy. The UOC, the largest religious institution in the country, severed ties with the Moscow Patriarchate following the start of the conflict. Zelensky has defended the move, insisting on the need to protect Ukraine’s “spiritual independence” from Russia. Moscow has condemned the measures, accusing Kiev of suppressing the canonical Orthodox faith and alleging that the West is encouraging these efforts.

Nobody cares.

• EU To Reject Russia-US Black Sea Deal – von der Leyen (RT)

The EU will not lift its sanctions against Russia for as long as the Ukraine conflict continues, European Commission President Ursula von der Leyen has said. During talks in Saudi Arabia on Monday, Russia and the US agreed to move towards reviving the Black Sea Grain Initiative, which, according to the Kremlin, should include the removal of Western restrictions against Russian Agricultural Bank and other financial institutions involved in the international sale of food and fertilizers. In her interview with French broadcaster LCI on Friday, von der Leyen made it clear that Brussels will not support the idea of a maritime truce between Moscow and Kiev put forward by the administration of US President Donald Trump.

“The sanctions are very significant; they are painful; they have an impact on the Russian economy, and they represent a powerful lever,” she said when asked about the possibility of the EU fulfilling Russian demands to lift some of the curbs. According to the head of the European Commission, the restrictions “will remain in effect until a just and lasting peace is established in Ukraine.” However, she noted that “when the war is over, the sanctions might be removed.” Von der Leyen also said that for the conflict to end, “security guarantees for Ukraine” are needed as well as “a solid defense industrial base and a deterrent force” in the EU. The Black Sea Grain Initiative, originally brokered in July 2022 by the UN and Türkiye, envisioned the safe passage of Ukrainian agricultural products in exchange for the West lifting its restrictions on Russian grain and fertilizer exports.

Moscow withdrew from the deal a year later, citing the West’s failure to uphold its obligations. The Americans and Russians now see its revival as a step towards settling the Ukraine conflict altogether. Earlier this week, President Vladimir Putin asserted that the Russian economy has become the fourth largest in the world in purchasing power parity terms after those of China, the US and India, despite a record 28,595 sanctions being placed on it by Washington, Brussels and their allies. According to the Russian government’s data, the country’s economy grew 4.1% in 2024, surpassing the official forecast of 3.9%. Putin previously urged the Russian business circles against expecting the sanctions to be fully lifted, describing them as a mechanism of strategic systemic pressure on the country that the West intends to keep using.

Eurobonds are a huge threat to every European: “The EU Debt Plan is About Centralizing Financial Control.”

• The EU Wants to Use War as an Excuse for More Debt (Andreen)

The European political and financial elite knows that the war in Ukraine is lost but wants to use it as an opportunity to reach strategic independence from the United States. As the future chancellor of Germany Friedrich Merz said right after his electoral win on Feb 23: “It will be an absolute priority for me to strengthen Europe as soon as possible so much that it gradually really achieves independence from the United States.” Such strategic independence needs money and investment—a lot of it—not only to boost defense but much else, like energy and innovation; areas in which Europe is lagging behind the US and China. In order to have the pretext to implement this spending plan, the idea among the EU elite is to make sure that the war in Ukraine does not end too quickly. That way the conflict can be used to justify artificially injecting much needed money into the moribund EU economies.

First, there was a question of providing €20 billion euros of additional military support for Ukraine and that the EU self-imposed fiscal rules to be loosened using the existing “escape clause” in the event of “exceptional” circumstances, such as the bogus “defense of Ukraine” excuse. As Bloomberg stated, “under this plan, EU nations would be exempt from debt and deficit limits when financing military expenditures. This marks a fundamental shift in EU financial policy, as such exemptions have previously been impossible under EU rules.” Indeed, the EU elite does not want to follow the arbitrary EU fiscal rules: for Paris, the 3 percent limit of budget deficit to GDP is politically painful, and for Berlin, the limit of max 60 percent of GDP in terms of federal public borrowing seems like an artificial constraint.

Then there was a talk of a €700 billion euro defense package. Newsweek stated that: “Baerbock said the package could be worth some 700 billion euros ($732 billion).” French President Emmanuel Macron also confirmed this on March 2, 2025. “We will give a mandate to the European Commission to define our capacity needs for a common defense,” Macron said in an interview published in several French newspapers. “This massive funding will probably reach hundreds of billions of euros.” The official slogan of “help Ukraine defend itself” will give the EU political and financial elite an excuse to turn on the spigots of the European Central Bank at full thrust again; to shower the entire European economy with “free” money, and shore up its fragile economies, like it did after the euro crisis of 2011, with the enormous covid recovery fund in 2021, as well as with the Green New Deal.

This time, the idea seems to be to use joint EU bonds. Reuters writes: “The bigger amounts will have to come from some type of centralized funding, because most budgets in Europe are relatively stretched, particularly in Italy and France.” As was stated in the infamous Draghi Report from Sept 2024: “the EU should move towards regular issuance of common safe assets to enable joint investment projects among Member States and to help integrate capital markets.” Therefore, “common issuance should over time produce a deeper and more liquid market in EU bonds.”

Joint EU bonds are essentially bond issuances against the whole euro economy and would thus entail a low risk and a lower interest rate than country level EU bonds. This is perceived as necessary in order for the EU to hold its own in competition with the US and China that already have unified capital markets, as a speech Draghi gave to the EU Commission last year made clear. There are three main sources of war financing: printing money, increasing taxes, and borrowing. Making available “hundreds of billions” for the EU would likely be based on debt issued from joint EU bonds. Bloomberg noted that, if the spending were funded with tax increases, or cuts in other areas, that could wipe out any positive impact—or worse. Any immediate spending on the military would not help Europe because it would be mostly spent buying US weapons.

Therefore, what the EU elite has in mind now is likely to put in place what F. Merz said; a strategic independence from the US through a huge investment by joint EU bonds, released and used over the long term in order to slowly build up Europe’s industry, not only in the defense sector but also in other sectors. In a sense, this would-be debt plan is just the European Union emulating the United States playbook of using war for crony capitalist benefits, finally “understanding” how to cynically exploit the Ukraine war, just as the US has been doing since 2022 by feeding its military-industrial complex. But, in order for this to happen, the war must not end too soon for the European elite, which is why efforts are made in order to—outrageously—spoil any US peace plans and get the war to continue for now.

All of a sudden, everybody knows Dr. Suzanne Humphries. Her X followers went from a few hundred to 62,000 overnight.

• Joe Rogan Guest Completely Shatters the Vaccine Narrative (VF)

Everything you’ve been told is a lie—especially when it comes to polio. Dr. Suzanne Humphries reveals what really made all those polio cases disappear after the vaccine was introduced. Dr. Suzanne Humphries, former board-certified nephrologist and co-author of Dissolving Illusions: Disease, Vaccines, and the Forgotten History, just made a bombshell appearance on The Joe Rogan Experience and what she shared will completely change how you think about vaccines. Most people are told vaccines are “safe and effective” with no real downside. But Dr. Humphries pulled back the curtain on decades of deception, starting with a major turning point in 1986—when President Reagan signed the National Childhood Vaccine Injury Act into law.

https://twitter.com/VigilantFox/status/1905055320449442103

Before that, vaccine manufacturers were getting hammered with lawsuits. Humphries explained that after the 1976 swine flu vaccine disaster, Guillain-Barré cases were piling up. It got so bad that the companies couldn’t even get insurance. They ran to the government and basically said: “Bail us out, or we’re done making vaccines.” So the government stepped in. First, it agreed to cover the lawsuits. Then came the 1986 law—sold to the public as a way to help injured families get compensation faster, but in reality, it became a kangaroo court system that rarely paid families deserving of vaccine injury claims. Companies like Wyeth (now Pfizer) admitted their vaccines were “unavoidably unsafe,” yet instead of making them safer, they were handed blanket immunity.

Humphries explained that this opened the floodgates for “creativity” by the vaccine makers. They could now play with adjuvants without fear of being sued. Profits soared, and the childhood vaccine schedule expanded rapidly. That freedom also meant cutting corners in safety testing. Most people assume vaccines are tested like other drugs—with placebo controls. But that’s not the case. Instead, vaccines are actually tested against other vaccines, which obscures negative outcomes. “The few studies that exist with saline placebos show how bad the vaccine actually is and how it makes you not only not respond to the disease when it comes around, but more susceptible to it in many cases,” Dr. Humphries explained.

When the conversation turned to polio, Dr. Humphries blew just about everyone’s mind on the internet. She challenged one of the most sacred beliefs in modern medicine: that vaccines eradicated polio. The truth is that polio wasn’t actually eradicated. “Polio is still here. Polio is still alive and well,” Dr. Humphries declared. It’s just that a few sleights of hand made the world believe otherwise. The real change that happened, according to Humphries, wasn’t the vaccine’s impact—it was the definition. “Polio is called different things today,” Humphries explained. “Whereas back in the 1940s, 1950s, the criteria for diagnosing polio were completely different to the year that the vaccine was introduced. The playing field, the goalposts—everything was changed… they were able to show a complete cascading drop of paralytic polio simply because of the way they changed the definitions of what polio is and what could cause it. After the vaccine rollout, cases that would’ve been diagnosed as polio were now labeled as Guillain-Barré syndrome, coxsackievirus, echovirus, or chalked up to lead or mercury poisoning.

https://twitter.com/VigilantFox/status/1905055665367986241

She also pointed to another key factor: environmental toxins. The rise in polio diagnoses, she said, mirrored the use of toxic chemicals like DDT. When the conversation turned to polio, Dr. Humphries blew just about everyone’s mind on the internet. She challenged one of the most sacred beliefs in modern medicine: that vaccines eradicated polio. The truth is that polio wasn’t actually eradicated. “Polio is still here. Polio is still alive and well,” Dr. Humphries declared. It’s just that a few sleights of hand made the world believe otherwise. The real change that happened, according to Humphries, wasn’t the vaccine’s impact—it was the definition. “Polio is called different things today,” Humphries explained. “Whereas back in the 1940s, 1950s, the criteria for diagnosing polio were completely different to the year that the vaccine was introduced. The playing field, the goalposts—everything was changed… they were able to show a complete cascading drop of paralytic polio simply because of the way they changed the definitions of what polio is and what could cause it.”

https://twitter.com/VigilantFox/status/1905056072642998351

After the vaccine rollout, cases that would’ve been diagnosed as polio were now labeled as Guillain-Barré syndrome, coxsackievirus, echovirus, or chalked up to lead or mercury poisoning. She also pointed to another key factor: environmental toxins. The rise in polio diagnoses, she said, mirrored the use of toxic chemicals like DDT. As use of neurotoxic pesticides like DDT, arsenic, and lead declined, so did toxic exposures that mimicked polio symptoms. Fewer kids were bathing in poisons that caused spinal nerve damage, so naturally, paralysis decreased. “The tonnage of production of DDT absolutely mirrored the diagnosis for polio,” Dr. Humphries explained. Even today, she added, “The countries that still make DDT… are where we’re still seeing this paralytic polio situation happen.”

And when it comes to the poliovirus itself? It’s not quite as harmful as people think. Humphries explained that polio is actually a “commensal”—a virus that lives in most people without causing harm. “95 to 99% of all polio is asymptomatic.” Dr. Humphries described a study of the Javante Indians, where “98 to 99% of every person they tested… had evidence of immunity to all three strains of polio,” yet none of the children were crippled. “They were like, ‘We don’t have any of that problem,’” she recalled. Dr. Humphries also cited a chilling story in history. In 1916, a Rockefeller lab in Manhattan set out with “the specific stated goal… to try to create the most pathological, neuropathological strain of polio possible.” Researchers injected monkey brains and human spinal fluid into monkeys.

https://twitter.com/VigilantFox/status/1905056279409651724

And that experimentation came with devastating consequences. “There was a big problem with that, which was [polio] released into the public by accident,” Dr. Humphries explained. “And the world experienced the worst polio epidemic on record. 25% mortality.” In short, Humphries argued that polio didn’t vanish because of vaccines. It disappeared under a mountain of redefinitions, environmental triggers, manmade disasters, and a lot of propaganda. Dr. Humphries also raised concerns about a link between vaccines and food allergies. “It’s very well known that the vaccines that have aluminum in them skew the immune system,” she said. Aluminum is added to many vaccines to make the immune system react more strongly. But when that reaction happens, the immune system can mistakenly target other things in the body, like food proteins.

For example, if a baby is exposed to something like peanuts or eggs around the time of vaccination, the immune system might mistakenly tag those foods as threats, potentially leading to a long-term food allergy. “So that’s kind of the paradox there [with vaccines],” Dr. Humphries explained. And then there’s mercury. Did you know that if a mercury-containing vaccine drops on the floor, “the HAZMAT people have to come and take that away”? Yet we inject it into 3-month-old babies.

https://twitter.com/VigilantFox/status/1905056642837643586

RFK vaccines
https://twitter.com/ChildrensHD/status/1905757292546462177

Bhakdi

Dr. Sucharit Bhakdi: “All mRNA vaccines are dangerous and are going to threaten life [and] this cannot be allowed to happen”

"Now if I am here today, it's for a very special reason. Four weeks ago, I don't know where you saw the video, released by the WHO where they proclaimed… pic.twitter.com/IfxkAXGA8b

— Camus (@newstart_2024) March 28, 2025

Cows
https://twitter.com/AMAZlNGNATURE/status/1905842442693186021

Maruay
https://twitter.com/Rainmaker1973/status/1905998384189854189

Lovebird

Lovebird collecting flowers
pic.twitter.com/yTasxOOQTa

— Science girl (@gunsnrosesgirl3) March 29, 2025

Ninja

Ninja dog on a mission..🐕🐾😅 pic.twitter.com/Z0pGYs2ldH

— 𝕐o̴g̴ (@Yoda4ever) March 28, 2025

Coral forest
https://twitter.com/buitengebieden/status/1905674058189975930

Tartaria
https://twitter.com/wakenminds/status/1905352502939099184

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Debt Rattle May 9 2017

May 092017

May 9, 2017 Posted by Raúl Ilargi Meijer at 8:13 am Finance Tagged with: Aegean, Canada, China, debt, eurobonds, landmine, Macron, MMT, refugees, subprime, Trump, Yucca 4 Responses »

Pablo Picasso Self portrait 1938

• Macron Is Not The Solution To Europe’s Top Existential Threat (CNBC)

• “Europe’s Not Out Of The Woods With Macron Win” (ZH)

• Commodities Send Ominous Signal On Global Economy (BBG)

• Traders Are Fleeing the Options Market (WSJ)

• The Debt-Bubble Landmine Obama Left For Trump (NYP)

• Canadians Buy Record Number of New Cars With Record Amount of Financing (BD)

• Majority of Consumers Now See Canadian Home Prices Rising (BBG)

• Over 50% of Canadians $200 or Less Away From Not Being Able To Pay Bills (Gl.)

• Quebec’s Finance Minister: Don’t Dawdle on NAFTA Overhaul (BBG)

• Chinese Stocks Head For Longest Losing Streak In 3 Years (BBG)

• How China Keeps Its Financial System From Collapsing (ZH)

• Parts of Asia Will Grow Old Before Getting Rich, IMF Warns (BBG)

• Italy Adds Bum Note To Macron’s Ode To Euro Zone Joy (R.)

• The Rock-Star Appeal of Modern Monetary Theory (Nation)

• To Bury Nuclear Waste, Dig Deeper Than Yucca Mountain (BBG)

• Dangerous Times in the Aegean and Cyprus (K.)

• New Refugee Center Planned On Chios As Tensions Simmer (K.)

• Nearly 200 Missing, 11 Dead As Migrant Boats Sink Off Libya (AFP)

• Hundreds Of Migrants Feared Dead In Mediterranean Over Weekend (R.)

Macron wants Eurobonds, anathema to Germany et al because they would allegedly “sharply reduce each euro zone government’s motivation to pursue sensible fiscal policies..”.

Many in Brussels want a banking union, anathema to quite a few countries. There is no democratic way that leads to such a union. It’s like handing the EU the keys to your country.

• Macron Is Not The Solution To Europe’s Top Existential Threat (CNBC)

The future of the euro zone is dependent on a common commitment to solid government finances, says Commerzbank’s chief economist, and France’s new president-elect does not bring the bloc any closer to achieving this reality. The pro-EU and centrist candidate, Emmanuel Macron, stormed to victory against his far-right political rival, Marine Le Pen, on Sunday and is now poised to become France’s youngest ever premier. However, the former economy minister is in favor of joint bond issuance which, according to Jörg Krämer, would sharply reduce each euro zone government’s motivation to pursue sensible fiscal policies. “The EU can’t keep feeling its way from one election to the next. At some point an election might go the wrong way – and if that happens in a large country, the survival of the monetary union would be in jeopardy,” Krämer said in a note.

Commerzbank’s chief economist also warned the repeated near misses of anti-EU political leaders in several European elections in recent years would not last forever and suggested the monetary union’s survival now rests on the bloc’s ability to create a genuine banking union. “To lay these existential risks to rest, the euro zone at long last needs a common commitment to solid government finances. The monetary union’s long-term survival depends on it. But new French President Macron won’t bring this any closer to reality,” he added. Meanwhile, just one day after the pro-business and market-friendly candidate Macron secured his country’s presidential election, EC President Juncker publically lambasted high state spending in the euro zone’s second largest economy. “With France, we have a particular problem … The French spend too much money and they spend too much in the wrong places. This will not work over time,” Reuters reported him as saying in Berlin on Monday.

Le Pen would have lost against anyone. But tons of Europeans still don’t like what the EU has become. All it takes is a candidate somewhere who’s not Le Pen or Wilders.

• “Europe’s Not Out Of The Woods With Macron Win” (ZH)

It appears the chairmen of UBS have plenty to say on Europe.Following former UBS chairman Peter Kurer’s comments that “to the elites, the EU is a means to get rich quickly and export their problems,” UBS current chairman Axel Weber has warned bankers that Europe is not “out of the woods” from its political risks even after Emmanuel Macron’s reassuring victory in the French presidential election. Peter Kurer recently remarked on the end of the Euro…

“Following an unfortunate combination of wrong decisions at the top and the uncontrolled flourishing of a self-serving bureaucracy, the union has moved in a direction where it has become a prisoner of its own constructed reality. The EU was a great idea but it has been ridden to death. Back in 1992, almost half of Swiss voted to join the European Economic Area, including the traveller. If there was a vote today on joining the union, the latest polls say just 15% would vote yes. The EU had its chances. It squandered them, and maybe it will come to an end in the foreseeable future under the weight of its burdens: La messa e finita, andate in pace.”

And over the weekend speaking in Tokyo, as the FT reports, UBS Chairman Axel Weber said that political risk in Europe remained “actually quite high” even though “we’ve seen the centre hold in France” with Macron’s victory over far-right candidate Marine Le Pen, and even though all the signs were that the centre will also hold in the upcoming German location elections.

“That doesn’t mean Europe is out of the woods,” he told the International Institute of Finance’s spring meeting. “There is still Italy where it is very unclear that the centre will hold. And there is still Greece.” He continued: “Where you find some bright side….there are (also) some downside risks that are not really priced into the market but could derail (Europe).” “Brexit is a time bomb… and the countdown is on. It will be two years from now,” Mr Weber said. He added that “if the British really do leave the customs union and single market there could be a lot of volatility which could impact on the global economy”.

How long can bubbles hold?

• Commodities Send Ominous Signal On Global Economy (BBG)

By almost any measure last week was a bad one for commodities, as practically every part of the market lost value. West Texas Intermediate crude oil fell under $44 per barrel, Brent crude broke below $50 per barrel and copper tested $5,500 per metric ton. In China, coal and iron ore tumbled. Gold, the supposed ultimate haven, dropped to almost $1,225 per ounce. Last week’s purge capped a steady decline in prices since mid-April and, more broadly, since February based on the Bloomberg Commodities Index. Although much of the blame is being tied to rather high and growing inventory levels, a lack of real demand shouldn’t be discounted. The market is experiencing something greater than a technical correction or speculative positioning. It is signaling something ominous about the state of the global economy.

So while Friday saw a small recovery, it appears to be merely a “dead cat bounce” rather than a sign of any market bottom. Traders have reason to question global economic strength. They are concerned about fresh signs of an over-extended Chinese economy and an ongoing slowdown in developed markets faced with aging demographics. In the U.S., they question President Donald Trump’s infrastructure promises along with his administration’s relaxed standards in the mining and drilling sectors, whose commodities we already have too much of. OPEC’s output cuts have failed to do enough to stymie the global oil glut as U.S. drillers add to their rig counts. Such negative sentiment has carried through in the equity markets, particularly among commodity-producing nations such as Australia, Canada and Brazil.

A liquidity problem. And a confidence one.

• Traders Are Fleeing the Options Market (WSJ)

Falling volumes and spiraling costs are pushing trading firms out of U.S. options, raising concerns about fragility in a market that investors rely on to protect portfolios. Trading has dwindled in most areas of the market, and investors and traders are grappling with increasing fragmentation. Liquidity, the crucial ability to do trades without significantly moving prices, has deteriorated, according to interviews with market participants and data reviewed by The Wall Street Journal. Options on key indexes, exchange-traded funds and high-volume stocks dominate trading. Meanwhile, there is less activity in the rest of the listed U.S. options world. The stresses prompted at least six prominent options market makers to exit from the business since 2012. Market makers are firms willing to both buy and sell using automated programs.

Thomas Peterffy, a pioneer of electronic options trading, said in March that his firm, Interactive Brokers, would pull the plug on options market making. KCG Holdings announced its exit from retail options market making last year, while UBS and Credit Suisse have also left automated options market making. JP Morgan and Bank of America made similar decisions in 2014, according to people familiar with the matter. “Most market makers congregate in the highly traded products,” Mr. Peterffy said in an interview. “It’s difficult for a market maker to maintain hundreds of thousands of bids and offers all the time.” It is hard to pinpoint what triggered the trader exodus, but industry experts say as firms leave, liquidity gets further drained, which spurs more market makers to retrench.

The dangerous feedback loop could sap appetite for options, key derivative securities that investors use to manage risk in their portfolios. “We could ill afford to lose any more market makers at this junction,” said Alan Grigoletto, who previously worked at the Boston Options Exchange, and now runs Grigoletto Consulting while trading options in his retirement account. Data show the liquidity bifurcation. Index and ETF options volume rose in April by 28% and 4%, respectively, data from the Options Clearing Corporation show. Meanwhile, total equity options volume shrank by 10% from the prior year.

The car loans issue keeps growing.

• The Debt-Bubble Landmine Obama Left For Trump (NYP)

President Trump came in for much jeering when he told reporters he had “inherited a mess” from President Barack Obama. On the economy, though, Obama did indeed leave behind a hidden mess: a seemingly healthy jobs market dependent on cheap debt. When this debt bubble bursts, just as the last one did, the manufacturing jobs Trump wants to save will be in even greater peril. [..] who is borrowing for used cars – and at much higher interest rates – is a huge concern. People with not-great credit scores have always made up about a fifth of the auto-loan market. But the percentage of people borrowing even though they have really bad credit scores has surged, reports Bloomberg. It’s now a third of the subprime auto-bond market, up from just 5% seven years ago. A Standard & Poor’s analysis of just one big subprime auto bond tells the story.

Last week, a company called DriveTime, which sells used cars in 26 states to people with bad credit, was in the market to issue $442 million worth of bonds backed by auto loans. The average credit score of borrowers was 538 — indicating a history of serious default. And, as S&P notes, “today’s subprime customer appears to be . . . weaker . . . than that of several years ago,” because people who defaulted right after the housing crash at least had the excuse that they were caught up in a global bubble. These loans are for people who have no choice but to borrow to buy a car, and no bargaining power on the interest rate they pay: close to 20%. Even though the borrowers pay through the nose, they depend on cheap global credit. With interest rates still near record lows, lenders have to take ever more risk in a low-interest-rate environment to make a little money.

As for that risk: Delinquency rates are rising, with 4.32% of subprime borrowers in general at least 60 days late last year, up from 3.52 two years earlier, says S&P. The bigger risk here isn’t the risk to investors, though. The auto-loan market is still much smaller than the housing market, and the investment world hasn’t created trillions of dollars of derivative securities based on this market (at least not that we know of). And unlike with houses, no one ever expects the value of a car to increase with use. No, this bubble presents a much more direct risk to the economy — and manufacturing jobs. If people with terrible credit can’t borrow an average of nearly $18,000 to buy a used car (what the DriveTime customer pays), the market for used cars collapses. That, in turn, affects the market for new cars. Indeed, the US auto industry has seen sales decline this year, after clocking half a decade of record highs.

Canadians do the subprime car thing too.

• Canadians Buy Record Number of New Cars With Record Amount of Financing (BD)

Canadians aren’t just buying real estate, they’re also treating themselves to new cars. According to a new release from Statistics Canada, sales of new cars reached a record high for February. Great for automobile manufacturers, but not so great for the economy. Debt-fuelled financing makes this more of a warning sign than a boom-time trend. Sales of new motor vehicles across Canada rose to an all-time record for February. The month saw 125,284 sales – a 2.74% increase from the same time last year. The largest segment of sales were seen in Ontario, where 41% of them occurred. This is up slightly from 2016, where Ontario accounted for 39% of sales. Booming real estate prices, and massive numbers for car sales… Ontario better be facing the greatest economy its ever experienced, or it’s in trouble.

Consumers are purchasing more expensive vehicles too. Over $5 billion was spent on new vehicles for the month, bringing the average to $40,100 – up 3.4% from the same time last year. Ontario was below the average for the country, where the average price was $39,400. While prices are lower in Ontario, they’re not exactly budget vehicles either. The uptick in average sale price is due to longer financing terms for buyers. According to the Financial Consumer Agency of Canada (FCAC), Canadians are “increasingly purchasing more car than they can afford,” due to longer financing becoming fashionable. The agency notes that average leases have crept up 2 months, every year since 2010. According to the Bank of Canada (BoC), the average loan was 74 months as of 2015.

The Canadian debt issue is turning into a total craze.

• Majority of Consumers Now See Canadian Home Prices Rising (BBG)

Expectations for Canada’s housing market are heating up, with more than half of respondents in a weekly telephone survey predicting home prices will rise, the first time the measure has topped 50% in records dating back to 2008. The bullishness comes even as a run on deposits at Toronto-based mortgage lender Home Capital leads to heightened scrutiny of a market which policy makers have said is divorced from economic fundamentals. The broad Bloomberg Nanos Canadian Confidence Index fell to 59 in the week ended March 5. Some 50.1% of respondents said they expect local home prices to rise. The figure has climbed for six straight weeks and is higher than the average for the series of 37.1%. Thepercentage of people surveyed in the week ending May 5 who said local home prices will decline in the next six months slid to 10% from 10.7%.

“Consumer sentiment on real estate has gone from hot to hotter,” said Nanos Research Group Chairman Nik Nanos. Housing has led the world’s 10th largest economy over most of this decade as exporters have struggled. The latest burst of housing momentum has led policy makers to question whether it’s being led by supply and demand or by speculation. The Ontario Securities Commission opened hearings into whether Home Capital failed to properly disclose an internal probe into fraudulent mortgage applications, a shakeup in a nation lauded for having the world’s safest banks. The latest Toronto figures also showed prices up 25% in April from a year earlier, still close to the 30% March pace that Ontario Finance Minister Charles Sousa called unsustainable on April 20 when he imposed a foreign buyers tax. Those events haven’t led to more bets on a price decline either, and housing optimists now outnumber pessimists by a factor of five to one.

So much in debt they can’t pay their bills. Maybe someone should take a look at Canadian inequality, too.

• Over 50% of Canadians $200 or Less Away From Not Being Able To Pay Bills (Gl.)

More than half of Canadians are living within $200 per month of not being able to pay all their bills or meet their debt obligations, according to a recent Ipsos survey conducted on behalf of accounting firm MNP. “With such a small amount of wiggle room, any kind of unanticipated hardship, such as a job loss or even a car repair, could send an already struggling family into financial despair,” said Grant Bazian, president of MNP’s personal insolvency practice, which is one of the largest in Canada. For 10% of Canadians, the margin of error when it comes to household finances is even thinner, at $100 or less. But those with anything at all left at the end of the month were in better shape than many: A whopping 31% of respondents said they already don’t make enough to meet all their financial obligations.

Debt is causing Canadians a fair bit of stress, the polling suggests, but few appear to be on track to buff up their monthly financial cushion. Two-thirds of survey takers said they are “less than very confident” about their ability to create an emergency fund. Another hair-raising finding from the survey: Roughly 60% said they don’t have a firm grasp of how interest rates affect debt repayments. The statistic helps explain why many indebted Canadians end up taking on more debt and high-cost loans, said Bazian. “That’s how so many end up in an endless cycle of debt,” he noted. But the data also raises the question of whether Canadians understand the implications of an interest rate hike by the Bank of Canada (BoC). A decision by the BoC to start lifting its key policy rate from historic lows would raise the cost of carrying debt across the country.

The Bank uses interest rates, among other tools, to influence inflation and economic activity. Many economists believe it could start to raise rates in the first half of 2018, as economic growth picks up pace. Although the BoC will probably lift rates gradually and over time, the impact on Canadian wallets will be substantial. For example, as Global News has reported before, a onepercentage point rise in the BoC’s key interest rate would likely push up variable mortgage rates by a similar amount. A variable mortgage rate that’s currently set at 3%, for example, would go up to 4%, which represents a 33% increase in interest payments for the mortgage holder. That’s an extra $83 a month for every $100,000 in outstanding mortgage debt.

Quebec has strong US trade ties.

• Quebec’s Finance Minister: Don’t Dawdle on NAFTA Overhaul (BBG)

Quebec Finance Minister Carlos Leitao has a message for government officials considering a renegotiation of NAFTA: Time is of the essence. “If we are going to renegotiate Nafta, then let’s do it,” Leitao said in an interview Friday at Bloomberg headquarters in New York. “The worst case scenario would be if we spend years talking about renegotiating, but don’t actually do it and it just keeps hanging around and doesn’t get addressed. The longer it drags on, the bigger the real impact on investment.” Canadian Prime Minister Justin Trudeau is facing a lengthy trade battle with the U.S., which also includes calls for a new softwood lumber pact and Donald Trump’s complaints about Canada’s system of protectionist dairy quotas.

It’s all set to drag on as the president has yet to trigger a 90-day notice period to Congress to renegotiate Nafta. The last softwood lumber dispute lasted five years. “The problem with the uncertainty is we don’t know what kind of process we will have,” Leitao said. “Is this going to be along the same lines as the last Nafta negotiations? That was very systematic. There were panels on various issues. It’s that kind of certainty that we would like. The actual nuts and bolts will take time.” Leitao has good reason to be wary of protracted trade battles, with his most recent budget already predicting Quebec’s economic growth will lag behind the Canadian average. Output in Quebec will grow 1.7% this year before slowing to 1.6% in 2018, budget forecasts show. That’s less than the 2.2% and 2.3% forecast for all of Canada over the same period.

Deleveraging.

• Chinese Stocks Head For Longest Losing Streak In 3 Years (BBG)

Chinese stocks pared declines, with technical indicators signaling that a five-day slide may have been overdone. The Shanghai Composite Index was little changed at 3,077.78 as of 1:07 p.m. local time, after declining as much as 0.7% earlier in the day. Consumer shares were the worst performers on the CSI 300 gauge, while telecom companies led gains. The Hang Seng Index climbed 0.4%. An intensifying campaign to reduce leverage in the financial system pushed the Shanghai benchmark to a 2.4% loss in the five days through Monday. This drove the gauge’s relative strength index to below 30, a level that suggests to some traders that an asset is oversold.

The nation’s banking regulator said Monday that lenders should carry out collateral pressure tests at least once a year, while the Securities Times reported that some rural banks had suspended interbank businesses temporarily while officials conduct spot checks. “Some stocks appeared to be very cheap at current levels, and this triggered some bargain hunting,” said Banny Lam, head of research at CEB in Hong Kong. State-owned enterprises that dominate old growth industries, such as banks and commodity producers, have been among the hardest-hit by the deleveraging drive, while new-economy shares remain in favor among overseas investors. That’s led to a wide gap between the nation’s two main offshore gauges: the Hang Seng China Enterprises Index and the MSCI China Index.

Much collateral doesn’t actually exist. Wealth management products, shadow banks, it’s all not much more than a mirage. It takes faith.

• How China Keeps Its Financial System From Collapsing (ZH)

With “risk” in most of the developed world seemingly a long forgotten four-letter word, as seen by today’s plunge in the VIX to a level not seen in 34 years, traders hoping for some “risk event” have been confined to the recent turmoil in China, where overnight not only did trade data disappoint, with both imports and exports missing, but bond yields jumped to the highest level since 2015, dragging stocks lower even as the local commodity crash slammed iron ore and copper to new YTD lows.

While largely a “controlled” tightening, meant to contain China’s out-of-control shadow banking system, the recent gyrations in Chinese capital markets are starting to have a profound impact on local funding, resulting in a collapse in new bond issuance, and according to FT calculations, in April the number of aborted issues rose to 154, up from 94 in March, 32 in February and 31 in January.

As DB added, “local bond markets are practically shut for corporates. In fact, YTD issuance is down 40%+ yoy and net issuance has been negative in three out of the first four months this year. A number of issuers are being forced to cancel bond issuances (over RMB100 billion YTD) and there were reports (Bloomberg) of even CDB halting issuance (though subsequently denied). Some AA corporates are now issuing at north of 7%.” These signs of mounting stress in China’s $9.3 trillion bond market come less than a month after the country’s banking regulator, Guo Shuqing, was quoted as supporting a campaign to sort out chaotic practices, and threatening to resign if the banking system became “a complete mess”.

[..] whether or not China keels over and has a hard (or worse) landing, will depend on the PBOC; when (not if) the central bank gets involved, will depend on how soon China’s banks and various CD-funded financial institutions run out of collateral (whether it exists or not) to sell, such as iron ore, copper, precious metals, bonds and even stocks. This will hardly come as a surprise. As we showed last month, the only reason the Chinese banking system hasn’t imploded, is due to nearly CNY 10 trillion in central bank liquidity support for the local banks, just under 100% of China’s GDP.

Europe too.

• Parts of Asia Will Grow Old Before Getting Rich, IMF Warns (BBG)

Asia’s rapidly aging population means the region is shifting from being the biggest contributor to the global workforce to subtracting hundreds of millions of people from it, according to the International Monetary Fund. The reversal of the so-called “demographic dividend” will drag on global growth and also that in Asia, the world’s fastest growing region, the IMF warned in its annual outlook for the area. The population growth rate will fall to zero for Asia by 2050 – it’s already negative in Japan – and the share of the population who are working-age has already hit its peak, the IMF estimates. That means the ratio of the population aged 65 and older will be almost two and a half times the current level by 2050, and even higher in East Asia.

“The speed of aging is especially remarkable compared to the historical experience in Europe and the United States,” the IMF said. Per capita income in Asia relative to the U.S. remains at much lower levels than those achieved by mature advanced economies in the past. “Countries in Asia will have less time to adapt policies to a more aged society than many advanced economies had,” the fund wrote. “As such, parts of Asia risk becoming old before becoming rich.” For economic growth, the aging process could erode up to one percentage point from annual output over the next three decades in Japan, and between 0.5-0.75 percentage point in China, Hong Kong, South Korea and Thailand.

While some bright spots remain, such as India and Indonesia, demographics could subtract 0.1 of a percentage point from annual global growth over the next three decades, the IMF estimates. It also means Asia is at risk of falling into secular stagnation if an older population leads to excessive savings and low investment renders monetary policy ineffective. The demographic shift will also likely keep downward pressure on real interest rates and asset returns for most major countries in Asia, the IMF said. “Adapting to aging could be especially challenging for Asia, as populations living at relatively low per capita income levels in many parts of the region are rapidly becoming old,” the IMF said.

It’s time to come clean on how bad Italy is really doing.

• Italy Adds Bum Note To Macron’s Ode To Euro Zone Joy (R.)

Italy is adding a bum note to Emmanuel Macron’s ode to joy. While it’s encouraging that a Europhile will take the French presidency after Sunday’s vote, attention can now turn to Europe’s other crisis-in-waiting. Elections are coming in Italy, and there are more of the ingredients for a populist shock than in France. The economy has fared much worse since the creation of the euro zone, with growth averaging zero since 2001, according to the IMF. GDP per capita has fallen in that time. The IMF expects the unemployment rate to reach 11.7% this year, 2 percentage points higher than in France. Anti-EU forces are also spread widely across Italy’s messy political landscape. Stagnation has fuelled support for the 5-Star Movement, which could lead Italy out of the euro zone and currently polls just below 30%.

Mainstream parties are shaky. The left fragmented after former prime minister Matteo Renzi lost his referendum on constitutional reform in December. The right is an awkward alliance between ageing former premier Silvio Berlusconi and more radical anti-EU parties, like the Lega Nord. The risk is that 5-Star forms a coalition with the Lega after elections that must take place by May next year. The economy is picking up, but tighter monetary policy, as the European Central Bank reins in bond buying, could strangle the recovery, as could an overly stern fiscal policy. Italy needs to cut spending or increase taxes by 2percentage points to meet European targets through 2019. Job losses from the restructuring of banks and bankrupt national airline Alitalia could become a lightning rod for anti-EU sentiment.

Europe can help. Italy is likely to miss its fiscal targets anyway, but loosening bloc-wide budget rules to encourage investment and spread out cuts over a long period would cement the recovery. A strong France, aided by Macron’s victory, might persuade Germany to spend more, and give other countries freer rein. However, even if a political shock is avoided, the next election may produce a weak government with no mandate for taking tough decisions to boost growth. Italy could be bringing discord to the region for years.

MMT must go mainstream.

• The Rock-Star Appeal of Modern Monetary Theory (Nation)

To a layperson, MMT can seem dizzyingly complex, but at its core is the belief that most of us have the economy backward. Conventional wisdom holds that the government taxes individuals and companies in order to fund its own spending. But the government—which is ultimately the source of all dollars, taxed or untaxed—pays or spends first and taxes later. When it funds programs, it literally spends money into existence, injecting cash into the economy. Taxes exist in order to control inflation by reducing the money supply, and to ensure that dollars, as the only currency accepted for tax payments, remain in demand.

It follows that currency-issuing governments could (and, depending on how you lean politically, should) spend as much as they need to in order to guarantee full employment and other social goods. MMT’s adherents like to point out that the federal government never “runs out” of money to fund the military, but routinely invokes budget constraints to justify defunding social programs. Money, in other words, isn’t a scarce commodity like silver or gold. “To people who’ve worked in financial markets, who work at the Fed, this isn’t controversial at all,” says Galbraith, who, while not an adherent, can certainly be described as “MMT-friendly.”

The decisions about how to issue, lend, and spend money come down to politics, values, and convention, whether the goal is reducing inequality or boosting entrepreneurship. Inflation, MMT’s proponents contend, can be controlled through taxation, and only becomes a problem at full employment—and we’re a long way off from that, particularly if we include people who have given up looking for jobs or aren’t working as much as they’d like to among the officially “unemployed.” The point is that, once you shake off notions of artificial scarcity, MMT’s possibilities are endless. The state can guarantee a job to anyone who wants one, lowering unemployment and competing with the private sector for workers, raising standards and wages across the board.

No matter how deep you dig, you can’t guarantee safety for a million years. That’s what’s halted Yucca Mountain. The Bloomberg editors don’t understand the issue either.

• To Bury Nuclear Waste, Dig Deeper Than Yucca Mountain (BBG)

Energy Secretary Rick Perry is right to say the U.S. needs a long-term solution to its massive nuclear waste problem. It also makes sense for Perry and some members of Congress to see Yucca Mountain as part of that solution – though many Nevadans promise to make sure it won’t be. But even if Yucca can survive the political fight, it can’t be the only option for disposing of America’s spent nuclear fuel. More than 75,000 metric tons of the stuff are cooling in pools and casks at dozens of power-plant sites around the country. That’s already too much to fit in Yucca Mountain, and the total grows by more than 2,000 tons a year. Other strategies are needed, ideally ones that are less politically radioactive. Consider, for instance, the idea of sinking the waste into boreholes that reach three miles below ground – 15 times as deep as the proposed chambers inside Yucca. Such shafts could be drilled in states that, unlike Nevada, benefit from the use of clean, reliable nuclear power.

Boring into the Earth’s deep rock layers could provide the kind of bury-it-and-forget-it underground disposal necessary for material that will remain dangerous for hundreds of millennia. Local opposition can still be expected; in North and South Dakota, residents have shouted down some plans to dig test holes. That’s why a so-called consent-based strategy, identifying locations with both the appropriate geology and an agreeable population, is necessary. If hosting a waste site means more funding for local public works and services, more communities might be willing to accept one. (This proved to be the case in Carlsbad, New Mexico, home to a storage place for low-level waste from nuclear weapons.) A familiarity with nuclear power may also encourage acceptance, perhaps because there is a nuclear plant in the area employing people and providing power.

The same approach could also be used to locate six or seven centers where waste from several nuclear plants could be stored while it awaits burial. Such containment facilities could also include research centers – mini national laboratories where scientists could work out new ways of reprocessing fuel and perhaps conduct demonstration projects for reactors designed to use safer fuels. The one thing the U.S. should not do is continue to neglect the growing quantities of nuclear waste. Over the past few decades, electricity ratepayers have contributed more than $34 billion to a national fund to pay for a geologic disposal site. And because none yet exists, taxpayers are forking over billions more to enable nuclear-plant operators to manage interim storage. The political barriers to solving this problem may be high, but further delay – and an undue fixation on Yucca Mountain – won’t make them any easier to overcome.

Turkey will provoke Greece at some point, and US and Europe had better prevent that from happening.

• Dangerous Times in the Aegean and Cyprus (K.)

The concept of gray zones (the claim that the sovereignty of a number of islands and islets in the Aegean is undetermined) was a novel idea that Turkey came up with 20 years ago. At some point, Ankara reached the point of including the Greek island of Gavdos in its gray zones list. Whenever Athens made an official request regarding the islands or rocky outcrops that Turkey had on its list, the answer was always very vague: “Anything that is not clearly included the bilateral agreements that set out Greece’s borders with other countries.” At first, many people thought this was a bargaining chip that Ankara would trade as part of a grand bargain. They were wrong. The failure to settle differences between Greece and Turkey gave Ankara the opportunity to add more issues to the agenda.

Over time, these have become permanent and ever-expanding. Currently, Turkey considers significant parts of the Aegean to be gray zones. This includes islands that have been inhabited for decades. It is questioning Greek sovereignty through its actions, not just its words, by the frequent presence of naval vessels in Greek waters and overflights by fighter jets. Over the last few months, it has being doing this more systematically and openly. Greece’s approach has also changed. The doctrine that existed in the wake of the Imia crisis in 1996, when the two countries almost went to war, was based around not building up tension following various incidents and maintaining a low profile.

[..] A dangerous situation is also playing out in Cyprus. The Turks are trying to impose the concept of gray zones there as well. July (when a new round of drilling for hydrocarbons is due to begin off Cyprus) promises to be a difficult month. Ankara will attempt before then to intimidate the companies that plan to start drilling or try to obstruct them if they are not scared off by threats.

Prison camps are no solution.

• New Refugee Center Planned On Chios As Tensions Simmer (K.)

The exact site for the creation of a new so-called pre-departure camp for migrants and refugees on the island of Chios will be determined by May 20, authorities said on Monday. The new camp will come as tensions at overcrowded reception centers on the eastern Aegean island continue to simmer, with almost daily clashes between stranded migrants of different ethnicities. “The experience of Lesvos and Kos where such centers have been created is positive,” said Lieutenant General Zacharoula Tsirigoti of the Greek Police in a press briefing Monday on Chios. Pre-departure centers are deemed essential as they house refugees and migrants returning to Turkey. Tsirigoti added that building a new center on the island is a “one-way street” as locals – many of whom have campaigned for the immediate removal of all migrants and refugees from Chios – say the situation has reached breaking point and that the large police force on the island has been unable to cope.

The season is just starting: “..the trend points to around 250,000 people arriving over the course of 2017”. There is no place for these people in Italy and Greece.

• Nearly 200 Missing, 11 Dead As Migrant Boats Sink Off Libya (AFP)

Eleven migrants have died and nearly 200 are missing after two boats sank off the coast of Libya, UN agencies said Monday citing survivors, in the latest such tragedy. The first involved an inflatable craft which left Libya early Friday with 132 people on board, only to start deflating a few hours later, before overturning. Some 50 survivors were picked up by a Danish container ship, the Alexander Maersk, which was alerted to divert by Italian coastguards and dropped them off on Sunday in Pozzallo, southern Sicily. Representatives of the UN High Commissioner for Refugees (UNHCR) and the International Organization for Migration (IOM) were able to meet them on Monday to hear their accounts. Survivors told them that women and children were among those missing.

At the same time, the bodies of 10 women and one child were found Monday on a beach in Zawiya, 50 kilometres (31 miles) west of Tripoli, according to an official for the Libyan Red Crescent. Then on Sunday seven migrants – a woman and six men – were rescued by Libyan fishermen and coastguards off the coast of the Libyan capital. An IOM spokesman who met them said they had set out on a boat with at least 120 people on board, including about 30 women and nine children. In all more than 6,000 migrants were rescued Friday and Saturday in international waters off the coast of Libya and brought to Italy, while several hundred were rescued in Libyan waters and taken back to Libya.

The number of people leaving Libya in the hope of starting a new life in Europe is up nearly 50% this year compared with the opening months of 2016. With most departures coming in the warm summer months, the trend points to around 250,000 people arriving over the course of 2017. Some 500,000 migrants were registered in Italy in the three years spanning 2014-16.

Europe’s reputation is tarnished for decades. But everyone thinks they can deflect responsibility. Time for skin in the game.

• Hundreds Of Migrants Feared Dead In Mediterranean Over Weekend (R.)

More than 200 migrants are feared to have died in the Mediterranean over the weekend, according to testimony from survivors, and several bodies, including that of an infant, have washed up on a Libyan beach. About 7,500 people have been rescued off the coast of Libya since Thursday, the Italian and Libyan coastguards said. Two groups of survivors told the organizations that hundreds drowned when their rubber boats began to deflate before rescuers arrived. More than 60 are feared dead and three bodies were recovered on Saturday, survivors brought to Sicily on Sunday told Italian coastguards. The boat left Libya carrying about 120, they said. There was some discrepancy in the numbers. Based on its interviews with some of the survivors in Pozzallo, Italy, the U.N. refugee agency estimated the number of dead at more than 80.

Separately, Libya’s coastguard picked up seven survivors over the weekend who said they had been on a boat packed with 170 migrants. Aid agency International Medical Corps, which gave medical care to the survivors, also confirmed their account. “We rescued on Sunday seven illegal migrants – six men and a woman,” said Omar Koko, a coastguard commander in the western city of Zawiya. “According to these survivors, there were 170 on board the boat, which sank because of overloading.” Among those missing were more than 30 women and nine children, Koko said. Eleven bodies washed up on the shore west of Zawiya, said Mohanad Krima, a spokesman for the Red Crescent in Zawiya. “All the bodies are of female victims and there is a girl of less than one year old,” he said.