Mar 102022
 


Johannes Vermeer The art of painting 1666-8

 

Doug Casey: U.S. Empire Collapsing, Greatest Danger in World Today (G&E)
A Recession Unlike Any Other (Pento)
Deutsche Bank Has Lost 38% of Its Market Value in a Month (Martens)
Revenge of the Putin-Nazis! (CJ Hopkins)
Victoria Nuland: Ukraine Has “Biological Research Facilities” (Greenwald)
US: Russia Could Launch Biological or Chemical Attack in Ukraine (Antiwar)
The Documents the US Embassy in Ukraine Scrubbed on Biolabs (BN)
US Won’t Give Poland’s Jets to Ukraine (ET)
Ukraine Bans Exports Of Wheat, Oats And Other Food Staples (AP)
Iraqis Protest Rise In Food Prices, Officials Blame Ukraine War (AlJ)
Dems Drop Covid-19 Funds, Clear Way For OK Of $13.6b Ukraine Aid (AP)
Bad News from Hong Kong (Chudov)
Austria Scraps Covid-19 Vaccine Mandate (RTE)
Bolshoi Conductor Resigns Over Free Speech Controversy (Turley)
Wales Bans Tchaikovsky (SD)

 

 

 

 

Plenary
https://twitter.com/i/status/1501673748151390214

 

 

 

 

Assange

 

 

“We could be looking at real chaos over the next decade or two.”

Doug Casey: U.S. Empire Collapsing, Greatest Danger in World Today (G&E)

Doug Casey talks Great Reset, says we’re in for a tough time, that trends in motion tend to stay in motion, and fears the stage is being set for some authoritarian leader to rise to power. He feels the people who love liberty (e.g. libertarians) are an anomaly or rounding error compared to the rest of society. He gives his thoughts on being an international man in the brave new world where air travel has collapsed and authority has become more digital and centralized. We discuss Ukraine…he believes the Russians are on the right side of all this. The U.S. Government is a collapsing empire and has become the greatest danger in the world today. We could be looking at real chaos over the next decade or two. He gives us some tips on surviving the apocalypse.

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“..the government’s debt to GDP ratio soaring to 125 percent. For perspective, that ratio was just 53 percent back in 1960, and only 58 percent as recently as 2000..”

A Recession Unlike Any Other (Pento)

The U.S. economy is already deteriorating due to the humongous fiscal and monetary cliffs. These cliffs are now being compounded by the war in Eastern Europe and near record-high inflation. And, the Fed’s “PUT” is much lower and smaller in size than Wall Street believes. The war in Ukraine will exacerbate the negative supply shocks that are already in place due to COVID-19. Worsening bottlenecks will combine with rising inflation to produce a contraction in global growth. Russia produces 12 percent of the world’s oil supply and exports 18 percent of the world’s wheat consumption. Ukraine accounts for 25 percent of global wheat production. Sanctions and war will serve to slow the economy further and send prices for these vital commodities even higher.

But the upcoming recession will be extraordinarily unique. Not only will it occur while inflation is at a multi-decade high, it will be the first U.S. economic contraction to take place while the Federal Reserve had its target interest rate at or near zero percent. For comparison, look at how much room the Fed had to reduce borrowing costs during previous economic contractions. The following historical data indicates the level of the Fed Funds Rate just prior to the outset of all 10 U.S. recessions since WWII: 1957 3.5 percent, 1960 4.0 percent, 1969 10.5 percent, 1973 13.0 percent, 1979 16.01 percent, 1981 20.61 percent, 1989 10.71 percent, 2000 6.86 percent, 2007 5.31 percent, and 2019 2.45 percent.

In addition, the swoon in GDP will occur after the Fed has just finished printing $4.5 trillion over the past two years and with the national debt vaulting over $30 trillion due to the massive increase in government deficits in the wake of the COVID-19 pandemic. Such borrowing helped send the government’s debt to GDP ratio soaring to 125 percent. For perspective, that ratio was just 53 percent back in 1960, and only 58 percent as recently as 2000. Inflation is destroying real wages, and rising borrowing costs are destroying consumers’ ability to consume. Consumption is 70 percent of GDP, and that means the rate of economic growth is set to plunge. This would normally spur the government into remediative action. But the fact remains that the ability of the Treasury and Federal Reserve to turn around a recession expeditiously by borrowing trillions of dollars and having that debt monetized by the Fed has become greatly fettered this time around.

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$35.4 trillion in notional derivatives..

“derivative weapons of mass destruction”

Deutsche Bank Has Lost 38% of Its Market Value in a Month (Martens)

Deutsche Bank closed at $16.50 on the New York Stock Exchange on February 10 of this year. It closed at $10.23 yesterday – a decline of 38 percent in a month’s time. That’s a big problem because Deutsche Bank is heavily interconnected to Wall Street banks via derivatives. According to Deutsche Bank’s most recent annual report, as of December 31, 2020, it held $35.4 trillion in notional derivatives. (Notional means face amount.) Deutsche Bank, a large German bank, was among the global banks bailed out by the Fed during the financial crash of 2008 as well as during the (still unexplained) liquidity crash that saw the Fed pump trillions of dollars in cumulative loans into global banks from September 17, 2019 through July 2, 2020.


In June 2016, The International Monetary Fund (IMF) released a report with a finding that Deutsche Bank posed the greatest threat to global financial stability than any other bank because of its interconnections to Wall Street mega banks and large banks in Europe. The largest bank in the United States, JPMorgan Chase, was shown as one of the banks with the largest amount of exposure. Despite that finding by the IMF in 2016, Deutsche Bank has been allowed by regulators in Europe and the U.S. to continue engaging in high-risk Over-the-Counter derivatives. It also has an uncomfortable history of suicides and rogue behavior. See a sampling of its history since 2014 below. Yes, President Joe Biden’s administration has a lot on its plate. But if it doesn’t get serious about reforming Wall Street and its derivative weapons of mass destruction, it will have a lot more to deal with eventually.

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“Return of the Putin-Nazis! Revenge of the Putin-Nazis! Return of the Revenge of the Bride of the Putin-Nazis!”

Revenge of the Putin-Nazis! (CJ Hopkins)

And they’re back! It’s like one of those 1960s Hammer Film Productions horror-movie series with Peter Cushing and Christopher Lee … Return of the Putin-Nazis! Revenge of the Putin-Nazis! Return of the Revenge of the Bride of the Putin-Nazis! And this time they are not horsing around with stealing elections from Hillary Clinton with anti-masturbation Facebook ads. They are going straight for “Democracy’s” jugular! Yes, that’s right, folks, Vladimir Putin, leader of the Putin-Nazis and official “Evil Dictator of the Day,” has launched a Kamikazi attack on the United Forces of Goodness (and Freedom) to provoke us into losing our temper and waging a global thermonuclear war that will wipe out the entire human species and most other forms of life on earth!

I’m referring, of course, to Putin’s inexplicable and totally unprovoked invasion of Ukraine, a totally peaceful, Nazi-free country which was just sitting there minding its non-Nazi business, singing Kumbaya, and so on, and not in any way collaborating with or being cynically used by GloboCap to menace and eventually destabilize Russia so that the GloboCap boys can get back in there and resume the Caligulan orgy of “privatization” they enjoyed throughout the 1990’s. No, clearly, Putin has just lost his mind, and has no strategic objective whatsoever (other than the total extermination of humanity), and is just running around the Kremlin shouting “DROP THE BOMBS! EXTERMINATE THE BRUTES!” all crazy-eyed and with his face painted green like Colonel Kurtz in Apocalypse Now … because what other explanation is there?

Or … OK, sure, there are other explanations, but they’re all just “Russian disinformation” and “Putin-Nazi propaganda” disseminated by “Putin-apologizing, Trump-loving, discord-sowing racists,” “transphobic, anti-vax conspiracy theorists,” “Covid-denying domestic extremists,” and other traitorous blasphemers and heretics, who are being paid by Putin to infect us with doubt, historical knowledge, and critical thinking, because they hate us for our freedom … or whatever. Let’s take a quick look at some of that “Russian disinformation” and “propaganda,” purely to inoculate ourselves against it. We need to be familiar with it, so we can switch off our minds and shout thought-terminating clichés and official platitudes at it whenever we encounter it on the Internet. It might be a little uncomfortable to do this, but just think of it as a Russian-propaganda “vaccine,” like an ideological mRNA fact-check booster (guaranteed to be “safe and effective”)!

OK, the first thing we need to look at, and dismiss, and deny, and pretend we never learned about, is this nonsense about “Ukrainian Nazis.” Just because Ukraine is full of neo-Nazis, and recent members of its government were neo-Nazis, and its military has neo-Nazi units (e.g., the notorious Azov Battalion), and it has a national holiday celebrating a Nazi, and government officials hang his portrait in their offices, and the military and neo-Nazi militias have been terrorizing and murdering ethnic Russians since the USA and the Forces of Goodness supported and stage-managed a “revolution” (i.e., a coup) back in 2014 with the assistance of a lot of neo-Nazis … that doesn’t mean Ukraine has a “Nazi problem.” After all, its current president is Jewish!

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Sort of new for us, but the Russians have known this all along.

“..if a biological attack were to occur, everyone should be “100% sure” that it was Russia who did it..”

Victoria Nuland: Ukraine Has “Biological Research Facilities” (Greenwald)

Self-anointed “fact-checkers” in the U.S. corporate press have spent two weeks mocking as disinformation and a false conspiracy theory the claim that Ukraine has biological weapons labs, either alone or with U.S. support. They never presented any evidence for their ruling — how could they possibly know? and how could they prove the negative? — but nonetheless they invoked their characteristically authoritative, above-it-all tone of self-assurance and self-arrogated right to decree the truth and label such claims false. Claims that Ukraine currently maintains dangerous biological weapons labs came from Russia as well as China. The Chinese Foreign Ministry this month claimed: “The US has 336 labs in 30 countries under its control, including 26 in Ukraine alone.”

Nuland

The Russian Foreign Ministry asserted that “Russia obtained documents proving that Ukrainian biological laboratories located near Russian borders worked on development of components of biological weapons.” Such assertions deserve the same level of skepticism as U.S. denials: namely, none of it should be believed to be true or false absent evidence. Yet U.S. fact-checkers dutifully and reflexively sided with the U.S. Government to declare such claims “disinformation” and to mock them as QAnon conspiracy theories. Unfortunately for this propaganda racket masquerading as neutral and high-minded fact-checking, the neocon official long in charge of U.S. policy in Ukraine testified on Monday before the Senate Foreign Relations Committee and strongly suggested that such claims are, at least in part, true.


Yesterday afternoon, Under Secretary of State Victoria Nuland testified before the Senate Foreign Relations Committee. Sen. Marco Rubio (R-FL), hoping to debunk growing claims that there are chemical weapons labs in Ukraine, smugly asked Nuland: “Does Ukraine have chemical or biological weapons?” Rubio undoubtedly expected a flat denial by Nuland, thus providing further “proof” that such speculation is dastardly Fake News emanating from the Kremlin, the CCP and QAnon. Instead, Nuland did something completely uncharacteristic for her, for neocons, and for senior U.S. foreign policy officials: for some reason, she told a version of the truth. Her answer visibly stunned Rubio, who — as soon as he realized the damage she was doing to the U.S. messaging campaign by telling the truth — interrupted her and demanded that she instead affirm that if a biological attack were to occur, everyone should be “100% sure” that it was Russia who did it. Grateful for the life raft, Nuland told Rubio he was right.

Tucker Carlson – Bio-Weapons Labs in Ukraine

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Yeah, right.

US: Russia Could Launch Biological or Chemical Attack in Ukraine (Antiwar)

On Wednesday, the White House claimed without evidence that Russia might use chemical or biological weapons to create a false flag operation in Ukraine. The White House also dismissed Moscow’s accusations that the US is involved in biological weapons research in Ukraine even though there are Pentagon-linked labs in the country. On Twitter, White House Press Secretary Jen Psaki said to be on the lookout “for Russia to possibly use chemical or biological weapons in Ukraine, or to create a false flag operation using them.” She said Russia’s claim of the US having biological weapons labs in Ukraine is “preposterous.” Psaki’s denial comes a day after Undersecretary of State Victoria Nuland said there are “biological research facilities” in Ukraine the US is concerned Russian forces might seize.

Nuland made the comments after being asked if there are bioweapons in Ukraine and said the US is working with the Ukrainians to keep “research materials” out of Russia’s hands. The Russian military has claimed that it uncovered 30 biological laboratories in Ukraine linked to the Pentagon’s Defense Threat Reduction Agency (DTRA). On Wednesday, Russian Foreign Ministry spokeswoman Maria Zakharova said Russia has documents that show Ukraine ordered the destruction of samples of plague, cholera, anthrax, and other pathogens before Russia launched its attack on February 24. According to a February 25 article from the Bulletin of Atomic Scientists, the US government has worked with 26 biological research facilities in Ukraine. The article quoted Robert Pope of the DTRA’s Cooperative Threat Reduction Program, who warned some of the labs could have Pathogens leftover from the Soviet Union’s bioweapons program.

Lavrov biological weapons

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The US is insane.

The Documents the US Embassy in Ukraine Scrubbed on Biolabs (BN)

Russian accusations of a U.S.-funded and administered ‘biowarfares’ laboratory research program in Ukraine has led to rampant speculation about the nature of these Pentagon-funded laboratories. The Russians’ insistence that it has evidence of such a bioweapons program has become a major hurdle at the diplomatic negotiations between Russia and Ukraine in Belarus. Russian foreign minister Sergei Lavrov charged at a press conference last week that “the Pentagon built two biowarfare labs and they have been developing pathogens there in Kyiv and in Odessa.” Lavrov also compared the presence of the laboratories to the United States’ Weapons of Mass Destruction program allegations that led it to invade Iraq in 2003 and topple dictator Saddam Hussein.


Leonid Slutsky, head of the Duma Committee on International Affairs and a member of the Russian delegation at the talks with Ukraine, argued that the purported development of biological weapons components “confirm that the Russian Federation had good reasons for conducting a special military operation to demilitarize Ukraine.” Major General Igor Konashenkov, an official representative of the Russian Ministry of Defense, charged on Sunday that “components of biological weapons were being developed in Ukraine, in close proximity to Russian territory.” Amid the Russians’ accusations, the U.S. Embassy in Ukraine has scrubbed a number of documents related to the Ukrainian “Biological Threat Reduction” program. Those documents have been retrieved and can be read below. The documents show both the locations of the Ukrainian laboratories and the Department of Defense’s listing as a “donor” to the program.

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They were fine with Poland handing them over directly. That way nobody could point at the US. It would still have been WWIII. And Poland didn’t fall for that trap.

US Won’t Give Poland’s Jets to Ukraine (ET)

The United States won’t act on a proposal from Poland to take fighter jets from the ally and transfer them to Ukraine because of concerns Russian officials would view the move as “escalatory,” a U.S. official said March 9. “The intelligence community has assessed the transfer of MiG-29s to Ukraine may be mistaken as escalatory, and could result in significant Russian reaction that might increase the prospects of a military escalation with NATO,” John Kirby, the U.S. Department of Defense’s spokesman, told reporters in Washington. Based on the assessment, with which Defense Secretary Lloyd Austin concurs, the military assesses the transfer as “high-risk” and will not carry it out, at least for now.

The proposal from Poland was Polish officials would transfer jets to the United States, which could then send the jets to Ukraine. Poland’s government also called on NATO allies to send jets to U.S. bases. But U.S. officials quickly rejected the proposal, though they had not detailed the intelligence assessment until Wednesday. Kirby also framed the decision as in Ukraine’s best interests, arguing that Ukraine would benefit more in the conflict with Russia by receiving anti-armor and air defense weapons. While Russia’s air force has significant capabilities, air assaults have been met with resistance in the air and on the ground, according to U.S. officials. Additionally, the Ukrainian Air Force was also said to have several squadrons of fully capable aircraft already, and a U.S. assessment concluded “giving them more is not likely” to make a big impact, according to Kirby.

Austin conveyed the position to Polish Defense Minister Mariusz Blaszczak in a call and also spoke with a top Ukraine official about similar matters. U.S. officials had previously said Poland was welcome to transfer planes to Ukraine directly and Kirby said each nation “can decide for themselves what they want to do.” Ukraine’s public position is that getting fighter jets would help tremendously against Russia, which invaded its neighbor on Feb. 24. “That’s absolutely the way we see it,” Vadym Prystaiko, Ukraine’s ambassador to the United Kingdom, said on Sky News on Wednesday when asked if jets would give Ukraine the advantage it needs.

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“..stabilize the market..”

Ukraine Bans Exports Of Wheat, Oats And Other Food Staples (AP)

Ukraine’s government has banned the export of wheat, oats and other staples that are crucial for global food supplies as authorities try to ensure they can feed people during Russia’s intensifying war. New rules on agricultural exports introduced this week also prohibit the export of millet, buckwheat, sugar, live cattle, and meat and other “byproducts” from cattle, according to a government announcement. The export ban is needed to prevent a “humanitarian crisis in Ukraine,” stabilize the market and “meet the needs of the population in critical food products,” Roman Leshchenko, Ukraine’s minister of agrarian and food policy, said in a statement posted on the government website and his Facebook page.


It’s the latest sign that the Russia’s invasion of Ukraine threatens the food supply and livelihoods of people in Europe, Africa and Asia who rely on the farmlands of the Black Sea region — known as the “breadbasket of the world.” Russia and Ukraine together supply nearly a third of the world’s wheat and barley exports, which have soared in price since the invasion. The products they send are made into bread, noodles and animal feed around the world, and any shortages could create food insecurity in places like Egypt and Lebanon. The export ban will likely reduce global food supplies just when prices are at their highest level since 2011.

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The start.

Iraqis Protest Rise In Food Prices, Officials Blame Ukraine War (AlJ)

Protests have erupted in Iraq’s impoverished south over a rise in food prices that officials attributed to the conflict in Ukraine. For about a week, the price of cooking oils and flour have skyrocketed in local markets as government officials have sought to address growing anger with various statements and measures. More than 500 protesters gathered on Wednesday in a central square in the southern city of Nasiriya – a flashpoint of anti-corruption protests that gripped the country in 2019. “The rise in prices is strangling us, whether it is bread or other food products,” retired teacher Hassan Kazem told AFP news agency. “We can barely make ends meet.” On Tuesday, the Iraqi government announced measures to confront the increase in international prices.


These included a monthly allowance of about $70 for pensioners whose incomes do not exceed one million dinars (almost $700), as well as civil servants earning less than 500,000 dinars ($343). The authorities also announced the suspension of customs duties on food products, basic consumer goods and construction materials for two months. Trade ministry spokesman Mohamed Hanoun attributed the rise in cooking-oil prices to the conflict in Ukraine. “There’s a major global crisis because Ukraine has a large share of [the world market in cooking] oils,” he said. On Tuesday, a protester was seriously injured in a demonstration in the central province of Babil that was marred by violence, a security source said. The interior ministry announced it had arrested 31 people accused of “raising the prices of food commodities and abusing citizens”. A protester in Nasiriya on Wednesday denounced the “greed of traders who manipulate prices”.

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“This is the beast that Putin is,” Pelosi said.

Dems Drop Covid-19 Funds, Clear Way For OK Of $13.6b Ukraine Aid (AP)

The House approved a massive spending bill Wednesday night that would rush $13.6 billion in U.S. aid to battered Ukraine and its European allies, after top Democrats were forced to abruptly drop their plan to include fresh funds to battle COVID-19. Passage of the Ukraine aid and the $1.5 trillion government-wide legislation carrying it let both parties lay claim to election-year victories for their priorities. Democrats won treasured domestic initiatives, Republicans achieved defense boosts, and both got their imprint on funds to counter Russia’s brutal invasion of its western neighbor. Senate approval was assured by week’s end or perhaps slightly longer.

Hours earlier, House Speaker Nancy Pelosi, D-Calif., had to abandon the bill’s $15.6 billion for combating the pandemic, a decision she called “heartbreaking” and that spelled defeat for a top priority of President Joe Biden and party leaders. The money was mostly to bolster U.S. supplies of vaccines, treatments and tests and battle the disease around the world, but a Democratic revolt over Republican-demanded state aid cuts to cover the new initiatives’ costs forced her to scrap that spending. “We’ve got a war going on in Ukraine,” Pelosi told reporters, explaining the urgency Democrats felt in making concessions in bargaining with Republicans. “We have important work that we’re doing here.” She said with her party in the 50-50 Senate needing at least 10 GOP votes to pass legislation, Democrats “are going to have to know there has to be compromise.”

The House approved the overall bill in two separate votes. The measure’s security programs were overwhelmingly approved by 361-69, the rest by 260-171, with most Republicans opposed. The Ukraine aid included $6.5 billion for the U.S. costs of sending troops and weapons to Eastern Europe and equipping allied forces there in response to Russian President Vladimir Putin’s invasion and bellicose threats. There was another $6.8 billion to care for refugees and provide economic aid to allies, and more to help federal agencies enforce economic sanctions against Russia and protect against cyber threats at home. Biden had requested $10 billion for Ukraine.

Pelosi said she talked to Ukrainian President Volodymyr Zelenskyy for 45 minutes Wednesday. She said they discussed the weapons and other assistance his country needs and “the crimes against humanity that Putin is committing,” including a Russian airstrike that destroyed a maternity hospital. “This is the beast that Putin is,” Pelosi said. While enmity toward Putin and a desire to send assistance to the region is virtually universal in Congress, lawmakers have had a harder time finding unity on other steps. In one area where both parties were eager to demonstrate action, the House voted 414-17 to banning Russian oil imports, a prohibition that Biden imposed this week.

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“..the case fatality rate in Hong Kong is 16 times HIGHER than in the US..”

Bad News from Hong Kong (Chudov)

Something very strange is happening in Hong Kong. I am not the first to write about it, but I wanted to do a good job compiling the information and informing my readers so this post is somewhat complete. I will include additional reading below. Hong Kong’s stringent “Zero Covid” policy, stopped to work in mid-February and a “wall of cases” curve exploded in the territory. Now, we have seen such “walls of cases” before, but nothing close ever happened to deaths. You can see that deaths per million in Hong Kong are basically three TIMES the highest death rate in the US or Israel. Cases between Feb 13-Feb 17: 18,493 Deaths between Feb 28-March 4: 895 Calculated Case Fatality Rate: 4.83%

The relevant case fatality rate in the US for our recent Omicron peak is roughly 0.3%, or 16 TIMES lower. Slow down and let it sink in: the case fatality rate in Hong Kong is 16 times HIGHER than in the US. That should make you curious. Hong Kong is vaccinated just as much as the United States or Israel, sitting closely between them. Clearly, something else is in play and not the vaccine. Just as cases and deaths in HK skyrocketed, a new sub-variant called “BA.2 + S:I1221T” has taken over. Not much is known about that variant, other than it is minimal elsewhere. Every Hong Konger who is diagnosed with Covid must be taken away and isolated for 21 days in a very bleak and sad place called “Penny Bay”, where they do not even have working wi-fi.

This, naturally, creates an incentive to NOT report a case of Covid and hide out at home with working wi-fi, for those lucky enough to be able to do it. This creates a bias of healthy people with mild cases not being reported, and may explain a part of high mortality. Here in the West, most people already had exposure to Covid. It is a mystery who gets infected first and why some people do not get Covid until later in the pandemic. It is possible that here in the US or UK, the least healthy people already caught Covid and some, sadly, died. Thus, subsequent waves seem to be less deadly, partly because several waves of Covid already went through the population, and some immunity already exists. Not so in HK, where everyone is now vulnerable.

While, so far, I have not seen any evidence of ADE affecting anyone, it is possible that such incredibly high mortality rates are due to ADE from this new variant. The S:i1221T mutation does change a spike amino acid and it is possible that vaccine spike antibodies are assisting infection instead of suppressing it. While it is still speculation, such a possibility need not be dismissed. Overall, Hong Kong is a story worth watching.

Remdesivir kills 26.9% of patients

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Hmmm .. what changed so dramatically? The polls?

Austria Scraps Covid-19 Vaccine Mandate (RTE)

Austria said it is suspending mandatory Covid-19 vaccinations for all adults saying the pandemic no longer poses the same danger, just weeks after the law took effect in an EU first. The Alpine nation of nine million people was among few countries in the world to make jabs against the coronavirus compulsory for all adults. The law took effect in February and called for fines up to €3,600 from mid-March for those who do not comply. But minister Karoline Edtstadler said the law’s “encroachment of fundamental rights” could no longer be justified by the danger posed by the pandemic. “After consultations with the health minister, we have decided that we will of course follow what the (expert) commission has said,” Ms Edtstadler told reporters after a Cabinet meeting.


“We see no need to actually implement this compulsory vaccination due to the (Omicron) variant that we are predominantly experiencing here.” The highly-contagious variant is widely believed to be less severe than previous strains of the virus, and so far Austrian hospitals have been able to cope with a surge in cases. This has led to the government to drop most coronavirus restrictions in recent weeks. The government has stressed it needs to act flexibly in line with the epidemiological situation. “Just like the virus keeps on changing, we need to be flexible and adaptable,” Ms Edtstadler said. The decision to suspend the law will be reviewed in three months, said Johannes Rauch, who took over as health minister this week as the third since the start of the pandemic.

Synthetic RNA

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“..in both cities he regularly invited Ukrainian singers and conductors because “we never even thought about our nationalities. We were enjoying making music together.”

Bolshoi Conductor Resigns Over Free Speech Controversy (Turley)

Now that assault on free speech has reached the highest levels of ballet after Tugan Sokhiev, the chief conductor at Bolshoi Theatre and the Orchestre National du Capitole de Toulouse, resigned rather than be coerced into such public statements. The Munich Philharmonic also dismissed chief conductor Valery Gergiev after he failed to condemn the invasion. Sokhiev is one of the most celebrated and respected conductors in the world. He also happens to be Russian. For many, his musical contributions became secondary when he failed to publicly condemn Putin. They demanded that he speak or resign. He resigned. Sokhiev wrote on Facebook “during last few days I witnessed something I thought I would never see in my life. In Europe, today I am forced to make a choice and choose one of my musical family over the other.”

As we previously discussed, it is during wartime and periods of social discord that the greatest abuses can occur for those with dissenting or unpopular views. Despite my strong support for Ukraine and condemnation of Putin, it is important for advocates of civil liberties and free speech to stand against such blacklisting and compelled speech. For many, this is hardly a new movement. For years, powerful politicians, academics, and even some in the media have demanded more censorship. This move against Russian performers and athletes may draw the unwitting into this anti-free speech movement. The response to those of us who are raising concerns is the same and predictable. You are called an apologist for Putin or a traitor to the cause. It is an effort to create a glacial chilling effect on dissenting voices.

Once again, it is important to address the rationalization on the left for attacks on free speech in recent years: the First Amendment only protects speech from government crackdowns. The First Amendment is not the full or exclusive embodiment of free speech. It addresses just one of the dangers to free speech posed by government regulation. Many of us view free speech as a human right. Corporate censorship of social media clearly impacts free speech, and replacing Big Brother with a cadre of Little Brothers actually allows for far greater control of free expression. As I have noted earlier, while liberal writers and artists were blacklisted and investigated in the 1950s, liberal activists have succeeded in censoring opposing views to an unprecedented degree in recent years. Rather than burn books, they have simply gotten stores to ban them or blacklist the authors, athletes, and artists.

Figures like the great singer Paul Robeson found themselves barred from performances due to their refusal to condemn others or Russia. Some, however, are not intimidated but rather incensed by the attack on free speech. In the meantime, at least one opera lover is boycotting the Met after it cancelled another great Russian artist for not publicly reciting the official line against Putin. I recently received the attached letter from a donor at the Met who stated that he was changing his will over the controversy involving soprano Anna Netrebko. He would no longer leave his estate to the Met and pledged to stop his regular contributions to the institution. As for Sokhiev, he noted that in both cities he regularly invited Ukrainian singers and conductors because “we never even thought about our nationalities. We were enjoying making music together.”

The response from the mayor of Toulouse, Jean-Luc Moudenc, was particularly telling. While denying that they demanded that Sokhiev “make a choice between his native country and his beloved city of Toulouse,” the mayor added: “However, it was unthinkable to imagine that he would remain silent in the face of the war situation, both vis-à-vis the musicians and the public and the community.” It is not “unthinkable.” He may support the invasion or fear for himself or his family in opposing this tyrant. It does not matter his reasons. He should have a right to hold opposing views or to remain silent. What is unthinkable is that artists are being blacklisted for refusing to recite political statements like some reeducation camp in the Cultural Revolution. It is a curious way to fight tyranny by denying free speech.

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It’s like a cartoon now.

Wales Bans Tchaikovsky (SD)

The Cardiff Philharmonic has cancelled an all-Tchaikovsky programme as ‘inappropriate at this time’. The concert included his decidedly apolitical second symphony, known as the Little Russian. The orchestra says: ‘: In light of the recent Russian invasion of Ukraine, Cardiff Philharmonic Orchestra, with the agreement of St David’s Hall, feel the previously advertised programme including the 1812 Overture to be inappropriate at this time. The orchestra hope you will continue to support them and enjoy the revised programme.’


This is unutterably stupid. At the start of the First World War, the Proms conductor Sir Henry Wood informed the British government that he would continue performing Wagner and other Germans. The same rule prevailed in the Hitler war. Only the Nazis ever banned Tchaikovsky. Welcome to Cardiff 2022.

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Elon Musk tweet

 

 

Nate Hagens Human superorganism

 

 

 

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Dec 052014
 
 December 5, 2014  Posted by at 12:20 pm Finance Tagged with: , , , , , , , , , ,  1 Response »


William Henry Jackson Hand cart carry, Adirondacks, New York 1902

This Is Oil’s ‘Minsky Moment’: Marc Chandler (CNBC)
Cheap Oil’s Economic Benefits May Be A Big Myth (MarketWatch)
Brent Drops From 4-Year Low as Saudi Discounts Deepen Price War (Bloomberg)
Oil Drop Gives U.S. Drillers Argument to End Export Ban (Bloomberg)
Canada-U.S. LNG Rivalry Draws Focus After Petronas Delay (Bloomberg)
ECB Paralyzed By Split As Irreversible Deflation Trap Draws Closer (AEP)
Greenspan Says He Would Pre-Empt Asset Bubbles Financed by Debt (Bloomberg)
US Economy Still Bigger, But China’s More Crucial (MarketWatch)
Wage Growth Stuck Below Pre-Crisis Levels (CNBC)
British Workers Suffer Biggest Real-Wage Fall Of Major G20 Countries (Guardian)
‘Colossal’ Cuts To Come, Warns UK Institute For Fiscal Studies (BBC)
North Sea Oil Exploration To Be Allocated UK Taxpayers’ Money (Guardian)
Poland More Worried About Europe Than Russia (CNBC)
Eurozone Mulls Longer Greek Bailout, But Athens Refuses (Reuters)
Japan Pension Fund Head Calls for $389 Billion Stock Revamp (Bloomberg)
The Japanese Government Bond Market Is Dead. And the Yen? (Wolfstreet)
Companies Don’t Need Banks for Bank Loans (Bloomberg)
Putin Warns Russians Of Hard Times Ahead (BBC)
Finns Who Can’t Be Fired Show Debt Trap at Work (Bloomberg)
Vatican Finds Hundreds Of Millions Of Euros ‘Tucked Away’ (Reuters)

Marc Chandler says what I have said: it’s not about the energy, it’s about the financing. Which is vanishing from the shale patch. “The big risk now to our shale is not going to be that the price of oil drops so far that it’s not going to be profitable,” he said. “The weakness, the Achilles’ heel, is that they don’t get the cheap funding anymore.”

This Is Oil’s ‘Minsky Moment’: Marc Chandler (CNBC)

Six years ago, the theories of economist Hyman Minsky were used to make sense of the collapse in housing prices, and its attendant effects on the economy. Today, Marc Chandler says the energy sector has just suffered its own Minsky moment. And while he doesn’t expect it to take down the stock market, the slide in oil could have a serious impact on the high-yield bond market. Minsky moment is a term coined by Pimco economist Paul McCulley in 1998, and it refers to a point when a period of rapid growth and risk-taking leads to a sudden turn lower and a crisis. Chandler, global head of markets strategy at Brown Brothers Harriman, says that is precisely what is happening in crude oil. “Many people a couple years ago, a year ago, were saying that oil prices could only go up—’we’re in peak oil’—meaning that we’re running out of the stuff. So a lot of things were leveraged based on oil prices that can only go up. Sort of like house prices—’they can only go up.’ So what happened is, because people held this as a deep conviction, they leveraged up,” Chandler said.”

In fact, the energy sector has borrowed $90 billion in the high-yield market since 2008, Chandler said, making energy producers “a large component of the high-yield market itself.” The problem is that “a lot of the loans, like loans on houses, were made not so much on a person’s ability to repay the loan as on the value of the house. Similarly, the banks and investors bought high-yield bonds or leveraged loans on the energy sector not on the basis of their ability to repay it, but on the value of the oil in the ground.” And so what happens now that crude oil has fallen nearly 40% from its June highs? Chandler foresees both further consolidation (along the lines of Halliburton’s acquisition of Baker Hughes) and failures ahead as the cheap financing dries up. “The big risk now to our shale is not going to be that the price of oil drops so far that it’s not going to be profitable,” he said. “The weakness, the Achilles’ heel, is that they don’t get the cheap funding anymore.” Or, to use a more modern metaphor: “This is sort of when Wile E. Coyote runs off the cliff.”

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“[When] an individual fills up their automobile, there is not an extra $10 bill that shows up in their wallet, therefore, the incentive to spend really is not recognized and the ‘savings’ get washed within already tight consumer budgets ..”

Cheap Oil’s Economic Benefits May Be A Big Myth (MarketWatch)

Cheap oil is awesome, right? Most economists describe it as a sort of tax cut for Americans at the gas pump. Even Larry Fink, a hot-shot Wall Street money manager, declared oil’s decline “spectacular.” “This is an incredible tax cut for Americans and everywhere else around the world,” Fink told CNBC Wednesday, referring to the startling plunge oil has seen in recent weeks. The cheap oil argument goes like this: consumers and businesses save in heating costs and in fueling their cars and those savings will be spent on discretionary items, fueling consumption. A recent article in the Washington Post indicated that Americans would pocket a $230 billion windfall, if prices stay at their current levels, compared to where they were in June.

However, some financial experts argue that a decline in oil isn’t all that it’s cracked up to be. In fact, it could be a bad omen for the U.S. economy. Lance Roberts, Strategist for STA Wealth Management, said the idea that declining energy prices are good for the economy is wrong. “[When] an individual fills up their automobile, there is not an extra $10 bill that shows up in their wallet, therefore, the incentive to spend really is not recognized and the ‘savings’ get washed within already tight consumer budgets,” Roberts argued. It’s often noted that consumer spending accounts for about two-thirds of gross domestic product. But Roberts pointed out that history does not seem to support the idea that lower gasoline prices, and other cheaper energy costs, lead to higher consumer spending, as the following chart shows:

In fact, as Roberts attempted to illustrate in the chart below, sharp declines in energy prices have actually “been coincident with lower economic growth rates,” as he termed it. In other words, falling oil prices have typically been a harbinger of difficult economic times to come. Think of oil prices as a measure of the global economy’s blood pressure. While there has been a production glut, the strengthening dollar has also contributed to the dramatic drop in oil prices — and that rapidly rising dollar is a function of weakness elsewhere, particularly in Europe and Asia.

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Everything’s on hold for US job numbers later today, but oil is at multi-year lows and slowly falling further this morning.

Brent Drops From 4-Year Low as Saudi Discounts Deepen Price War (Bloomberg)

Brent extended losses from a four-year low as Saudi Arabia offered customers in Asia record discounts on its crude, bolstering speculation it’s defending market share. West Texas Intermediate dropped in New York. Futures fell as much as 0.8% in London and are headed for a second weekly decline. State-run Saudi Arabian Oil Co. cut its differential for Arab Light sales to Asia next month to $2 a barrel below a regional benchmark, according to a company statement. That’s the lowest in at least 14 years. The kingdom doesn’t want to subsidize Iran, Iraq and Venezuela and is willing to let the market decide prices, said Daniel Yergin, an energy analyst and Pulitzer Prize-winning author.

Crude slumped 18% last month as the Organization of Petroleum Exporting Countries maintained its output quota, letting prices decrease to a level that may slow U.S. production. Saudi Arabia has no price target and will let the market decide at what level oil should trade for now, said a person familiar with its policy. “It seems what the Saudis want, the Saudis are going to get,” Phil Flynn, a senior market analyst at Price Futures Group in Chicago, said by e-mail today. “We’re going to see prices continue to be under pressure. It is still game on.”

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Great idea to add US oil to an already overloaded global market.

Oil Drop Gives U.S. Drillers Argument to End Export Ban (Bloomberg)

Collapsing crude prices have given oil producers a new argument for ending a 39-year-old U.S. ban on exports. With U.S. output at a 31-year high and imports at the lowest level since 1995, producers seeking the best possible price for crude are straining at having to keep sales at home. Removing the ban could erase an imbalance between U.S. and foreign crude prices by expanding the market for shale oil. A 38% decline in crude prices since June, “will weigh into the debate” and help make the case to lift the export ban, said Senator Lisa Murkowski, the Alaska Republican poised to take over as head of the Energy and Natural Resources Committee next year. Lawmakers in Washington are set to hold a hearing next week on dropping the ban. Murkowski hasn’t decided yet whether she’ll introduce a bill to allow exports.

Republicans, who are slated to take control of both houses of Congress next year, have yet to reach consensus on what to do. The top House and Senate Republicans haven’t yet taken a position on the matter and some rank-and-file members, including Senator Susan Collins of Maine, say they are wary of action because of fears it may lead to higher gasoline and heating-oil prices. President Barack Obama’s former top economic adviser Lawrence Summers called for ending the ban in September after the Brookings Institution, a Washington policy group, released an analysis showing that exports would lower gasoline prices. White House Press Secretary Josh Earnest declined to say yesterday whether lifting the ban was being discussed or considered by the administration.

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With falling oil prices, these projects loook ever more megalomaniacal. “Backers of LNG projects in British Columbia face higher costs than Gulf Coast proponents such as Sempra Energy because of the pipelines required across two Canadian mountain ranges, the lack of existing infrastructure on the Pacific Coast and negotiations with aboriginals.”

Canada-U.S. LNG Rivalry Draws Focus After Petronas Delay (Bloomberg)

Petroliam Nasional’s deferred decision on a C$36 billion ($32 billion) liquefied natural gas project in British Columbia is bringing to the fore Canada’s struggle to compete with the U.S. on costs. Petronas, as the Malaysian state-owned producer is known, is pushing contractors to bring costs closer in line with U.S. rivals as it tries to keep the first exports to Asia on track to start by 2019, Michael Culbert, chief executive officer of the Pacific NorthWest LNG project, said. “We’ve got real competition that is coming out of the Gulf Coast projects,” Culbert said by phone yesterday, estimating U.S. suppliers can deliver LNG to Asia for $1 to $2 less per million British thermal units than Canadian projects. “With the changing oil prices, contractors may not be as busy as they thought they would be.” While U.S. terminals are already being built, none of the proponents in Canada have decided to proceed. Pacific NorthWest LNG would be the country’s first large project to come online among a handful put forward by Shell to Chevron.

Petronas joined BG Group in pushing back a decision on its plans in Canada as oil trades close to five-year lows. BG cited competition from U.S. supplies when it deferred its decision in October. Backers of LNG projects in British Columbia face higher costs than Gulf Coast proponents such as Sempra Energy because of the pipelines required across two Canadian mountain ranges, the lack of existing infrastructure on the Pacific Coast and negotiations with aboriginals. U.S. projects have caught up to Canadian rivals that received export approvals to start lining up buyers earlier and are now passing them by. Gulf Coast proponents adding export capabilities to existing LNG import terminals need less new equipment and have access to a network of pipelines already linked to vast supplies of gas in shale formations, as well as a larger labor pool.

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Ambrose is right. All the speculation on ECB QE is more or less pointless, because Germany (re: the Bundesbank) is not likely to change its mind.

ECB Paralyzed By Split As Irreversible Deflation Trap Draws Closer (AEP)

The European Central Bank has dashed hopes for quantitative easing this year and acknowledged for the first time that the institution’s elite board is split on plans for a €1 trillion liquidity blitz. Equity markets fell across southern Europe,with Italy’s MIB off 2.77pc, led by sharp falls in bank stocks. Spain’s IBEX dropped 2.35pc. The euro surged by more than 1pc to $1.2455 against the dollar in early trading as speculators rushed to cover short positions. Expectations for immediate stimulus had been riding high after the ECB’s president, Mario Draghi, pledged action “as fast as possible” last month. The bank slashed its forecasts for economic growth to 1pc next year, and admitted that inflation will remain stuck at just 0.7pc, a combination that traps large parts of southern Europe in deflationary slump and corrodes debt dynamics. BNP Paribas said eurozone inflation is likely to average 0pc in 2015, after turning negative this month.

“The ECB’s measures are woefully behind the curve,” said Ashoka Mody, a former EU-IMF bailout chief now at the Bruegel think-tank in Brussels. “For anyone who wants to see it, a debt-deflation cycle is ongoing in the distressed economies. The authorities have very nearly lost control of a process that will become ever harder to manage as it becomes more entrenched,” he said. Mr Mody said the ECB repeatedly asserts that it will act “if needed” but declines to spell out what that means and why it continues to delay when the inflation level – now 0.3pc – is already so far below target. “Cheap talk is a legitimate policy tool. But talk can also create a cognitive bubble,” he said. Mr Draghi denied that the ECB is complacent about the deflation risk or that is succumbing to paralysis. “Let me be absolutely clear. We won’t tolerate prolonged deviation from price stability,” he said.

Yet he pleaded for more time to study the effects of the oil price crash and gave a strong hint that there would be no further decisions on monetary stimulus until after the next meeting in January. The governing council discussed possible purchases of every major asset “other than gold” but has not yet agreed to go beyond the current mix of covered bonds and asset-backed securities. “The credibility of the ECB lies in tatters. It’s now patently clear that Draghi lacks the crucial German support for launching full-blown QE,” said sovereign bond strategist Nicolas Spiro. Mr Draghi insisted that the bank could in principle ram through the QE decision by majority vote but said he was “still confident” that a package of measures could be designed to keep everybody on board.

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The oracle leaks lubricant.

Greenspan Says He Would Pre-Empt Asset Bubbles Financed by Debt (Bloomberg)

Former Federal Reserve Chairman Alan Greenspan, who was blamed by some economists for overheating equity and housing prices in the 1990s and 2000s, said that were he in the job today, he would take pre-emptive action to tackle asset bubbles if they were financed by leverage. Greenspan, who argued in office that it was better to clean up after an asset bubble had burst rather than artificially prick it, told delegates at a conference hosted by Citigroup Inc. in London today that he believed that argument is correct when a speculative boom isn’t financed by debt, mentioning the 1987 stock market crash as an example. If the overheating was caused by leverage, however, “then you’re going to have problems,” he said. “Bubbles are aspects of human nature and you can try as hard as you like, you will not alter the path,” Greenspan told the audience at Citigroup’s European Credit Conference via a video link from Washington.

“I still hold to the general view that unless you have debts supporting the bubble, I would just let it alone because certain things about human nature cannot be changed and I’ve come to the conclusion this is one of them.” The former Fed chairman, who warned against “irrational exuberance” in stock markets as early as 1996, was faulted by some economists for not using higher borrowing costs to prevent equity prices from rising before the bursting of the so-called tech bubble in 2000. He cut interest rates afterwards to “mop up” the damage, which some analysts said led to an overheating in the housing market that partly caused the financial crisis. Greenspan remained unapologetic about the tech bubble, saying in a December 2002 speech that central banks had “little experience” in dealing with market bubbles and that “dealing aggressively with the aftermath of a bubble” was “likely to avert long-term damage.”

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Yeah, that’s a really important topic. Bragging rights in the glue factory.

US Economy Still Bigger, But China’s More Crucial (MarketWatch)

Commentary was ablaze Thursday over new data suggesting China now makes up a larger portion of the world economy than the U.S., or at least when adjusted to reflect purchasing power. The numbers — published by the International Monetary Fund — had folks from Nobel laureate economist Joseph Stiglitz to MarketWatch columnist Brett Arends declaring the end of the U.S. as the top economic power, while others such as Harvard professor and former Clinton Administration advisor Jeffrey Frankel, argued that America was still on top. But while most economic analysis would still put the U.S. comfortably atop the world rankings, HSBC economist Frederic Neumann said that the real lesson of the IMF data was that China, and emerging Asia as a whole, has become more crucial to the global economy.

In a report Friday, Neumann noted that if you adjust this year’s gross domestic product data for purchasing parity (smoothing out foreign-exchange differences by making the price of products the same in each country), not only is China bigger than the U.S., but the emerging economies of Asia would be bigger than those of the U.S. and euro zone combined. “But that’s not necessarily the right measure to look at to gauge a market’s importance to the world,” Neumann wrote. “Here, international purchasing power matters, and that is best captured by looking at GDP in U.S. dollars.” In other words, an economy’s influence must be measured by what it’s worth globally, not just in its own currency. So if you look at nominal dollar-denominated GDP, the U.S. makes up 22% of the world’s total, while the euro zone is 17%, and China is 11%. “But that’s not to dismiss the growing importance of Asia,” the HSBC economist wrote. “For one, emerging Asia’s combined U.S.-dollar GDP will pull equal to that of the U.S. for the first time this year.”

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We know. That’s why we call BS on ‘growth’.

Wage Growth Stuck Below Pre-Crisis Levels (CNBC)

Stagnant wage growth in developed countries has pulled average global earnings lower and is in danger of dragging economic performance down, according to the International Labour Organization (ILO). In its latest report published Friday, the ILO said that global wage growth in 2013 slowed to 2%, from 2.2% the year before. As such, pay growth has a significant way to go before it reaches its pre-crisis level of around 3%. The average rate was pulled down by stagnant pay in developed countries, the organization said. Annual wage growth in these economies had been around 1% since 2006, but fell to just 0.1% in 2012, and 0.2% in 2013. Wage growth in developed countries was hit hard by the recent economic crisis, which saw employers become reluctant to increase workers’ pay. Over the past few years, as nascent recoveries took hold in major economies including the U.S. and U.K., pay increases have lagged broader economic growth.

It’s an issue that will be in focus on Friday, when the U.S.’s non-farm payrolls numbers are released. The unemployment rate is expected to be unchanged at 5.8%, according to Reuters, but analysts are hoping for a slight increase in wages – a key measure for the Federal Reserve in considering when to raise interest rates. “Wage growth has slowed to almost zero for the developed economies as a group in the last two years, with actual declines in wages in some,” Sandra Polaski, the ILO’s deputy director-genera for policy, said in a release. “This has weighed on overall economic performance, leading to sluggish household demand in most of these economies and the increasing risk of deflation in the euro zone.” By contrast, pay growth in emerging countries has stormed ahead over the last two years, according to the ILO, coming in at 6.7% and 5.9% in 2012 and 2013 respectively.

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That’s how they get their ‘recovery’.

British Workers Suffer Biggest Real-Wage Fall Of Major G20 Countries (Guardian)

British workers suffered the biggest fall in real wages of all major G20 countries in the three years to 2013, according to the International Labour Organisation (ILO). They fared worse in terms of falling real pay than all of the bailed-out eurozone economies – Portugal, Spain and Ireland – apart from Greece. Wages in Japan and Italy also fell over the period but at a slower rate than in the UK, while real terms pay increased in the US, France, Germany, Canada and Australia. Patrick Belser, senior economist at ILO and author of the report, said: “In the UK in 2008 there was some positive growth of real wages whereas some other countries had stagnant or declining wages – such as Japan. Then what you see subsequently is a continuous fall in wages to 2013. We expect wages to be at best flat this year, and they will most likely decline.”

The biggest fall in UK wages adjusted for inflation came in 2011, when they fell by 3.5%. In Italy, which was one of the countries hit hardest by the eurozone crisis, real pay fell by only 1.9%. Last year real UK pay fell by 0.3% according to the ILO, compared with a 2% increase globally. Real wages in the UK have fallen consistently since 2008, with inflation outpacing pay rises an economic recovery and recent rapid falls in unemployment. In the UK, but also in Greece, Ireland, Italy, Japan and Spain, average real wages in 2013 remained below their 2007 level. Belser said weak productivity was part of the story in the UK. The Bank of England said in its latest quarterly inflation report last month that recent employment growth had been concentrated among young, lower-skilled and lower-paid workers, which was probably dragging down average wage growth. Weaker-than-expected pay growth in Britain has also generated lower than expected tax revenues for the government, which in turn has slowed deficit reduction.

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“One thing is for sure – if we move in anything like this direction, whilst continuing to protect health and pensions, the role and shape of the state will have changed beyond recognition.”

‘Colossal’ Cuts To Come, Warns UK Institute For Fiscal Studies (BBC)

The plans set out by George Osborne in the Autumn Statement on Wednesday will require government spending cuts “on a colossal scale” after the election, an independent forecaster has warned. The Institute for Fiscal Studies (IFS) said just £35bn of cuts had already happened, with £55bn yet to come. The detail of reductions had not yet been spelled out, IFS director Paul Johnson said. As a result, he said it would be wrong to describe them as “unachievable”. However, voters would be justified in asking whether the chancellor was planning “a fundamental reimagining of the role of the state”, Mr Johnson told a briefing in central London on Thursday.

If reductions in departmental spending were to continue at the same pace after the May 2015 election as they had over the past four years, welfare cuts or tax rises worth about £21bn a year would be needed by 2019-20, at a time when the Conservatives were committed to income tax cuts worth £7bn, according to the IFS. Mr Johnson added: “One thing is for sure – if we move in anything like this direction, whilst continuing to protect health and pensions, the role and shape of the state will have changed beyond recognition.”

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What a great idea with oil moving towards $50. Does that mean they’ll get more of our money?

North Sea Oil Exploration To Be Allocated UK Taxpayers’ Money (Guardian)

Taxpayers’ money could be channelled directly into North Sea oil exploration under a scheme announced to the industry in Aberdeen on Thursday by Danny Alexander, chief secretary to the Treasury. The promise to give financial support for seismic surveys was one of a number of tax and other benefits proposed by the government in an attempt to halt a collapse in exploration and remedy a fall in production. The moves were welcomed by the offshore industry but criticised by environmentalists as “environmental and economic illiteracy of the highest order”. Alexander said it was right to give targeted support to Scotland’s oil and gas industry building on tax reductions and other moves made in the autumn statement on Wednesday.

“We’re incentivising and working with the industry to develop new investment opportunities and support new areas of exploration. This will help ensure that the industry continues to thrive and contribute to the economy,” he explained. Other North Sea countries including Norway and Holland provide seismic incentives but they are new in the UK. Mike Tholen, economics and commercial director at lobby group Oil & Gas UK, said the allocation was expected to be a few millions of pounds rather than billions and to be matched by companies. It would be targeted at areas that would otherwise not be explored. “It is small beer financially but it is important because it is government putting its money where its mouth is,” he said.

Friends of the Earth said it was extraordinary that the government was trying to squeeze as much oil out of the North Sea as it could while the international community was trying to agree a plan during world climate talks in Lima, Peru to head off the threat of catastrophic climate change. Craig Bennett, the organisation’s policy and campaigns director, said: “This is environmental and economic illiteracy of the highest order. Ministers must end their obsession with dirty fossil fuels and build a clean economy for the future based on energy efficiency and the nation’s huge renewable power resources.”

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As the western press tries to make the most out of Poland’s fear of Putin, they have other things on their mind.

Poland More Worried About Europe Than Russia (CNBC)

With Russia and Ukraine for neighbors, Poland’s economy is feeling the heat from the geopolitical crisis but government officials said insist the country was a bright spot in a bad neighborhood and that the euro zone was more of a concern than Russia. “Sanctions are felt across the board, exports to Ukraine are down 25% and to Russia they’re down 10%,” Krzysztof Rybinski, the former deputy governor of the Polish Central Bank, told CNBC Friday. “But I don’t think investors will pull the plug on Poland unless Russia does something really unpredictable.” For Poland the euro zone slowdown was more of a worry. “For the Polish economy it’s much more important what happens in the west, if there is no growth, stagnation and recession in the west it will take us down with the situation.

Russia and Ukraine together are only about 7.5% of Polish exports – that’s significant but not as much as (our exports to) Germany.” Sanctions in Russia and the conflict in Ukraine, coupled with sluggish growth in the euro zone have had a “chilling” effect on Central Eastern Europe, with Poland no exception. Despite credit rating agency Moody’s saying that Poland’s economy had shown “resilience in times of stress” the country’s gross domestic product has declined. The economy grew by 2.0% in 2012, but grew 1.6% last year, according to EU statistics service Eurostat. Rybinski said there had been some positive effects of the sanctions on Russia, however. “We have many Ukrainian young people flowing through the border to Polish universities, this is a positive effect of sanctions. Other positive effects are that the zloty (the Polish currency) is not very strong which is helping Polish exporters,” he said.

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Without that bailout, the markets will attack Greece once again.

Eurozone Mulls Longer Greek Bailout, But Athens Refuses (Reuters)

Euro zone ministers are considering extending Greece’s bailout by six months to mid-2015, according to a document obtained by Reuters, but Athens said it was only willing to consider an extension of a few weeks to the unpopular program. Extending the program beyond a few weeks into the new year would complicate Prime Minister Antonis Samaras’ efforts to secure victory for his preferred candidate in a presidential vote in February. He had depended on exiting the EU/IMF bailout by the end of the year, when funding from the EU is due to end. “Greece has not received any written proposal on an extension,” a government official told Reuters. “In any case, everything that the prime minister and Finance Minister (Gikas) Hardouvelis has said stands – that Greece can discuss only a technical extension, which cannot be longer than a few weeks.”

An extension of the bailout, under which Athens will have received a total of €240 billion ($300 billion) since 2010, is necessary because international lenders and the Greek government are still negotiating what Athens must do to get the remaining €1.8 billion and secure a back-up credit line for after the bailout ends and Greece returns to market financing. Athens needed to wrap up its bailout review by a meeting on Dec. 8 of euro zone ministers to meet the timeline for exiting by the end of the year. But the talks have been held up by a row over a budget shortfall next year, and a senior euro zone official on Wednesday said Greece would have to ask for an extension on its bailout because a credit line to replace the program will not be ready in time. Euro zone officials are now urging the country to reach a deal by Dec. 14, a Greek finance ministry official said.

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Stop pretending already. There is no cure for Japan.

Japan Pension Fund Head Calls for $389 Billion Stock Revamp (Bloomberg)

Japan’s Government Pension Investment Fund is considering whether to overhaul its $389 billion of stock investments by loosening rules that restrict managers to domestic or international equities. A month after the $1.1 trillion pool unveiled plans to more than double local and foreign share targets so that each makes up 25% of assets, Takahiro Mitani, its president, said separating the world into Japan and everywhere else may not be the best approach. GPIF should consider letting some of its managers invest both at home and abroad, he said. “More funds are investing without discriminating between domestic and foreign, and I think that’s worth considering,” Mitani, 65, said in an interview in Tokyo on Dec. 3. “If choosing between Toyota and Volkswagen, instead of being limited to just Toyota and Nissan, raises investment performance and efficiency, it’s an option we mustn’t rule out.”

The California Public Employees’ Retirement System, the biggest U.S. public pension, makes no distinction between local and foreign holdings. Calpers, which oversees about $295 billion, has a 51% target for public equities, according to its website. GPIF’s stock investments were parceled out to managers in 45 different pieces as of March 31, according to the fund’s annual report. The Topix index rallied 8.4% since GPIF announced the investment strategy changes on Oct. 31. The Bank of Japan unexpectedly expanded its bond buying to 80 trillion yen ($666 billion) a year on the same day, as it targets annual inflation of 2%. The extra purchases helped drive yields on benchmark 10-year notes down by 3.5 basis points to 0.435% yesterday, after touching a more than 1 1/2-year low at the end of November. The Topix rose 0.4% at today’s close to extend a seven-year high. The yen fell 0.3% to 120.01 per dollar.

GPIF would have to revise its systems to allow one manager to invest across Japanese and non-domestic shares, Mitani said. Alternatively, it could create a new global stock class on top of the existing ones, he said. The fund is due to review foreign equity managers in about 18 months, according to Mitani, who said he plans to retire when his five-year term finishes at the end of March.

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And this is what you get, Mr. Pension fund head: ” .. 37% of Japan’s yen-denominated wealth has gone up in smoke ..” Abenomics equals desperation.

The Japanese Government Bond Market Is Dead. And the Yen? (Wolfstreet)

[The BOJ’s] relentless bid has driven yields to near zero, now increasingly for longer-dated maturities as well. In this process, the Bank of Japandemonium, as I’ve come to call it, has tightened its iron grip on the government bond market to where the market ran out of air and died. Takeshi Fujimaki, an opposition lawmaker, explained the phenomenon this way:

The BOJ used consumer prices as an excuse to add stimulus and continues to hide that it’s monetizing government debt. But the truth is that Japan will default unless the BOJ continues to buy JGBs even after inflation accelerates beyond its intended target.

Alas, to monetize ever larger portions of government debt, the BOJ is selling freshly printed yen into a market it can manipulate but not control: the global currency market. Once big players around the world start dumping the yen, and once scared Japanese folks start dumping their yen too, the yen might do what the ruble is doing now: spiraling down uncontrollably. When Abenomics became a noun in late 2012, it took ¥75 to buy $1. Today it takes ¥120. With the effect that 37% of Japan’s yen-denominated wealth has gone up in smoke. But once the BOJ decides that the yen has fallen enough, it might not be able to stop its fall. It would have to sell its international reserves and buy yen – the opposite of QE.

If it decided to buy yen, instead of printing yen, to prop up the currency, it would thereby surrender control over the government bond market. The relentless bid would disappear even as the flood of new JGBs would continue. There would be no other buyers, not with yields at near zero. Chaos would break out instantly. The BOJ might try for a minute or two, and it might try to talk up the yen, but it can’t actually prop up the yen with yen purchases without causing JGBs to spiral out of control, which it would never allow to happen. It would never allow a debt crisis to throw Japan into chaos. Instead, it will continue to guarantee the nominal value of the debt by buying up every JGB that comes on the market, while keeping yields at near zero. And to heck with the yen. Fujimaki sees ¥200 to the dollar.

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Good point.

Companies Don’t Need Banks for Bank Loans (Bloomberg)

A while ago U.S. banking regulators announced guidelines to prevent banks from making loans to companies at more than six times Ebitda, because the regulators thought those loans were too risky. More recently those regulators have announced, roughly once a week, that they intend to enforce those rules, but for real this time. Here is a Wall Street Journal story about how private-equity firms – whose buyouts tend to be funded by leveraged loans – are adapting to those rules. Here is one funny way to adapt:

Private-equity firms have used adjustments in their models that contribute to a company’s earnings, thereby decreasing the leverage ratio and lifting a company’s future cash flow, a measure regulators use to calculate a company’s ability to repay debt. Vista Equity Partners adjusted Tibco Software’s Ebitda for the 12 months to Aug. 31 by 58%, to $378 million, from Tibco’s own calculation of $239 million.

This is an admirable strategy: If you want to borrow 8.5 times as much money as you make in a year, then that’s bad. One way to fix that is to borrow less money, but that is no fun. Another way to fix it is to make more money, but that is hard. A third way to fix it is to cross out the number of dollars that you make in a year and write a different number, and, boom, now you are borrowing 5.3 times Ebita. (Yes yes yes Vista “factored in cost savings” that the buyout would generate.) I don’t know how popular that strategy is.

The more interesting adaptation strategy is direct syndication. The thing is, most leveraged loans don’t come from banks. When a company does a leveraged loan, a bank will normally arrange the loan, and lend some of the money, but typically most of the money will come from other investors: hedge funds, mutual funds, collateralized loan obligations, etc.3 In the modern leveraged-loan market — much like in the stock and bond markets — banks are mostly intermediaries, matching companies that want to borrow with investors who want to lend. Those investors can still lend. The banks can’t. (I mean, they can, but the regulators will make sad faces at them.) But statistically the banks weren’t lending that much anyway. They were calling up the investors who were actually lending, but banks don’t have a monopoly on telephones.

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Everyone seems to be gambling on Russians dumping Putin in hard times, but why should they?

Putin Warns Russians Of Hard Times Ahead (BBC)

President Vladimir Putin has warned Russians of hard times ahead and urged self-reliance, in his annual state-of-the nation address to parliament. Russia has been hit hard by falling oil prices and by Western sanctions imposed in response to its interventions in the crisis in neighbouring Ukraine. The rouble, once a symbol of stability under Mr Putin, suffered its biggest one-day decline since 1998 on Monday. The government has warned that Russia will fall into recession next year. Speaking to both chambers in the Kremlin, Mr Putin also accused Western governments of seeking to raise a new “iron curtain” around Russia. He expressed no regrets for annexing Ukraine’s Crimea peninsula, saying the territory had a “sacred meaning” for Russia.

He insisted the “tragedy” in Ukraine’s south-east had proved that Russian policy had been right but said Russia would respect its neighbour as a brotherly country. Speaking in Basel in Switzerland later, US Secretary of State John Kerry said the West did not seek confrontation with Russia. “No-one gains from this confrontation… It is not our design or desire that we see a Russia isolated through its own actions,” Mr Kerry said. Russia could rebuild trust, he said, by withdrawing support for separatists in eastern Ukraine.

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This has many European countries worried.

Finns Who Can’t Be Fired Show Debt Trap at Work (Bloomberg)

Finland is a nice place to be if you work in the public sector. But laws that protect municipal workers from the hard reality of a faltering economy are adding to the debt burden in a country that had its credit rating cut just two months ago. In some towns, no public-sector staff can be fired until as late as 2022. Meanwhile, Finnish local government debt has tripled to €16.3 billion ($20 billion) since 2000. It will grow by another €10 billion by 2018, the Finance Ministry estimates. “The government and municipalities have the same problem: the income base has collapsed while expenses have continued to grow,” Anssi Rantala, chief economist at Aktia Bank Oyj, said by phone. As more people retire than join the workforce, Finland’s recession shows no sign of easing.

Prime Minister Alexander Stubb has described the country’s plight as a “lost decade” as manufacturing fails to spur growth for a third consecutive year. Adding to the country’s woes is the economic pain spreading through its eastern neighbor as exports to Russia collapse. In October, Standard & Poor’s cut Finland to AA+ from AAA as the state’s debt exceeds the 60% limit to gross domestic product permitted inside the European Union. As the government struggles to squeeze more competitiveness out of its labor force, existing laws are hampering its efforts. Many municipal employees enjoy a five-year immunity in case their town is merged with another. Among Finland’s 320 towns, the smallest ones may merge several times – giving those workers another five years of job protection each time.

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Francis has guts. He fired the head of the Swiss guard as well yesterday. But money is a topic that can draw especially harsh responses, certainly when it’s a lot. And the Vatican has an awful lot.

Vatican Finds Hundreds Of Millions Of Euros ‘Tucked Away’ (Reuters)

The Vatican’s economy minister has said hundreds of millions of euros were found “tucked away” in accounts of various Holy See departments without having appeared in the city-state’s balance sheets. In an article for Britain’s Catholic Herald Magazine to be published on Friday, Australian Cardinal George Pell wrote that the discovery meant overall Vatican finances were in better shape than previously believed. “In fact, we have discovered that the situation is much healthier than it seemed, because some hundreds of millions of euros were tucked away in particular sectional accounts and did not appear on the balance sheet,” he wrote. “It is important to point out that the Vatican is not broke … the Holy See is paying its way, while possessing substantial assets and investments,” Pell said, according to an advance text made available on Thursday.

Pell did not suggest any wrongdoing but said Vatican departments had long had “an almost free hand” with their finances and followed “long-established patterns” in managing their affairs. “Very few were tempted to tell the outside world what was happening, except when they needed extra help,” he said, singling out the once-powerful Secretariat of State as one department that had especially jealously guarded its independence. “It was impossible for anyone to know accurately what was going on overall,” said Pell, head of the new Secretariat for the Economy that is independent of the now downgraded Secretariat of State. Pell is an outsider from the English-speaking world transferred by Pope Francis from Sydney to Rome to oversee the Vatican’s often muddled finances after decades of control by Italians.

Pell’s office sent a letter to all Vatican departments last month about changes in economic ethics and accountability. As of Jan. 1, each department will have to enact “sound and efficient financial management policies” and prepare financial information and reports that meet international accounting standards. Each department’s financial statements will be reviewed by a major international auditing firm, the letter said. Since the pope’s election in March, 2013, the Vatican has enacted major reforms to adhere to international financial standards and prevent money laundering. It has closed many suspicious accounts at its scandal-rocked bank. In his article, Pell said the reforms were “well under way and already past the point where the Vatican could return to the ‘bad old days’.”

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