extinction Archives - Page 2 of 5

At 5.55am, Talgarth Road, one of the major arteries into west London, is just beginning to clog up with early rush-hour traffic. A man named Dave, his white van pulled over into a loading bay, is putting up a billboard poster by the side of the carriageway. The previous one was an advert for Calvin Klein featuring the model Lara Stone. Over the course of 20 minutes, Dave covers Stone up, expertly pasting rectangles of paper over her, using a ladder for the high ones, then sweeping over with his brush. The first rectangle, in the top left corner, contains a headshot of Jacob Rees-Mogg and the beginning of his Twitter handle. As Dave lines up edges, pastes and brushes, and Stone disappears, a quote emerges from Rees-Mogg.

This one wasn’t a tweet; he said it in parliament. “We could have two referendums. As it happens, it might make more sense to have a second referendum after the renegotiation is completed.” There are three other men here, dressed in hoodies, lumberjack shirts and beanies, lurking around and admiring the work. Their work – because Richard, Adam and Chris are three of the four key people behind Led By Donkeys, the remainer guerrilla activists highlighting the hypocrisy and lies of politicians by posting their damning quotes on billboards around the country. Less guerrilla now, actually: they’ve gone legit, this hoarding is paid for. Before, they just took them over.

[..] It all began, as most good ideas do, in the pub. They were talking about the infamous David Cameron tweet – “Britain faces a simple and inescapable choice – stability and strong government with me or chaos with Ed Miliband” – which was doing the rounds again after Theresa May cancelled the vote on her deal in December. And someone said: why don’t they slap it on a billboard, make it the tweet you can’t delete? The next day, on the WhatsApp group, one of them said they had found someone who would print it out for them. They all agreed: “Let’s just fucking do it.” It was cheaper to do five, so they cobbled together four more tweets – from Michael Gove, David Davies, John Redwood and Liam Fox – not really thinking they’d ever put them up. Initial outlay was about 200 quid, plus £90 on a ladder from B&Q.

Tusk is an idiot, but he was right when he said thet as both May and Corbyn want to Leave, there is no political leadership for Remain. But the majority of Britons by now want to Remain. Don’t underestimate the danger of this.

• Tusk: Special Place In Hell For Brexiteers Without Even Sketch Of A Plan (Ind.)

A war of words has further undermined Theresa May’s mission to Brussels to rescue her Brexit deal, after the EU warned of a “special place in hell” for politicians who botched the project. Downing Street and Tory politicians hit back angrily after the extraordinary attack by Donald Tusk on those who triumphed in the referendum “without even a sketch of a plan how to carry it safely”. The prime minister’s spokesman urged people to ask whether such language was “helpful” – before noting, sarcastically, that was impossible “because he didn’t take any questions”. Andrea Leadsom, the Commons leader, condemned the comments by Mr Tusk, the European Council president, as “disgraceful” and “spiteful”, saying such behaviour “demeans him”.

Sammy Wilson, Brexit spokesman of the Democratic Unionist Party (DUP), which props up the Tories in power, went further – branding him a “devilish, trident-wielding, Euro maniac”. But pro-EU Tory Anna Soubry backed him and named Boris Johnson, David Davis and Nigel Farage as among his likely targets, for having “abdicated all responsibility”. The fury overshadowed the tough message for Ms May before she lands in Brussels on Thursday morning – that the EU will never agree to reopening the divorce deal, as she has vowed to do. The prime minister will again demand either an end date for the Irish backstop or an exit mechanism from it for there to be any hope of the Commons passing the deal. Ms May appeared to drop her third option – replacing the backstop with ill-defined “alternative arrangements”, based on unproven technology – to the anger of some Brexiteer Tories.

Vote Corbyn, get May.

• Corbyn Lays Out Labour’s Terms For Backing May On Brexit (G.)

Jeremy Corbyn has written to the prime minister, offering to throw Labour’s support behind her Brexit deal if she makes five legally binding commitments – including joining a customs union. The Labour leader held private talks with Theresa May last week for the first time since her deal was rejected by a historic margin of 230 votes in January. In a follow-up letter sent on Wednesday, he laid out in the clearest terms yet what commitments he is seeking in exchange for offering Labour support. His intervention will dismay backbench Labour MPs and grassroots activists still hoping he will switch the party’s policy towards demanding a second Brexit referendum – which is not mentioned in the letter.

And it comes as No 10 prepares to publish legislation underpinning workers’ rights, perhaps as early as next week, in an attempt to win support from Labour backbenchers. In his letter, Corbyn calls for the government to rework the political declaration setting the framework for Britain’s future relationship with the EU – and then enshrine these new negotiating objectives in UK law, so that a future Tory leader could not sweep them away after Brexit. He says the changes to the political declaration must include:

• A “permanent and comprehensive UK-wide customs union”, including a say in future trade deals.
• Close alignment with the single market, underpinned by “shared institutions”.
• “Dynamic alignment on rights and protections”, so that UK standards do not fall behind those of the EU.
• Clear commitments on future UK participation in EU agencies and funding programmes.
• Unambiguous agreements on future security arrangements, such as use of the European arrest warrant.

Britain can no longer manage with two parties. Same as so many countries.

• Not Opposing Brexit Could Lose Labour 45 Seats (G.)

A trade union affiliated with the Labour party has claimed that Jeremy Corbyn’s party could lose an additional 45 seats in a snap election if it fails to take an anti-Brexit position, in a leaked report. The report, drawn up by the transport union TSSA and including extensive polling, was sent to the leftwing pressure group Momentum. It appears to be an attempt to pile pressure on the Labour leader over Brexit. It claims that “Brexit energises Labour remain voters” disproportionately, and warns: “There is no middle way policy which gets support from both sides of the debate.” The Guardian understands that while the report was sent to Momentum, it was not commissioned or requested by the group.

Sources inside the party stressed that there were risks from turning either way on Brexit – and other polls showed a different picture. The document – marked strictly confidential – says: “There can be no disguising the sense of disappointment and disillusionment with Labour if it fails to oppose Brexit and there is every indication that it will be far more damaging to the party’s electoral fortunes than the Iraq war. “Labour would especially lose the support of people below the age of 35, which could make this issue comparable to the impact the tuition fees and involvement in the coalition had on Lib Dem support.” The document starts by pointing out that the TSSA has “supported Jeremy Corbyn’s leadership from the very beginning”.

It says that the party’s supporters view Brexit as a “Tory project”. It adds that four-fifths of them believe the current deal will hurt the British economy and 91.4% of Labour voters do not trust the government to deliver a good Brexit for people such as them.

Only in hindsight will Americans see the damage done by these people.

• Yellen: Next Fed Move May Be A Rate Cut (CNBC)

The Federal Reserve’s next move may well be an interest rate cut if weakening growth around the world starts infecting the U.S. economy, former central bank Chair Janet Yellen said Wednesday. Weakening economies in China and Europe are posing danger to an otherwise strong U.S. economy, Yellen told CNBC’s Steve Liesman during a “Power Lunch” interview. “Of course it’s possible. If global growth really weakens and that spills over to the United States where financial conditions tighten more and we do see a weakening in the U.S. economy, it’s certainly possible that the next move is a cut,” she said. “But both outcomes are possible.” The former central bank head cited “slowing global growth” as the biggest threat to the economy she once watched over. “The data from China has been recently weak, the European data has also come in weaker than expected,” she said.

The very last people who should conduct such tests.

• Fed’s Quarles Sees 2019 As An ‘Interim’ Year For Bank Stress Tests (R.)

U.S. bank stress tests conducted during an “interim” period this year will help the Federal Reserve decide what permanent changes to make to the closely followed examinations, the Fed’s point person on financial supervision Randal Quarles said on Wednesday. On Tuesday the Fed said it would make its stress testing of large banks more transparent in 2019, providing financial firms significantly more information about how their portfolios would perform under potential economic shocks. The changes respond to long-running bank complaints that the current stress-testing process is cumbersome and opaque. Less complex banks with assets between $100 billion and $250 billion, such as SunTrust Banks and Fifth Third Bancorp, do not have to face 2019 stress tests, as the Fed is moving to a two-year cycle for testing those firms.

“Our challenge now is to preserve the strength of the test, while improving its efficiency, transparency, and integration into the post-crisis regulatory framework,” Federal Reserve Vice Chairman of Supervision Randal Quarles said in remarks prepared for delivery at a Council for Economic Education event in New York. “Our experience with this ‘interim’ year will inform the move to a permanently longer testing cycle – a change that would, of course, be subject to a full notice and comment process.” The 2019 tests also include factoring in a jump to 10 percent unemployment from the current 4 percent rate, as well as elevated stress in corporate loan and commercial real estate markets in the most severe scenario.

The press, including WaPo, have changed tactics. They no longer try for a larger audience, they make their existing readers more faithful. More subscribers, much ‘better’ targeted ads.

• Press Needs More Than Super Bowl Ad To Fix Its Plunging Credibility (ZH)

Media Bias: While journalists are getting pink slips across the country, the Washington Post decided to dump a boatload of cash for a Super Bowl image ad that tried to portray the news media as national heroes. Here’s a better, and much cheaper, idea to restore the industry’s shattered reputation: Be less blatantly partisan. In the 60-second ad, Tom Hanks intones about the importance of journalists against the backdrop of historic events. Thankfully, during these times, the ad says, “There’s someone to gather the facts. To bring you the story. No matter the cost. Because knowing empowers us. Knowing helps us decide. Knowing keeps us free.” The problem with journalists today, however, is that they aren’t interested in gathering facts or empowering the public with knowledge.

Instead, they are interested mainly in pushing their agenda — a basic failing of the profession brought into high relief over the past two years. The latest IBD/TIPP Poll makes this abundantly clear. The poll asked several questions to gauge the public’s perception of the mainstream news media. What did it find? First, that fully half the country says its trust in the media decreased over the past two years. A tiny 8% say it’s increased. That includes a plurality of independents (49%). Even among Republicans, who’ve long grown accustomed to media bias, 81% say their trust in the press has dropped over the past two years. Geographically, those in the Midwest and the South are mostly likely to say their trust in the press has declined (52% and 57%, respectively) since Trump took office.

Men are far more likely than women (54% vs. 47%). And those with incomes over $75,000 (51% of home distrust the media more) more than lower-income households. These findings alone should be alarming. After all, as any corporate executive knows, you can’t run a successful business when a vast and increasing share of your customer base doesn’t trust the product you are selling. It gets worse. The poll found that more than two-thirds of the public (69%) think the news media “is more concerned with advancing its points of view rather than reporting all the facts.” Only 29% of the public disagrees with that statement. In other words, nearly seven out of 10 adults in the country think the Post ad’s blather about “gathering the facts” is bull. That includes 72% of independents, 95% of Republicans, and — surprisingly enough — 43% of Democrats.

And how can the press pull off its tricks? Easy as pie. Edward Bernays and Goebbels.

• Homo Credulus (Bowman)

Given the right circumstances… a little programing… and enough time for it all to marinate in his soft, mammalian brain… there is almost nothing Homo Credulus will not learn to embrace. Don’t believe us? Take a look at the historical record; you’ll soon wonder how we ever got this far. Sure, you’ll discover gizmos and flying contraptions… art and agriculture… music and mathematics. You’ll witness spectacular scientific breakthroughs, the number “0” and a man’s footprint on the moon. You’ll also find automobiles with so many cup holders, you won’t know where to holster your oversized 7/11 Big Gulp. But you’ll also scratch you head. Perhaps you’ll even weep. And if you think hard enough, you’ll put a few things to serious question…

“Central banks?” “Modern democracy?” “The Rosie O’Donnell Show?” How has mankind survived such atrocities? Self inflicted, no less! And why, moreover, does he rush so earnestly to repeat and replay his worst mistakes? Don’t be too hard on yourself, Dear Reader. After all, repetition is nothing new… You’ll recall that it was the Greeks who first gave the world democracy – from the Greek, demokratia, literally “Rule by ‘People’”. (And yes, it was those very same Greeks who put their own beloved Socrates to death… by a majority vote of 140-361.) Today, democracy is a cherished tenet of “the West.” It is woven into the civic religion, sewn into the social fabric. Men march off eagerly to fight for it, to proselytize it … and to die in forgotten ditches defending it. At least, that’s what they believe they’re doing. As usual, the poor saps have been duped.

The phrase “Making the world safe for democracy” was actually a marketing slogan, coined back in the 1910s, as a way to sell “The Great War” to America. Weary from their own disastrous Civil War just a few decades earlier, in which hundreds of thousands gave up the ghost, Americans were mostly inward looking at the time. That is to say, they wanted little to do with what they largely saw as a “European affair.” Polls might have indicated no appetite for battle… but the nation’s politicians were nonetheless starved for military misadventure. They sensed big profits abroad, both in manufacturing armaments and making onerous bank loans to foreign lands. Sure, “the nation” would have to fill tank and trench with warm young bodies… but very few soldiers would carry senatorial surnames along with their rifles.

Too late already. A deliberate Monsanto policy.

• French, German Farmers Must Destroy Crops After GMOs Found In Monsanto Seeds (RT)

French and German farmers have been forced to dig up thousands of hectares of rapeseed fields after authorities found an illegal GMO strain mixed in with the natural seeds they’d bought from Bayer-Monsanto. Authorities discovered the illicit seeds in three separate batches of rapeseed seeds last fall, but the public has only just been notified. While Bayer issued a recall, by the time the farmers learned of it some of the seeds had already been planted, covering 8,000 ha in France and 3,000 ha in Germany. Bayer-Monsanto estimated the number of rogue seeds at just about .005 percent of the total volume of rapeseed seeds sold to both nations under the brand name Dekalb, but each country has a ban on GMO cultivation, with strict penalties for “accidental” contamination of standard crops.

The agrochemical giant refused to estimate the total cost of the GMO contamination, which knocks out not only this season’s crop but also the next season’s, as farmers will be barred from growing rapeseed next year “to avoid re-emergence of the GMO strain,” according to Bayer-Monsanto’s French COO Catherine Lamboley. They offered to compensate farmers €2,000 per hectare, which would work out to about €20 million between both countries. The cause of the contamination is unknown, Lamboley said, claiming the seeds were produced in Argentina “in a GMO-free area” and declaring that the company “has decided to immediately stop all rapeseed production in Argentina.” The rogue GMO seeds were of a variety grown in Canada that is banned in Europe, although imported food made with the modified rapeseed is permitted for human and animal consumption as long as it is adequately labeled.

Except those farmed.

• The Killing Of Large Species Is Pushing Them Towards Extinction (G.)

The vast majority of the world’s largest species are being pushed towards extinction, with the killing of the heftiest animals for meat and body parts the leading cause of decline, according to a new study. While habitat loss, pollution and other threats pose a significant menace to large species, also known as megafauna, intentional and unintentional trapping, poaching and slaughter is the single biggest factor in their decline, researchers found. An analysis of 362 megafauna species found that 70% of them are in decline, with 59% classed as threatened by the International Union for Conservation of Nature. Direct killing by humans is the leading cause across all classes of animals, the study states.

A range of maladies including intensive agriculture, toxins and invasive competitors are also helping to trigger these declines. This situation adds to the “mounting evidence that humans are poised to cause a sixth mass extinction event”, according to the research, published in Conservation Letters. It adds that “minimizing the direct killing of the world’s largest vertebrates is a priority conservation strategy that might save many of these iconic species and the functions and services they provide.” Humans cause the deaths of large creatures in a variety of ways, from snares that entangle mountain gorillas and the poaching of elephants for ivory to the killing of the Chinese giant salamander, which can grow up to 6ft long and is considered a delicacy in Asia.

So what are you going to do about it? Appeal to your politicians?

• Global Warming Could Exceed 1.5ºC Within Five Years (G.)

Global warming could temporarily hit 1.5C above pre-industrial levels for the first time between now and 2023, according to a long-term forecast by the Met Office. Meteorologists said there was a 10% chance of a year in which the average temperature rise exceeds 1.5C, which is the lowest of the two Paris agreement targets set for the end of the century. Until now, the hottest year on record was 2016, when the planet warmed 1.11C above pre-industrial levels, but the long-term trend is upward. Man-made greenhouse gases in the atmosphere are adding 0.2C of warming each decade but the incline of temperature charts is jagged due to natural variation: hotter El Niño years zig above the average, while cooler La Ninã years zag below.

In the five-year forecast released on Wednesday, the Met Office highlights the first possibility of a natural El Niño combining with global warming to exceed the 1.5C mark. Dr Doug Smith, Met Office research fellow, said: “A run of temperatures of 1C or above would increase the risk of a temporary excursion above the threshold of 1.5C above pre-industrial levels. Predictions now suggest around a 10% chance of at least one year between 2019 and 2023 temporarily exceeding 1.5C.” Climatologists stressed this did not mean the world had broken the Paris agreement 80 years ahead of schedule because international temperature targets are based on 30-year averages.

“Exceeding 1.5C in one given year does not mean that the 1.5C goal has been breached and can be redirected towards the bin,” said Joeri Rogelj, a lecturer at the Grantham Institute. “The noise in the annual temperatures should not distract from the long-term trend.”

Debt Rattle January 10 2019

Jan 102019

January 10, 2019 Posted by Raúl Ilargi Meijer at 10:26 am Finance Tagged with: bank run, Brexit, Dark Overlord, European Spring, extinction, Germany, hunger, May, recession, Salvini, snail, Trump, wall, yellow vests 6 Responses »

René Magritte The menaced assassin 1927

• ‘Total Waste Of Time’: Trump Walks Out Of Shutdown Talks With Democrats (RT)

• Fed May Be Open To Changes To Balance Sheet Plan (R.)

• China Still Borrows Billions In Low-Cost Loans From World Bank (CNBC)

• Germany Probably Just Went Into A Recession (BI)

• Yellow Vests Hope To Trigger Bank Run With Financial Protest (RT)

• Salvini Suggests ‘European Spring’ To Bring End To ‘German-French Axis’ (RT)

• MPs Push For Final Say Referendum As May Suffers Stunning Commons Defeat (Ind.)

• May Loses Grip On Brexit Deal After Fresh Commons Humiliation (G.)

• Theresa May Offers Tory Rebels Fresh Compromise Likely To Anger EU (Ind.)

• Hunger In UK ‘Significant And Growing’ (Ind.)

• Dark Overlord Hackers Leak More 9/11 Docs (RT)

• Lonely George The Tree Snail Dies, And A Species Goes Extinct (NatGeo)

The longer it takes, the deeper the heels are dug in.

• ‘Total Waste Of Time’: Trump Walks Out Of Shutdown Talks With Democrats (RT)

President Donald Trump walked out of the negotiations with congressional Democrats, declaring it a “total waste of time” after they repeated their refusal to fund any sort of wall on the border with Mexico. “Just left a meeting with Chuck and Nancy, a total waste of time,” Trump tweeted, referring to Senate Minority Leader Chuck Schumer (D-New York) and Speaker of the House Nancy Pelosi (D-California). “I asked what is going to happen in 30 days if I quickly open things up, are you going to approve Border Security which includes a Wall or Steel Barrier? Nancy said, NO. I said bye-bye, nothing else works!” After the meeting, Schumer and Pelosi denounced Trump for refusing to reopen the government, just as they had the previous evening.

“Again, we saw a temper tantrum because he couldn’t get his way,” Schumer told reporters outside the White House on Wednesday. Federal workers are “as disappointed as we are that Democrats are unwilling to engage in good-faith negotiations,” Vice President Mike Pence told reporters after the meeting. The US government has been partially shut down for almost 19 days, after Senate Democrats refused to back a Republican-majority House bill that would allocate $5.7 billion to building the border wall. Democrats took over the House on January 3, and have proposed bills to reopen the government, but have rejected any funding to the wall, ever, calling it “immoral.”

“This is a crisis… it is a humanitarian crisis, it is a security crisis,” Homeland Security Secretary Kirstjen Nielsen said. “And the reality is that walls work.” Some 800,000 federal workers will soon miss their first paycheck, and each sides has accused the other of ignoring their needs and interests. Prior to the meeting, Trump said he would be willing to declare a national emergency if the talks with Democrats failed. Asked by ABC reporter Jonathan Karl if he would be willing to reopen the government for the sake of federal workers, Trump asked him if he would do so in his place. “If you would do that, you should never be in this position, because you’d never get anything done,” the president said.

First the rates, now a full 180º?!

• Fed May Be Open To Changes To Balance Sheet Plan (R.)

Federal Reserve policymakers have indicated they may be open to tweaking a longstanding plan to shrink the central bank’s balance sheet, including by shedding housing-backed bonds earlier than anticipated or keeping a bigger-than-expected portfolio of assets. Those were among a range of options discussed at the Fed’s December meeting, minutes released on Wednesday showed. The discussion will continue at future meetings, the minutes said. JP Morgan chief U.S. economist Michael Feroli, writing in a note to investors, described the debate as informal “spitballing.” Fed Chair Jerome Powell himself said in December that shrinking the balance sheet was on “automatic pilot.”

But the discussion shows that the future of the plan may be in flux as policymakers become increasingly nervous about potential kinks in their control over short-term interest rates. The Fed for years bought bonds to stimulate a moribund economy, eventually accumulating a $4.5 trillion balance sheet, but began reversing course in 2013, first by slowing its bond-purchases and then, in 2017, allowing the portfolio to shrink. The Fed is now trimming its holdings by $50 billion each month, an amount intended to reduce the portfolio to a more “normal” size over a number of years without putting too much pressure on the Fed’s short-term policy rate. It has now shed more than $380 billion worth of U.S. Treasuries and mortgage bonds. But reserves are declining at a much faster rate, dropping to $1.51 trillion at the end of 2018, from a 2014 peak of more than $2.7 trillion.

Very timely given my essay yesterday, China Won’t Be Taking Over:

“..tension has developed as China is lending billions of dollars of its own to developing countries under opaque terms as part of its “Belt and Road” initiative to build infrastructure.

• China Still Borrows Billions In Low-Cost Loans From World Bank (CNBC)

China is borrowing billions of dollars each year from the World Bank, despite its position as the world’s second-largest economy, according to a study released Thursday. The Center for Global Development found that the World Bank’s International Bank for Reconstruction and Development loaned China an average of $2 billion a year, totaling more than $7.8 billion, since the country surpassed the bank’s income threshold for lending in 2016. The IBRD lends to middle-income and creditworthy low-income countries. It uses resources from those loans to help boost poorer countries. But tension has developed as China is lending billions of dollars of its own to developing countries under opaque terms as part of its “Belt and Road” initiative to build infrastructure.

The administration of U.S President Donald Trump has been critical of lending to China that squeezes out loans to other countries. But cutting off China from World Bank funding could remove a useful tool to influence policy. “If we want China to be a more responsible lender in the world, then let’s use the World Bank to help them along with that,” said Scott Morris, a senior fellow at the Center for Global Development and lead author of the study. The study looked at the type of loans granted to China and found that $3 billion, or about 38 percent of the total, went to things that provide benefits beyond China’s border, such as pollution controls and green infrastructure projects.

[..] Some lawmakers want China reined in. “We must end the World Bank’s lending to China, especially at a time when Beijing itself is saddling developing countries with predatory debt on unfair terms. Growing the Chinese economy is not the World Bank’s job,” said Brad Sherman, D-Calif., a member of the House Financial Services and Foreign Affairs committees.

There was a time when Business Insider wouldn’t have posted such flimsy articles.

• Germany Probably Just Went Into A Recession (BI)

German industry went into a sudden and unexpected collapse in November. The data is so bad some economists think it might be wrong. Germany may be in recession, economists said, after they trawled through an unexpectedly horrible set of industrial and manufacturing data published on Wednesday’s from the world’s fourth-largest economy. • German industrial production fell by -1.9% in November. • Year over year, production hit a low of -4.6% – the biggest trough since the 2008 crisis. • Germany’s exports fell -0.4% month over month in November, the government reported today. Suddenly, Europe is faltering.

Germany is the largest European economy and its leaders have an outsized influence on the rest of the EU and the European Central Bank. A recession in Germany could easily drag down France and Italy – and the latter country is already likely in a recession of its own. Greece is still struggling to recover from its debt crisis and neighbouring Turkey also dropped into a steep recession, triggered by the devaluation of its currency.

Let’s see Macron counter this one. Is he going to close the ATMs? The banks?

• Yellow Vests Hope To Trigger Bank Run With Financial Protest (RT)

Yellow Vest protesters are hoping to trigger a bank run with a nationwide coordinated cash withdrawal. By threatening the French financial system, protesters say, they want to peacefully force the government to pass their reforms. “If the banks weaken, the state weakens immediately,” said Yellow Vest “sympathizer” Tahz San on Facebook. “It’s elected officials’ worst nightmare.” Protesters plan to empty their bank accounts on Saturday, withdrawing as much money as possible in a bid to undermine the French banks – if not the euro itself. The plan is to “scare the state legally and without violence,” forcing the government to adopt the movement’s Citizens’ Referendum Initiative, which would allow citizens to propose and vote on new laws.

“We are going to get our bread back…you’re making money with our dough, and we’re fed up,” said protester Maxime Nicolle in a video message shared on YouTube. A well-coordinated financial action has the potential to bring the French banking system – and by extension the euro – to its knees, as banks always hold only a fraction of the funds the country’s citizens have in their accounts. However, most banks limit ATM withdrawals to a relatively low amount, meaning protesters would have to line up inside the banks to withdraw the rest of their money, giving the state plenty of time to place restrictions on withdrawals – though this would, no doubt, spark further protest.

There will be a huge shift in power after the European Elections this spring.

• Salvini Suggests ‘European Spring’ To Bring End To ‘German-French Axis’ (RT)

Italy’s Euroskeptic deputy prime minister Matteo Salvini has said he wants Italy and Poland to join together to create a “European Spring” which could end the long-standing French and German domination on the continent. Speaking during a press conference with Polish Interior Minister Joachim Brudzinski in Warsaw on Wednesday, Salvini said that Poland and Italy “will be part of the new spring of Europe, the renaissance of European values” which would create a “new equilibrium” where the dominance of France and Germany is diminished. The leader of the Northern League party said that upcoming European parliamentary elections, set for May, could lead away from a Europe “that is run by bureaucrats.”

Salvini, who is aiming to forge alliances with other Eurosceptic parties across Europe ahead of the elections, was in Warsaw for meetings with members of Poland’s ruling Law and Justice party, which shares a similar anti-immigration and anti-Brussels ideology. At the meeting, Brudzinski also praised Salvini’s immigration policy and his decision to close Italian ports to migrant boats, saying that Poland was also committed to “strengthening borders.” At a press conference with France’s right-wing National Rally leader Marine Le Pen in October, Salvini promised a new era of “common sense” was coming to Europe with the rise of nationalist parties. Salvini’s Northern League formed a coalition government with the anti-establishment Five Star Movement in June last year.

M5S leader Luigi Di Maio has also been seeking to make friends with other anti-establishment parties across the continent, holding meetings with a number of party leaders from Poland, Croatia and Finland who share similar values. Earlier this week, Salvini and Di Maio were embroiled in a public feud with French government officials after they threw their support behind France’s Yellow Vest anti-government protest movement. On his public blog, Di Maio urged demonstrators “not to weaken,” and said he planned to meet with some of the activists in the coming days, while Salvini accused French President Emmanuel Macron of being “against his people.” France’s Minister for European Affairs, Nathalie Loiseau, shot back, telling the Italian duo to “sweep their own doorstep” before commenting on French affairs.

“…even if an amendment did pass, the government would not be legally required to comply with what the Commons had voted for…”

• MPs Push For Final Say Referendum As May Suffers Stunning Commons Defeat (Ind.)

MPs are weighing up how quickly to launch a bid for a fresh referendum on Brexit, after inflicting a stunning defeat on Theresa May which cleared the way for a Commons vote. Another Conservative revolt will force the prime minister to present her “plan B” within just three working days of what seems certain to be a heavy defeat of her proposed deal next Tuesday. The victory torpedoed Ms May’s apparent plan to force MPs to vote multiple times on that deal, while “running down the clock” to the threat of crashing out of the EU with no agreement, as the feared alternative. It triggered chaotic scenes in the Commons, as furious Brexiteers accused John Bercow, the Commons speaker, of blatant bias in allowing the vote, against legal advice.

The government must now table a motion, setting out what it plans to do if it loses on Tuesday, by 21 January – which, crucially, could be amended to allow parliament to “take back control”, as one senior Tory put it. Supporters of a Final Say referendum are weighing up whether to go for the kill immediately, or wait until after Jeremy Corbyn has, finally, set out Labour’s position. All eyes will be on the Labour leader, amid a growing expectation he will table a vote of no confidence in the government next week, to try to force a general election. That is likely to fail, piling enormous pressure on Mr Corbyn to then back a fresh referendum – without which a Commons majority for a public vote is unlikely.

[..] by 21 January, there may still be no Commons majority for any alternative to Ms May’s doomed plan, whether a referendum, extending Article 50, or the soft Brexit “Norway option”. Furthermore, even if an amendment did pass, the government would not be legally required to comply with what the Commons had voted for…

After next Tuesday the gloves really come off.

• May Loses Grip On Brexit Deal After Fresh Commons Humiliation (G.)

Theresa May’s room for manoeuvre should her Brexit deal be rejected next week was further constrained on Wednesday night, after the government lost a second dramatic parliamentary showdown in as many days. An increasingly boxed-in prime minister must now set out her plan B within three working days of a defeat next Tuesday, after the rebel amendment passed. There were furious scenes in the House of Commons as the Speaker, John Bercow, took the controversial decision to allow a vote on the amendment, tabled by the former attorney general Dominic Grieve. A string of MPs, including the leader of the house, Andrea Leadsom, repeatedly intervened to question the Speaker’s approach. Some accused him of being biased against Brexit.

But parliament went on to back Grieve as the prime minister was defied by Conservative rebels determined to hand control of the Brexit process to MPs if next week’s vote is lost. The fresh defeat, which followed a separate backbench amendment to the finance bill on Tuesday, means the government will have to return to parliament swiftly with a plan. An accelerated timetable will also pile the pressure on Labour to move quickly. The motion setting out the government’s plan can be amended by MPs hoping to push their own alternative proposals, from a second referendum to a harder Brexit.

One desperate woman. She now offers to break the deal she has with the EU. Then there’ll be nothing left.

• Theresa May Offers Tory Rebels Fresh Compromise Likely To Anger EU (Ind.)

Theresa May is on a fresh collision course with Brussels after the government said it would give MPs the chance to override a key part of the exit deal agreed with the European Union. In a new bid to win over Tory rebels, ministers announced they would support moves to ensure parliament is given a vote in 2020 on whether or not to enter the controversial Northern Ireland backstop. That could see MPs vote to block the UK entering the backstop, even though it would be legally bound to do so under the terms of the withdrawal agreement. The government said on Wednesday that it will accept an amendment tabled by former Tory minister Sir Hugo Swire.

The motion says that if no trade deal with the EU is in place by 2020 ministers must hold a vote in parliament on whether or not to enter the backstop, and must limit the UK’s participation in the mechanism to one year. Both appear to contradict the terms of the withdrawal agreement with Brussels, which states that the backstop is the default option if a deal on the future relationship is not in place by the end of 2020 and says that this will apply indefinitely.

“..call for the appointment of a “Minister for Hunger”..”

• Hunger In UK ‘Significant And Growing’ (Ind.)

The government has been accused of presiding over “significant and growing” hunger as a report warns that one in five children in the UK live in homes that are severely food insecure – making it the worst for child hunger in Europe. A combination of high living costs, stagnating wages and the rollout of universal credit has led to a steady rise in food insecurity – yet ministers have allowed the issue to “fall between the cracks”, according to a report by the Environmental Audit Committee. In a damning indictment of the welfare system, the MPs accuse the government of being “silent” on food insecurity in its obesity strategy, and call for the appointment of a “minister for hunger” to ensure cross-departmental action on the issue.

The report cites figures showing that 2.2 million people in Britain are severely food insecure – the highest reported level in Europe. This indicates that the UK is responsible for one in five of all severely food insecure people on the continent. Recent data published by Unicef shows one in five youngsters under 15 now live in a food insecure home – which the committee described as a “scandal that cannot be allowed to continue”. It comes after Philip Alston, the UN’s special rapporteur on extreme poverty and human rights, said policies and drastic cuts to social support were entrenching high levels of poverty and inflicting unnecessary misery in the UK, and that Brexit was exacerbating the problem.

Becoming a weird story, fast.

• Dark Overlord Hackers Leak More 9/11 Docs (RT)

The Dark Overlord hacker group has released decryption keys for a second batch of 9/11 documents, totalling over 7,500 files. Additional document leaks containing “more secrets” and “more truth” have been promised, for a price. The first batch of the supposed 18,000 documents was made available by the hackers at the weekend, along with a decryption key for ‘layer 1’ of the dump. The documents are believed to have been stolen from insurance companies, law firms and government agencies, and the hackers originally demanded an unspecified bitcoin ransom to keep them unreleased. After apparently failing to secure the ransom, the group then took bitcoin donations from the public, releasing ‘layer 1’ after collecting $12,000 – but then also releasing ‘layer 2’ on Wednesday despite not meeting its funding target.

So far, no ‘smoking gun’ has emerged detailing conspiracy or government involvement in the terrorist attacks. Instead, the documents build up a picture of insurance litigators brainstorming to see who they could sue for damages in the wake of the attacks. In emails, the lawyers discuss targeting the airlines, airplane manufacturers, the Federal Aviation Authority, the terrorists themselves, and foreign entities. Talking strategy, the lawyers mull taking action against Boeing for not fitting the 757 and 767 aircraft used in the attacks with automatic transponders, which could have alerted authorities sooner that something was amiss, a case that the lawyers admit in the documents was flimsy. The lawyers also discuss dropping a case against the FAA, for fear of rankling the government.

[..] The hacker group has promised three more layers of documents to come, if its price is met. The latest leak was accompanied with the message: “Continue to keep the bitcoins flowing, and we’ll continue to keep the truth flowing.” The hackers are asking for $2 million in bitcoin for the public release of its “megaleak,” which it has dubbed “the 9/11 Papers.” [..] The group may have a hard time paying its members if the latest ransom demands are not met, however. Cyberscoop reported on Tuesday that the group was posting recruitment ads on dark web forums in November, looking to hire four skilled cybercriminals. New employees were reportedly promised 50,000 pounds ($63,500) monthly, bumped up to 70,000 pounds ($89,000) after two years’ service.

Life cannot exist in a vacuum. We either respect it all, or none of it.

“They’re revered in Native Hawaiian legends which hold that tree snails can sing beautifully, and are known as the ‘voice of the forest’.”

• Lonely George The Tree Snail Dies, And A Species Goes Extinct (NatGeo)

George, a Hawaiian tree snail—and the last known member of the species Achatinella apexfulva—died on New Year’s Day. He was 14, which is quite old for a snail of his kind. George was born in a captive breeding facility at the University of Hawaii at Manoa in the early 2000s, and soon after, the rest of his kin died. That’s when he got his name—after Lonesome George, the Pinta Island tortoise who was also the last of his kind. For over a decade, researchers searched in vain for another member of the species for George to mate with, to no avail. (Though these snails are hermaphrodites, two adults must mate to produce offspring, and researchers refer to George as a “he.”)

Photograph Courtesy Aaron K. Yoshino, Honolulu Magazine

“I’m sad, but really, I’m more angry because this was such a special species, and so few people knew about it,” says Rebecca Rundell, an evolutionary biologist with State University of New York who used to help care for George and his kin. Throughout his life, George was a public face for the struggles facing Hawaiian land snails. His death highlights both the vast diversity of indigenous snails—and their desperate plight. “I know it’s just a snail, but it represents a lot more,” says David Sischo, a wildlife biologist with the Hawaii Department of Land and Natural Resources and coordinator of the Snail Extinction Prevention Program.

[..] In some ways, these snails are more like mammals or birds than other invertebrates: They regularly live well into their teens, take five or more years to reach sexual maturity, and give birth to less than ten offspring per year. They’re revered in Native Hawaiian legends which hold that tree snails can sing beautifully, and are known as the ‘voice of the forest’. (It’s not clear why since they aren’t known to make audible noises.) [..] Land snails and slugs represent about 40 percent of the known animal extinctions since 1500, more likely disappeared before becoming known to science …

Snails in the Achatinellinae family live on multiple Pacific islands, but are most diverse in Hawaii. Like many snails they face serious threats, particularly invasive predators, and hundreds of species have already gone extinct. Photographs Courtesy David Sischo, Hawaii Department Of Land And Natural Resources

Debt Rattle November 18 2018

Nov 182018

November 18, 2018 Posted by Raúl Ilargi Meijer at 10:35 am Finance Tagged with: APEC, Brexit, CIA, climate change, extinction, Gulen, Kerry, Khashoggi, Pence, press pass, silica, supernova, Trump 8 Responses »

Gabriel Loppé The Eiffel tower struck by lightning 1902

• Habitat And Species Loss Threatens All Our Futures (G.)

• John Kerry: ‘People Are Going To Die Because Of The Decision Trump Made’ (G.)

• Bear Market Growls (Roberts)

• APEC Leaders Divided After US, China Spat (AFP)

• Pence Vows No End To Tariffs Until China Bows (R.)

• Trump Calls CIA Assessment Of Khashoggi Murder Premature But Possible (R.)

• Trump ‘Not Considering’ Extraditing Gülen to Turkey (Ind.)

• White House Press Pass Has Nothing To Do With The First Amendment (McMaken)

• Brussels Tells Theresa May Delaying Brexit Will Cost UK £10 Billion (O.)

• Tory MPs Warn Hardliners They May Abandon Brexit (Ind.)

• Activists Who Blocked Migrant Deportations Face Life in Prison In UK (IC)

• Glass Was Forged Inside The Heart Of An Exploding Ancient Star (AFP)

Why does climate change get so much more attention than species extinction? Because people see more profit in it.

• Habitat And Species Loss Threatens All Our Futures (G.)

As a UN conference convenes to work out a new deal for protecting the planet’s biodiversity, the focus falls on the nations that are not attending. Amid the worst loss of life on Earth since the demise of the dinosaurs, the agenda at the Convention on Biological Diversity (CBD) in the Egyptian resort of Sharm el-Sheikh could hardly be more important, but the spirit of international collaboration appears to be as much at risk of extinction as the world’s endangered wildlife. The United States has never signed up and Brazil is among a growing group of countries where new nationalist leaders are shifting away from global cooperation.

The two-week meeting of the CBD is its first in two years. It has always been the neglected sibling of its twin, the United Nations Framework Convention on Climate Change. The two organisations were conceived amid great hope at the Rio Earth summit in 1992 but while the energy transition has attracted heads of state interested in billion-dollar renewable projects, the effort to save the natural world has been left to weak environment ministries, conservation NGOs and underfunded scientists. Media research suggests there is only one news story about UN biodiversity talks for every 20 about UN climate negotiations. Coverage tends to focus on a few totemic species, such as lions, chimpanzees and pandas, rather than the collapsing ecosystems on which we depend.

[..] Since 1970 humanity has wiped out 60% of mammals, birds, fish and reptiles, according to the latest Living Planet report by WWF, which warned that the loss of wildlife was now an emergency that is threatening our civilisation. This followed a report earlier this year that one in eight bird species is threatened with global extinction. Recent studies have also tracked calamitous declines of pollinating insects in the US, Costa Rica and Germany, promoting warnings of ecological Armageddon. Cristiana Pasca Palmer, the head of the CBD, says we must stem the loss of biodiversity or face the prospect of our own extinction. But the global mechanics to do that are missing.

Part of the reason for the low level of interest is that the last two major biodiversity agreements – in 2002 and 2010 – have been ineffectual. At Nagoya in Japan eight years ago, the 196 signatory nations to the CBD signed up to the Aichi biodiversity targets: to at least halve the loss of natural habitats, ensure sustainable fishing in all waters, and expand nature reserves from 10% to 17% of the world’s land by 2020. With two years left in the Aichi plan, the conference this year will show that many of the 20 targets have been missed. And even apparent progress in the creation of new protected areas is misleading because governments from Brazil to China have done little to police these “paper reserves”.

The level of sociopathy here is blinding. Just count the dead on Kerry’s watch. But again, he’s talking about climate change. Because that’s where the money is. Makes you wonder what the real issue is: rising temperatures or people looking to get rich off of them. Remember the braindead Michael Bloomberg/Mark Carney paper I wrote about when it came out, on getting rich while saving the planet. Who’s your enemy, really?

• John Kerry: ‘People Are Going To Die Because Of The Decision Trump Made’ (G.)

“Here’s my feeling. And I’m certain of this.” He slows down. “I. Do. Not. Take. It. Personally. I’m sorry for the world. I’m sorry for my country, which looks ridiculous. Look, I’ve known all my life that this is a tough business, that politics is hard – that there are ups and down and if you personalise them you’re never going to survive.” Also, he points out, “I feel better than a lot of people think”, because Trump cannot affect the 194 countries still “doing Paris”, or even the 38 US states (plus Washington DC) committed to renewable energy portfolios regardless of the president’s edicts. The Iran deal is wounded, but still exists, he says. “In fact France, Germany, Britain, Russia and China all met few weeks ago in New York with the foreign minister of Iran, to talk about how to keep the deal moving forward.”

Surely he is angry, though? “You know what I’m angry about? People are going to die because of the decision Donald Trump made. My kids and my grandkids are going to face a difficult world because of what Donald Trump has done. But if you sound angry all the time, people aren’t going to listen to you.” Anger boiled over into a tweet last week, when he could not bear the farrago unfolding on Remembrance Day. “It was just a sad moment, for our country and for the presidency. The president of the United States did not go to an event because of rain, when those guys died in the rain, died in the snow, died in the gas, died in the mud, and not to honour them I thought was brutal.”

I’d say you don’t need to know much more than this. It’s just that the game of guessing which straw breaks the camel’s back doesn’t strike me as particularly useful.

• Bear Market Growls (Roberts)

Fortunately, up to this point, there has not been a triggering of margin debt, as of yet, which remains the “gasoline” to fuel a rapid market decline. As we have discussed previously, margin debt (i.e. leverage) is a double-edged sword. It fuels the bull market higher as investors “leverage up” to buy more equities, but it also burns “white hot” on the way down as investors are forced to liquidate to cover margin calls. Despite the two sell-offs this year, leverage has only marginally been reduced.

If you overlay that the S&P 500 index you can see more clearly the magnitude of the reversions caused by a “leverage unwind.”

The reason I bring this up is that, so far, the market has not declined enough to “trigger” margin calls. At least not yet. But exactly where is that level? There is no set rule, but there is a point at which the broker-dealers become worried about being able to collect on the “margin lines” they have extended. My best guess is that point lies somewhere around a 20% decline from the peak. The correction from intraday peak to trough in 2015-2016 was nearly 20%, but on a closing basis, the draft was about 13.5%. The corrections earlier this year, and currently, have both run close to 10% on a closing basis.

Does China think Trump will give in?

• APEC Leaders Divided After US, China Spat (AFP)

Leaders from 21 Asia-Pacific nations failed Sunday to bridge gaping divisions at a summit overshadowed by a war of words over the US and China as they vie for influence in the region. For the first time in the history of the APEC grouping, leaders were unable to agree on a formal written declaration amid sharp differences over trade policy. “The leaders agreed that instead of a traditional leaders’ declaration, they would leave it to the hands of PNG as the chair to issue a chair statement on behalf of all the members,” said Zhang Xiaolong, a spokesman from the Chinese foreign ministry. Canada’s Prime Minister Justin Trudeau admitted there were “different visions on particular elements with regard to trade that prevented full consensus on a communique document.”

The annual gathering, held for the first time in Papua New Guinea, was overshadowed by speeches from Chinese President Xi Jinping and US Vice President Mike Pence, which appeared to represent competing bids for regional leadership. Pence warned smaller countries not to be seduced by China’s massive Belt-and-Road infrastructure programme, which sees Beijing offer money to poorer countries for construction and development projects. The “opaque” loans come with strings attached and build up “staggering debt”, Pence charged, mocking the initiative as a “constricting belt” and a “one-way road”. He urged nations instead to stick with the United States, which doesn’t “drown our partners in a sea of debt” or “coerce, corrupt or compromise your independence”.

In a speech to business leaders just minutes before Pence, Xi insisted the initiative was not a “trap” and there was no “hidden agenda” – amid criticism that it amounts to “chequebook diplomacy” in the region. Xi also lashed out at “America First” trade protectionism, saying it was a “short-sighted approach” that was “doomed to failure”. [..] Trump — and Russian President Vladimir Putin – both decided to skip the gathering, leaving the spotlight on Xi who arrived two days early to open a Chinese-funded school and road in Papua New Guinea’s dirt-poor capital Port Moresby.

Putin and Trump were both absent. Why have the summit then? So Xi can shoot himself in the foot?

• Pence Vows No End To Tariffs Until China Bows (R.)

The United States will not back down from its trade dispute with China, and might even double its tariffs, unless Beijing bows to U.S. demands, Vice President Mike Pence said on Saturday. In a bluntly worded speech at an Asia Pacific Economic Co-operation (APEC) summit in Papua New Guinea, Pence threw down the gauntlet to China on trade and security in the region. “We have taken decisive action to address our imbalance with China,” Pence declared. “We put tariffs on $250 billion in Chinese goods, and we could more than double that number.” “The United States, though, will not change course until China changes its ways.”

The stark warning will likely be unwelcome news to financial markets which had hoped for a thaw in the Sino-U.S. dispute and perhaps even some sort of deal at a G20 meeting later this month in Argentina. U.S. President Donald Trump, who is not attending the APEC meeting, is due to meet Chinese President Xi Jinping in Argentina. Pence’s warning on Saturday contrasted with remarks made by Trump on Friday, when he said he may not impose more tariffs after China sent the United States a list of measures it was willing to take to resolve trade tensions. [..] There was no hint of compromise from Pence.“China has taken advantage of the United States for many years. Those days are over,” he told delegates gathered on a cruise liner docked in Port Moresby’s Fairfax Harbour.

Killing the petrodollar is a big responsibility. But the CIA wouldn’t have issued the assessment without strong evidence.

• Trump Calls CIA Assessment Of Khashoggi Murder Premature But Possible (R.)

President Donald Trump on Saturday called a CIA assessment blaming Saudi Crown Prince Mohammed bin Salman for the killing of Saudi journalist Jamal Khashoggi “very premature” and said he will receive a complete report on the case on Tuesday. Trump, on a trip to California, said the killing “should never have happened.” The report on Tuesday will explain who the U.S. government believes killed Khashoggi and what the overall impact of his murder is, Trump said. It was unclear who is producing the report. Trump also said the CIA finding that bin Salman was responsible for the killing was “possible.” Trump made the remarks hours after the State Department said the government was still working on determining responsibility for the death of Khashoggi.

“Recent reports indicating that the U.S. government has made a final conclusion are inaccurate,” State Department spokeswoman Heather Nauert said in a statement. “There remain numerous unanswered questions with respect to the murder of Mr. Khashoggi.” Nauert said the State Department will continue to seek facts and work with other countries to hold those involved in the journalist’s killing accountable “while maintaining the important strategic relationship between the United States and Saudi Arabia.” Trump discussed the CIA assessment by phone with the agency’s director, Gina Haspel, and Secretary of State Mike Pompeo while flying to California on Saturday, White House spokeswoman Sarah Huckabee Sanders told reporters.

The CIA had briefed other parts of the U.S. government, including Congress, on its assessment, sources told Reuters on Friday, a development that complicates Trump’s efforts to preserve ties with the key U.S. ally. A source familiar with the CIA’s assessment said it was based largely on circumstantial evidence relating to the prince’s central role in running the Saudi government. The CIA’s finding is the most definitive U.S. assessment to date tying Saudi Arabia’s de facto ruler directly to the killing and contradicts Saudi government assertions that Prince Mohammed was not involved.

NBC egg on face. ‘T is the season?

• Trump ‘Not Considering’ Extraditing Gülen to Turkey (Ind.)

President Donald Trump said on Saturday he is “not considering” extraditing an Islamic cleric self-exiled in the United States to Turkey. The extradition of Fethullah Gulen, accused of plotting a failed coup in 2016 to overthrow Turkish President Tayipp Erdogan, would be a strategic effort to persuade Turkey to lessen scrutiny on Saudi Arabia over the killing of journalist Jamal Khashoggi. In recent months, the Trump administration has been vigorous in its defence and flattery of its close ally Saudi Arabia – and the kingdom’s Crown Prince Mohammed Bin Salman – in hopes Riyadh will serve its role in carrying out the president’s Middle East foreign policy.

“No, it’s not under consideration,” Mr Trump said when pressed on whether or not he would extradite the Turkish cleric, a political opponent of Erdogan, to his home country. “We are looking, always looking at whatever we can do for Turkey.” Mr Trump’s statement comes three days after NBC News reported that his administration is looking into whether or not extraditing Mr Gulen could convince the Turkish president to soften pressure on Saudi Arabia for reportedly killing Mr Khashoggi, a Washington Post columnist critical of Riyadh, in its Istanbul consulate earlier last month.

The Jim Acosta show continues. CNN should cancel it.

• White House Press Pass Has Nothing To Do With The First Amendment (McMaken)

It’s difficult to see how something so limited and so unavailable to nearly everyone could be called a right. After all, not even all reporters can hope to secure a White House press pass. And non-reporters have even less chance of ever getting access. Access to White House media facilities and forums are a privilege reserved for a select few —and most of those few are wealthy operatives of extremely powerful media corporations. A press pass is clearly not a right in the same sense as a trial by jury, a right to be secure in one’s personal property, or a right to peaceably assemble. In theory at least, those rights apply to everyone unless voluntarily waived, or unless revoked through some sort of public due process.

Nor is it the case that just anyone who is recognized as a journalist gets access to the White House press room. The room, of course, is of a finite size — there are 49 seats — and access is limited. Only a select group of people is allowed in, and the credentialing process is controlled in part by the White House Correspondents’ Association which hardly hands out credentials as if they were a human right. [..] even if everyone who wanted it were somehow magically given space in the White House press room, it’s hard to see how hobnobbing with the White House communications staff forms a pillar of a free press or free inquiry. In other words, the very premise that a White House press pass is a critical component of a free press is questionable at best. After all, the press room, the communications staff, and the entire White House media apparatus exists to make the president look good.

It’s not there to offer a frank exchange of information, or to divulge any information the White House doesn’t want released. To find that sort of information, one would have to engage in real investigative journalism in which journalists uncover facts that powerful government officials would rather not be uncovered. That, of course, is what Julian Assange has done. But you won’t find many establishment American journalists defending him. No, in the minds of the Jim Acostas of the world, “journalism” consists of repeating the official talking points released at official press conferences. And this is a lucky thing for presidents, many of whom have long understood that the purpose of White House communications is to manipulate the press.

Delay will be at least a year if it happens.

• Brussels Tells Theresa May Delaying Brexit Will Cost UK £10 Billion (O.)

The latest Opinium poll for the Observer on Sunday delivers more bad news for May, with Labour opening up a three-point lead. It shows Tory Leave supporters appear to be deserting May’s party in droves. Compared with a month ago, the Conservatives have dropped five points to 36% while Labour has gained three to stand on 39%. The proportion of Leavers backing the Tories has dropped by 10 points in one month. As May’s allies sprang to her defence and said she was “winning over the country”, Brussels threw a new spanner in the works by saying any extension of the 21-month transition period designed to smooth the UK’s exit must last at least a year beyond the end of December 2020.

May told an EU leaders summit last month that she might ask for a “few months” extra time if that was what was needed to complete an EU-UK trade deal and prevent the Irish backstop from coming into force. But on Saturday night Brussels was making clear that if the UK wants an extension of the transition – during which it is tied to the EU economic system but with no say over its rules – it must last at least a further year. A year-long extension would cost about £10bn on top of the £39bn divorce bill already agreed. Such a prospect will appal hardline Brexiters who already complain that the UK will have to spend almost two more years tied to the EU after Brexit on 29 March next year.

No Brexit at all is also still an option. The problem may well be that Brexit means something different to every single person.

• Tory MPs Warn Hardliners They May Abandon Brexit (Ind.)

Moderate Conservatives have warned they will push Britain towards tighter relations with the EU or even turn against Brexit altogether if “purists” in their party tear down Theresa May’s draft withdrawal deal. A string of Tory MPs told The Independent that Eurosceptic colleagues who have begun a sustained push to bring down both Ms May and her Brexit plans, should not be mistaken that a no-deal exit risking the livelihoods of British people is obtainable. The moderates say the only remaining option if Brexiteers block Ms May’s approach will mean being more closely bound to the single market or even revisiting the 2016 referendum result. Their warning comes as the Eurosceptic wing of the Conservatives launched a coordinated campaign against the draft deal to be signed off at an EU summit next weekend, and pushed for a vote of no confidence in the prime minister.

Ms May is set to continue her media offensive defending the deal on Sunday with a live interview in the morning, but Eurosceptics have also been in force attacking it. The pushback from Tory moderates began with pointed words from serving frontbencher Alistair Burt, who indicated that if Ms May’s plans fell, Brexiteers could not expect Remain-voting MPs to continue to go along with the result of the 2016 referendum regardless of the consequences. He wrote on Twitter: “Be very clear. If an agreed deal on leaving between the Govt and the EU is voted down by purist Brexiteers, do not be surprised if consensus on accepting the result of the referendum by Remain-voting MPs breaks down. “Parliament will not support no deal.”

Picking people up just to fill seats on a plane. Morals we have none.

• Activists Who Blocked Migrant Deportations Face Life in Prison In UK (IC)

Smoke is a founding member of Lesbians and Gays Support the Migrants, a group created in 2015 to stand in solidarity with migrant communities in the U.K., and also part of End Deportations, a group campaigning to end deportations that originally formed around the Stansted action. They chose to focus on one particular aspect of the U.K.’s deportation system: charter flights. While some migrants and asylum-seekers are deported on commercial flights alongside passengers traveling for business or pleasure, others are deported via private flights chartered by the Home Office, the government department responsible for immigration, security, and law and order. The Titan plane around which the Stansted 15 locked themselves in March 2017 was one of the latter.

[..] Freedom of Information requests have revealed that the Home Office chartered 93 deportation flights from January 2016 through May 2018, including the flight grounded by the Stansted 15. Most of these flights went to Pakistan, Albania, Nigeria, and Ghana, although a few also flew to Germany, France, and Bulgaria. Some carried over 50 deportees; most had less than 20 passengers being deported because of a criminal conviction. These destinations have shifted over time as the population of asylum-seekers has changed: Charter deportation flights in 2014 also frequented Afghanistan and Kosovo. The Stansted 15, along with many others who research or campaign around deportation, take issue with numerous aspects of deportation charter flights, starting with the way in which migrants and asylum-seekers are notified of them.

“It’s a weird numbers game where the government needs to fill seats on this plane to make it economically viable,” says Morten Thaysen, one of the co-founders of Lesbians and Gays Support the Migrants. There will often be “raids in the weeks leading up to the flight,” according to Thaysen. “People [are] being taken from marketplaces, workplaces, their home, and put in detention centers – these kind of immigration prisons – and then taken in the middle of the night on these secret flights where there are no witnesses. So it’s the brutality of how they function.” Some people, activists also argue, are not notified of their impending deportation with enough time to appeal the decision. “We see so many people on these flights whose cases haven’t been properly finished, haven’t had their cases heard properly,” says Thaysen.

“Silica makes up around 60 percent of the Earth’s crust..”

• Glass Was Forged Inside The Heart Of An Exploding Ancient Star (AFP)

The next time you’re gazing out of the window in search of inspiration, keep in mind the material you’re looking through was forged inside the heart of an exploding ancient star. An international team of scientists said Friday they had detected silica — the main component of glass — in the remnants of two distant supernovae billions of light years from Earth. Researchers used NASA’s Spitzer Space Telescope to analyse the light emitted by the collapsing mega-cluster and obtain silica’s “fingerprint” based on the specific wavelength of light the material is known to emit. A supernova occurs when a large star burns through its own fuel, causing a catastrophic collapse ending in an explosion of galactic proportions.

It is in these celestial maelstroms that individual atoms fuse together to form many common elements, including sulphur and calcium. Silica makes up around 60 percent of the Earth’s crust and one particular form, quartz, is a major ingredient of sand. As well as glass windows and fibreglass, silica is also an important part of the recipe for industrial concrete. “We’ve shown for the first time that the silica produced by the supernovae was significant enough to contribute to the dust throughout the Universe, including the dust that ultimately came together to form our home planet,” said Haley Gomez, from Cardiff University’s School of Physics and Astronomy. “Every time we gaze through a window, walk down the pavement or set foot on a sandy beach, we are interacting with material made by exploding stars that burned millions of years ago.”

Debt Rattle November 3 2018

Nov 032018

November 3, 2018 Posted by Raúl Ilargi Meijer at 9:41 am Finance Tagged with: Catalonia, confidence, Erdogan, extinction, hysteria, Iran, Khashoggi, meddling, sanctions, stress tests, Trump, wage growth, waivers 9 Responses »

Winslow Homer Cloud shadows 1890

• The World Has Two Years To Secure A Deal To Halt Species Extinction – UN (G.)

• US Wage Growth Hits Nine-Year High (BBC)

• America’s Wealth Bubble Is Boosting Consumer Confidence (Colombo)

• Inside The Trump Gold Rush At CNN (VF)

• Who’s Really ‘Undermining’ US Democracy? (Stephen Cohen)

• Perpetual Hysteria ( Kunstler)

• Trump Will Grant 8 Waivers To Buy Iranian Oil (CNBC)

• Europe Vows To Defy US Sanctions Against Iran (RT)

• Europe’s Top Banks Ease Past ECB’s Latest Stress Tests (CNBC)

• Erdogan Says ‘Highest Level’ Saudi Officials Ordered Khashoggi Murder (RT)

• Public Prosecutors Charge Catalan Independence Leaders With Rebellion

The actual headline of this Guardian piece is “Stop Biodiversity Loss Or We Could Face Our Own Extinction”. Mine is better, because it illustrates, providing it’s accurate, how hopeless the situation is. If only because of what’s already in the pipeline. The prospect of 2 more years of meetings doesn’t change a thing.

• The World Has Two Years To Secure A Deal To Halt Species Extinction – UN (G.)

The world has two years to secure a deal for nature to halt a ‘silent killer’ as dangerous as climate change, says biodiversity chief

The world must thrash out a new deal for nature in the next two years or humanity could be the first species to document our own extinction, warns the United Nation’s biodiversity chief. Ahead of a key international conference to discuss the collapse of ecosystems, Cristiana Pasca Palmer said people in all countries need to put pressure on their governments to draw up ambitious global targets by 2020 to protect the insects, birds, plants and mammals that are vital for global food production, clean water and carbon sequestration.

“The loss of biodiversity is a silent killer,” she told the Guardian. “It’s different from climate change, where people feel the impact in everyday life. With biodiversity, it is not so clear but by the time you feel what is happening, it may be too late.” Pasca Palmer is executive director of the UN Convention on Biological Diversity – the world body responsible for maintaining the natural life support systems on which humanity depends. Its 196 member states will meet in Sharm el Sheikh, Egypt, this month to start discussions on a new framework for managing the world’s ecosystems and wildlife. This will kick off two years of frenetic negotiations, which Pasca Palmer hopes will culminate in an ambitious new global deal at the next conference in Beijing in 2020.

Conservationists are desperate for a biodiversity accord that will carry the same weight as the Paris climate agreement. But so far, this subject has received miserably little attention even though many scientists say it poses at least an equal threat to humanity. The last two major biodiversity agreements – in 2002 and 2010 – have failed to stem the worst loss of life on Earth since the demise of the dinosaurs. Eight years ago, under the Aichi Protocol, nations promised to at least halve the loss of natural habitats, ensure sustainable fishing in all waters, and expand nature reserves from 10% to 17% of the world’s land by 2020. But many nations have fallen behind, and those that have created more protected areas have done little to police them. “Paper reserves” can now be found from Brazil to China.

3 days to midterms.

• US Wage Growth Hits Nine-Year High (BBC)

Wages in the US grew at their fastest pace for nine years last month, the latest official figures show. The US Labor Department said wages grew at an annual rate of 3.1% in October, accelerating from a rate of 2.8% the month before. The economy also added 250,000 jobs last month, beating expectations, while the jobless rate remained at 3.7%. The report quickly became fodder for political debate ahead of next week’s high stakes congressional election. President Donald Trump celebrated the figures on Twitter as “incredible” and urged his followers to “Vote Republican”. In an unusual move, the White House also organised a briefing call for reporters to promote the gains.

The top Senate Democrat, Chuck Schumer of New York, issued a statement of his own, aiming to redirect voter attention. The latest numbers “may look good” but should be considered alongside other economic policies, he said. “When the average family sees their health care costs go up because of Republican actions, these numbers will mean little,” he said. Among economists, there was wider agreement that the jobs report pointed to strength in the US economy, despite recent worries that weakness may be emerging in some sectors such as housing and trade.

There’s something wonderfully ironic in this. Getting your confidence from hot air.

• America’s Wealth Bubble Is Boosting Consumer Confidence (Colombo)

ZeroHedge posted an interesting chart a few days ago showing how affluent Americans (those making over $50,000 a year) have not been more confident since the dot com bubble. While strong consumer confidence may seem like a good thing when taken at face value, the contrarian in me sees it as a warning of the kind of over-exuberance seen during bubbles like the dot-com bubble and housing bubble.

Unfortunately, I believe that the U.S. is experiencing an unsustainable, artificial household wealth bubble that is causing affluent consumers to be over-optimistic despite the fact that our economic boom is largely driven by cheap credit and is going to end in a painful bust. As I explained in a recent presentation, U.S. household wealth has surged by approximately $46 trillion or 83% since 2009 to an all-time high of $100.8 trillion. Since 1951, household wealth has averaged 379% of the GDP, while the Dot-com bubble peaked at 429%, the housing bubble topped out at 473%, and the current bubble has inflated household wealth to a record 505% of GDP (see the chart below):

As I’ve said numerous times, Trump sells better than sex, and he’s keeping CNN alive. The suggestion that CNN allows both sides into teh debate is ludicrous, though.

• Inside The Trump Gold Rush At CNN (VF)

Zucker was on the phone talking about why Trump sucks up so much of CNN’s oxygen. “People say all the time, ‘Oh, I don’t want to talk about Trump. I’ve had too much Trump,’ ” he told me. “And yet at the end of the day, all they want to do is talk about Trump. We’ve seen that, anytime you break away from the Trump story and cover other events in this era, the audience goes away. So we know that, right now, Donald Trump dominates.” Zucker, the guy who first brought our president to the small screen when he green-lighted The Apprentice in 2004 while running NBC, had arguably schooled Trump in the art of reality television.

Halfway through Trump’s first term, his instincts remain just as acute. If Fox News represents Trump’s base and MSNBC has become a friendly platform for the resistance, CNN is the arena where both sides show up for cantankerous battle. “On Fox, you rarely hear from people who don’t support Trump,” Zucker told me. “On MSNBC, you rarely hear from people who do support Trump. We want to be home to both those points of view.” He continued, as if rebuking a common critique of the network. “It is true some of these folks are not very good with the facts, but that’s O.K. in the sense that it’s our job then to call them out.”

[..] Even though CNN still trails Fox News and MSNBC in prime-time audience size, its ratings have never been better. The average number of people watching on a given day has been above 700,000 each year since 2016, compared to around 400,000 in the pre-Trump news cycle. That’s also considerably larger than any other time over the past 25 years, an astonishing feat given the ubiquity of news and the decline of cable.

https://twitter.com/i/status/1058528086680051712

Russiagate undermines democracy.

• Who’s Really ‘Undermining’ US Democracy? (Stephen Cohen)

Even though still unproven, charges that the Kremlin put Trump in the White House have cast a large shadow of illegitimacy over his presidency and thus over the institution of the presidency itself. This is unlikely to end entirely with Trump. If the Kremlin had the power to affect the outcome of one presidential election, why not another one, whether won by a Republican or a Democrat? The 2016 presidential election was the first time such an allegation became widespread in American political history, but it may not be the last. Now the same shadow looms over the November 6 elections and thus over the next Congress. If so, in barely two years, the legitimacy of two fundamental institutions of American representative democracy will have been challenged, also for the first time in history.

And if US elections are really so vulnerable to Russian “meddling,” what does this say about faith in American elections more generally? How many losing candidates on November 6 will resist blaming the Kremlin? Two years after the last presidential election, Hillary Clinton and her adamant supporters still have not been able to do so. We know from critical reporting and from recent opinion surveys that the origins and continuing fixation on the Russiagate scandal since 2016 have been primarily a product of US political-intelligence-media elites. It did not spring from the American people – from voters themselves. Thus a Gallup poll recently showed that 58 percent of those surveyed wanted improved relations with Russia. And other surveys have shown that Russiagate is scarcely an issue at all for likely voters on November 6. Nonetheless, it remains a front-page issue for US elites.

Indeed, Russiagate has revealed the low esteem that many US political-media elites have for American voters – for their ability to make discerning, rational electoral decisions, which is the bedrock assumption of representative democracy. It is worth noting that this disdain for rank-and-file citizens echoes a longstanding attitude of the Russian political intelligentsia, as recently expressed in the argument by a prominent Moscow policy intellectual that Russian authoritarianism springs not from the nation’s elites but from the “genetic code” of its people.

Certainly looks like the Democrats need to hit some kind of bottom before they can rise again. If that ever happens.

• Perpetual Hysteria ( Kunstler)

Back in the last century, when this was a different country, the Democrats were the “smart” party and the Republicans were the “stupid” party. How did that work? Well, back then the Democrats represented a broad middle class, with a base of factory workers, many of them unionized, and the party had to be smart, especially in the courts, to overcome the natural advantages of the owner class. In contrast, the Republicans looked like a claque of country club drunks who staggered home at night to sleep on their moneybags. Bad optics, as we say nowadays. [..] The Republican Party has, at least, sobered up some after getting blindsided by Trump and Trumpism. Like a drunk out of rehab, it’s attempting to get a life.

Two years in, the party marvels at Mr. Trump’s audacity, despite his obvious lack of savoir faire. And despite a longstanding lack of political will to face the country’s problems, the Republicans are being forced to engage on some real issues, such as the need for a coherent and effective immigration policy and the need to redefine formal trade relations. Meanwhile, the Democratic Party has become the party of bad ideas and bad faith, starting with the position that “diversity and inclusion” means shutting down free speech, an unforgivable transgression against common sense and common decency. It’s a party that lies even more systematically than Mr. Trump, and does so knowingly (as when Google execs say they “Do no Evil”).

[..] I hope that Democrats lose as many congressional and senate seats as possible. I hope that the party is shoved into an existential crisis and is forced to confront its astounding dishonesty. I hope that the process prompts them to purge their leadership across the board. If there is anything to salvage in this organization, I hope it discovers aims and principles that are unrecognizable from its current agenda of perpetual hysteria.

Overreach. America’s anti-Iran stance hinges to a large extent on Saudi interests. Which have taken a huge hit.

• Trump Will Grant 8 Waivers To Buy Iranian Oil (CNBC)

The Trump administration will grant eight jurisdictions special exceptions to continue importing oil from Iran after U.S. sanctions on the country snap back into place on Monday, according to cabinet members. President Donald Trump gave oil buyers 180 days to wind down purchases of Iranian crude when he pulled out of the Iran nuclear deal in May. The eight waivers will allow the jurisdictions to more gradually reduce their purchases after the Nov. 4 deadline. Oil market watchers have been closely monitoring the situation to determine how forcefully the Trump administration will enforce the sanctions.

State Department officials initially said importers must cut their purchases to zero by November, but administration officials subsequently telegraphed that some exceptions would be made. Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin on Friday declined to name the eight jurisdictions during a conference call with reporters. The officials said all of the countries or territories have significantly reduced their purchases and will be given more time to further reduce their imports. [..] Japan, India and South Korea are among the countries, and China is still negotiating a waiver, Bloomberg News reported earlier on Friday, citing a senior administration official. Pompeo confirmed on Friday that the EU is not one of the jurisdictions that will receive a waiver.

Russia and China will stand by Iran. Europe may as well.

• Europe Vows To Defy US Sanctions Against Iran (RT)

European countries have vowed to maintain “effective financial channels” and to keep trading with Tehran after the US announced that the EU is not among those spared from its sweeping sanctions against Iran. European countries suddenly discovered that they were not on the list of the ‘lucky ones’ that their ally, the US, decided to exempt from the new wave of all-encompassing sanctions it plans to unleash on Iran. The sanctions, targeting Iran’s shipping, finance and energy sectors, which come into force on November 5, are also designed to punish those countries that dared to do business with the Islamic Republic in defiance of the US pressure.

Only eight nations were graciously granted exemptions by the US, according to Secretary of State Mike Pompeo. However, Pompeo made it clear that the EU as a single entity is not on the list, sparking an angry reaction from the US’ western allies. Washington also specifically mentioned that it plans to target the special mechanism the EU has been creating to circumvent the restrictions, prompting its allies to fight back.

In response, the EU foreign policy chief Federica Mogherini, together with the foreign and finance ministers of Germany, France and the UK, vowed to maintain “effective financial channels with Iran” and in particular to continue buying the Islamic Republic’s oil and gas. They also said that despite Washington’s pressure the EU is still committed to establishing a “Special Purpose Vehicle” for Iran-EU trade. The European nations will seek to protect its companies engaged in “legitimate business with Iran,” the statement said, adding that the EU will cooperate with Russia and China in particular to achieve these goals.

Central banks are incapable of doing stress tests that matter.

• Europe’s Top Banks Ease Past ECB’s Latest Stress Tests (CNBC)

Results of the stress test of Europe’s bigger banks released Friday revealed that all of the financial institutions in the EU wide examination passed the European Central Bank’s “adverse scenario”. The stress tests were carried out by the European Banking Authority (EBA) and the Single Supervisory Mechanism (SSM) to gauge the health of the European banking system. The EBA said in findings published on their website that all 48 banks beat the common tier ratio of 5.5 percent under adverse stress. British bank Barclays ranked lowest in the test, scoring a common tier ratio of just 6.37 percent in the adverse scenario. Fellow U.K. bank Lloyds also performed poorly with a score of 6.8 percent.

Commenting after the results, the Bank Of England said the results showed that U.K. banks could absorb the effect of the EBA’s worst scenario. Europe’s biggest bank, Deutsche Bank, performed better than some forecasters had predicted, registering a core tier of 8.14 percent, again in an adverse scenario. EBA said under their adverse scenario, the capital depletion across the banks at the end of 2020 was 236 billion euros ($268 billion) and 226 billion euros on a “transitional and fully loaded basis respectively.” The ECB added that the EBA test showed that banks in Europe were now “more resilient to financial shocks.”

Italian banks were also under scrutiny but managed to record satisfactory scores according to banking regulators. Unicredit, Italy’s largest lender, scored a common tier ratio of 9.34 while UBI Banca scored 7.42 percent. The lowest score among Italian banks was for Banco BPM which registered 6.67 percent.

Erdogan was insulted by the Saudi chief prosecutor visiting Ankara/Istanbul.

• Erdogan Says ‘Highest Level’ Saudi Officials Ordered Khashoggi Murder (RT)

The killing of journalist Jamal Khashoggi was sanctioned at the “highest levels” of the Saudi government, Turkey’s President Recep Tayyip Erdogan said, trying to play kingmaker in Riyadh and bolster his credentials in the West. “We know that the order to kill Khashoggi came from the highest levels of the Saudi government,” the Turkish leader wrote in a surprise contribution to Friday’s Washington Post, vowing to “reveal the identities of the puppet masters” behind the murder. “No one should dare to commit such acts on the soil of a NATO ally again,” Erdogan wrote dramatically. “Had this atrocity taken place in the United States or elsewhere, authorities in those countries would have gotten to the bottom of what happened.”

“It would be out of the question for us to act any other way,” he added, noting that Ankara has already “moved heaven and earth to shed light on all aspects of this case.” The Turkish leader also used the opportunity to burnish his credentials in the West, saying that as a responsible NATO member, Turkey will not just leave this case uninvestigated and will act in exactly the same way as the US or any of its allies would in its place. Erdogan openly accused Riyadh of “trying to cover up the murder” by stalling the investigation and refusing to cooperate with the Turkish authorities, singling out the Saudi chief prosecutor Saud Al Mojeb, who visited Turkey earlier this week. “The refusal of the Saudi public prosecutor… to cooperate with the investigation and answer even simple questions is very frustrating,” he wrote, adding that Al Mojeb’s “invitation for Turkish investigators to Saudi Arabia … felt like a desperate and deliberate stalling tactic.”

Franco’s still alive and kicking.

• Public Prosecutors Charge Catalan Independence Leaders With Rebellion

The public prosecution on Friday morning filed its written accusation against Catalan secessionist leaders who are in pretrial detention for their role in the unauthorized referendum of October 1, 2017 and the unilateral independence declaration that followed. As expected, prosecutors are seeking a 25-year prison term for ex-deputy premier Oriol Junqueras for rebellion and misuse of public funds, and they also want the Catalan Republican Party (ERC) leader barred from holding public office for the next 25 years. Prosecutors are also seeking 17-year jail terms for Jordi Sànchez and Jordi Cuixart, the former heads of civic associations that campaigned actively for independence, and for Carme Forcadell, the former speaker of the Catalan parliament.

Other defendants in the upcoming trial face penalties ranging from economic fines to prison terms of 16 years. Meanwhile, Spain’s Solicitor General, who represents the Spanish state in the courts, has not accused Catalan secessionist leaders of rebellion. Instead, the written accusation focuses on the crimes of sedition and misuse of public funds in connection with the referendum and unilateral independence declaration. In its written accusation, the Solicitor General’s Office has called for Junqueras to be sentenced to 12 years in prison and a 12-year ban on holding public office.

Debt Rattle October 30 2018

Oct 302018

October 30, 2018 Posted by Raúl Ilargi Meijer at 9:27 am Finance Tagged with: Amazon, Assange, austerity, Brexit, extinction, Fed, Greyhound, Khashoggi, midterms, rhino, Russiagate, tiger, wildlife, Yukon 6 Responses »

Pablo Picasso Sleeping peasants 1919

• Global Wildlife Populations Have Fallen By 60% Since 1970 (R.)

• Alarm As China Eases 25-Year Ban On Rhino And Tiger Parts (BBC)

• Climate Change Is ‘Escalator To Extinction’ For Mountain Birds (BBC)

• Massive Canadian Glaciers Shrinking Rapidly (G.)

• Fed May Have To Adjust The Way It’s Raising Rates (CNBC)

• Amazon Shares Are Cratering – Down 6% Monday, 23% In The Past Month (CNBC)

• China’s Economic Slump Accelerated In October (ZH)

• 5 More Years Of Austerity In Event Of No-Deal Brexit – Chancellor (Ind.)

• With Just Days to the Midterms, Russiagate Is MIA (Maté)

• Khashoggi Murder Tape Will Never Be Made Public: Turkish Source (MEE)

• Britain ‘Knew Of Khashoggi Plot And Begged Saudi Arabia To Abort Plans’ (Exp.)

• Seeking A Bargain, And Taste Of The Good Life, Chinese Buy Greek Homes (R.)

• Assange’s Lawsuit Over Asylum Conditions Denied By Ecuador Judge (RT)

• Decline Of Greyhound Service Mirrors Rural Canada’s Plight (G.)

“We are the first generation to know we are destroying the planet and the last to be able to do anything about it”

• Global Wildlife Populations Have Fallen By 60% Since 1970 (R.)

Global wildlife populations have fallen by 60% since 1970 as humans overuse natural resources, drive climate change and pollute the planet, a report warns. WWF has called for an ambitious “global deal” for nature and people, similar to the international Paris Agreement to tackle climate change, as the conservation charity’s new report spelled out the damage being done to the natural world. Only a quarter of the world’s land area is free from the impacts of human activity and by 2050 that will have fallen to just a tenth, the Living Planet Report 2018 says. The percentage of the world’s seabirds with plastic in their stomach is estimated to have increased from 5% in 1960 to 90% today, and the world has already lost around half its shallow water corals in just 30 years.

Overall, populations of more than 4,000 species of mammals, reptiles, birds, fish and amphibians have declined by an average of 60% between 1970 and 2014, the most recent year for which data is available. Tropical areas have seen the worst declines, with an 89% fall in populations monitored in Latin America and the Caribbean since 1970. Species which live in fresh water habitats, such as frogs and river fish, have seen global population falls of 83%, according to the living planet index by the Zoological Society of London (ZSL) which tracks the abundance of wildlife. From hedgehogs and puffins to elephants, rhinos and polar bears, wildlife is in decline, due to the loss of habitats, poaching, pollution of land and seas and rising global temperatures, the Living Planet report warns.

Current action to protect nature is failing because it is not enough to match the scale of the threat facing the planet, the conservationists claim. “Exploding” levels of human consumption are driving the impacts on nature, with over-exploitation of natural resources such as over-fishing, cutting down forests to grow crops such as soy and palm oil and the use of pesticides in agriculture. Climate change and plastic pollution are also significant and growing threats.

We’re going to have to boycott trade with China because of this.

• Alarm As China Eases 25-Year Ban On Rhino And Tiger Parts (BBC)

Animal conservationists are alarmed over China’s decision to partially reverse a ban on the trade of tiger bones and rhino horn. Rhinos and tigers are both endangered in the wild and China prohibited their trade in 1993. But on Monday it said parts from captive animals would be authorised for scientific, medical and cultural use. Experts worry this will increase demand for the animals and jeopardise efforts to protect them. Rhino and tiger parts are highly valued in traditional Chinese medicine. They are prescribed to treat a large variety of ailments including fever, gout, insomnia and meningitis, thought any benefits have not been proven.

In a statement announcing the replacement of the 25-year old ban, the State Council said powdered forms of rhino horn and bones from dead tigers could be used in “qualified hospitals by qualified doctors”. The animal products can only be obtained from farms, it said. Parts from those animals classified as “antiques” could be used in cultural exchanges if approved by the cultural authorities, the statement adds. The World Wildlife Fund (WWF) said in a statement that the move would have “devastating consequences” and be an “enormous setback” to efforts to protect the animals in the wild.

Species already living in the earth’s ‘extremes’ have nowhere to go.

• Climate Change Is ‘Escalator To Extinction’ For Mountain Birds (BBC)

Scientists have produced new evidence that climate change is driving tropical bird species who live near a mountain top to extinction. Researchers have long predicted many creatures will seek to escape a warmer world by moving towards higher ground. However, those living at the highest levels cannot go any higher, and have been forecast to decline. This study found that eight bird species that once lived near a Peruvian mountain peak have now disappeared. Researchers are particularly concerned about tropical mountain ranges and the impacts of climate change. “The tropical mountain areas are the hottest of biodiversity hotspots; they harbour more species than any other place on Earth,” lead author Dr Benjamin Freeman from the University of British Columbia told BBC News.

“It’s only got a little bit warmer in the tropics and tropical plants and animals seem to be living quite a bit higher now than they used to.” The species that live in these regions are also hugely vulnerable because the difference in temperatures between lower and higher elevations in tropical regions is not as great as it is in other parts of the world. This means that moving up the slopes may not be as much of a solution for species in the tropics as it is elsewhere. [..] scientists carried out a survey in 2017 of bird species that lived on a remote Peruvian mountain peak. The team covered the same ground, at the same time of year, and used the the same methods as a previous survey, carried out in 1985.

They found that on average, species’ ranges had shifted up the slope between the two surveys. Most of the species that had been found at the highest elevations declined significantly in both range and abundance. The researchers say that recent warming constitutes an “escalator to extinction” for some of these species with temperatures in the area increasing by almost half a degree Celsius between the two surveys. Of 16 species that were restricted to the very top of the ridge, eight had disappeared completely in the most recent survey.

A scarlet-breasted fruiteater which inhabits high elevations on the Cerro de Pantiacolla in Peru Photo: Graham Montgomery

“We’re slated to lose 80% of the ice cover in the Rocky Mountains over the next 50 years.”

• Massive Canadian Glaciers Shrinking Rapidly (G.)

Scientists in Canada have warned that massive glaciers in the Yukon territory are shrinking even faster than would be expected from a warming climate – and bringing dramatic changes to the region. After a string of recent reports chronicling the demise of the ice fields, researchers hope that greater awareness will help the public better understand the rapid pace of climate change. The rate of warming in the north is double that of the average global temperature increase, concluded the US National Oceanic and Atmospheric Administration in its annual Arctic Report Card, which called the warming “unprecedented”. “The region is one of the hotspots for warming, which is something we’ve come to realize over the last 15 years,” said David Hik of Simon Fraser University. “The magnitude of the changes is dramatic.”

In their recent State of the Mountains report published earlier in the summer, the Canadian Alpine Club found that the Saint Elias mountains – which span British Columbia, the Yukon and Alaska – are losing ice faster than the rest of the country. Previous research found that between 1957 and 2007, the range lost 22% of its ice cover, enough to raise global seal levels by 1.1 millimetres. “When I first went to the St Elias range, it felt like time travel – into the past,” said Hik, who co-edited the report. “What we’re seeing now feels like time travel into the future. Because as the massive glaciers are retreating, they’re causing a complete reorganization of the environment.”

“We’re seeing a 20% difference in area coverage of the glaciers in Kluane national park and reserve and the rest of the Unesco world heritage site [over a 60-year period],” Diane Wilson, a field unit superintendent at Parks Canada, told the CBC. “We’ve never seen that. It’s outside the scope of normal.” In the St Elias range, researchers have found warming intensifies at higher altitudes – a phenomenon they are not quite able to explain. “These types of events aren’t isolated to glacial events in the St Elias,” said Zac Robinson, the report’s co-author and professor at the University of Alberta. “We’re slated to lose 80% of the ice cover in the Rocky Mountains over the next 50 years.”

Take away their power.

• Fed May Have To Adjust The Way It’s Raising Rates (CNBC)

Along with an expected rate hike in December, some central bank watchers expect the Federal Reserve to approve another tweak to ensure that its current policy path, which has come under increasing pressure lately, proceeds smoothly. If the Fed is unable to manage the range where it keeps its benchmark interest rate, that could lead it to halt the unwinding of its balance sheet comprised of bonds it purchased to lower mortgage rates and stimulate the economy. The economic and market ramifications could be substantial, though there’s no indication now that the Fed is considering halting the balance sheet reduction.

The market has long been expecting the Fed to go through with a 25 basis point (0.25 percentage point) increase in its benchmark funds rate at the year’s final Federal Open Market Committee Meeting. Under normal circumstances, such a move would be accompanied by a commensurate quarter-point hike in the interest the Fed pays on excess reserves from banks, or the IOER. The current level is 2.2%, compared to the 2% to 2.25% range for the funds rate. However, the funds rate has risen near the top boundary of its range, to 2.2% to equal the IOER, and that presents a problem. The Fed uses the IOER to guide the funds rate, generally as a floor for where the funds rate should be.

The central bank manages its funds rate through the interest rate on reserves and its overnight repo facility, which also helps the Fed to set a floor on rates. This year, as government debt issuance has surged and rates have increased on the repo purchases in which the Fed has purchased, the funds rate has drifted to the upper end of its target range. Back in June, the Fed addressed the issue by raising the IOER just 20 basis points to try to push the funds rate more toward the center of the range. That worked for a few months, but the two rates have drifted closer together and on Oct. 23 met at 2.2%. The Fed has “lost control over rates” at the upper bounds of its target range, said Michael Pearce, senior U.S. economist at Capital Economics.

Bezos lost 23% of his fortune in a month. That’s tens of billions.

• Amazon Shares Are Cratering – Down 6% Monday, 23% In The Past Month (CNBC)

Amazon shares closed down 6.3% on Monday suffered their steepest two-day tumble in more than four years, as investors continued to flee the stock following Thursday’s disappointing earnings report. The stock dropped $103.93 to $1,538.88 at the close, after losing $139.36, or 7.8%, on Friday, and is trading at its lowest price since April, down 23% over the past month. The 13.7-percent drop over two days is the biggest decline since February 2014, when the shares plummeted 14.1%. Amazon reported third-quarter revenue last week that trailed analysts’ estimates and also provided a fourth-quarter outlook that was below expectations.

The stock dragged down the Nasdaq, which closed down 1.6% on Monday. Netflix, which like Amazon has been a favored stock for tech investors in recent years, is in the midst of a hefty two-day drop, down 9%. Monday was a tumultuous day for tech stocks broadly as markets opened to the news that IBM agreed to buy cloud software distributorRed Hat for $34 billion, a 63% premium. Red Hat surged on the news, while IBM was down 4.1%.

Nothing stabilizes.

• China’s Economic Slump Accelerated In October (ZH)

As corporate defaults surge, forcing a desperate PBOC to reverse its deleveraging efforts and threaten more interventions to stave off a more serious retrenchment in growth in the world’s second largest economy, it seems like not a day goes by without another warning sign that China’s economic precarious situation is even worse than we thought. The impact this has had on the mainland investors’ psyche has been obvious to all. Repeated interventions by China’s ‘National Team’ have done little to arrest the inexorable decline in mainland stocks in October, leaving the Shanghai Composite, the country’s main benchmark index, on track for one of its worst months since the financial crisis, and its worst year since 2011.

Meanwhile, a flood of FX outflows has pushed the Chinese yuan dangerously close to the 7 yuan-to-the dollar threshold which, if breached, could unleash another wave of chaos across global markets. And as Chinese policy makers are probably already scrambling to pad the official stats, Bloomberg has released its own proprietary preliminary gauge of Chinese GDP in October which showed that the slowdown unleashed by the US-China trade war worsened in October. The Bloomberg Economics gauge aggregates the earliest-available indicators on business conditions and market sentiment, and unequivocally affirmed that the Communist Party’s efforts to stabilize the country’s economy and markets – the party this month introduced a raft of measures to stabilize sentiment, including steps to boost liquidity in the financial system, new tax deductions for households and targeted measures aimed at helping exporters – haven’t been successful – at least not yet.

Okay, well, get a deal then.

• 5 More Years Of Austerity In Event Of No-Deal Brexit – Chancellor (Ind.)

Austerity will continue for five more years if Britain crashes out of the EU with no deal, Philip Hammond signalled, in a Budget warning to MPs threatening to vote down Theresa May’s Brexit plans. The chancellor unveiled a Budget giveaway that cut income tax, announced a tax on the tech giants and conceded to pressure to help the victims of the bungled universal credit shake-up. But, most significantly, Mr Hammond made clear the prime minister’s promise that “austerity will be over” would only be met in full if Britain sidesteps economic damage from Brexit and the growing risk of leaving the EU with no agreement next March. pending would rise by 1.2% per year from next year, he announced – but immediately acknowledged the £20bn for the NHS would gobble up all the extra cash.

All other departments would only “keep pace with inflation”, a Treasury source said, before adding, tantalisingly: “If there’s a good deal, there’s an increase”. It appeared to be a clear warning to MPs that plunging Britain into the chaos and damage of a no-deal Brexit would prolong the pain of austerity for years to come. Some key departments – covering spending on the police, the courts and benefits – are still heading for cuts in day-to-day spending until 2022, the Budget book showed.

Ain’t that curious?

• With Just Days to the Midterms, Russiagate Is MIA (Maté)

The upcoming midterms are widely seen as a referendum on Donald Trump’s presidency, but its defining issue to date is notably MIA. “Campaign ads and debates are mostly avoiding the Russia investigation,” Politico reports, “in favor of other issues important to voters…like the economy, health care and taxes.” One study of political ads over a four-week period through mid-October found that 0.1% of ads aired in congressional races mentioned Russia; there were zero mentions of Russia in ads for Senate races.

On one level, it is unsurprising that the election has been focused on issues that impact voters’ lives, rather than the byzantine bureaucratic drama that has consumed Washington and elite media since Trump’s election. But after months of fearmongering about a sweeping Russian interference effort and a compromised, complicit president, perhaps we are also seeing the penny start to drop: Russiagate, for all its hype, has not gone as advertised.

Take the supposed Russian threat to the midterms. For months, intelligence officials and prominent media outlets have bombarded us with warnings about “a pervasive messaging campaign by Russia to try to weaken and divide the United States” (Director of National Intelligence Dan Coats), a threat so dire that we might as well dub the vote the “The Moscow Midterms” (FiveThirtyEight) and acknowledge that “we’re defenseless against Russian sabotage in the midterm elections,” (Washington Post columnist Jennifer Rubin). The New York Times informed readers in July that Coats had likened “the persistent danger of Russian cyberattacks today…to the warnings the United States had of stepped-up terror threats ahead of the Sept. 11, 2001, attacks.” “The warning lights are blinking red again,” he said.

Pompeo didn’t want to listen b/c he didn’t want to make a statement on it: Fox

Saudi Prosecutor demanded but couldn’t get the tape: AJ

• Khashoggi Murder Tape Will Never Be Made Public: Turkish Source (MEE)

Turkey will never make its recordings of Jamal Khashoggi’s murder public, a government source told Middle East Eye, because they were made secretly and in contravention of international law. Instead, Turkey is placing the onus of officially revealing the details of the journalist’s assassination on Saudi Arabia’s Istanbul consulate on Riyadh. On Monday, as the Saudi prosecutor met with his Turkish counterpart in Istanbul, Foreign Minister Mevlut Cavusoglu called on Riyadh to release the “whole truth” behind Khashoggi’s killing. Khashoggi, a prominent Saudi journalist and critic of the kingdom’s crown prince, Mohammed bin Salman (MBS), was murdered on 2 October by a hit squad of 15 Saudis sent to kill him.

Turkish sources who have listened to the audio recording of Khashoggi’s death have told MEE that the Washington Post columnist was tortured, murdered and dismembered after entering the consulate to obtain divorce papers The existence of the audio recording of Khashoggi’s murder has long been touted as a crucial piece of evidence held by the Turkish government. However, a government source told MEE on Monday that the tape would never officially be made public because the recording was obtained through “intelligence work” and could therefore not be used as legal evidence. Diplomatic missions such as the Saudi consulate in Istanbul are protected under the Vienna Convention, meaning Turkish spying on the building would be unlawful.

Turkish President Recep Tayyip Erdogan and the United Nations’ human rights chief have both said the extreme circumstances of the Khashoggi murder should be grounds enough to strip the consulate and its workers of diplomatic immunity, in order to facilitate the best possible investigation.

They knew and didn’t tell anyone, not even the US.

• Britain ‘Knew Of Khashoggi Plot And Begged Saudi Arabia To Abort Plans’ (Exp.)

Murdered journalist Jamal Khashoggi was about to disclose details of Saudi Arabia’s use of chemical weapons in Yemen, sources close to him said last night. The revelations come as separate intelligence sources disclosed that Britain had first been made aware of a plot a full three weeks before he walked into the Saudi consulate in Istanbul. Intercepts by GCHQ of internal communications by the kingdom’s General Intelligence Directorate revealed orders by a “member of the royal circle” to abduct the troublesome journalist and take him back to Saudi Arabia.

[..] Speaking last night the intelligence source told the Sunday Express: “We were initially made aware that something was going in the first week of September, around three weeks before Mr Khashoggi walked into the consulate on October 2, though it took more time for other details to emerge. “These details included primary orders to capture Mr Khashoggi and bring him back to Saudi Arabia for questioning. However, the door seemed to be left open for alternative remedies to what was seen as a big problem. “We know the orders came from a member of the royal circle but have no direct information to link them to Crown Prince Mohammad bin Salman. “Whether this meant he was not the original issuer we cannot say.”

The entire country’s for sale. Athens will all be on Airbnb, and there’ll be no place left for Greeks.

• Seeking A Bargain, And Taste Of The Good Life, Chinese Buy Greek Homes (R.)

Three times a week, hundreds of Chinese investors arrive at Athens airport to be greeted by Greek real estate agents who drive them straight into the city to view apartments for sale. The visitors are drawn to Greece by rock-bottom property prices and one of Europe’s most generous “golden visa” schemes, offering a renewable five-year resident’s permit in return for a 250,000 euro ($285,000)investment in real estate. That’s enough to buy a three-bedroom apartment in the capital with a view to the Acropolis hill. It is also enough to bring the first glimmers of recovery to the market since the Greek economy started to collapse after the debt crisis in 2009, although prices are still down by about 40% from their peak.

One Athens resident, who gave his name only as Vassilis, had almost given up finding a buyer for his home last year when a minivan pulled up outside his maisonette and a Chinese family of four got out. A day later, he got an offer. “They didn’t see the house again. We went and got a down-payment, and everything was set in motion,” he said. Vassilis had bought the home in the up-and-coming suburb of Gerakas for 320,000 euros ($367,000) in 2007 and decided to sell in order to buy his two adult children their own apartments. He sold it to the Chinese family for 220,000 euros. Real estate prices rose 0.8% in the second quarter year-on-year after a 0.1% rise in the first – the first pick-up since 2008, according to Bank of Greece data.

Foreign direct investment in property jumped 91% to 287 million euros last year from 2016, the bank’s data showed. Meanwhile, taxes from property sales rose by an annual 41% in the seven months to July to 204.7 million euros, according to data from state revenue authority AADE. “We are getting much more phone calls,” said Lefteris Potamianos, head of the Real Estate Association of Athens, which represents about 3,000 brokers. “The overwhelming majority is foreigners and there are yet some Greeks. Certainly, Chinese are by far ahead of the game.”

He’ll appeal.

• Assange’s Lawsuit Over Asylum Conditions Denied By Ecuador Judge (RT)

An Ecuadorian judge has thrown out the lawsuit by Julian Assange, who objected to the harshly revised terms of his asylum. The WikiLeaks co-founder has been trapped at the Embassy of Ecuador in London since 2012.
The judge made the decision following a lengthy hearing held by teleconference. Ecuador will maintain Assange’s asylum as long as he wants to keep it, but he must follow the rules laid out for him by the government, an unnamed government official told Reuters on Monday. The new rules, which were leaked earlier this month by an opposition politician, involve a list of restrictions Assange has argued violate his “fundamental rights and freedoms” as well as Ecuadorian and international law.

Among them are restrictions on discussing politics and receiving visitors, and demands of Assange to pay for his own food, medical care, laundry and related expenses of living at the embassy starting December 1. Ecuador has also threatened to seize Assange’s pet cat if he did not care for it properly, according to the leaked regulations. In the teleconference Monday, Assange accused Ecuador of using him as a “bargaining chip” in talks with the US and UK governments, and submitting to pressure from Washington and London. Ecuadorian Attorney General Inigo Salvador Crespo responded by calling those statements “malicious and perverse,” according to the newspaper El Comercio.

The new regulations and special protocols governing Assange’s visitations were put together for the purpose of making Assange’s continued stay at the embassy “harmonious,” Crespo argued. “It is a public building that was not intended for housing, so there must be regulation,” he told the judge.

Canada is huge. We’re talking 10 hour bus trips. There’s nothing to replace them.

• Decline Of Greyhound Service Mirrors Rural Canada’s Plight (G.)

It’s 10 to midnight when the Winnipeg-bound Greyhound bus swings off of the empty highway and into a dirt lot illuminated by a single street lamp. Its headlights sweep across the only passenger waiting in this remote lumber town: Mary Reimer, 80, is bundled in a purple parka against the cold. “Since my husband passed away four years ago, this is how I get to my sister,” she says, before climbing aboard. It’s the last time she’ll make the journey this way. Amid cratering passenger figures, Greyhound will discontinue all service in Canada’s western provinces on 31 October. The cuts will eliminate routes that have existed for nearly a century and sever the only transit link for dozens of towns where the British-owned company has endured even as other businesses have trickled away.

Some analysts see it as yet another indicator that rural Canada is not only struggling, but slowly decoupling from the country’s thriving urban cores. Don Warkentin has witnessed these changes. After 34 years driving Greyhound buses between Winnipeg and the mining city of Flin Flon eleven hours north, he’ll retire next week along with his route. One of 415 employees phased out by the cuts, he remembers when Greyhound made three runs a day on this stretch, with 24-hour depots at each stop. Now there’s one bus nightly, and most stops are bare-bones roadside pull-offs like this one. “Not as many people are riding these days,” he says, pushing Reimer’s luggage into the undercarriage. “It’s an Uber culture now.”

For those that can’t afford an Uber or the high cost of gas, Greyhound’s decision to write off much of the Canadian frontier is more than an inconvenience. “Greyhound is a private company, but they were almost public transportation in terms of the service they provided,” says Cathy Sproule, a member of the New Democratic party congress in Saskatchewan. But Greyhound hasn’t turned a profit on some of those routes in over a decade. Since 2010, ridership has tumbled by 41%, hollowed out by urban migration, discount airlines and rising car ownership. After this month, its buses will no longer travel to points west of Sudbury, Ontario. [..] “We see a confluence of events happening,” says Laura Neidhart, spokesperson for the advocacy group Canada Without Poverty. “More and more people are leaving rural Canada, and the people who remain are often the ones who are unable to leave.”

Debt Rattle October 17 2018

Oct 172018

October 17, 2018 Posted by Raúl Ilargi Meijer at 9:28 am Finance Tagged with: Australia, censor, extinction, Fed, Khashoggi, neoliberalism, Saudi, Sears, shadows, Trump, Venezuela 6 Responses »

Georgia O’Keeffe Autumn leaves, Lake George 1924

• Fed Minutes May Unlock Details About Jerome Powell’s Ultimate Plan (Y!)

• China May Have $6 Trillion Of Unreported Local Government Debt – S&P (CNBC)

• Jamal Khashoggi’s Killing Took Seven Minutes – Turkish Source (MEE)

• Sears Didn’t ‘Die.’ Vulture Capitalists Killed It. (Kuttner)

• On Theresa May, Danny DeVito and ‘Other People’s Money’ (Pettifor)

• Britain Fell For A Neoliberal Con Trick – Even The IMF Says So (G.)

• Venezuela Drops US Dollar, Will Use Euro For International Transactions (RT)

• The World Will Soon Start Talking Like Trump (FP)

• Supreme Court To Hear Case Linked To Who Social Media Can Censor (CNBC)

• Record Number of Older Australians are in Financial Trouble. (ABC.au)

• UK Restaurants And Cafes Throw Out 320 Million Fresh Meals A Year (G.)

• Nature Will Need Up To 5 Million Years To Fill The Gaps Caused By Man (Ind.)

Trump’s discomfort is still understandable.

• Fed Minutes May Unlock Details About Jerome Powell’s Ultimate Plan (Y!)

Wednesday’s minutes of the Federal Reserve’s September meeting, released at 2 p.m. ET, may reveal more details about the pacing of the central bank’s rate hikes, which have rattled investors and President Trump over the past week. Trump has repeatedly criticized the Fed in recent days, calling it “crazy” and “too cute” in various media interviews. Investors seemed to largely agree with this characterization — and sent the Dow Jones Industrial Average down over 1,300 points over a few trading sessions last week, as higher interest rates make stocks less attractive. The Fed has raised interest rates three times this year and has telegraphed a fourth hike as soon as December.

But Danielle DiMartino Booth, a former Federal Reserve advisor and CEO of Quill Intelligence, doesn’t expect Wednesday’s minutes to reflect the market’s recent worry over interest rates. “With Jay Powell, we have seen clean minutes,” she told Yahoo Finance, describing the minutes as a summation of the Fed’s thinking at the time of the September meeting. She said former Fed chairs Ben Bernanke and Janet Yellen used to massage the minutes if they needed to update their outlook in the weeks following the Fed’s last statement. [..] A lot has occurred since the September 25-26 meeting, including a steep rise in bond yields and last week’s aforementioned market turmoil. “[Last week’s market] declines won’t cause Powell to push the panic button,” Booth said. “If you look at the past few trading sessions, much of the declines have reversed.”

The shadows. Not under Xi’s control.

• China May Have $6 Trillion Of Unreported Local Government Debt – S&P (CNBC)

Unreported Chinese local government debt may amount to trillions of U.S. dollars, meaning the country’s debt-to-GDP ratio has hit “alarming” levels, S&P Global Ratings said in a report released Tuesday. The analysts noted a large gap between reported investment in local infrastructure and funding, as permitted by central authorities. As a result, the actual level of off-balance sheet debt could be several times more than what is publicly disclosed and range as high as 30 trillion yuan to 40 trillion yuan, or about $4.34 trillion to $5.78 trillion, credit analysts Gloria Lu, Laura Li and their team said in the report.

“And that’s a debt iceberg with titanic credit risks,” they added, estimating that the ratio of all government debt to GDP was 60 percent last year. To encourage economic growth in the region, local governments in China have invested heavily in infrastructure, often using financing structures known as “local government financing vehicles,” or LGFVs. Details about their size or nature tend to be unclear, and the S&P analysts said much of the hidden debt is in those vehicles. Beijing has been trying to move financing away from off-balance sheet sources, but has had limited success so far. In the future, S&P Global Ratings expects authorities will allow more defaults in local government financing vehicles, the report said.

Very graphic. There was no botched kidnapping, and no rogue elements. Find a new line. It doesn’t look like this story can be stopped anymore. Turkey keeps leaking details.

• Jamal Khashoggi’s Killing Took Seven Minutes – Turkish Source (MEE)

It took seven minutes for Jamal Khashoggi to die, a Turkish source who has listened in full to an audio recording of the Saudi journalist’s last moments told Middle East Eye. Khashoggi was dragged from the Consul General’s office at the Saudi consulate in Istanbul and onto the table of his study next door, the Turkish source said. Horrendous screams were then heard by a witness downstairs, the source said. “The consul himself was taken out of the room. There was no attempt to interrogate him. They had come to kill him,” the source told MEE. The screaming stopped when Khashoggi – who was last seen entering the Saudi consulate on 2 October – was injected with an as yet unknown substance.

Salah Muhammad al-Tubaigy, who has been identified as the head of forensic evidence in the Saudi general security department, was one of the 15-member squad who arrived in Ankara earlier that day on a private jet. Tubaigy began to cut Khashoggi’s body up on a table in the study while he was still alive, the Turkish source said. The killing took seven minutes, the source said. As he started to dismember the body, Tubaigy put on earphones and listened to music. He advised other members of the squad to do the same. “When I do this job, I listen to music. You should do [that] too,” Tubaigy was recorded as saying, the source told MEE. A three-minute version of the audio tape has been given to Turkish newspaper Sabah, but they have yet to release it.

Killing companies and cutting 100s of 1000s of jobs is perfectly legal.

• Sears Didn’t ‘Die.’ Vulture Capitalists Killed It. (Kuttner)

If you’ve been following the impending bankruptcy of America’s iconic retailer as covered by print, broadcast and digital media, you’ve probably encountered lots of nostalgia and sad clucking about how dinosaurs like Sears can’t compete in the age of Amazon and specialty retail. But most of the coverage has failed to stress the deeper story. Namely, Sears is a prime example of how hedge funds and private equity companies take over retailers, encumber them with debt in order to pay themselves massive windfall profits, and then leave the retailer without adequate operating capital to compete. Part of the strategy is to sell off valuable real estate, the better to enrich the hedge fund, and stick the retail company with costly rental payments to occupy the space that it once owned.

In the case of Sears, the culprit is a hedge-fund operator named Edward Lampert, once a senior merger guy at Goldman Sachs. In 2005, Lampert merged Sears with Kmart, loaded both up with debt, and used some of the debt on stock buybacks to pump up the share price and enrich shareholders, notably himself and his hedge fund. In a decade, 175,000 people at Sears/Kmart lost their jobs and revenue was cut in half. Various pieces of Sears were sold off. Lampert did just fine. Lampert’s hedge fund also became a prime a lender to Sears, making money off of commissions and interest charges as well as being a prime shareholder. The strategy ensures that the fund and its beneficiaries (including Lampert himself) get rich, even if they run Sears into the ground.

“..at a time of private economic failure, it is vital for government to borrow and spend..”

• On Theresa May, Danny DeVito and ‘Other People’s Money’ (Pettifor)

PEF Council member Ann Pettifor explains how all governments finance their spending (and its not from taxation). She deconstructs Theresa May’s address to the Conservative Party Conference with its deliberate framing of Labour governments as tax raiders. The use of the phrase “other people’s money” was not accidental. It was first used in the title of a famous work (1973) by Donald R. Cressy about the social psychology of embezzlement. The book was later made into a movie about a corrupt corporate raider, and starred Danny de Vito and Gregory Peck. Mrs May’s speech writer wanted to imply that Labour governments are tax raiders.

That is both a calumny, but also a lie – twice over. First because no Labour government has ever run out of money – not even Clement Attlee’s which started life with public debt at 250% of national income, and then spent enormous sums creating the NHS, affordable housing, a public education system etc. As a result of that spending, public debt as a share of GDP fell precipitously, because the Labour government increased the nation’s income, through well-paid employment. Good, well-paid employment in turn generated tax revenues – to pay for the borrowing, and pay down the public debt.

Second, no government – including today’s Conservative government – finances spending from taxation. Instead governments finance spending by borrowing from their own Bank, the Bank of England, or from capital markets. If that borrowing creates employment and increases income, then tax revenues accrue to HMRC, and is used to pay for the borrowing. To keep the public finances balanced at a time of private economic failure, it is vital for government to borrow and spend, to expand the nation’s income and thereby to generate the tax revenues needed to repay the borrowing, and keep the public finances in order.

Most of the world has.

• Britain Fell For A Neoliberal Con Trick – Even The IMF Says So (G.)

I want to address the most stubborn belief of all: that running a small state is the soundest financial arrangement for governments and voters alike. Because 40 years on from the Thatcher revolution, more and more evidence is coming in to the contrary. Let’s start with the IMF itself. Last week it published a report that barely got a mention from the BBC or in Westminster, yet helps reframe the entire debate over austerity. The fund totted up both the public debt and the publicly owned assets of 31 countries, from the US to Australia, Finland to France, and found that the UK had among the weakest public finances of the lot. With less than £3 trillion of assets against £5tn in pensions and other liabilities, the UK is more than £2tn in the red. Of all the other countries examined by researchers, including the Gambia and Kenya, only Portugal’s finances look worse over the long run. So much for fixing the roof.

Almost as startling are the IMF’s reasons for why Britain is in such a state: one way or another they all come back to neoliberalism. Thatcher loosed finance from its shackles and used our North Sea oil money to pay for swingeing tax cuts. The result is an overfinancialised economy and a government that is £1tn worse off since the banking crash. Norway has similar North Sea wealth and a far smaller population, but also a sovereign wealth fund. Its net worth has soared over the past decade. The other big reason for the UK’s financial precarity is its privatisation programme, described by the IMF as no less than a “fiscal illusion”. British governments have flogged nearly everything in the cupboard, from airports to the Royal Mail – often at giveaway prices – to friends in the City. Such privatisations, judge the fund, “increase revenues and lower deficits but also reduce the government’s asset holdings”.

If they are successful others may follow.

• Venezuela Drops US Dollar, Will Use Euro For International Transactions (RT)

Venezuela is abandoning the US dollar, with all future transactions on the Venezuelan exchange market to be made in euro, Tareck El Aissami, the country’s Vice President for Economy, announced. The sanctions, recently introduced by Washington against Caracas, “block the possibility of continuing to trade using the US dollar on the Venezuelan exchange market,” El Aissami said, adding that the American restrictions were “illegal and against international law.” The American “financial blockade” of Venezuela affects both the country’s public and private sectors, including pharmacy and agriculture, and shows “just how far the imperialism can go in its madness,” the vice president said.

Venezuela’s floating exchange rate system, Dicom, “will be operating in euro, yuan or any other convertible currency and will allow the foreign exchange market to use any other convertible currency,” El Aissami said. The vice president added that all private banks in Venezuela are obliged to participate in the Dicom bidding system. The government is going to sell 2 billion euros between November and December to allow the public to purchase the European currency “at a real, non-speculative rate,” he said.

The price of success?!

• The World Will Soon Start Talking Like Trump (FP)

[..] no one doubts that Trump, through his surprise election victory and unprecedented approach to governance, has redefined political communication. For better or worse, every future president and presidential candidate will seek to learn from, and at least partially emulate, Trump’s unique and successful methods in this. Because America often sets trends in political communication, we should also expect to see such Trumpian techniques adopted abroad as well. Of course, there is considerable disagreement about precisely what those techniques are and which aspects of them will endure and transfer into other campaigns. It is early days, but at least three aspects of Trumpian political communication are likely to endure.

The most obvious and most commented upon aspect of Trumpian communication is the president’s use of Twitter. Trump is quite simply addicted to the medium—and he has stuck to it despite warnings from his political advisors that it is unwise for a president to make unfiltered use of social media. [..] Trump [..] clearly values Twitter precisely because it provides him with direct access to voters, unencumbered by the press, advisors, the government bureaucracy, or even personal reflection. He provides breaking news on his feed not available elsewhere and provides insight into his thinking through tweets.

Trump should do this.

• Supreme Court To Hear Case Linked To Who Social Media Can Censor (CNBC)

The Supreme Court has agreed to hear a case that could determine whether users can challenge social media companies on free speech grounds. The case, Manhattan Community Access Corp. v. Halleck, No. 17-702, centers on whether a private operator of a public access television network is considered a state actor, which can be sued for First Amendment violations. The case could have broader implications for social media and other media outlets. In particular, a broad ruling from the high court could open the country’s largest technology companies up to First Amendment lawsuits.

That could shape the ability of companies like Facebook, Twitter and Alphabet’s Google to control the content on their platforms as lawmakers clamor for more regulation and activists on the left and right spar over issues related to censorship and harassment. The Supreme Court accepted the case on Friday. It is the first case taken by a reconstituted high court after Justice Brett Kavanaugh’s confirmation earlier this month. [..] On its face, the case has nothing to do with social media at all. Rather, the facts of the case concern public access television, and two producers who claim they were punished for expressing their political views.

The producers, DeeDee Halleck and Jesus Melendez, say that Manhattan Neighborhood Network suspended them for expressing views that were critical of the network. In making the argument to the justices that the case was worthy of review, attorneys for MNN said the court could use the case to resolve a lingering dispute over the power of social media companies to regulate the content on their platforms. [..] While the First Amendment is meant to protect citizens against government attempts to limit speech, there are certain situations in which private companies can be subject to First Amendment liability. Attorneys for MNN have made the case that social media companies are clearly not government actors. But in raising the question, they have provided the Supreme Court an opportunity to weigh in.

Interest-only mortgages.

• Record Number of Older Australians are in Financial Trouble. (ABC.au)

Financial helpline counsellors are at “capacity” with record numbers of older Australians struggling in poverty, but they still urge those experiencing debt distress to not hesitate to call. The National Debt Helpline — a federal government-run financial counselling service — said it’s on track to receive a record number of cases through its call centres this year — many from older Australians who can’t meet their mortgage or rent payments. “The phones just never stop now,” financial counsellor Greg said. “They’re just going day after day, after day. “You put the phone down, you pick the phone up again.”

[..] For the first time, the National Debt Helpline has started fielding calls from Australians struggling to switch from interest, to principal and interest mortgage payments. “We are seeing an increasing number of older Australians calling us,” Ms Cox said. “Very occasionally we’re still seeing people who have just been granted a very large mortgage, even though they’re in their 50s or 60s, and one that’s set to go for a 25 or 30-year term.” Those sorts of lending practices can lead older Australians down a financial rabbit hole. That is when sickness can creep in and marriages break down.

Our economies run on waste.

• UK Restaurants And Cafes Throw Out 320 Million Fresh Meals A Year (G.)

Almost 900,000 perfectly edible, freshly prepared meals end up in the bin in the UK every day, new figures reveal, because they haven’t been sold in time by restaurants and cafes. This means that more than 320m meals are thrown away by British food establishments every year – enough meals for everyone in the UK five times over, according to food waste app Too Good To Go. While consumers are increasingly aware of the food wasted in their homes and by supermarkets, waste by restaurants is still largely overlooked. Figures from the government’s food waste advisory body Wrap state that the problem costs UK businesses over £2.5m every week.

The app – which allows users to “rescue” surplus meals at a discounted price – is calling on more food businesses and consumers to join forces to help cut waste. “No one leaves the lights on when they leave the house,” said Hayley Conick, UK managing director at Too Good To Go. “Yet, whether it’s in restaurants, food shops or our own homes, we don’t think twice about throwing away perfectly good food.” Separately, Britons are being urged to help cut their food waste at home by setting their fridges to a colder temperature to make fresh milk and other chilled foods last longer. The advice from campaign group Love Food Hate Waste comes as a new survey revealed that half the UK population do not realise that their fridge should be set at below 5C to maximise its efficiency.

Not a timeframe we can oversee. So not a call to action.

• Nature Will Need Up To 5 Million Years To Fill The Gaps Caused By Man (Ind.)

Mankind has taken the world to the brink of a mass extinction that could wipe out vast swathes life on Earth for millions of years, scientists have warned in a new study. Humans are killing off animal and plant species so rapidly that evolution is unable to keep up to fill the gaps left behind, the work suggests. Unless conservation efforts are stepped up, nature will require between three and five million years to recover the levels of biodiversity expected to be lost over the next 50 years, predicted researchers. There have been five previous mass extinctions in the past 450 million years, and scientists have warned climate change, poaching, pollution and habitat destruction are bringing about a sixth.

More than 300 mammal species have been eradicated by human activity, according to researchers at Aarhus University in Denmark and the University of Gothenburg. More are likely to follow them into extinction in the next few decades. [..] Instead of simply counting lost or threatened species, the study considered the amount of time each had spent evolving to reflect. The extinction of species with distinct lineages and few close relatives meant the loss of “unique ecological functions and the millions of years of evolutionary history they represented”, researchers said.

“Large mammals, or megafauna, such as giant sloths and sabre-toothed tigers, which became extinct about 10,000 years ago, were highly evolutionarily distinct,” said Aarhus University palaeontologist Matt Davis, who led the study. “Since they had few close relatives, their extinctions meant that entire branches of Earth’s evolutionary tree were chopped off.” Researchers suggested threatened mammals with long evolutionary histories should be prioritised for conversation. They highlighted Asian elephants, one of only two existing species of a once mighty mammalian order that included mammoths and mastodon, and which are said to have just a 33-per-cent chance of surviving the century.

A Climate Fit For a Groundhog

Oct 092018

October 9, 2018 Posted by Raúl Ilargi Meijer at 1:03 pm Primers Tagged with: Bloomberg, Carney, climate, energy, extinction, groundhog, IPCC, leaders, petri dish, politicians, profit 6 Responses »

Pieter Bruegel the Elder Two monkeys 1562

And there we go again. Another IPCC report, and they all keep getting more alarming than the previous one. And then nothing substantial happens. Until the next report is issued and makes everybody’s headlines for a day, or two. Rinse, spin and repeat. “Now we really have to do something!”. “World leaders have a moral obligation to act!”.

Oh boy. To start with that last bit, world leaders don’t act because of moral obligations. They act to stay in, or get in, power. And they all know that to achieve that goal they must keep their people happy, even if dictators do this differently from ‘democratically elected’ leaders.

The first tool they have for this is control of the media, control of the narratives that define -or seem to- their societies. If a society is in bad shape, they will control the media to show that it is doing fine. if it’s actually doing fine, they will make sure all the praise for this is theirs and theirs alone.

So what makes their people happy? One thing far ahead of anything else is material comfort. If leaders can’t convince people that they’re comfortable, their power is in danger. Once enough people are miserable or hungry, a process is set in motion that threatens to push leaders aside in favor of someone who promises to make things better. There’s never a shortage of those.

Leaders, politicians, think short-term. They may see further into the future than the next election, but that is not useful information. If they enact measures aimed at 10 years from today or more, they risk being voted out in 2 years, or 4. It’s not even their fault, it’s how the system works. It is different for dictators, but not even that much.

The general notion is clear. But that means we can’t rely on our leaders to act against the climate change the IPCC keeps warning of. because is has a -much- longer time window than the next elections -or the next coup in dictator terms. Even if every IPCC report depicts a shorter window than the last one, it’s still not inside those 4-year election cycles (numbers vary slightly, 4 is typical).

A typical ‘response’ to the climate threat are the COP meetings and agreements. I have fulminated plenty against COP21, the Paris accord, even named it CON21. Because that was signed by those very leaders tied down in their election cycles. Completely useless. That most of the other signees were business leaders who represent oil companies, airlines and Big Tech with huge server parks seals the reality of the deal.

These are not the people who will solve the problems. They have too much interest in not doing so. The CEO’s have their profits to think about, the politicians their elections. They should be kept out of the decision-making process. But they’re the only ones who are in it.

I still think the issue was never better epitomized than in the December 2016 piece in the Guardian by Michael Bloomberg and Mark Carney entitled “How To Make A Profit From Defeating Climate Change” , about which I said at the time:

These fine gents probably actually believe that this is perfectly in line with our knowledge of, say, human history, of evolution, of the laws of physics, and of -mass- psychology. All of which undoubtedly indicate to them that we can and will defeat the problems we have created -and still are-, literally with the same tools and ideas -money and profit- that we use to create them with. Nothing ever made more sense.

That these problems originated in the same relentless quest for profit that they now claim will help us get rid of them, is likely a step too far for them; must have been a class they missed. “We destroyed it for profit” apparently does not in their eyes contradict “we’ll fix it for profit too”. Not one bit. It does, though. It’s indeed the very core of what is going wrong.

Profit, or money in general, is all these people live for, it’s their altar. That’s why they are successful in this world. It’s also why the world is doomed. Is there any chance I could persuade you to dwell on that for a few seconds? That, say, Bloomberg and Carney, and all they represent, are the problem dressed up as the solution?

This week’s IPCC report says the efforts to keep warming at acceptable levels (1.5ºC) will cost many trillions of dollars every year. But a billionaire publisher and a central bank head want to make a profit?! Hey, perhaps they can, as long as you and I pay… But they won’t solve a thing. if only because not doing that will be too profitable. Still, while they’re at it, maybe they can do us a favor.

You see, what is hardly ever mentioned, let alone acknowledged, is that we have more than one major existential problem, and they exist in such a form of symbiosis that solving only one doesn’t make much difference.

We have a changing climate, we have accelerating species extinction, we have plastics in our fish, and we have a global economy that’s about to topple over. The common thread in all these is an overkill in energy use and therefore an overkill in waste. Thermodynamics, 2nd law. Waste kills. By raising temperatures, finishing off wildlife, plugging rivers and oceans with plastics, making increasing amounts of people economically miserable.

But as I wrote a while ago, our economies exist to produce waste, it’s not just a by-product -anymore-. If we stop making things we don’t need, and things that do harm to our world and our lives, our economies will collapse. We must continue on our path or see our lifetstyles plummet. They will anyway, we’re just delaying the inevitable, but we’re stuck.

And politicians are utterly useless and utterly unfit in situations like this. But ask yourself: are you any better? If you were told that in order to ‘save the planet’, you’d have to cut your energy use in half, which would take away many of your comforts and luxuries, would you do it?

A better question yet is, if you would agree to do that, and then see that your neighbor does not, would you still cut your driving and flying and electricity? That’s hard enough on an individual level, but how about if one nation does, while another refuses? Or when nations that have much lower per capita energy consumption tell the West: you go first?

What do you think the odds are that we’ll find a global solution, approach, before the 2030 cutoff date the IPCC provides in its latest report? While the likes of Bloomberg and Carney still talk about climate change as a profit opportunity? I know what I think.

The report says we need to drastically ‘reform’ our economies and lifestyles. Cutting our energy use in the West in half won’t be enough, if only because billions of people demand more energy at their disposal. Will you cut into your lifestyle, will your children, when they see their neighbors increasing their energy use, when they see entire nations increase theirs?

We don’t have ‘leaders’ that can stop species extinction or a warming planet or an economic collapse, because they either are clueless or they will be voted out of power if they tell the truth. Extend and pretend is a term that’s used to describe economic policies a lot, but it actually paints an accurate picture of everything we do.

“Free”, surplus, energy can come in the shape of sugar in a petri dish full of bacteria, or of stored carbon on planet earth. In both cases, the outcome is as predictable as can be. Can we, with our billions of cars and billions of miles flown every year, and billions of phones and computers, return to the energy use of only 100 years ago? Don’t think so.

On the contrary, we’re constantly increasing our energy consumption. Just like the bacteria do in the petri dish. Until they no longer can, until reality, physics, thermodynamics, sets a limit. One of my favorite themes is that we are the most tragic species ever because we can see ourselves doing things that we know are harmful to us, but we can’t stop ourselves from continuing.

The best we can hope for is that tomorrow morning everything will be the same again as where we started today. But no, that’s not sufficient, either, many of the things we’ve unleashed have 20+ year runtimes, and they’re already baked into the cake of our futures. We can’t start afresh every morning, no Groundhog Day for us. Every morning the alarm goes off things have gotten worse. And we can’t stop that.

Debt Rattle September 17 2018

Sep 172018

September 17, 2018 Posted by Raúl Ilargi Meijer at 9:32 am Finance Tagged with: Brexit, corruption, Dick Fuld, Everything Bubble, extinction, Fraud, Growth, Lehman, multiculturalism, risk assets, Shell, Tesla 10 Responses »

René Magritte Companions of fear 1942

• Repo 105 (Ben Hunt)

• The Everything Bubble” Threatens $400 Trillion In Assets (ZH)

• What Can Cause the Next Mortgage Crisis in the US? (WS)

• Dollar Dominant & Dangerous, System Not Stable – Catherine Austin Fitts (USAW)

• Shell Faces One Of The Biggest Corruption Cases In Corporate History (Ind.)

• Only Alternative To Chequers Is No Brexit Deal, Says Theresa May (G.)

• Brussels Nearing Impasse With May Over Irish Border Proposal (G.)

• Four In 10 Think British Culture Is Undermined By Multiculturalism (G.)

• Musk Says Tesla Now In ‘Delivery Logistics Hell’ (R.)

• The EU Needs A Stability And Wellbeing Pact, Not More Growth (G.)

• 7 Endangered Species That Could (Almost) Fit In A Single Train Carriage (G.)

Lehman sold bad loans to banks for a fee so it could look better, only to buy them back days later. It was very basic fraud. And Dick Fuld walked away.

• Repo 105 (Ben Hunt)

Every time Dick Fuld’s publicists succeed in getting a “redemption story” published in the Wall Street Journal or New York Times, I’m going to write an Epsilon Theory brief about Repo 105, the fraudulent scheme that Lehman Brothers ran for years to hide its deteriorating financial condition from investors and regulators alike.

[..] Repo 105 was a multiyear scheme by Lehman to defraud the government and its own investors by falsifying the actual amount of loans it had on the books, making Lehman look safer than it actually was. It worked like this. A few days before the end of the calendar quarter, Lehman would “sell” billions of dollars worth of loans to another bank. I put “sell” in quotation marks, because Lehman ALSO had an agreement with these other banks to buy the loans back a few days after the quarter ended for the same price as they were sold, plus enough money to cover whatever the going interest rate was on that cash for the few days it was in Lehman’s hands. This is what’s called a repurchase agreement, or repo, hence the name Repo 105 (the 105 refers to the 5% overcollateralization that counterparty banks required to lend the cash to Lehman even for a few days – THEY knew Lehman was in trouble).

Since financial reporting happens at the end of the quarter, Lehman’s books would look like they had more cash and fewer loans than they actually did. Surely, you say, no law firm would bless this blatant attempt to cook the books? And I say, don’t call me Shirley. I say, well … no US law firm would bless this, so naturally Lehman found a UK firm, Linklaters, to say that this was, in fact, technically a “true sale”. Even then, to pull this off Lehman had to run Repo 105 through their offshore subsidiaries, not through their US-chartered entities. It was really expensive for Lehman to run Repo 105. But also entirely necessary, or else the entire house of cards that WAS Lehman would have collapsed well before September, 2008.

Risk. It’s back.

• The Everything Bubble” Threatens $400 Trillion In Assets (ZH)

By now, it’s a very familiar question: how high can the Fed hike rates before it causes a major market “event.” Two weeks ago, Stifel analyst Barry Banister became the latest to issue a timeline on how many more rate hikes the Fed can push through before the market is finally impacted. According to his calculations, just two more rate hikes would put the central bank above the neutral rate – the interest rate that neither stimulates nor holds back the economy. The Fed’s long-term projection of its policy rate has risen from 2.8% at the end of 2017 to 2.9% in June. As the following chart, every time this has happened, a bear market has inevitably followed.

A similar argument was made recently by both Deutsche Bank and Bank of America, which in two parallel analyses observed last year that every Fed tightening cycle tends to end in a crisis. In a report issued on Friday, BCA’s strategists make the key point that the performance of bonds – and stocks – in an inflation scare would depend on the relative size of the inflationary impulse compared with the disinflationary impulse that resulted from sharply lower risk-asset prices. They make the point that if central banks were more concerned about the inflationary impulse, which at least for Fed chair Powell appears to be the case for now – Janet Yellen’s “lower for longer revised forward guidance” notwithstanding – they would have to keep tightening – in which case, bond yields would be liberated to reach elevated territory.

Conversely, if the bigger worry was the disinflationary impulse, which arguably is the case from a legacy standpoint, central banks would quickly reverse course, and bond yields would return to the lowlands. Thus, the disinflationary impulse from lower risk-asset prices would end up as the bigger issue. [..] BCA estimates that the total value of global risk-assets is $400 trillion, equal to about five times the size of the global economy. The takeaway is that any inflationary impulse would – through higher bond yields – undermine the valuation support of global risk-assets that are worth several times the size of the global economy.

“In a rising housing market, delinquencies will always be low but are not an indicator of future default risks. But home prices are an indicator of default risk.”

• What Can Cause the Next Mortgage Crisis in the US? (WS)

Mortgage delinquencies at all commercial banks in the US inched down to 3.14% in the second quarter, the lowest since Q2 2007, according to the Federal Reserve. But after those soothingly low delinquency rates in 2007, something happened. By Q3 2008, the delinquency rate hit 5.2%, and in Q4 2009, it went over 10%, and stayed in the double-digits until Q1 2013. This was the mortgage crisis. And we’re a million miles away from it, thank God. Or are we? This chart compares home prices in the US (green, left scale) to delinquency rates (red, right scale). Delinquency rates started surging after home prices started falling. The inflection point is marked by the vertical purple line, labeled “it starts”:

Home prices began falling in 2006. By 2008, some homeowners were seriously “underwater” – they owed more on their house than the house was worth. When they ran into financial trouble because they were in over their heads, or because one of the breadwinners in the household lost their jobs, or because they’d lied on their mortgage application and never had enough income to begin with, or because they were investors who couldn’t make the math work out anymore, or whatever, they were stuck. In a rising housing market, they would just sell the home and pay off the mortgage. But they couldn’t sell their home because it was worth less than the mortgage, and default was the only option. The chart above shows the relationship between home prices and delinquencies. In a rising housing market, delinquencies will always be low but are not an indicator of future default risks. But home prices are an indicator of default risk.

“The U.S. government is “missing” $21 trillion between the DOD and HUD.”

• Dollar Dominant & Dangerous, System Not Stable – Catherine Austin Fitts (USAW)

Investment advisor and former Assistant Secretary of Housing, Catherine Austin Fitts, predicts the global financial system “will take some big hits before the end of the year.” Fitts explains, “Right now, economists say the dollar is ‘dangerous and dominant.’ It’s still, if you look at the market shares around the world, it’s still very, very significant portion of total reserves. So, it’s still very important. At the same time, the U.S. dollar hegemony is probably not going to last forever . . . So, I think the long term dollar looks very weak. Short term, it doesn’t look like it’s coming apart anytime soon, as far as I can see. What that means is when you have something that is dangerous and dominant, you have the possibility of extreme volatility events.

That’s the new code word for the ‘you know what’ hits the, you know what. Whether it’s different countries exploding economically, or we whether are pressuring people that makes them very uncomfortable, these kinds of fights over shrinking pies are very dangerous because they mean covert wars. They mean overt wars, and the more we steal pies from each other instead of make new pies, the worse the situation gets. That’s what you are seeing. The system is not stable.” [..] There is good reason people are going to real assets. The U.S. government is “missing” $21 trillion between the DOD and HUD. This fact was uncovered by Fitts and economist Dr. Mark Skidmore last year.

What was the government’s answer to this gigantic accounting fraud that is the size of the federal deficit? Give the government’s budgets basically classified national security status. Fitts says, “Apparently, the people leading the audit have come to them and said if we do this audit, we will disclose classified projects. So, the board (Federal Accounting Standards Advisory Board – FASAB) came out with a new policy. I say it is illegal. You cannot do it under the financial management laws, and you certainly cannot do it under the Constitution, and it said you can keep classified off the books, which means you can cook the books and you can basically do whatever you want.

What was that about reality and fiction?

• Shell Faces One Of The Biggest Corruption Cases In Corporate History (Ind.)

Giant oil companies, offshore accounts, ex-MI6 agents, champagne lunches, a former Nigerian president and allegations of one of the biggest bribes ever paid – the corruption case against Shell and Italy’s Eni filed by prosecutors in Milan over a shady $1.3bn deal for a vast African oil field has all the elements of an espionage thriller. The latest twists thicken the plot further with a cache of documents seized in a raid on a Swiss financier’s apartment that could be crucial to the case, leaving prosecutors in a race against time to get them to Milan as trial hearings get underway this week. The Geneva raid uncovered a briefcase belonging to Emeka Obi, a middleman who received millions of dollars from the deal and is in the dock along with several senior Shell and Eni executives.

Inside the briefcase, Swiss prosecutors found a laptop, two Nigerian passports, five sim cards and a hard drive containing 41,000 documents that prosecutors believe could be crucial to the trial playing out on the other side of the Alps. The stakes are high. Italian prosecutors allege that, of the total $1.3bn fee paid by Shell and Eni for the oil field, $1.1bn went not into the coffers of the Nigerian state but the accounts of former oil minister Dan Etete who then distributed hundreds of millions to well-connected individuals, including former president Goodluck Jonathan. The amount distributed as bribes is more than the entire Nigerian healthcare budget for 2018, in a country where 87 million people live in extreme poverty – more than any other country on earth.

She’s stuck. Dangerous position.

• Only Alternative To Chequers Is No Brexit Deal, Says Theresa May (G.)

May said: “I believe we will get a good deal. We will bring that back from the EU negotiations and put that to parliament. I think that the alternative to that will be not having a deal.” The Chequers plan prompted the resignations of David Davis and Boris Johnson. May tried again to remake the case for it by claiming the other options put forward by the EU were unacceptable. “The European Union had basically put two offers on the table. Either the UK stays in the single market and the customs union – effectively in the EU – that would have betrayed the vote of the British people,” she said.

“Or, on the other side, a basic free trade agreement but carving Northern Ireland out and effectively keeping Northern Ireland in the European Union and Great Britain out. That would have broken up the United Kingdom, or could have broken up the United Kingdom. Both of those were unacceptable to the UK. “We said ‘no’ … we’re going to put our own proposal forward and that’s what Chequers is about … It unblocked the negotiations.”

Preparing to blame the EU for failing.

• Brussels Nearing Impasse With May Over Irish Border Proposal (G.)

The EU is proving unable to convince Theresa May that by using “trusted trader schemes” and technology its proposal to in effect keep Northern Ireland in the customs union and single market will not draw a border in the Irish sea. The Brexit negotiations have reached an impasse over the failure to find an acceptable solution to avoiding a hard border on the island of Ireland after the UK leaves the EU. The solution proposed by Brussels in which Northern Ireland has a different status from the rest of the UK has been rejected by the prime minister as involving the economic and constitutional “dislocation” of the country. The EU’s chief negotiator, Michel Barnier, has nevertheless repeatedly insisted that the issue can be “de-dramatised”.

Barnier has sought to show that the level of trade between Belfast and the rest of the UK is minimal, and that the checks that would be required do not pose a constitutional threat to the British government. But according to what is described as a diplomatic note seen by the Times, the EU is struggling to convince the UK that it is significant that checks at a border could be avoided entirely for many companies through trusted trade schemes. The diplomatic note, said to have been drafted following a meeting of EU ambassadors last Wednesday with Barnier’s deputy, Sabine Weyand, reports that the UK has not been “helpful” over the issue. The note says: “The biggest unsolved problem is Northern Ireland. There is a political mobilisation in the UK in this regard. Therefore, we are trying to clarify the EU position. The controls or checks only have to be organised in a way that would not endanger the EU single market.”

How about you start by picking your own strawberries?

• Four In 10 Think British Culture Is Undermined By Multiculturalism (G.)

A large minority of people in the UK believe multiculturalism has undermined British culture and that migrants do not properly integrate, according to some of the broadest research into the population’s attitudes to immigration. The study, conducted over the last two years, also reflects widespread frustration at the government’s handling of immigration, with only 15% of respondents feeling ministers have managed it competently and fairly. On balance, the UK population appears to be slightly more positive than negative about the impact of immigration; however, 40% of respondents agreed that having a wide variety of backgrounds has undermined British culture. More than a quarter of people believe MPs never tell the truth about immigration and half the population wants to see a reduction in the numbers of low-skilled workers coming into Britain from the EU.

The study was based on a survey of 3,667 adults carried out in June by ICM, as well as 60 citizens’ panels carried out on behalf of the thinktank British Future and the anti-racism group Hope Not Hate. “The lack of trust we found in the government to manage immigration is quite shocking,” said Jill Rutter, the director of strategy for British Future. “People want to have their voices heard on the choices we make, and to hold their leaders to account on their promises. While people do want the UK government to have more control over who can come to the UK, most of them are ‘balancers’ – they recognise the benefits of migration to Britain, both economically and culturally, but also voice concerns about pressures on public services and housing.”

“Should be solved shortly..”

• Musk Says Tesla Now In ‘Delivery Logistics Hell’ (R.)

Tesla Inc’s Chief Executive Officer Elon Musk on Sunday acknowledged that the electric carmaker’s problems have now shifted to delivery logistics from production delays, the latest speed bump in its efforts to achieve profitability. “Sorry, we’ve gone from production hell to delivery logistics hell, but this problem is far more tractable. We’re making rapid progress. Should be solved shortly,” Musk said in a tweet here in response to a customer complaint on delivery delay. The 47-year-old billionaire who earlier this month faced investor ire over smoking marijuana on a live web show, has indicated in the past that Tesla’s customers may face a longer response time because of a significant increase in vehicle delivery volume in North America.

238 academics signed. But it’s not the conversation we’ll have.

• The EU Needs A Stability And Wellbeing Pact, Not More Growth (G.)

This week, scientists, politicians, and policymakers are gathering in Brussels for a landmark conference. The aim of this event, organised by members of the European parliament from five different political groups, alongside trade unions and NGOs, is to explore possibilities for a “post-growth economy” in Europe. For the past seven decades, GDP growth has stood as the primary economic objective of European nations. But as our economies have grown, so has our negative impact on the environment. We are now exceeding the safe operating space for humanity on this planet, and there is no sign that economic activity is being decoupled from resource use or pollution at anything like the scale required. Today, solving social problems within European nations does not require more growth. It requires a fairer distribution of the income and wealth that we already have.

Growth is also becoming harder to achieve due to declining productivity gains, market saturation, and ecological degradation. If current trends continue, there may be no growth at all in Europe within a decade. Right now the response is to try to fuel growth by issuing more debt, shredding environmental regulations, extending working hours, and cutting social protections. This aggressive pursuit of growth at all costs divides society, creates economic instability, and undermines democracy. Those in power have not been willing to engage with these issues, at least not until now. The European commission’s Beyond GDP project became GDP and Beyond. The official mantra remains growth — redressed as “sustainable”, “green”, or “inclusive” – but first and foremost, growth. Even the new UN sustainable development goals include the pursuit of economic growth as a policy goal for all countries, despite the fundamental contradiction between growth and sustainability.

Another way to put it. You could easily do this for 70 species, or 700, 7000.

• 7 Endangered Species That Could (Almost) Fit In A Single Train Carriage (G.)

Some species are so close to extinction, that every remaining member can fit on a New York subway carriage (if they squeeze). All estimates come from the IUCN Red List, 2018.

Debt Rattle September 14 2018

Sep 142018

September 14, 2018 Posted by Raúl Ilargi Meijer at 8:28 am Finance Tagged with: Bailouts, Brexit, China, extinction, Florence, Lehman, mass surveillance, Salvini, underwater 1 Response »

Claude Monet The sheltered path 1888

• The Bailouts for the Rich Are Why America Is So Screwed Right Now (Stoller)

• Ten Years After the Crash, We’ve Learned Nothing (Taibbi)

• Millions Of Americans Trapped In Underwater Homes 10 Years After Crisis (R.)

• No-Deal Brexit Could Lead To Financial Crisis As Bad As 2008 – Carney (Ind.)

• Europe’s Top Rights Court Rules Against Britain Over Mass Surveillance (AFP)

• S&P Sees Major Opportunity In China’s $11 Trillion Bond Market (CNBC)

• China Says World Trade System Not Perfect, Needs Reform (R.)

• ‘Little Mussolinis’: EU Chief Angers Italy With Comment On Far Right (R.)

• Third Of Earth’s Surface Must Be Protected To Prevent Mass Extinction (Ind.)

• Hurricane Florence Deluges Carolinas Ahead Of Landfall (R.)

And there are different ways…

• The Bailouts for the Rich Are Why America Is So Screwed Right Now (Stoller)

In 1933, when FDR took power, global banking was essentially non-functional. Bankers had committed widespread fraud on top of a rickety and poorly structured financial system. Herbert Hoover, who organized an initial bailout by establishing what was known as the Reconstruction Finance Corporation, was widely mocked for secretly sending money to Republican bankers rather than ordinary people. The new administration realized that trust in the system was essential. One of the first things Roosevelt did, even before he took office, was to embarrass powerful financiers. He did this by encouraging the Senate Banking Committee to continue its probe, under investigator Ferdinand Pecora, of the most powerful institutions on Wall Street, which were National City (now Citibank) and JP Morgan.

Pecora exposed these institutions as nests of corruption. The Senate Banking Committee made public Morgan’s “preferred list,” which was the group of powerful and famous people who essentially got bribes from Morgan. It included the most important men in the country, like former Republican President Calvin Coolidge, a Supreme Court Justice, important CEOs and military leaders, and important Democrats, too. Roosevelt also ordered his attorney general “vigorously to prosecute any violations of the law” that emerged from the investigations. New Dealers felt that “if the people become convinced that the big violators are to be punished it will be helpful in restoring confidence.” The DOJ indicted National City’s Charles Mitchell for tax evasion.

This was part of a series of aggressive attacks on the old order of corrupt political and economic elites. The administration pursued these cases, often losing the criminal complaints but continuing with civil charges. This bought the Democrats the trust of the public. When Roosevelt engaged in his own broad series of bank bailouts, the people rewarded his party with overwhelming gains in the midterm elections of 1934 and a resounding re-election in 1936. Along with an assertive populist Congress, the new administration used the bailout money in the RFC to implement mass foreclosure-mitigation programs, create deposit insurance, and put millions of people to work. He sought to save not the bankers but the savings of the people themselves.

Neil Barofsky on Twitter: “No need to write a retrospective on the bailouts, @mtaibbi has got it all covered here.”

Taibbi’s reply: “Wow. Can I unpublish so you will write one? (Neil wrote the definitive book on the subject)”.

(Barofsky was the SIGTARP, the Special United States Treasury Department Inspector General overseeing the Troubled Assets Relief Program from late 2008 till early 2011)

• Ten Years After the Crash, We’ve Learned Nothing (Taibbi)

Too Big To Fail shows Fuld on a rant: “People act like we’re crack dealers,” Fuld (James Woods) gripes. “Nobody put a gun to anybody’s head and said, ‘Hey, nimrod, buy a house you can’t afford. And you know what? While you’re at it, put a line of credit on that baby and buy yourself a boat.” This argument is the Wall Street equivalent of Reagan’s famous Cadillac-driving “welfare queen” spiel, which today is universally recognized as asinine race rhetoric. Were there masses of people pre-2008 buying houses they couldn’t afford? Hell yes. Were some of them speculators or “flippers” who were trying to game the bubble for profit? Sure. Most weren’t like that – most were ordinary working people, or, worse, elderly folks encouraged to refinance and use their houses as ATMs – but there were some flippers in there, sure.

People pointing the finger at homeowners are asking the wrong questions. The right question is, why didn’t the Fulds of the world care if those “nimrods” couldn’t afford their loans? The answer is, the game had nothing to do with whether or not the homeowner could pay. The homeowner was not the real mark. The real suckers were institutional customers like pensions, hedge funds and insurance companies, who invested in these mortgages. If you had a retirement fund and woke up one day in 2009 to see you’d lost 30 percent of your life savings, you were the mark. Ordinary Americans had their remaining cash in houses and retirement plans, and the subprime scheme was designed to suck the value out of both places, into the coffers of a few giant banks.

“As of June 30, nearly one in 10 American homes with mortgages were “seriously” underwater..”

• Millions Of Americans Trapped In Underwater Homes 10 Years After Crisis (R.)

School bus driver Michael Payne was renting an apartment on the 30th floor of a New York City high-rise, where the landlord’s idea of fixing broken windows was to cover them with boards. So when Payne and his wife Gail saw ads in the tabloids for brand-new houses in the Pennsylvania mountains for under $200,000, they saw an escape. The middle-aged couple took out a mortgage on a $168,000, four-bedroom home in a gated community with swimming pools, tennis courts and a clubhouse. “It was going for the American Dream,” Payne, now 61, said recently as he sat in his living room. “We felt rich.” Today the powder-blue split-level is worth less than half of what they paid for it 12 years ago at the peak of the nation’s housing bubble.

Located about 80 miles northwest of New York City in Monroe County, Pennsylvania, their home resides in one of the sickest real estate markets in the United States, according to a Reuters analysis of data provided by a leading realty tracking firm. More than one-quarter of homeowners in Monroe County are deeply “underwater,” meaning they still owe more to their lenders than their houses are worth. The world has moved on from the global financial crisis. Hard-hit areas such as Las Vegas and the Rust Belt cities of Pittsburgh and Cleveland have seen their fortunes improve. But the Paynes and about 5.1 million other U.S. homeowners are still living with the fallout from the real estate bust that triggered the epic downturn.

As of June 30, nearly one in 10 American homes with mortgages were “seriously” underwater, according to Irvine, California-based ATTOM Data Solutions, meaning that their market values were at least 25 percent lower than the balance remaining on their mortgages.

And he just signed up to oversee it till 2020.

• No-Deal Brexit Could Lead To Financial Crisis As Bad As 2008 – Carney (Ind.)

A no-deal Brexit could lead to a financial crisis as bad as the crash in 2008, the governor of the Bank of England has warned. Mark Carney told Theresa May and senior ministers that not getting a deal with the European Union would lead to a number of negative economic consequences. It is also understood that Mr Carney warned house prices could fall by up to 35 per cent over three years in a worst case scenario, an event that could cause the value of sterling to plummet and force the bank to push up interest rates. His bleak prognosis came as France said it could halt flights and Eurostar trains from the UK if there was no agreement when Britain leaves the EU in March 2019.

The Bank of England declined to comment on Mr Carney’s briefing to ministers. Following the three-and-a-half hour meeting of the cabinet, a Downing Street spokesman said ministers remained confident of securing a Brexit agreement, but had agreed to “ramp up” their no-deal planning.

So what changes now?

• Europe’s Top Rights Court Rules Against Britain Over Mass Surveillance (AFP)

Europe’s top rights court ruled Thursday that Britain’s programme of mass surveillance, revealed by whistleblower Edward Snowden as part of his sensational leaks on US spying, violated people’s right to privacy. Ruling in the case of Big Brother Watch and Others versus the United Kingdom, the European Court of Human Rights in Strasbourg, France, said the interception of journalistic material also violated the right to freedom of information. The case was brought by a group of journalists and rights activists who believe that their data may have been targeted. The court ruled that the existence of the surveillance programme “did not in and of itself violate the convention” but noted “that such a regime had to respect criteria set down in its case-law”.

They concluded that the mass trawling for information by Britain’s GCHQ spy agency violated Article 8 of the European Convention on Human Rights regarding the right to privacy because there was “insufficient oversight” of the programme. The court found the oversight to be doubly deficient, in the way in which the GCHQ selected internet providers for intercepting data and then filtered the messages, and the way in which intelligence agents selected which data to examine. It determined that the regime covering how the spy agency obtained data from internet and phone companies was “not in accordance with the law”.

China needs money, badly. Or it wouldn’t open up like this.

• S&P Sees Major Opportunity In China’s $11 Trillion Bond Market (CNBC)

Financial services and ratings giant S&P Global is honing in on China’s $11 trillion bond market, a move that may spell good news for international investors in search of more reliable ratings for bonds. Speaking to CNBC on Friday, S&P Global Chief Financial Officer Ewout Steenbergen explained that it’s a good time to enter China as Asia’s largest economy has lifted foreign ownership restrictions for credit ratings agencies. Elaborating on the company’s plan to offer ratings services for the bond market there, Steenbergen said that S&P Global intends to start a new entity for its mainland business.

“We are expanding our market intelligence business in China, very specific local content, for example for Chinese private company data … But the most attractive opportunity we have is in the ratings business,” he said on CNBC’s “Squawk Box.” “It is the third-largest domestic bond market in the world, we think it will overtake Japan soon to become the second-largest domestic bond market,” added Steenbergen, who is also an executive vice president at S&P Global. [..] Steenbergen said he hopes that S&P Global’s move to enter that market can create more confidence. “Today, Chinese domestic bonds, 2 percent are bought by international investors, 98 percent only by Chinese investors. And I think (how) we can help with the market is to create more maturity, more confidence.

Another way to protest tariffs.

• China Says World Trade System Not Perfect, Needs Reform (R.)

The current world trade system is not perfect and China supports reforms to it, including to the World Trade Organization, to make it fairer and more effective, Beijing’s top diplomat said. China is locked in a bitter trade war with the United States and has vowed repeatedly to uphold the multilateral trading system and free trade, with the WTO at its center. But speaking late on Thursday to reporters after meeting French Foreign Minister Jean-Yves Le Drian, Chinese State Councillor Wang Yi said some reforms could be good. While certain doubts have been raised about the current international trading system, China has always supported the protection of free trade and believes that multilateralism with the WTO at its core should be strengthened, Wang added.

[..] China will not buckle to U.S. demands in any trade negotiations, the major state-run China Daily newspaper said in an editorial on Friday, after Chinese officials welcomed an invitation from Washington for a new round of talks. The official China Daily said that while China was “serious” about resolving the stand-off through talks, it would not be rolled over, despite concerns over a slowing economy and a falling stock market at home. “The Trump administration should not be mistaken that China will surrender to the U.S. demands. It has enough fuel to drive its economy even if a trade war is prolonged,” the newspaper said in an editorial.

Brussels still feels superior.

• ‘Little Mussolinis’: EU Chief Angers Italy With Comment On Far Right (R.)

The EU’s top economic official has voiced fears that “little Mussolinis” might be emerging in Europe, drawing a furious response from Italy’s far-right interior minister who accused him of insulting his country and Italians. Pierre Moscovici, a Frenchman who is the European Union’s economics affairs commissioner, said the current political situation, with populist, far-right forces on the rise in many nations, resembled the 1930s when Germany’s Adolf Hitler and Italian fascist chief Benito Mussolini were in power. “Fortunately there is no sound of jackboots, there is no Hitler, (but maybe there are) small Mussolinis. That remains to be seen,” he told reporters in Paris, speaking in a jocular fashion.

Moscovici, a former French finance minister, mentioned no names, but Matteo Salvini, who is a deputy prime minister and heads Italy’s anti-immigrant League, took it personally. “He should wash his mouth out before insulting Italy, the Italians and their legitimate government,” Salvini said in a statement released by his office in Rome. Salvini took advantage of the spat to set out once again his grievances with France, which he accuses of not doing enough to help deal with migrants from Africa and of having plunged Libya into chaos by helping to oust former strongman Muammar Gaddafi. “EU commissioner Moscovici, instead of censuring his France that rejects immigrants … has bombed Libya and has broken European (budget) parameters, attacks Italy and talks about ‘many little Mussolini’ around Europe,” Salvini said.

Yeah. Not going to happen.

• Third Of Earth’s Surface Must Be Protected To Prevent Mass Extinction (Ind.)

Two leading scientists have issued a call for massive swathes of the planet’s land and sea to be protected from human interference in order to avert mass extinction. Current levels of protection “do not even come close to required levels”, they said, urging world leaders to come to a new arrangement by which at least 30 per cent of the planet’s surface is formally protected by 2030. Chief scientist of the National Geographic Society Jonathan Baillie and Chinese Academy of Sciences biologist Ya-Ping Zhang made their views clear in an editorial published in the journal Science.

They said the new target was the absolute minimum that ought to be conserved, and ideally this figure should rise to 50 per cent by the middle of the century. “This will be extremely challenging, but it is possible,” they said. “Anything less will likely result in a major extinction crisis and jeopardise the health and wellbeing of future generations.” Most current scientific estimates have the amount of space needed to safeguard the world’s animals and plants at between 25 and 75 per cent of land and oceans.

Nervous weekend ahead. In the Philippines too.

• Hurricane Florence Deluges Carolinas Ahead Of Landfall (R.)

Heavy rain, wind gusts and rising floodwaters from Hurricane Florence swamped the Carolinas early on Friday as the massive storm crawled toward the coast, threatening millions of people in its path with record rainfall and punishing surf. Florence was downgraded to a Category 1 storm on the five-step Saffir-Simpson scale on Thursday evening and was moving west at only 6 mph (9 km/h). The hurricane’s sheer size means it could batter the U.S. East Coast with hurricane-force winds for nearly a full day, according to weather forecasters. Despite its unpredictable path, it was forecast to make landfall near Cape Fear, North Carolina, at midday on Friday.

Debt Rattle September 5 2018

Sep 052018

September 5, 2018 Posted by Raúl Ilargi Meijer at 9:18 am Finance Tagged with: Brexit, buybacks, Carney, extinction, flash crashes, Google, haircut, macaw, meddling, Mueller, social unrest, Trump, Woodward 6 Responses »

Henri Matisse Luxury, calm and pleasure 1904

• JP Morgan Warns Next Crisis To Have Flash Crashes And Social Unrest (CNBC)

• Share Buybacks Boost Earnings (Roberts)

• Mueller To Accept Written Answers From Trump In Russia Probe (Ind.)

• Senior Diplomat Exposes US Meddling In Russian Election (ZH)

• Google Bosses Expected To Snub Senate (BBC)

• Mervyn King Attacks ‘Incompetent’ Brexit Approach (BBC)

• Angela Merkel Admits Collapse Of Brexit Talks Cannot Be Ruled Out (G.)

• Mark Carney Willing To Stay On As BoE Governor To Help ‘Smooth’ Brexit (Ind.)

• US ‘Could Have Forced A Greek Debt Haircut’ – Ashoka Mody (K.)

• Eight Bird Species Are First Confirmed Avian Extinctions This Decade (G.)

Yeah, I know, the Woodward book. No objective views available. Lots of sensational quotes subject to interpretation. Tons of voices saying for instance that Trump wanted Mattis to kill Assad, even ordered him to. But Woodward writes that Trump said: “Let’s fucking kill him! Let’s go in. Let’s kill the fucking lot of them..”. That doesn’t sound like an order. That’s a first reaction from someone who’s been fooled by his own staff into believing Assad was responsible. Normal first reaction. Not an order. We’ll get some more balance, but it won’t come from the MSM.

Liquidity, volatility, fighting in the streets.

• JP Morgan Warns Next Crisis To Have Flash Crashes And Social Unrest (CNBC)

Sudden, severe stock sell-offs sparked by lightning-fast machines. Unprecedented actions by central banks to shore up asset prices. Social unrest not seen in the U.S. in half a century. That’s how J.P. Morgan Chase’s head quant, Marko Kolanovic, envisions the next financial crisis. The forces that have transformed markets in the last decade, namely the rise of computerized trading and passive investing, are setting up conditions for potentially violent moves once the current bull market ends, according to a report from Kolanovic sent to the bank’s clients on Tuesday. His note is part of a 168-page mega-report, written for the 10th anniversary of the 2008 financial crisis, with perspectives from 48 of the bank’s analysts and economists.

Kolanovic, a 43-year-old analyst with a Ph.D. in theoretical physics, has risen in prominence for explaining, and occasionally predicting, how the new, algorithm-dominated stock market will behave. The current bull rally, the longest in modern history by some measures, has been characterized by extended periods of calm punctuated with spasms of selling known as flash crashes. Recent examples include a nearly 1,600 point intraday drop in February and a 1,100 point decline in August 2015. “They are very rapid, sharp declines in asset values with sharp increases in market volatility,” Kolanovic, the bank’s global head of macro quantitative and derivatives research, said in a recent interview. But those flash crashes occurred during a backdrop of a U.S. economic expansion; the new market hasn’t been tested in the throes of a recession, he said.

“If you have these liquidity-driven sharp sell-offs that come at the end of the cycle, or maybe even causes the end of the cycle, then I think you can have a much more significant asset price correction and even more significant increase in market volatility,” Kolanovic said. [..] Kolanovic closes his report on an ominous note: “The next crisis is also likely to result in social tensions similar to those witnessed 50 years ago in 1968.”

Tyler labeled it the graph of the decade. That may be a bit much, but it’s good to point out that earnings rise ONLY because there are so many fewer outstanding shares. Buybacks don’t only raise share prices, they raise earnings numbers too.

• Share Buybacks Boost Earnings (Roberts)

[..] while top line SALES fell, bottom line revenue expanded as share buybacks and accounting gimmickry escalated for the quarter. The question is whether sales dramatically expanded in Q2? Given some of the recent economic data, we have our doubts and expect a smaller increase. (I will update this chart when S&P updates the sales/share figure for Q2) As shown in the chart below, the biggest support for earnings expansion in Q2 continues to be the dramatic decline in shares outstanding.

Of course, such should not be a surprise. Since the recessionary lows, much of the rise in “profitability” have come from a variety of cost-cutting measures and accounting gimmicks rather than actual increases in top-line revenue. While tax cuts certainly provided the capital for a surge in buybacks, revenue growth, which is directly connected to a consumption-based economy, has remained muted. Since 2009, the reported earnings per share of corporations has increased by a total of 353%. This is the sharpest post-recession rise in reported EPS in history. However, the increase in earnings did not come from a commensurate increase in revenue which has only grown by a marginal 44% during the same period and declined from 49% in Q1.

The reality is that stock buybacks create an illusion of profitability. If a company earns $0.90 per share and has one million shares outstanding – reducing those shares to 900,000 will increase earnings per share to $1.00. No additional revenue was created, no more product was sold, it is simply accounting magic. Such activities do not spur economic growth or generate real wealth for shareholders. However, it does provide the basis for with which to keep Wall Street satisfied and stock option compensated executives happy.

if Mueller does anything in the public eye before the mid terms are over, expect chaos.

• Mueller To Accept Written Answers From Trump In Russia Probe (Ind.)

Special Counsel Robert Mueller will accept written answers from President Donald Trump on whether his campaign conspired with Russia to interfere in the 2016 US election, but Mr Mueller is not ruling out a follow-up interview on that issue, Mr Mueller’s offer to accept written responses from the president on questions about possible collusion was contained in a letter that Mr Trump’s lawyers received on Friday, a person familiar with the matter said on Tuesday. Mr Trump’s legal team and Mr Mueller’s investigators have been negotiating for months over whether the president will be formally interviewed in the probe.

The president’s team have not yet answered the letter. After receiving the written responses, Mr Mueller’s investigators would decide on a next step, which could include an interview with Mr Trump, the person said. The letter was first reported by the New York Times. It was not immediately clear what those conditions mean for other avenues Mr Mueller is exploring, including whether the president sought to obstruct the Russia investigation through actions such as the firing last year of former FBI Director James Comey.

And there is Google.

• Senior Diplomat Exposes US Meddling In Russian Election (ZH)

As Russian citizens prepare to head to the polls on Sunday to vote in regional elections, a senior Russian diplomat has revealed that Moscow has uncovered a US interference effort involving a Silicon Valley tech giant and activists opposed to the government of Russian President Vladimir Putin. Following a briefing on the matter, senior Russian diplomat Andrey Nesterenko told Russia’s Interfax news agency that the US “certainly does” meddle in the Russian electoral processes, as RT reported. The revelation followed reports that Russia has resumed a major airstrike of a reputed terrorist stronghold in Idlib province over the objections of President Trump, who warned that such a strike would be a humanitarian disaster.

“Our collective opinion is that electoral sovereignty is a principle that all civilized nations should respect” the diplomat said, adding that Moscow will notify “our American partners that the actions of their media outlets allow us to state that they are close to breaking Russian law.” Specifically, Nesterenko was referring to a possible violation of Russian election laws by Google parent Alphabet, which hosted advertisements for an illegal campaign rally organized by Russian opposition leader Aleksey Navalny. Navalny is calling for protests to denounce the vote, which he believes is biased. To help spread the word, Navalny’s public movement is using paid ads on Google services like YouTube. However, holding an event dedicated to an election campaign on the same day as the vote goes against Russian law.

The Russian Central Election Commission, media watchdog Roskomnadzor, and the Russian Anti-monopoly Service have reportedly informed Google about these illegal activities being carried out on its platform. “Living in a proper law-abiding nation, we expect every actor to play by the rules. Especially an informed player. If the opposite happens, I believe we have tools at our disposal [to address that],” Andrey Kashevarov, the deputy head of FAS, said.

It’s like an all-out power game.

• Google Bosses Expected To Snub Senate (BBC)

When Silicon Valley companies once again appear in front of the US Senate on Wednesday, there will be one major absentee: Google. The Senate Intelligence Committee wanted to hear from Sundar Pichai, Google’s chief executive, or his boss Larry Page, the chief executive of Google’s parent firm, Alphabet. Barring a dramatic, last-minute change of plan, the BBC understands neither will attend. It would mark the first time a technology firm has refused to comply with the wishes of Congress since the wide-reaching inquiries into misinformation and meddling began in the wake of the 2016 election. Google had instead hoped to send Kent Walker, one of its top lawyers. The offer was abruptly shut down by the committee.

Its vice chairman, the Democratic Senator Mark Warner, said an empty chair would be left out to represent Google’s non-appearance. Eventually, senators may issue a subpoena, forcing an appearance under the threat of prosecution. “If Google thinks we’re just going to go away, they’re sadly mistaken,” said Senator Warner, speaking to Wired magazine. The hearing, scheduled to begin at 09:30 (13:30 GMT), is entitled “Foreign Influence Operations’ Use of Social Media Platforms”. As well as Google, Twitter and Facebook have been called to appear. Twitter will be represented by its chief executive, Jack Dorsey, while Facebook is sending its chief operating officer, Sheryl Sandberg. It will be the first time either executive has faced a congressional committee.

[..] The affair risks becoming a public relations crisis for Google, which just last week was doing its best to bat back claims from President Donald Trump that it was censoring conservative news outlets in its search results. The White House did not provide any evidence to support the president’s complaints, but the topic may well come up at Wednesday’s hearing. “I don’t know if it’s because [Page] wants to avoid being asked about those things or because they think they’re so important and so powerful that they don’t need to provide congressional testimony,” said Republican Senator Marco Rubio, speaking to the Washington Post. He also told the newspaper: “They should be careful with that. When a company gets too big to become accountable, they become a monopoly.”

No kidding.

• Mervyn King Attacks ‘Incompetent’ Brexit Approach (BBC)

Former Bank of England governor Lord King has blasted Brexit preparations as “incompetent”. The Brexit supporter said it “beggared belief” that the world’s sixth-biggest economy should be talking of stockpiling food and medicines. This left the government without a credible bargaining position, he said. “A government that cannot take action to prevent some of these catastrophic outcomes illustrates a whole lack of preparation,” he said. “It doesn’t tell us anything about whether the policy of staying in the EU is good or bad, it tells us everything about the incompetence of the preparation for it.” Lord King said the 11th-hour preparation for a no-deal Brexit had undermined the government’s negotiating position.

He added: “We haven’t had a credible bargaining position, because we hadn’t put in place measures where we could say to our colleagues in Europe, ‘Look, we’d like a free-trade deal, we think that you would probably like one too, but if we can’t agree, don’t be under any misapprehension, we have put in place the measures that would enable us to leave without one.'” He predicts that we will find ourselves with what’s been dubbed as Brino – Brexit in name only – which he said was the worst of all worlds. It’s also a state of affairs that he fears could drag on for years. “I think the biggest risk to the UK, and this is what worries me most, is that this issue isn’t going to go away, you know the referendum hasn’t decided it, because both camps feel that they haven’t got what they wanted.”

Lord King expressed regret and surprise that it was more difficult for a single country to present a united front than the other 27 EU members. He said: “They must have been really worried that they had 27 countries to try to corral, how could they have a united negotiating position, they were dealing with a country that was one country, made a clear decision, voted to leave, it knew what it wanted to do, how on earth could the EU manage to negotiate against this one decisive group on the other side of the Channel? “Well, the reality’s been completely the opposite. The EU has been united, has been clear, has been patient and it’s the UK that’s been divided without any clear strategy at all for how to get to where we want to go.”

Maybe at this point Merkel should be more outspoken?

• Angela Merkel Admits Collapse Of Brexit Talks Cannot Be Ruled Out (G.)

Angela Merkel has warned her country’s business leaders that the Brexit negotiations are in danger of collapse. With talks in Brussels at an impasse with just months to go before a deal needs to be agreed, the German chancellor made a rare intervention at a conference in Frankfurt. She told major players in the world of German finance on Tuesday: “We don’t want the discussions to break down. We will use all our force and creativity to make sure a deal happens. We don’t want these negotiations to collapse. But we also can’t fully rule that out because we still have no result.” The EU says it needs a deal to be struck on the withdrawal agreement covering citizens’ rights, the £39bn divorce bill and the Irish border, along with the political declaration on the future deal, by November at the latest.

The German chancellor has generally played a backseat role in the talks, preferring to intervene only at crunch points at EU summits. EU leaders are due to meet in Brussels in October, but an emergency summit is being pencilled in for 13 November in case the negotiations require an extra few weeks for agreement to be made. The leaders will be gathering at a summit in Salzburg later this month where the EU27 are planning a “carrot and stick” approach to Brexit, offering Theresa May warm words on the Chequers proposals to take to the Conservative conference alongside a sharp warning that they need a plan for Northern Ireland within weeks.

Using the words ‘Brexit’ and ‘smooth’ in one sentence is just comedy. Wonder what they had to promise him. Knighthood?

• Mark Carney Willing To Stay On As BoE Governor To Help ‘Smooth’ Brexit (Ind.)

Mark Carney told MPs on Tuesday that he was willing to stay on as governor of the Bank of England beyond his planned departure date in order to “smooth” the Brexit process. Mr Carney had planned to step down in June 2019 after six years in Threadneedle Street’s top job, two years fewer than BoE governors normally serve. But, asked by MPs on the Treasury Committee whether he would stay, Mr Carney said: “Even though I have already agreed to extend my time to support a smooth Brexit, I am willing to do whatever else I can in order to promote both a smooth Brexit and effective transition at the Bank of England.”

“The chancellor and I have discussed this. I would expect an announcement to be made in due course.” The comments come after mounting speculation in recent days that the Treasury would like Mr Carney to stay on in his role, providing more continuity during uncertain economic times. There are fears that few candidates will put themselves forward for the job as the Brexit negotiations reach a critical stage.

“What was the basic demand of SYRIZA? To tie debt repayments to GDP and so reduce the level of austerity. Any good economist will tell you that was a very reasonable starting point for the negotiation.”

• US ‘Could Have Forced A Greek Debt Haircut’ – Ashoka Mody (K.)

“The fundamental reason why the Greek crisis lasted so long was the extreme level of austerity that was imposed.” That is the verdict of Ashoka Mody, visiting professor in International Economic Policy at Princeton University, a former deputy director of the IMF’s European Department and one of the most eloquent critics of the policies of the troika in Greece and elsewhere. Mody, who recently published a long-form version of these critiques in his book “EuroTragedy: A Drama in Nine Acts”, spoke to Kathimerini about the Greek crisis and those to blame for it. We began by discussing what many consider the original sin of the bailout period: the decision not to restructure Greece’s debt in May 2010. What should the IMF have done?

“It should have insisted, it should have made the restructuring a condition of its participation,” the Indian-born economist said, mentioning that the staff report all but admitted the debt was unsustainable and that Dominique Strauss-Kahn later said he was in favor of debt relief. “The reason it didn’t happen was the ideological opposition of the European Central Bank – in this case supported by the US Treasury. Strauss-Kahn did not want to offend either the Americans or the Europeans. The stance of the US Treasury was critical – if its representative on the Executive Board had come out in favor of a restructuring, it would have happened. Instead, it sided completely with the European viewpoint – the Treasury secretary, Tim Geithner, believed that there should never be a restructuring in the midst of a crisis.”

Regarding the argument that the problem in Greece (compared with other bailout countries) was there was no ownership of reforms, Mody said: “It is indeed the case that IMF programs only succeed when there is ownership. The question is what were Greeks asked to own. The arithmetic of austerity was relentless, cruel. Whatever the Greeks did, with austerity on such a scale they could not have escaped the collapse in gross domestic product. And then things became even worse, because the recession led to targets being missed, which led to more measures! The IMF published studies at the time showing what a terrible idea it was to impose further austerity in a recession, how it worsens the debt-to-GDP ratio. Yet the IMF kept doing it in Greece, ignoring all its internal studies!”

[..] The conversation turned to 2015. How does he think the creditors should have handled SYRIZA differently? “Look, even before SYRIZA came to power, Wolfgang Schaeuble said that elections do not matter. On January 31, 2015, six days after the election, Erkki Liikanen, the head of the Finnish central bank, says that if the new government does not accept the program, the ECB will cut liquidity support for Greek banks. Four days later, the ECB withdraws the waiver [which allowed the banks to borrow cheaply from it, using Greek government bonds as collateral]. And in June, the Europeans close down the banks. What was the basic demand of SYRIZA? To tie debt repayments to GDP and so reduce the level of austerity. Any good economist will tell you that was a very reasonable starting point for the negotiation.”

More of my friends are leaving every day. Some don’t even say goodbye.

• Eight Bird Species Are First Confirmed Avian Extinctions This Decade (G.)

Spix’s macaw, a brilliant blue species of Brazilian parrot that starred in the children’s animation Rio, has become extinct this century, according to a new assessment of endangered birds. The macaw is one of eight species, including the poo-uli, the Pernambuco pygmy-owl and the cryptic treehunter, that can be added to the growing list of confirmed or highly likely extinctions, according to a new statistical analysis by BirdLife International. Historically, most bird extinctions have been small-island species vulnerable to hunting or invasive species but five of these new extinctions have occurred in South America and are attributed by scientists to deforestation.

Stuart Butchart, BirdLife International’s chief scientist, said the new study highlighted that an extinction crisis was now unfolding on large continents, driven by human habitat destruction. “People think of extinctions and think of the dodo but our analysis shows that extinctions are continuing and accelerating today,” he said. “Historically 90% of bird extinctions have been small populations on remote islands. Our evidence shows there is a growing wave of extinctions washing over the continent driven by habitat loss from unsustainable agriculture, drainage and logging.” More than 26,000 of the world’s species are now threatened, according to the latest “red list” assessment, with scientists warning that humans are driving a sixth great extinction event.

The Brazilian Spix’s macaw, as seen in the children’s movie Rio, is one of the eight birds to become extinct Photograph: Al Wabra Wildlife Preservation

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