extinction Archives - Page 3 of 5

I have commented on Target2 liabilities before. Perhaps a Mish-modified translation from the Welt article Imbalance in the Euro System Reaches a New Record will ring a bell. The central banks of Germany’s euro partners Italy, Spain and France owe the Bundesbank almost a trillion euros . This is a new high. – more than ever before. Tendency continues to rise. There is no security for this money. Read that last line again and again until it sinks in. Italy is €464.7 billion in the hole. Spain is €376.6 billion in the hole. Creditors owe Germany, the Netherlands, and Finland over €1.157 trillion. In May, Italian liabilities increased by almost 40 billion euros.

“Capital flight to Germany is in full swing,” says Hans-Werner Sinn, longtime head of the Ifo Institute and one of the most prominent economists in the Federal Republic. Originally, Target2 was designed to facilitate cross-border transactions within the eurozone. The system achieved this goal. From the point of view of critics, this means that the Deutsche Bundesbank provides long-term unsecured and non-interest-bearing loans to the central banks of other eurozone countries , especially the central banks of southern countries Italy, Spain and Portugal.

Target2 is a fundamental problem of the Eurozone. • The ECB guarantees these loans. • As long as they are guaranteed, then hells bells, why not make more loans? Germany will pay one way or another. Here are the possibilities. 1) Germany and the creditor nations forgive enough debt for Europe to grow. This is the transfer union solution. 2) Permanently high unemployment and slow growth in Spain, Greece, Italy, with stagnation elsewhere in Europe 3) Breakup of the eurozone. Those are the alternatives. Germany will not allow number 1. It is unreasonable to expect number 2 to last forever. The only door left open is door number 3.

Nothing about this needs to be invented.

• The Big Italy Short Was Hiding In Plain Sight (R.)

The marriage of politics and finance in Italy regularly produces strange offspring. But a suggestion, floated over the weekend in the country’s most-respected newspaper, of a James Bond-style plot by some big investors to sink Italian financial markets added a new twist. More curious was the theory’s abrupt disappearance by Monday. The episode highlights the degree to which Europe’s most chaos-resilient economy has entered a risky new paradigm with the arrival of the most populist government since the Italian Republic’s founding in 1946. On Saturday, Corriere della Sera, the Milanese voice of the establishment, published an article which speculated that some investors betting against Italian assets might have helped engineer a market crisis.

The trigger for the Italian panic was the May 15 publication by Huffington Post’s Italian website of a draft version of the new government’s “contract”, which included language pertaining to a possible exit from the single European currency. That document, HuffPo has said, arrived in an unmarked envelope. Markets went haywire over the prospect that the government cobbled together by the two parties who gained the most seats in the March election – the right-wing League and hard-to-label 5-Star Movement – would adopt an explicitly anti-euro platform. The difference between the yields on 10-year German and Italian government bonds surged to almost 320 basis points from just around 130 basis points before the draft appeared. Any bets against Italian sovereign credit would have produced a tidy profit.

Corriere has substantially revised the story. It no longer includes language that one hedge fund, Brevan Howard, considered defamatory. That firm’s AH Master Fund, run by Alan Howard, gained 37 percent in May, thanks in part to bets on the direction of Italian assets. On Tuesday, the newspaper appended an author’s note to the piece in which it said: “We never intended to accuse or suggest that there were any kind of offenses or improper conduct by Howard in trading or in his involvement in the case of documents filtered to the Huffington Post.” In a statement to Reuters Breakingviews, the author, Federico Fubini, defended the piece. “We have run a fact-based article whose substance remains.” The paper decided “to amend the text to avert a potentially time-consuming case in foreign courts.”

EU, China protectionism.

• G7 Summit Highlights Western Leaders Hypocrisy (Lacalle)

The G7 failure to come to terms on trade highlights the problem of governments trying to macromanage trade. And no, the failure to even agree to disagree cannot be blamed on President Trump and his new-found economic nationalism. The list of countries with the largest trade surplus with the United States is led by China, which exports $375 billion more than it imports. It is followed, very far away, by Mexico ($71 billion), Japan (69 billion), Germany (65 billion), Vietnam (38 billion), Ireland (38 billion) and Italy ($31 billion). Not surprisingly, the markets with most protectionist measures against the United States are China, the European Union, Japan, Mexico and India.

These facts explain much more about the failure of the G7 summit than any Manichean analysis on Trump, Trudeau, Macron, or any of the leaders gathered there. During the last twenty years, the world has carried out a widespread practice in governments’ disastrous idea of “sustaining” GDP with demand-side policies. Build excess capacity, subsidize it, and hope to export that excess to the United States. Especially China, Germany, and Japan have economies with high state interventionism and therefore very high excess capacity, in part due to a high personal savings rate. Steel and aluminum, like the automobile industry, are examples of building unnecessary capacity and subsidizing it, country by country, hoping it will be somebody else who closes its inefficient factories to be able to export more to that country.

In Germany, the influence of the automobile industry over the government is legendary. What isn’t are the relatively high tariffs American manufacturers face when exporting to Europe and the low tariffs America itself imposes on automobile imports. What is also ironic is that modern-day protectionism didn’t start with Trump. Barriers against global trade increased between 2009 and 2016. The World Trade Organization warned, year after year, since 2010, about the increase in protectionism. The Obama administration, faced with the exponential increase in its trade deficit, was the one that introduced the highest number of protectionist measures between 2009 and 2016. The only difference between Trump and Obama was that Obama didn’t publicize this much and the mainstream media didn’t complain.

True, these deals need a sunset clause.

• Donald Trump Was Right. The Rest Of The G7 Were Wrong (Monbiot)

He gets almost everything wrong. But last weekend Donald Trump got something right. To the horror of the other leaders of the rich world, he defended democracy against its detractors. Perhaps predictably, he has been universally condemned for it. His crime was to insist that the North American Free Trade Agreement (Nafta) should have a sunset clause. In other words, it should not remain valid indefinitely, but expire after five years, allowing its members either to renegotiate it or to walk away. To howls of execration from the world’s media, his insistence has torpedoed efforts to update the treaty.

In Rights of Man, published in 1791, Thomas Paine argued that: “Every age and generation must be as free to act for itself, in all cases, as the ages and generations which preceded it. The vanity and presumption of governing beyond the grave is the most ridiculous and insolent of all tyrannies.” This is widely accepted – in theory if not in practice – as a basic democratic principle. Even if the people of the US, Canada and Mexico had explicitly consented to Nafta in 1994, the idea that a decision made then should bind everyone in North America for all time is repulsive. So is the notion, championed by the Canadian and Mexican governments, that any slightly modified version of the deal agreed now should bind all future governments.

But the people of North America did not explicitly consent to Nafta. They were never asked to vote on the deal, and its bipartisan support ensured that there was little scope for dissent. The huge grassroots resistance in all three nations was ignored or maligned. The deal was fixed between political and commercial elites, and granted immortality. In seeking to update the treaty, governments in the three countries have candidly sought to thwart the will of the people. Their stated intention was to finish the job before Mexico’s presidential election in July. The leading candidate, Andrés Lopez Obrador, has expressed hostility to Nafta, so it had to be done before the people cast their vote. They might wonder why so many have lost faith in democracy.

[..] Trump was right to spike the Trans-Pacific Partnership. He is right to demand a sunset clause for Nafta. When this devious, hollow, self-interested man offers a better approximation of the people’s champion than any other leader, you know democracy is in trouble.

Caitlin again.

• Centrists Very Concerned That Donald Fucking Trump Isn’t Hawkish Enough (CJ)

[..] by far the most common concerns being expressed about the Singapore summit are based not on a fear of this administration making insufficiently aggressive demands of Pyongyang, but on pure ridiculous nonsense. “President Trump seems to have given away two or three of the major things that Kim Jong-Un wanted,” Schumer complained at the aforementioned press conference. “A meeting. The flags next to each other. Now a delay of exercises with South Korea, without getting anything in return.” Huh? A meeting? Flags next to each other? I can kinda-sorta-almost see into Schumer’s twisted reality tunnel when it comes to temporarily suspending military drills along the DPRK’s border as an act of good faith, but on what planet is having a meeting or putting two flags next to each other a win of any kind?

Well, going by the outcry I’m seeing from Twitter pundits, the concern appears to be that it “legitimizes” Kim Jong-Un. What exactly that means is hard to fathom in terms of actual, tangible reality, but for years that term has been passed around like it has as much relevance as war or starvation sanctions. This imaginary product of “legitimacy” is, according to influential mainstream political commentators, meant to be withheld from Kim until he gives up everything he has and grovels on his belly begging for it. This just shows you the power of narrative, where repeating some meaningless placeholder syllables over and over again can create the illusion that a purely mental construct is as relevant in peace negotiations as nuclear warheads.

It isn’t hard to see through for anyone who doesn’t have a vested interest in subscribing to that narrative, though, and Pyongyang certainly has no such interest. [..] There are many, many perfectly valid things to criticize the Trump administration for. Opening up peace talks with North Korea is not one of them, and anyone who says it is is not a friend of humanity. The fact that nobody on either side of the aisle seems to have their foot anywhere near the brake pedal when it comes to war should concern us all, and we need to do something about it.

Might as well stop the whole process right now.

• May Heads Off Major Defeat After Last-Minute Climbdown To Rebels (Ind.)

Rebel Conservatives have forced Theresa May into a climbdown, handing parliament greater control of Brexit if she fails to seal a deal. After the prime minister was threatened with what could have been a damaging commons defeat, she promised key concessions in dramatic last minute talks with pro-EU rebels. It is likely to mean her accepting a deadline by which she must secure a deal with Brussels, if she wants to stay in the driving seat for negotiations. Her ministers must now spell out the detail of her compromises within days, with Tory rebels warning a failure to do so would reignite the prospect of a major commons loss destabilising her leadership.

It followed a day which started with the resignation of a minister and passed into febrile commons debate that saw ministers bargaining openly with rebels in the chamber. Rebel MP Nicky Morgan told The Independent: “The whole point of what has come about is that we are going to have a process to this, something which does not simply allow us to drift into a hard Brexit.” The row was precipitated by the Lords last month passing a plan that would have given parliament the power to direct Ms May’s actions if she failed to seal a Brexit deal later this year. Ministers were demanding Tory MPs vote it out of existence in the Commons on Tuesday, but had also refused to consider a more palatable compromise proposed by the former Conservative attorney general Dominic Grieve.

It would have instead seen Ms May being tied into a strict timetable of having to set out her own proposals if she failed to seal a deal by November, and then gain parliamentary approval for them – the stronger powers for MPs to direct her action would only come into play if a deal had still not been reached by February.

What, no new loans?

• Tesla To Cut 9% Of Staff In Profitability Drive (G.)

Tesla is slashing thousands of jobs, its chief executive, Elon Musk, announced Tuesday, as the electronic car company attempts to hit production targets and reach profitability. Musk called the job cuts, which will affect about 9% of the company’s more than 40,000 employees, “difficult, but necessary” in a tweet that contained the email he had sent to employees announcing the layoffs. “What drives us is our mission to accelerate the world’s transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable,” the billionaire entrepreneur wrote in the email.

The job cuts will be centered on salaried employees, not factory workers, Musk said, writing, “This will not affect our ability to reach Model 3 production targets in the coming months.” Tesla has been under intense pressure to prove that it can achieve mass production of the Model 3, its first mass market vehicle. The company has yet to reach Musk’s goal of producing 5,000 cars a week – originally promised for the end of 2017. At Tesla’s annual shareholder meeting on 5 June, Musk said he believed the company would hit the 5,000 cars-a-week goal by the end of June, and that he thought the company could be profitable later this year.

They paid off so much because they owe so much.

• Americans Just Paid Off A Ton Of Credit-Card Debt—But Here’s The Bad News (MW)

A lot of Americans paid big credit-card bills in the first quarter of 2018. And they still have a long way to go. Americans repaid $40.3 billion in credit card debt during the first quarter of 2018, according to a new analysis of data from the U.S. Census Bureau, Federal Reserve and credit agency TransUnion by the personal-finance website WalletHub. That’s the second-highest amount paid off in one quarter since the first quarter of 2009, when consumers paid off more than $44 billion. Now, the bad news: That doesn’t mean their debts are getting that much smaller. Americans ended 2017 with $91.6 billion in new credit-card debt, the largest annual amount since 2007 and 104% above the post-recession average.

Outstanding credit card debt is at the second-highest point since the end of 2008, the report said. In 2017, Americans hit a record high of $1.021 trillion in outstanding revolving debt (often categorized as credit-card debt). In April 2018, they still had more $1.030 trillion to pay off, according to the Federal Reserve. Consumers’ recent debt payoff “is not as dramatic as the dollar amount makes it seem,” said Nick Clements, the co-founder of personal finance company MagnifyMoney, who previously worked in the credit industry. The reason: The total amount of credit-card debt Americans have has also been growing.

How Monsanto sneaks in illegal seeds.

• India Farmers Sow Unapproved Monsanto Cotton Seeds, Risking Arrest (R.)

Many Indian farmers are openly sowing an unapproved variety of genetically modified (GM) cotton seeds developed by Monsanto, as the government sits on the sidelines for fear of antagonizing a big voting bloc ahead of an election next year. India approved the first GM cotton seed trait in 2002 and an upgraded variety in 2006, helping transform the country into the world’s top producer and second-largest exporter of the fiber. But newer traits are not available after Monsanto in 2016 withdrew an application seeking approval for the latest variety due to a royalty dispute with the government. The herbicide-tolerant variety, lab-altered to help farmers save costs on weed management, has, however, seeped into the country’s farms since then. Authorities say they are still investigating how that happened.

“I will only use these seeds or nothing at all,” said Rambhau Shinde, a farmer who has been cultivating cotton for nearly four decades in the western state of Maharashtra. The federal environment ministry said last year planting the seeds violated the Environment Protection Act, and farmers who did so were risking potential jail terms. But many farmers are desperate to boost their incomes after poor yields over the past few years and are willing to ignore the warnings. A government official in New Delhi, who deals with matters related to GM crops, said it was difficult to keep farmers away from something that they saw benefit in. “If you don’t allow them to plant legally, illegal planting will happen,” the official said, requesting anonymity, adding that Monsanto had yet to reapply for an approval to sell its latest variety of GM cotton in India.

Bats and cats and rats.

• One in Three British Mammal Species Could Be Gone Within A Decade (Ind.)

Populations of much-loved British mammals including hedgehogs and water voles have dropped by up to two-thirds over the past 20 years, and many more are threatened with imminent extinction. Even some apparently common creatures such as rabbits have been driven into decline by human pressures such as harmful farming activities and climate change. These findings come from a review carried out by the Mammal Society and Natural England, the first of its kind to be conducted in more than two decades. The country has undergone significant changes since the last analysis in 1995, and some of the species at risk then – including badgers and otters – have since made considerable recoveries.

However, pesticide use, invasive species and road deaths have all taken their toll, and the scientists behind the study have warned Britain is on “a precipice” and must take urgent action to save its mammals. “This is happening on our own doorstep so it falls upon all of us to try and do what we can to ensure that our threatened species do not go the way of the lynx, wolf and elk and disappear from our shores forever,” said Professor Fiona Mathews, chair of the Mammal Society. The review, which made use of data collected by members of the public as well as scientists over the course of decades, covered all 58 of the country’s land mammal species.

The scientists constructed the first ever “red list” for British mammals, and found 12 are threatened with extinction. This means animals like the wildcat, greater mouse-eared bat and even the black rat are likely to be gone forever from Britain’s shores within the next 10 years. However, they noted this is likely to be an underestimate, and the real number could be as high as one in three.

Everything That Dies Does Not Come Back

Jun 072018

June 7, 2018 Posted by Raúl Ilargi Meijer at 2:17 am Finance Tagged with: Bayer, climate change, delusion, denial, entropy, extinction, Hawking, insanity, Mars, Monsanto, murder, vertebrates, waste Comments Off

Charles Sprague Pearce The Arab jeweler c1882

There are a lot of industries in our world that wreak outsized amounts of havoc. Think the biggest global banks and oil companies. Think plastics. But there is one field that is much worse than all others: agro-chemicals. At some point, not that long ago, the largest chemical producers, who until then had kept themselves busy producing Agent Orange, nerve agents and chemicals used in concentration camp showers, got the idea to use their products in food production.

While they had started out with fertilizers etc., they figured making crops fully dependent on their chemicals would be much more lucrative. They bought themselves ever more seeds and started manipulating them. And convinced more and more farmers, or rather food agglomerates, that if there were ‘pests’ that threatened their yields, they should simply kill them, rather than use natural methods to control them.

And in monocultures that actually makes sense. It’s the monoculture itself that doesn’t. What works in nature is (bio)diversity. It’s the zenith of cynicism that the food we need to live is now produced by a culture of death. Because that is what Monsanto et al represent: Their solution to whatever problem farmers may face is to kill it with poison. But that will end up killing the entire ecosystem a farmer operates within, and depends on.

However, the Monsantos of the planet produce much more ‘research’ material than anybody else, and it all says that the demise of ecosystems into which their products are introduced, has nothing to do with these products. And by the time anyone can prove the opposite, it will be too late: the damage will have been done through cross-pollination. Monsanto can then sue anyone who has crops that show traces of its genetically altered proprietary seeds, even if the last thing a farmer wants is to include those traces.

Anyway, when reading John Vidal in the Guardian yesterday, I was struck by some numbers. Bayer-Monsanto, soon to be just Bayer, own 60% of proprietary seeds and 70% of agrochemicals in the world. That’s roughly comparable to the numbers of vertebrates and insects that have vanished from the countrysides of Germany, France and England. Life itself is dying. Species extinction is now a bigger threat than climate change. Vidal:

Who Should Feed The World: Real People Or Faceless Multinationals?

“Through its many subsidiary companies and research arms, Bayer-Monsanto will have an indirect impact on every consumer and a direct one on most farmers in Britain, the EU and the US. It will effectively control nearly 60% of the world’s supply of proprietary seeds, 70% of the chemicals and pesticides used to grow food, and most of the world’s GM crop genetic traits, as well as much of the data about what farmers grow where, and the yields they get.

It will be able to influence what and how most of the world’s food is grown, affecting the price and the method it is grown by. But the takeover is just the last of a trio of huge seed and pesticide company mergers.” It will be able to influence what and how most of the world’s food is grown, affecting the price and the method it is grown by.

But the takeover is just the last of a trio of huge seed and pesticide company mergers. Backed by governments, and enabled by world trade rules and intellectual property laws, Bayer-Monsanto, Dow-DuPont and ChemChina-Syngenta have been allowed to control much of the world’s supply of seeds.

Do note that although Dow-DuPont and ChemChina-Syngenta may be large companies, Bayer-Monsanto alone own 60% of proprietary seeds and 70% of agrochemicals. Since they ‘only’ own 60% and 70%, they can’t be accused of running a monopoly. But their main product, glyphosate (Roundup) is also produced by Dow, DuPont and Syngenta. So together they do effectively run a monopoly. Just not ‘technically’. These guys have the world’s best and biggest legal, lobbying and PR teams. Because they’re after global control.

[..] because most farmers in rich countries already buy their seeds from the multinationals, opposition has barely been heard. Instead, it is coming from the likes of Debal Deb, an Indian plant researcher who grows forgotten crops and is the antithesis of Bayer and Monsanto. While they concentrate on developing a small number of blockbuster staple crops, Deb grows as many crops as he can and gives the seeds away.

This year he is cultivating an astonishing 1,340 traditional varieties of Indian “folk” rice on land donated to him in West Bengal. More than 7,000 farmers in six states will be given the seeds, on the condition that they also grow them and give some away.

This seed-sharing of “landraces”, or local varieties, is not philanthropy but the extension of an age-old system of mutualised farming that has provided social stability and dietary diversity for millions of people. By continually selecting, crossbreeding and then exchanging their seeds, farmers have developed varieties for their aroma, taste, colour, medicinal properties and resistance to pests, drought and flood.

The battle is between biodiversity and Monsanto, and the latter is winning big. Monsanto-Bayer wants farmers to grow only a few crops, that it has patents on, and to kill off everything else with the chemicals without which these crops will not grow. Monoculture on steroids, raised in sterile environments bereft of life. 75% of insects gone in Europe’s countrysides, 60% of vertebrates, birds and butterflies becoming a rarity.

It is insanity in its purest form. Insanity of individual people, insanity of legal systems, insanity of governance. No-one, and no country, should be obliged to prove that Monsanto’s products are killing off biodiversity. We have an instrument called the precautionary principle, and we must use it. Like Hippocrates’ First Do No Harm. It is not complicated.

But I must admit I sometimes think it’s already too late. Once you kill off 70% of any form of life, in any ecosystem, how is it going to recover? Because mind you, with the Bayer-Monsanto merger being approved worldwide, things are only going to get worse at ever increasing speed. The agro-chemical industry is a culture of death that relies for its profits on a giant die-off, probably worse than whatever it is that killed the dinosaurs 65 million years ago.

And the odds that mankind will survive this one are slim to none. Our survival depends one on one on the diversity in the ecosystems we reside in. But yeah, I hear you: intelligent species.

Here’s something I first published in December 2016. Things have gotten much worse much faster than I could have predicted back then. Kill Monsanto before it kills your children.

Mass Extinction and Mass Insanity

Caters Extremely rare albino elephant, Kruger National Park in South Africa

Everything dies, baby, that’s a fact
But maybe everything that dies someday comes back …
Springsteen, Atlantic City

“Erwin Schrodinger (1945) has described life as a system in steady-state thermodynamic disequilibrium that maintains its constant distance from equilibrium (death) by feeding on low entropy from its environment – that is, by exchanging high-entropy outputs for low-entropy inputs. The same statement would hold verbatium as a physical description of our economic process. A corollary of this statement is that an organism cannot live in a medium of its own waste products.”
Herman Daly and Kenneth Townsend

What drives our economies is waste. Not need, or even demand. Waste. 2nd law of thermodynamics. It drives our lives, period.

First of all, don’t tell me you’re trying to stop the ongoing extinction of nature and wildlife on this planet, or the destruction of life in general. Don’t even tell me you’re trying. Don’t tell me it’s climate change that we should focus on (that’s just a small part of the story), and you’re driving an electric car and you’re separating your trash or things like that. That would only mean you’re attempting to willfully ignore your share of destruction, because if you do it, so will others, and the planet can’t take anymore of your behavior.

This is the big one. And the only ones amongst us who don’t think so are those who don’t want to. Who think it’s easier to argue that some problems are too big for them to tackle, that they should be left to others to solve. But why should we, why should anyone, worry about elections or even wars, when it becomes obvious we’re fast approaching a time when such things don’t matter much anymore?

The latest WWF Living Planet Report shows us that the planet is a whole lot less alive than it used to be. And that we killed that life. That we replaced it with metal, bricks, plastic and concrete. Mass consumption leads to mass extinction. And that is fully predictable, it always was; there’s nothing new there.

We killed 58% of all vertebrate wildlife just between 1970 and 2012, and at a rate of 2% per year we will have massacred close to 70% of it by 2020, just 4 years from now. So what does it matter who’s president of just one of the many countries we invented on this planet? Why don’t we address what’s really crucial to our very survival instead?

The latest report from the WWF should have us all abandon whatever it is we’re doing, and make acting to prevent further annihilation of our living world the key driver in our everyday lives, every hour of every day, every single one of us. Anything else is just not good enough, and anything else will see us, that self-nominated intelligent species, annihilated in the process.

Granted, there may be a few decrepit and probably halfway mutant specimens of our species left, living in conditions we couldn’t even begin, nor dare, to imagine, with what will be left of their intelligence wondering how our intelligence could have ever let this happen. You’d almost wish they’ll understand as little as we ever did; that some form of ignorance equal to ours will soften their pain.

It’s important to note that the report does not describe a stagnant situation, there’s no state of affairs, not something still, it describes an ongoing and deteriorating process. That is, we don’t get to choose to stop the ongoing wildlife annihilation at 70%; we are witnessing, and indeed we are actively involved in, raising that number by 2% every year that we ‘live’ (can we even call it that anymore, are you alive when you murder all life around you?) in this world.

This is our only home.

Without the natural world that we were born into, or rather that our species, our ancestors, were born into, we have zero chance of survival. Because it is the natural world that has allowed for, and created, the conditions that made it possible for mankind to emerge and develop in the first place. And we are nowhere near making an earth 2.0; the notion itself is preposterous. A few thousand years of man ‘understanding’ his world is no match for billions of years of evolution. That’s the worst insult to whatever intelligence it is that we do have.

Much has been made through the years of our ability to adapt to changing circumstances, and much of that is just as much hubris as so much of what we tell ourselves, but the big question should be WHY we would volunteer to find out to what extent we can adapt to a world that has sustained the losses we cause it to suffer. Even if we could to a degree adapt to that, why should we want to?

Two thirds of our world is gone, and it’s we who have murdered it, and what’s worse – judging from our lifestyles- we seem to have hardly noticed at all. If we don’t stop what we’ve been doing, this can lead to one outcome only: we will murder ourselves too. Our perhaps biggest problem (even if we have quite a few) in this regard is our ability and propensity to deny this, as we deny any and all -serious, consequential- wrongdoing.

There are allegedly serious and smart people working on, dreaming of, and getting billions in subsidies for, fantasies of human colonies on Mars. This is advertized as a sign of progress and intelligence. But that can only be true if we can acknowledge that our intelligence and our insanity are identical twins. Because it is insane to destroy the planet on which we depend one-on-one for everything that allows us to live, and at the same time dream of human life on another planet.

While I see no reason to address the likes of King of Subsidies Elon Musk, Stephen Hawking is different. Unfortunately, in Hawking’s case, with all his intelligence, it’s his philosophical capacity that goes missing.

Humanity Will Not Survive Another 1,000 Years If We Don’t Escape Our Planet

Professor Stephen Hawking has warned humanity will not survive another 1,000 years on Earth unless the human race finds another planet to live on. [..] Professor Hawking, 74, reflected on the understanding of the universe garnered from breakthroughs over the past five decades, describing 2016 as a “glorious time to be alive and doing research into theoretical physics”. “Our picture of the universe has changed a great deal in the last 50 years and I am happy if I have made a small contribution,“ he went on.

”The fact that we humans, who are ourselves mere fundamental particles of nature, have been able to come this close to understanding the laws that govern us and the universe is certainly a triumph.” Highlighting “ambitious” experiments that will give an even more precise picture of the universe, he continued: “We will map the position of millions of galaxies with the help of [super] computers like Cosmos. We will better understand our place in the universe.”

“But we must also continue to go into space for the future of humanity. I don’t think we will survive another 1,000 years without escaping beyond our fragile planet.”

The tragedy is that we may have gained some knowledge of natural laws and the universe, but we are completely clueless when it comes to keeping ourselves from destroying our world. Mars is an easy cop-out. But Mars doesn’t solve a thing. Because it’s -obviously- not the ‘fragile planet’ earth that is a threat to mankind, it’s mankind itself. How then can escaping to another planet solve its problems?

What exactly is wrong with saying that we will have to make it here on planet earth? Is it that we’ve already broken and murdered so much? And if that’s the reason, what does that say about us, and what does it say about what we would do to a next planet, even provided we could settle on it (we can’t) ? Doesn’t it say that we are our own worst enemies? And doesn’t the very idea of settling the ‘next planet’ imply that we had better settle things right here first? Like sort of a first condition before we go to Mars, if we ever do?

In order to survive, we don’t need to escape our planet, we need to escape ourselves. Not nearly as easy. Much harder than escaping to Mars. Which already is nothing but a pipedream to begin with.

Moreover, if we can accept that settling things here first before going to Mars is a prerequisite for going there in the first place, we wouldn’t need to go anymore, right?

We treat this entire extinction episode as if it’s something we’re watching from the outside in, as if it’s something we’re not really a part of. I’ve seen various undoubtedly very well-intentioned ‘green people’, ‘sustainable people’, react to the WWF report by pointing to signs that there is still hope, pointing to projects that reverse some of the decline, chinook salmon on the North American Pacific coast, Malawi farmers that no longer use chemical fertilizers, a giant sanctuary in the Antarctic etc.

That, too, is a form of insanity. Because it serves to lull people into a state of complacency that is entirely unwarranted. And that can therefore only serve to make things worse. There is no reversal, there is no turnaround. It’s like saying if a body doesn’t fall straight down in a continuous line, it doesn’t fall down at all.

The role that green, sustainability, conservationist groups play in our societies has shifted dramatically, and we have failed completely to see this change (as have they). These groups have become integral parts of our societies, instead of a force on the outside warning about what happens within.

Conservationist groups today serve as apologists for the havoc mankind unleashes on its world: all people have to do is donate money at Christmas, and conservation will be taken care of. Recycle a few bottles and plastic wrappings and you’re doing your part to save the planet. It is utterly insane. It’s as insane as the destruction itself. It’s denial writ large, and in the flesh.

It’s not advertized that way, but that doesn’t mean it’s not how it works. Saying that ‘it’s not too late’ is not a call to action as many people continue to believe. It’s just dirt poor psychology. It provides people with the impression, which rapidly turns into an excuse, that there is still time left. As almost 70% of all vertebrates, those animals that are closest to us, have disappeared. When would they say time is up? At 80%, 90%?

We do not understand why, or even that, we are such a tragically destructive species. And perhaps we can’t. Perhaps that is where our intelligence stops, at providing insight into ourselves. Even the most ‘aware’ amongst us will still tend to disparage their own roles in what goes on. Even they will make whatever it is they still do, and that they know is hurtful to the ecosystem, seem smaller than it is.

Even they will search for apologies for their own behavior, tell themselves they must do certain things in order to live in the society they were born in, drive kids to school, yada yada. We all do that. We soothe our consciences by telling ourselves we mean well, and then getting into our cars to go pick up a carton of milk. Or engage in an equally blind act. There’s too many to mention.

Every species that finds a large amount of free energy reacts the same way: proliferation. The unconscious drive is to use up the energy as fast as possible. If only we could understand that. But understanding it would get in the way of the principle itself. The only thing we can do to stop the extinction is for all of us to use a lot less energy. But because energy consumption provides wealth and -more importantly- political power, we will not do that. We instead tell ourselves all we need to do is use different forms of energy.

Our inbuilt talent for denying and lying (to ourselves and others) makes it impossible for us to see that we have an inbuilt talent for denying and lying in the first place. Or, put another way, seeing that we haven’t been able to stop ourselves from putting the planet into the dismal shape it is in now, why should we keep on believing that we will be able to stop ourselves in the future?

Thing is, an apology for our own behavior is also an apology for everyone else’s. As long as you keep buying things wrapped in plastic, you have no right, you lose your right, to blame the industry that produces the plastic.

We see ourselves as highly intelligent, and -as a consequence- we see ourselves as a species driven by reason. But we are not. Which can be easily demonstrated by a ‘reverse question’: why, if we are so smart, do we find ourselves in the predicament of having destroyed two thirds of our planet?

Do we have a rational argument to execute that destruction? Of course not, we’ll say. But then why do we do it if rationality drives us? This is a question that should forever cure us of the idea that we are driven by reason. But we’re not listening to the answer to that question. We’re denying, we’re even denying the question itself.

It’s the same question, and the same answer, by the way, that will NOT have us ‘abandon whatever it is we do’ when we read today that 70% of all wildlife will be gone by 2020, that 58% was gone by 2012 and we destroy it at a rate of 2% per year. We’re much more likely to worry much more about some report that says returns on our retirement plans will be much lower than we thought. Or about the economic growth that is too low (as if that is possible with 70% of wildlife gone).

After all, if destroying 70% of wildlife is not enough for a call to action, what would be? 80%? 90? 99%? I bet you that would be too late. And no, relying on conservationist groups to take care of it for us is not a viable route. Because that same 70% number spells out loud and clear what miserable failures these groups have turned out to be.

We ‘assume’ we’re intelligent, because that makes us feel good. Well, it doesn’t make the planet feel good. What drives us is not reason. What drives us is the part of our brains that we share in common with amoeba and bacteria and all other more ‘primitive forms of life, that gobbles up excess energy as fast as possible, in order to restore a balance. Our ‘rational’, human, brain serves one function, and one only: to find ‘rational’ excuses for what our primitive brain has just made us do.

We’re all intelligent enough to understand that driving a hybrid car or an electric car does nothing to halt the havoc we do to our world, but there are still millions of these things being sold. So perhaps we could say that we’re at the same time intelligent enough, and we’re not.

We can see ourselves destroying our world, but we can not stop ourselves from continuing the destruction. Here’s something I wrote 5 years ago:

Most. Tragic. Species. Ever.

We have done exactly the same that any primitive life form would do when faced with a surplus, of food, energy, and in our case credit, cheap money. We spent it all as fast as we can. Lest less abundant times arrive. It’s an instinct, it comes from our more primitive brain segments, not our more “rational” frontal cortex. It’s not that we’re in principle, or talent, more devious or malicious than more primitive life forms. It’s that we use our more advanced brains to help us execute the same devastation our primitive brain drives us to, but much much worse.

That’s what makes us the most tragic species imaginable. We’ll fight each other, even our children, over the last few scraps falling off the table, and kill off everything in our path to get there. And when we’re done, we’ll find a way to rationalize to ourselves why we were right to do so. We can be aware of watching ourselves do what we do, but we can’t help ourselves from doing it. Most. Tragic. Species. Ever.

The greatest miracle you will ever see, that you could ever hope to see, is so miraculous you can’t even recognize it for what it is. We don’t know what the word beautiful means anymore. Or the word valuable. We’ve lost all of that, and are well on our way, well over 70% of it, to losing the rest too.

PS Please note I could not gather all sources for all pictures here, but I’d be more than happy to add them. It’s not that I don’t recognize the effort that goes into them; it’s an emotional thing.

Debt Rattle June 4 2018

Jun 042018

June 4, 2018 Posted by Raúl Ilargi Meijer at 8:37 am Finance Tagged with: austerity, capital controls, collapse, Deutsche, extinction, Merkel, migrants, money-laundering, refugees, Trump 11 Responses »

Roy Lichtenstein Crying girl 1964

• This Is Why The Global Collapse Will Be Devastating (von Greyerz)

• If Trump Wants To Win A Trade War, The Market Has To Crash – Goldman (ZH)

• Deutsche Bank Faces Another Challenge With Fed Stress Test (R.)

• The Big Con: How Neoliberals Convinced Us There Wasn’t Enough To Go Around (G.)

• Greece Relaxes Capital Controls To Prove Worst Of Turmoil Is Over (G.)

• Australia’s Commonwealth Bank Agrees To $530M Fine Over Money-Laundering (AFP)

• Merkel’s Comeuppance is Europe’s – and the World’s – Misfortune (Varoufakis)

• Dozens Drown After Migrant Boat Sinks Off Tunisia Coast (G.)

• Six Children, Three Adult Migrants Drown Off Turkish Coast (AFP)

• Bayer To Close Monsanto Takeover, To Retire Target’s Name (R.)

• Global Airport Capacity Crisis Amid Passenger Boom (AFP)

• Eerie Silence Falls On Shetland Cliffs That Once Echoed Seabirds’ Cries (G.)

• Notes on Heartache and Chaos (Jim Kunstler)

“.. If the above forecast of a major fall in the population as well as a substantial increase in debt is even vaguely accurate, Italy is on its way to the Dark Ages..”

• This Is Why The Global Collapse Will Be Devastating (von Greyerz)

“The ECB (European Central Bank) just had its 20th birthday. But there is really nothing to celebrate. The EU is in a total mess and the Euro, which was launched on January 1, 1999, is a failed currency. Every president of the ECB has had to deal with fires that had very little to do with price stability but were more a question of survival. Most of these fires were a lot more serious than the candles in the Euro cake above which Draghi is trying to blow out. During the Frenchman Trichet’s watch, he had to deal with the Great Financial Crisis that started in 2006…

[..] The EU now has major economic and/or political problems in many countries. Italy’s new coalition government is a protest against the EU and Euro. With debt to GDP already the highest in Europe, the new regime will exacerbate the problems. Lower taxes and higher spending will guarantee that. As the chart below shows, Italian debt to GDP is already 140%. By 2050 this is projected to grow to 210%. As interest rates go up, servicing the growing debt will soon absorb all tax revenue. Italy will be bankrupt long before 2050 and default on all its debt.

Between now and 2050, the Italian working age population is forecast to decline by 1/3, from 36 million to 24 million. There will be a lot less people to pay for a much higher debt.

The consequences of massive debt, economic stagnation and population decline will be a much lower GDP, which is expected to decline 35% by 2050.

If the above forecast of a major fall in the population as well as a substantial increase in debt is even vaguely accurate, Italy is on its way to the Dark Ages. I must stress here that I find it so sad that this glorious country is suffering so much already and will suffer a lot more. Personally I love Italy — the people, the food, the architecture, the history and the Giola di Vivere (joie de vivre) of the Italians. It will be so tragic to see all of this disintegrate. Hopefully it will take a long time, although, sadly, the crisis might actually be around the corner.

But Italy is just one of many countries which will collapse in coming years. Spain is in a similar situation and the prime minister has just been kicked out. Greece’s problems have never been resolved and this fine country is also bankrupt and so are the Greek banks. I could go on with Portugal, France, Ireland, the UK and many others. Most of these countries have insoluble problems. It is only a matter of degree and time when the EU/Eurozone house of cards comes down.

To make tariffs threats credible.

• If Trump Wants To Win A Trade War, The Market Has To Crash – Goldman (ZH)

[..] to maintain leverage in negotiations, the Administration must convince trading partners that the US intends to impose trade restrictions. However, and this is the key part, “it is unlikely that the White House can convince trading partners that tariff threats are credible without also convincing financial markets.” In other words, for Trump’s trade negotiations to be successful, and for US trade partners to take a flip-flopping Trump credibly, the market has to crash. Incidentally, this makes sense when one considers that when Trump officially launched the trade war with China in early April, the president explicitly warned that stocks “may take a hit”, and told investors to prepare for “pain” in the market, a statement which promptly became a self-fulfilling prophecy and sent the market sharply lower.

The other consequence is that markets may tumble not as an effect, but as a cause of the trade war: after all Trump needs to be taken seriously, and that could mean another slide in the S&P. Goldman agrees as much: “… we do not expect trade policy risks to fade anytime soon. While we think that financial market sentiment around trade issues is unlikely to become as negative again as it was in early April, when the President floated the possibility of tariffs on another $100 billion in imports from China, we do not expect markets to become entirely comfortable with the outlook for trade policy, either.”

The punchline: “The challenge that the White House faces is that, to maintain leverage in negotiations, trading partners must believe that the US intends to follow through with proposed actions like tariffs. However, repeated threats begin to lose credibility unless they are followed up with action.” In short, just as China said earlier, the US can’t have its cake and eat it too: Trump can’t have trade war, or the threat thereof, and record high stocks.

It’s going to be public. But can the Fed afford to damage Deutsche?

• Deutsche Bank Faces Another Challenge With Fed Stress Test (R.)

Deutsche Bank AG will face another challenge this month when the Federal Reserve publishes the results of a “stress test” on the bulk of its U.S. operations for the first time. Germany’s largest lender is already facing challenges with U.S. bank regulators and in financial markets, with its stock price falling to historic lows on Thursday. Standard & Poor’s downgraded its credit rating to BBB+ from A- on Friday. The downgrade came after reports earlier in the week that the Fed designated one of Deutsche Bank’s U.S. businesses as “troubled” last year, something a person with knowledge of the matter confirmed to Reuters on Friday. The Fed’s stress test results, expected to be released sometime this month, will be the next big public barometer of Deutsche Bank’s financial strength.

It could be difficult for a bank with a subsidiary on the “troubled” list to pass the scenarios, according to a person familiar with the tests who was not authorized to speak publicly. That is because the capital, liquidity and risk management failures that would land a bank on the list are similar to those that lead banks to flunk the stress test, the person said. The Fed has been examining how the biggest U.S. banks would handle a range of adverse economic and market scenarios since 2009, requiring many to shore up their capital buffers and risk management controls. But this is the first year it will publicly release results of six foreign lenders, including Deutsche Bank, after requiring them to create consolidated U.S. holding companies with ring-fenced capital. The Fed tested those new entities last year in a trial run, the results of which are confidential.

Austerity eats people.

• The Big Con: How Neoliberals Convinced Us There Wasn’t Enough To Go Around (G.)

Australia just experienced one of the biggest mining booms in world history. But even at the peak of that boom, there was no talk of the wonderful opportunity we finally had to invest in world-class mental health or domestic violence crisis services. Nor was there much talk from either major party about how the wealth of the mining boom gave us a once-in-a-generation opportunity to invest in remote Indigenous communities. Nope, the peak of the mining boom was not the time to help those who had missed out in decades past, but the Howard government thought it was a great time to introduce permanent tax cuts for high-income earners. These, of course, are the tax cuts that caused the budget deficits we have today.

Millions of tonnes of explosives were used during the mining boom to build more than 100 new mines, but it wasn’t just prime farmland that was blasted away in the boom, it was access to the middle class. At the same time that Gina Rinehart was becoming the world’s richest woman on the back of rising iron-ore prices, those on the minimum wage were falling further and further behind their fellow Australians. Australia isn’t poor; it is rich beyond the imagining of anyone living in the 1970s or ’80s. But so much of that new wealth has been vacuumed up by a few, and so little of that new wealth has been paid in tax, that the public has been convinced that ours is a country struggling to pay its bills.

Convincing Australians that our nation is poor and that our governments “can’t afford” to provide the level of services they provided in the past has not just helped to lower our expectations of our public services and infrastructure, it has helped to lower our expectations of democracy itself. A public school in Sydney has had to ban kids from running in the playground because it was so overcrowded. Trains have become so crowded at peak hours that many people, especially the frail and the disabled, are reluctant to use them.

Relax capital controls when nobody has any money left to get out of the bank.

• Greece Relaxes Capital Controls To Prove Worst Of Turmoil Is Over (G.)

Greece is to take a substantial step towards easing capital controls – restrictions associated with the worst days of economic crisis – as it prepares to exit its current bailout programme. Signalling that confidence is gradually returning to the country’s banking system, the leftist-led government has doubled the amount depositors will be able to withdraw from their accounts as of Monday. “As is usually the case with the economy, this is about psychology,” said a senior official at the Bank of Greece. “The relaxation is as much about boosting confidence among investors and savers as showing banks can now afford to work under normal conditions.” Barely three months before its third international bailout programme expires, the country once at the epicentre of the euro crisis is keen to prove its financial turmoil is over.

Under the new rules, the limit on cash withdrawals from local banks will be raised from €2,300 to €5,000 per month. Business transactions will also be facilitated, with cash transfers abroad being doubled to €40,000 a month. The Greek finance ministry said it had similarly decided to increase the amount depositors can take abroad, in euros or foreign currency, from €2,300 to €3,000 per trip. From 1 July, banks will be allowed to accept customer orders for money transfers overseas for up to €4,000 bi-monthly. In a statement the finance ministry said the aim was to fully lift restrictions “as soon as possible” while ensuring macroeconomic and financial stability.

“serious and systemic non-compliance” of anti-money laundering laws more than 53,000 times…”

• Australia’s Commonwealth Bank Agrees To $530M Fine Over Money-Laundering (AFP)

The Commonwealth Bank Monday agreed to the largest civil penalty in Australian corporate history to settle claims it breached anti-money laundering and counter-terrorism financing laws. The Aus$700 million (US$530 million) fine – which is subject to court approval – comes after mediation between the nation’s biggest lender and the country’s financial intelligence agency AUSTRAC. It follows the bank being taken to court last August for “serious and systemic non-compliance” of anti-money laundering laws more than 53,000 times, with AUSTRAC filing 100 further claims in December. CBA was also accused of failing to adequately monitor suspected terrorist financiers.

“While not deliberate, we fully appreciate the seriousness of the mistakes we made,” said CBA chief executive Matt Comyn in a statement. “Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward. On behalf of Commonwealth Bank, I apologise to the community for letting them down.” The bank, which in the fallout has replaced senior leadership overseeing financial crimes and pumped millions of dollars into improving its systems, also agreed to pay AUSTRAC’s Aus$2.5 million legal fees.

After slumping more than 10 percent over the past month, during which it admitted losing financial records for almost 20 million customers, CBA’s share price rallied 1.44 percent on the settlement to close at Aus$69.69. The scandal is only the latest issue to damage the reputation of Australian banks, which have been under intense scrutiny amid allegations of dodgy financial advice, life insurance and mortgage fraud, and rigging benchmark interest rates. Last week, ANZ Bank was accused of “cartel arrangements” over a multi-billion-dollar capital raising, along with its advisers Deutsche Bank and Citigroup. They face potential criminal charges.

Germany blows up the EU in slow motion.

• Merkel’s Comeuppance is Europe’s – and the World’s – Misfortune (Varoufakis)

The causal link between Germany’s two political headaches has an economic basis. Trump understands one thing well: Germany and the eurozone are at his mercy, owing to their increasing dependence on large net exports to the US and the rest of the world. And this dependence has grown inexorably as a result of the austerity policies that were first tried out in Greece and then implemented in Italy and elsewhere.

To see the link, recall the “fiscal compact” to eliminate structural budget deficits that Germany insisted upon as a condition of agreeing to bailout loans for distressed governments and banks. Then note that this pan-European austerity drive took place against the backdrop of massive excess savings over investment. Finally, note that large excess savings and balanced government budgets necessarily mean large trade surpluses – and thus the increasing reliance of Germany, and Europe, on massive net exports to the United States and Asia. In other words, the same incompetent policies that gave rise to the xenophobic, anti-Europeanist Italian government also bolstered Trump’s power over Merkel.

Europe’s inability to get its own house in order has engendered a new Italian majority that is planning to expel a half-million migrants, blowing fresh winds into the sails of militant racists in Hungary, Poland, France, Britain, the Netherlands, and, of course, Germany itself. Meanwhile, with Europe too enfeebled to tame Trump, the US will aim to force China to deregulate its financial and tech sectors. If it succeeds, at least 15% of China’s national income will gush out of the country, adding to the deflationary forces that are breeding political monsters in Europe and in the US.

And still no UN emergency meeting. The shame will not wash away.

• Dozens Drown After Migrant Boat Sinks Off Tunisia Coast (G.)

At least 47 people died and 68 others were rescued after their migrant boat sank off Tunisia’s southern coast, according to the country’s defence ministry. Authorities said about 180 people, of both Tunisian and other nationalities, were hemmed in onboard the vessel. A survivor said the captain had abandoned the boat after it hit trouble in order to escape arrest. “I survived by clinging to wood for nine hours,” he told Reuters from a hospital in the city of Sfax where people were arriving in search of relatives and friends. Flavio Di Giacomo, a spokesman for the International Organisation for Migration (IOM), warned on Twitter that the final number of missing was still not known.

Tunisia has recently seen growing use of its coasts by human traffickers ferrying migrants from Africa to Europe, as Libyan authorities have cracked down on similar activity on their own shores. Tunisia has been suffering from an economic crisis since the toppling of Zine al-Abidine Ben Ali as president in 2011, which led to rocketing unemployment and inflation. In a separate incident, nine people including six children were killed off the coast of Turkey on Sunday after their speedboat sank, the Turkish coast guard said. By 30 May, the IOM had recorded 32,080 people as having reached Europe by boat in 2018 and around 660 as having died or gone missing in the attempt.

And there’s always more.

• Six Children, Three Adult Migrants Drown Off Turkish Coast (AFP)

Nine migrants, including six children, seeking to head to Europe in a speedboat drowned on Sunday when the vessel sank off Turkey’s Mediterranean coast, state media reports said. The boat hit trouble off the Demre district of Turkey’s Mediterranean Antalya province, a popular holiday spot, the state-run Anadolu news agency said. Five were rescued while one person was still missing, it added. Two adults, one woman and six children lost their lives, it said. The Dogan news agency said that they were seeking to head illegally to Europe but their planned route was not immediately clear. The nearest EU territory is the small Greek island of Kastellorizo to the west which lies off the Turkish resort of Kas.

The nationalities of those on board have yet to be made clear. Over a million people, many fleeing the war in Syria, crossed to European Union member Greece from Turkey in 2015 after the onset of the bloc’s worst migration crisis since World War II. [..] According to the International Organisation for Migration (IOM), 10,948 people crossed to Greece this year up to May 30, sharply more than in the same period in 2017. Thirty-five people lost their lives using this route so far this year, according to the IOM. As well as migrants from countries such as Syria, Eritrea, Iraq and Afghanistan, the route has been used by Turkish citizens fleeing the crackdown that followed the 2016 failed coup.

Bayer wants to get rid of the bad name Monsanto has. Let’s give Bayer an even worse name.

• Bayer To Close Monsanto Takeover, To Retire Target’s Name (R.)

Germany’s Bayer will wrap up the $62.5 billion takeover of Monsanto on Thursday this week and also retire the name of the U.S. seeds maker, it said on Monday. The German drugmaker had received all required approvals from regulatory authorities, it said in a statement. “Bayer will remain the company name. Monsanto will no longer be a company name. The acquired products will retain their brand names and become part of the Bayer portfolio,” it said. Bayer launched a 6 billion euro ($7 billion) rights issue on Sunday, a cornerstone of the financing package for the deal.

Yeah. We need more air travel. Without counting the externalities.

• Global Airport Capacity Crisis Amid Passenger Boom (AFP)

Governments need to urgently tackle a capacity crisis facing airports as demand for international travel grows, but they should be cautious about private sector involvement, airline industry group IATA warned Monday. With passenger levels projected to nearly double to 7.8 billion by 2036, infrastructure such as airports and air traffic control systems were not keeping pace, the International Air Transport Association said. Major airports have sought to address the crisis by managing slots — giving airlines specific operating rights at particular times. But there was still a need for new airports, IATA chief Alexandre de Juniac said at the body’s annual meeting in Sydney.

“We are in a capacity crisis. And we don’t see the required airport infrastructure investment to solve it,” he said, adding that cash-strapped governments were increasingly turning to private firms to increase airport capacity. But he cautioned against privatised airports, warning that they have “not lived up to airline expectations” with many carriers having “far too many bitter experiences”. [..] IATA Monday projected global air passenger traffic to rise by 6.5 percent this year to 4.36 billion, after increases of 7.0 and 7.3 percent in 2016 and 2017 respectively.

Not sure it’s wise to blame this on climate change. The extinction stories come too fast. How about blaming Monsanto and booming air travel?

• Eerie Silence Falls On Shetland Cliffs That Once Echoed Seabirds’ Cries (G.)

Sumburgh Head lies at the southern tip of mainland Shetland. This dramatic 100-metre-high rocky spur, crowned with a lighthouse built by Robert Louis Stevenson’s grandfather, has a reputation for being one of the biggest and most accessible seabird colonies in Britain. Thousands of puffins, guillemots, razorbills, kittiwakes and fulmars gather there every spring to breed, covering almost every square inch of rock or grass with teeming, screeching birds and their young. Or at least they used to – for this year Sumburgh Head is a quiet and largely deserted place. Where seabirds once swooped and cried in their thousands, only a handful of birds wheel round the cliffs.

The silence is uncanny – the result of a crash in seabird numbers that has been in progress for several years but which has now reached an unprecedented, catastrophic low. One of the nation’s most important conservation centres has been denuded of its wildlife, a victim – according to scientists – of climate change, which has disrupted food chains in the North Sea and North Atlantic and left many seabirds without a source of sustenance. The result has been an apocalyptic drop in numbers of Arctic terns, kittiwakes and many other birds. “In the past, Sumburgh Head was brimming with birds, and the air was thick with the smell of guano. The place was covered with colonies of puffins, kittiwakes, fulmars, and guillemots,” said Helen Moncrieff, manager of RSPB Scotland’s office in Shetland.

“There were thousands and thousands of birds and visitors were guaranteed a sight of puffins. Today they have to be very patient. At the same time, guillemots have halved in numbers. It is utterly tragic.” This grim description is backed by figures that reveal the staggering decreases in seabird numbers in Shetland, the most northerly part of the British Isles. In 2000, there were more than 33,000 puffins on the island in early spring. That figure dropped to 570 last year and there are no signs of any recovery this year, although it is still early in the season. Similarly, Shetland’s kittiwake population plummeted from over 55,000 in 1981 to 5,000 in 2011, and observers believe those numbers have declined even further in the past few years.

Absolutely wonderful from Jim.

• Notes on Heartache and Chaos (Jim Kunstler)

I was interviewing a couple of homesteaders on an island north of Seattle at twilight last night when they noticed that the twelve-year-old family dog, name of Lacy, had not come home for dinner as ever and always at that hour. A search ensued and they soon found her dead in the meadow a hundred feet behind the house with two big puncture wounds in her body. Nobody had heard a gunshot. We’d just been talking inside and a nearby window was open. They suspect the dog met up with a black-tailed deer buck out there and was gored to death. We hadn’t heard a yelp, or anything. A week ago, an eagle got one of their geese, and some land-based monster got its companion just the other day.

Nature is what it is, of course, and it’s natural for human beings to think of its random operations as malevolent. That aspersion probably inclines us to think of ourselves as beings apart from nature (some of us, anyway). We at least recognize the tragic side of this condition we’re immersed in, and would wish that encounters between its denizens might end differently — like maybe that two sovereign creatures meeting up by sheer chance on a mild spring evening would exchange pleasantries, ask what each was up to, and go on their ways.

Malevolent nature visited me the night before, back home in upstate New York. Something slit the screened window of my henhouse, got inside, and slaughtered two of my birds. Big Red was missing altogether except for a drift of orange feathers. I found Little Blue just outside in a drift of her own feathers, half-eaten. I suspect a raccoon got them, slitting the window screen cleverly with its dexterous hand-like paws — yes, so much like our own clever hands. (In classic after-the-fact human style, I fortified the window with steel hardware cloth the next day.)

It’s the time of year when the wild critters of field and woodland are birthing their young and anxious to procure food for them. Who can blame them for that. Chicken is an excellent dish. I eat it myself, though never my own hens. I actually rescued Little Blue from the clutches of a red-tailed hawk last year as the hawk struggled to get airborne with her and let go as I screeched at it. Blue recovered from the talon punctures and had a good year — one good year on this earth with all its menace, when it is not busy being beautiful.

Debt Rattle April 23 2018

Apr 232018

April 23, 2018 Posted by Raúl Ilargi Meijer at 9:49 am Finance Tagged with: birds, Brexit, China, customs union, DNC, extinction, Google, MSM, Syria, Wikileaks, Windrush 3 Responses »

Russell Lee Highway tavern. Crystal City, Texas 1939

• A Google Breakup Would Fit the EU’s Logic (BBG)

• Customs Union U-Turn By May Could Inspire Brexiter Cabinet Revolt (G.)

• The Windrush Story Was Not A Rosy One Even Before The Ship Arrived (G.)

• Britain, Headquarters Of Fraud (G.)

• China Q1 Imports From North Korea Fall 87% Year-On-Year (R.)

• How China Is Buying Its Way Into Europe (BBG)

• China Factory Crackdown Masks Sweeping Takeover By The State (BBG)

• Canadians Just Set A New Record For Borrowing Against Their Homes (BD)

• MSM Is Frantically Attacking Dissenting Syria Narratives (CJ)

• WikiLeaks To Countersue Democrats; “Discovery Is Going To Be Amazing Fun” (ZH)

• One In Eight Bird Species Is Threatened With Extinction (G.)

Does Google think it can win this?

• A Google Breakup Would Fit the EU’s Logic (BBG)

On Thursday, the European Parliament backed the idea of breaking up Google. It doesn’t have the power to do it, but the legislators’ decision is a notable part of a backlash against the remedial action Google took after the European Commission fined it 2.4 billion euros ($2.95 billion) for abusing its dominant position in shopping search. That backlash can lead to dire consequences for the search giant. The commission found last June that by giving its own product comparison service, Google Shopping, prime “real estate” at the top search result pages, Google was hampering competition for independent shopping comparison websites. The company’s remedy is to hold auctions for spaces in the special box in which comparison results appear if a user searches for a product to buy.

Google Shopping bids in these auctions on the same terms as its rivals, and Google has promised to keep the service profitable so it can’t outbid the competition every time with the company’s vastly superior resources. Yet, months after the remedy was applied, it’s next to impossible to run into a non-Google offer in that box. The original complainants, notably the U.K. firm Foundem, have been campaigning to have Google declared non-compliant. Foundem’s argument is laid out in an interactive presentation released on April 18. The British company argues that even though Google claims to run Google Shopping at arm’s length, it’s merely an obfuscation, a meaningless accounting arrangement. In reality, Google as a whole still harvests 100% of the profit from the ads in runs after winning auctions – plus 80% of the profits from competing services’ ads in the form of their winning bids.

“While Google’s promise to run Google Shopping at a notional ‘profit’ may allow rival services to bid their way into ‘the box,’ it does nothing to address the seismic inequality between bids that cost you nothing and bids that cost you most of your incentive and ability to innovate and grow,” Foundem wrote in the presentation. The annual report on competition policy from the European Parliament’s Committee on Economic and Monetary Affairs, which the legislature approved on Thursday, shows that at least some in the “Brussels bubble” that rules the EU are receptive to Foundem’s argument. “Without a full-blown structural separation between the company’s general and specialised search services, an auction-based approach might not deliver equal treatment,” the report says.

[..] If Google is declared non-compliant, its parent company, Alphabet Inc., can be forced to pay up to 5 percent of its daily turnover for every day that it has violated the commission’s ruling, meaning, theoretically, since last September. Taking Alphabet’s average daily revenue in the fourth quarter of 2017 as a base, that’s about $17.6 million a day for seven months and counting. This could end up being worse than the original fine, which Google is appealing. Even a breakup could be preferable to paying this sort of penalty for a protracted period.

The mess spreads.

• Customs Union U-Turn By May Could Inspire Brexiter Cabinet Revolt (G.)

Theresa May could face a cabinet revolt on a customs union as peers prepare to inflict more defeats on the government over the EU withdrawal bill in a key week for the future of the UK’s relations with Europe. Amid Brexiter threats of a leadership challenge, the former cabinet minister Nicky Morgan, who chairs the Treasury committee, said party rebels should be careful what they wished for. “This sabre-rattling is not coming from the section of the party that I represent. It is coming from the pro-Brexit section of the party and is deeply unhelpful,” she said. Government hopes of avoiding a hard border in Ireland either through technological innovation or regulatory alignment have been set back after they were rejected during preliminary negotiations in Brussels.

That has led to speculation that May is preparing to concede on a customs union, which has been a red line since the prime minister’s conference speech in October 2016. Reports over the weekend suggested a “wargaming” exercise into the consequences of a concession showed that not even leading Brexiters such as Michael Gove, the environment secretary, or Boris Johnson, the foreign secretary, would resign. But a source close to Gove reiterated his opposition: “Michael believes respecting the referendum result means taking back control of trade policy. He fully supports the prime minister’s position that this means leaving the customs union.” Although the loss of other pledges in negotiations have been reluctantly accepted, such as the promise to reclaim control over fishing quotas from March 2019, accepting continued membership of a customs union would be of a different and much larger scale.

Superiority complex writ large

• The Windrush Story Was Not A Rosy One Even Before The Ship Arrived (G.)

This is a year so overflowing with anniversaries that it was perhaps always going to draw our attention to the histories of race and migration in Britain. June marks the 70th anniversary of the arrival of the Empire Windrush at Tilbury Docks, carrying 492 West Indians who were looking to rewrite their fortunes in a Britain desperate for labour. The Windrush is now so much part of British history that almost instantly it became the shorthand used to describe the generation of black Britons whose plight has so shocked the country.

Friday 20 April was an anniversary of a darker kind, 50 years since Enoch Powell delivered his “rivers of blood” speech. That toxic diatribe, with its unsubtle references to “piccaninnies” and the “whip hand”, remains politically radioactive half a century later, as Radio 4 discovered last weekend when it broadcast the speech in an anniversary documentary. Today is the sombre anniversary of the murder of Stephen Lawrence, 25 years ago.

But there is another 2018 anniversary that, until last week, might well had passed by quietly, hardly noticed. This year marks 70 years since the passing of the 1948 British Nationality Act, which was being debated while the Windrush was crossing the Atlantic; gaining royal ascent in July 1948, as the Windrush pioneers were settling into their new jobs. Although now obscure, it was a law that Powell once referred to as “that most evil statute”. Much of what has happened over the past week can be traced back to that forgotten but critical piece of legislation. The act was intended to reaffirm what many in the late 1940s regarded as a “time-honoured principle”, the doctrine that all British subjects should have the automatic right to travel to and settle in the United Kingdom.

[..] Even before the Windrush had left Jamaica, the prime minister, Clement Attlee, had examined the possibility of preventing its embarkation or diverting the ship and the migrants on board to East Africa. After the vessel had arrived at Tilbury, the colonial secretary, Arthur Creech Jones, is said to have reassured his cabinet colleagues that, although “these people have British passports and must be allowed to land there’s nothing to worry about because they won’t last one winter in England” (detailed in Randall Hansen’s book Citizenship and Immigration in Post-War Britain). When that prediction was proved false, ministers began to consider how they might revoke the commitments enshrined in the 1948 act.

What followed was a two decade-long political struggle to change Britain’s immigration law and reduce the flow of immigrants from the so-called New Commonwealth. This is the other side of the Windrush story. In 1971, a new immigration act finally achieved that aim and stemmed the flow of migrants from the New Commonwealth. The same law granted those who had already arrived indefinite leave to remain. That would have been the end of the story, had not, in 2013, those thousands been pushed into Theresa May’s “hostile environment”. The current crisis is a relic left by the political struggle to row back from the commitments made in the 1948 act.

Competition for the title is stiff.

• Britain, Headquarters Of Fraud (G.)

Officials get fed up with accusations that Britain is a cesspool of dirty money; that they do too little to check the wealth hidden behind shell corporations. They grouse among themselves that their critics overlook the work they’re doing to expose the money flows and to drive out the corrupt. When they do get a win, therefore, they trumpet it. Last month, Companies House successfully prosecuted someone who had lied in setting up a company, the kind of white-collar crime committed by the sophisticated fraudsters who fleece ordinary Brits every day, and the government went large. “This prosecution – the first of its kind in the UK – shows the government will come down hard on people who knowingly break the law and file false information on the company register,” crowed business minister, Andrew Griffiths, in a press release.

A Warwickshire businessman called Kevin Brewer had pleaded guilty, paid a fine and the government’s costs: a total of more than £12,000. His crime had been to falsely claim that two companies he created belonged, in one case, to the MP Vince Cable, and, in the other, to the MP James Cleverly, Lady Neville-Rolfe and an imaginary Israeli. At first, the public response to the news was everything the press release’s authors could have hoped for. The Times splashed with the details of the crime – the government was tough on fraud, tough on the causes of fraud. But the victory was short-lived.

Within a month of the triumphant press release, Tory MP John Penrose, the government’s anti-corruption champion, was slamming the prosecution as “a bone-headed exercise in shooting the messenger”. Brewer may have been, by his own admission, naive, but he was trying to expose a flaw in British regulations that enables frauds totalling hundreds of billions of pounds. His reward was years of being ignored and, finally, a criminal record. “That has to be wrong,” said Penrose.

Can we check this?

• China Q1 Imports From North Korea Fall 87% Year-On-Year (R.)

China’s imports from North Korea fell 87% in the first quarter from a year earlier to 448.8 million yuan ($71.31 million), customs data showed on Monday, while exports to North Korea were down 46.1% to 2.68 billion yuan. For March, China’s exports to North Korea were 907.54 million yuan while imports from North Korea were 78.5 million yuan. China’s March total trade with North Korea was 986.07 million yuan, customs data showed.

Cue protectionism.

• How China Is Buying Its Way Into Europe (BBG)

For more than a decade, Chinese political and corporate leaders have been scouring the globe with seemingly bottomless wallets in hand. From Asia to Africa, the U.S. and Latin America, the results are hard to ignore as China has asserted itself as an emerging world power. Less well known is China’s diffuse but expanding footprint in Europe. Bloomberg has crunched the numbers to compile the most comprehensive audit to date of China’s presence in Europe. It shows that China has bought or invested in assets amounting to at least $318 billion over the past 10 years. The continent saw roughly 45% more China-related activity than the U.S. during this period, in dollar terms, according to available data.

The volume and nature of some of these investments, from critical infrastructure in eastern and southern Europe to high-tech companies in the west, have raised a red flag at the EU level. Leaders that include Angela Merkel and Emmanuel Macron are pressing for a common strategy to handle China’s relentless advance into Europe, with some opposition from the EU’s periphery. We analyzed data for 678 completed or pending deals in 30 countries since 2008 for which financial terms were released, and found that Chinese state-backed and private companies have been involved in deals worth at least $255 billion across the European continent. Approximately 360 companies have been taken over, from Italian tire maker Pirelli to Irish aircraft leasing company Avolon, while Chinese entities also partially or wholly own at least four airports, six seaports, wind farms in at least nine countries and 13 professional soccer teams.

Importantly, the available figures underestimate the true size and scope of China’s ambitions in Europe. They notably exclude 355 mergers, investments and joint ventures—the primary types of deals examined here—for which terms were not disclosed. Bloomberg estimates or reporting on a dozen of the higher-profile deals among this group suggest an additional total value of $13.3 billion. Also not included: greenfield developments or stock-market operations totaling at least $40 billion, as compiled by researchers at the American Enterprise Institute and the European Council on Foreign Relations, plus a $9 billion stake in Mercedes-Benz parent company Daimler AG by Zhejiang Geely chairman Li Shufu reported by Bloomberg.

Anbang was just the start.

• China Factory Crackdown Masks Sweeping Takeover By The State (BBG)

President Xi Jinping’s big push to curb pollution and excess capacity in steel and other industries is also consolidating his government’s control over them. Just last year, the state’s share of steel capacity increased to 67% from 60% while aluminum smelting saw about an equal increase, J Capital Research estimates. In coal, which began consolidating years earlier, the government now controls 80% of capacity compared with about 45% in 2010, according to the Hong Kong-based firm. Xi’s campaign has boosted corporate profits, ended years of deflation, and stabilized debt growth to help underpin the first full-year economic acceleration last year since 2010.

But his aim for a “bigger, better and stronger” state role also means those bloated companies risk stifling private ones, as the Communist Party strengthens its grip on the economy. Call it “de facto nationalization,” says Jude Blanchette, China practice lead at Crumpton Group in Arlington, Virginia, and a former Conference Board researcher in Beijing. “We’re clearly seeing the re-strengthening of state-owned enterprises, oftentimes at the zero-sum expense of private players. Private folks are exiting the market either because they’re pushed out or they can’t survive.” State gains in heavy industry follow a broad SOE comeback since Xi took power in 2013. Their share of fixed-asset investment stopped falling in 2014 and rebounded over the next three years, says Andrew Batson at Gavekal Dragonomics.

The state is also extending control over the private sector away from heavy industry as it cracks down on debt. Once-acquisitive insurer Anbang Insurance was seized by the government, and regulators have curtailed the activities of conglomerates including Dalian Wanda and HNA. Such consolidation may spur blowback from the U.S. and other countries. President Donald Trump already brands China a strategic rival, slapping tariffs on its goods and criticizing industrial policy for subsidizing state enterprises in a push to dominate tech sectors.

“The idea, promoted during the Zhu Rongji era, that state enterprises should be independent, profit-seeking companies that just happen to be owned by the state has essentially been abandoned,” said Batson, referring to the former premier. “The government thinks that SOEs are there to serve its overall strategic goals.”

Words fail.

• Canadians Just Set A New Record For Borrowing Against Their Homes (BD)

Canadian real estate related debt tapering? That would be ridiculous! Filings obtained from the Office of the Superintendent of Financial Institutions (OSFI) show, after a brief decline in January, the balance of loans secured by residential real estate hit a new high in February. More interesting is the segment of loans being used for personal consumption, is growing at the fastest pace in years. Loans secured by residential real estate are exactly what they sound like. They’re loans that you pledge your home equity in order to secure. The most common example would be a Home Equity Line of Credit (HELOC). You know, the same type of loan the Canadian government is discretely paying to teach you how to borrow. There’s also more productive uses, like when you start a new business and need to use your home as security – just in case you aren’t able to pay your loan shark bank back.

Either way, debt is debt. The big difference to note is a loan secured for personal reasons, is considered non-productive. The borrower isn’t expected to take a calculated risk, in order to earn more money. A business loan is considered productive, since it might generate more money. This isn’t just our opinion, banks actually classify these loans separately in their filings. Today we’ll go through the aggregate of these numbers, then break them down segment by segment. Loans secured by real estate hit a new all-time high in February. The total balance of loans secured with real estate racked up to $283.65 billion, up 0.77% from the month before. This represents a 7.79% increase compared to the same month last year. It almost looked like Canadians were reeling that debt in January, with a tiny decline. Instead it made a monster move, more than making up the ground lost the month before.

A media war.

• MSM Is Frantically Attacking Dissenting Syria Narratives (CJ)

It’s getting too blatantly obvious, like a stranger coming up to you and talking about climate change while openly masturbating; what he is doing would eclipse interest in whatever he is saying. The frenetic publication of hit pieces against anyone who fails to fall in line with the establishment Syria narrative is fast becoming the real story here. Many of these recent hit pieces are coming out of the UK, which is interesting given the way a BBC reporter recently admonished her interviewee for questioning the official story about the alleged Douma chemical attacks because his words could hurt the “information war” effort against Russia.

If this view is widespread among British journalists (and recent headlines by the Times, the Independent and the Telegraph suggest that it may be), this means we’re looking at an environment wherein reporters aren’t even pretending it’s their job to be truthful, tell all sides of a story and hold power to account, but rather to manufacture support for escalations against Russia and undermine anyone who resists. Today yet another mainstream smear piece has been published about Vanessa Beeley, an investigative journalist who has done extensive work on the ground in Syria, which the UK’s Huffington Post branch hilariously titled “How An Obscure British Blogger Became Russia’s Key Witness Against The White Helmets”.

Its author, senior Huffpo editor Chris York, doesn’t explain how we’re meant to see an investigative journalist practicing the definition of investigative journalism on the ground in a war-torn nation as “an obscure blogger”, but he has said that he has two more such articles on the way. Who do these people think they’re kidding? Are we truly meant to believe that people expressing skepticism about the authenticity of a “civil defense group” in a distant Middle Eastern country is suddenly the most dangerous thing in the world?

Are we really meant to think it’s normal for all these mass media corporations to suddenly start ferociously attacking anyone who expresses skepticism about the military agendas of western forces that have an extensive and well-documented history of using lies, propaganda and false flags to manufacture support for military agendas? Are we really meant to believe that Syria, a nation for which the US and UK have been plotting regime change for many years, is just now in sore need of humanitarian regime change? And that anyone who says otherwise just loves Bashar al-Assad, Vladimir Putin and dead babies?

I asked before: did the DNC think this through?

• WikiLeaks To Countersue Democrats; “Discovery Is Going To Be Amazing Fun” (ZH)

WikiLeaks has hit back against a multimillion-dollar lawsuit filed by the Democratic National Committee (DNC), announcing over Twitter that they are seeking donations for a counter-suit, noting “We’ve never lost a publishing case and discovery is going to be amazing fun,” along with a link which people can use to donate to the organization. Discovery is a pre-trial process by which one party can obtain evidence from the opposing party relevant to the case. The Trump campaign, which is also named in the DNC filing, says the lawsuit will provide an opportunity to “explore the DNC’s now-secret records.”

Hours after the Washington Post broke the news of the lawsuit, President Trump tweeted “Just heard the Campaign was sued by the Obstructionist Democrats. This can be good news in that we will now counter for the DNC server that they refused to give to the FBI,” referring to the DNC email breach. Trump also mentioned “the Debbie Wasserman Schultz Servers and Documents held by the Pakistani mystery man and Clinton Emails.” In a statement which goes into the various items they’ll be pursuing in court, the Trump campaign said the following: “While this lawsuit is frivolous and will be dismissed, if the case goes forward, the DNC has created an opportunity for us to take aggressive discovery into their claims of ‘damages’ and uncover their acts of corruption for the American people..”

If this lawsuit proceeds, the Trump Campaign will be prepared to leverage the discovery process and explore the DNC’s now-secret records about the actual corruption they perpetrated to influence the outcome of the 2016 presidential election. Everything will be on the table, including: • How the DNC contributed to the fake dossier, using Fusion GPS along with the Clinton Campaign as the basis for the launch of a phony investigation. • Why the FBI was never allowed access to the DNC servers in the course of their investigation into the Clinton e-mail scandal. • How the DNC conspired to hand Hillary Clinton the nomination over Bernie Sanders. • How officials at the highest levels of the DNC colluded with the news media to influence the outcome of the DNC nomination. • Management decisions by Debbie Wasserman Schultz, Donna Brazile, Tom Perez, and John Podesta; their e-mails, personnel decisions, budgets, opposition research, and more.

It’s much worse than the title suggests.

• One In Eight Bird Species Is Threatened With Extinction (G.)

One in eight bird species is threatened with global extinction, and once widespread creatures such as the puffin, snowy owl and turtle dove are plummeting towards oblivion, according to the definitive study of global bird populations. The State of the World’s Birds, a five-year compendium of population data from the best-studied group of animals on the planet, reveals a biodiversity crisis driven by the expansion and intensification of agriculture. In all, 74% of 1,469 globally threatened birds are affected primarily by farming. Logging, invasive species and hunting are the other main threats.

“Each time we undertake this assessment we see slightly more species at risk of extinction – the situation is deteriorating and the trends are intensifying,” said Tris Allinson, senior global science officer for BirdLife International, which produced the report. “The species at risk of extinction were once on mountaintops or remote islands, such as the pink pigeon in Mauritius. Now we’re seeing once widespread and familiar species – European turtle doves, Atlantic puffins and kittiwakes – under threat of global extinction.” According to the report, at least 40% of bird species worldwide are in decline, with researchers blaming human activity for the losses.

After farming, logging is a key factor in declines of 50% of the most globally endangered species, followed by invasive species (39%), hunting and trapping (35%), climate change (33%) and residential and commercial development (28%). The illegal killing of birds – usually because of traditional hunting – results in an estimated 12 to 38 million individual birds dying or being taken each year in the Mediterranean region alone

The Science of a Vanishing Planet

Mar 262018

March 26, 2018 Posted by Raúl Ilargi Meijer at 1:46 pm Finance Tagged with: Bayer, biodiversity, birds, chemicals, extinction, food, GMOs, insects, Monsanto, pesticides, Precautionary Principle, science, Taleb 11 Responses »

Dorothea Lange Gravestone St. George, Utah 1953

There are numerous ways to define the Precautionary Principle. It’s something we can all intuitively understand, but which many parties seek ways to confuse since it has the potential to stand in the way of profits. Still, in the end it should all be about proof, not profits. That is exactly what the Principle addresses. Because if you first need to deliver scientific proof that some action or product can be harmful to mankind and/or the natural world, you run the risk of inflicting irreversible damage before that proof can be delivered.

In one of many definitions, the 1998 Wingspread Statement on the Precautionary Principle says: “When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically.”

Needless to say, that doesn’t easily fly in our age of science and money. Cigarette makers, car manufacturers and oil companies, just to name a few among a huge number of industries, are all literally making a killing while the Precautionary Principle is being ignored. Even as it is being cited in many international treaties. Lip service “R” us. Are these industries to blame when they sell us our products, or are we for buying them? That’s where governments must come in to educate us about risks. Which they obviously do not.

Nassim Nicholas Taleb -of Black Swan and Antifragile fame- has made the case, in his usual strong fashion, for applying the Precautionary Principle when it comes to GMOs. His argument is that allowing genetically modified organisms in our eco- and foodsystems carries unknown risks that we have no way of overseeing, and that these risks may cause irreversible damage to the very systems mankind relies on for survival.

Taleb is not popular among GMO producers. Who all insist there is no evidence that their products cause harm. But that is not the point. The Precautionary Principle, if it is to be applied, must turn the burden of proof on its head. The absence of evidence is not evidence of absence. Monsanto et al must prove that their products do no harm. They can not. Which is why they have, and need, huge lobbying, PR and legal departments.

But I didn’t want to talk about GMOs today, and not about Precautionary Principle alone. I wanted to talk about this: Paragraph 2 of article 191 of the European Union’s Lisbon Treaty (2009) states that:

“Union policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Union. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay.”

In other words, the EU has committed itself to the Precautionary Principle. Well, on paper, that is. However, then we get to a whole series of reports on wildlife in Europe, and they indicate all sorts of things, but not that Brussels cares even one bit about adhering to the Precautionary Principle, either for its people or its living environment. One voice below calls it a “state of denial”, but I would use some other choice words. Let’s start with the Guardian this morning, because they have an interesting perspective:

Most Britons remain blithely unaware that since the Beatles broke up, we have wiped out half our wildlife…

…since the fall of the Berlin Wall in 1989, the number of flying insects on nature reserves in Germany had dropped by at least 76% – more than three-quarters…

Things like ‘since you were born’, ‘since man landed on the moon’, ‘since the wall came down’ or ‘since 9/11’ may be a bit clearer than 100 years, or 25 years. Moreover, I read somewhere that since Columbus landed in 1492, America has lost on third of all its biodiversity, but that doesn’t yet explain the rate of acceleration that is taking place.

In October last year, the Guardian had this:

Three-Quarters Of Flying Insects In Germany Have Vanished In 25 Years

The abundance of flying insects has plunged by three-quarters over the past 25 years , according to a new study that has shocked scientists. Insects are an integral part of life on Earth as both pollinators and prey for other wildlife and it was known that some species such as butterflies were declining. But the newly revealed scale of the losses to all insects has prompted warnings that the world is “on course for ecological Armageddon”, with profound impacts on human society.

The new data was gathered in nature reserves across Germany but has implications for all landscapes dominated by agriculture, the researchers said. The cause of the huge decline is as yet unclear, although the destruction of wild areas and widespread use of pesticides are the most likely factors and climate change may play a role. The scientists were able to rule out weather and changes to landscape in the reserves as causes, but data on pesticide levels has not been collected.

“The fact that the number of flying insects is decreasing at such a high rate in such a large area is an alarming discovery,” said Hans de Kroon, at Radboud University in the Netherlands and who led the new research. “Insects make up about two-thirds of all life on Earth [but] there has been some kind of horrific decline,” said Prof Dave Goulson of Sussex University, UK, and part of the team behind the new study. “We appear to be making vast tracts of land inhospitable to most forms of life , and are currently on course for ecological Armageddon. If we lose the insects then everything is going to collapse.”

[..] When the total weight of the insects in each sample was measured a startling decline was revealed. The annual average fell by 76% over the 27 year period, but the fall was even higher – 82% – in summer, when insect numbers reach their peak. Previous reports of insect declines have been limited to particular insects, such European grassland butterflies, which have fallen by 50% in recent decades. But the new research captured all flying insects, including wasps and flies which are rarely studied, making it a much stronger indicator of decline.

Then last week from AFP:

France’s Bird Population Collapses As Pesticides Kill Off Insects

Bird populations across the French countryside have fallen by a third over the last decade and a half, researchers have said. Dozens of species have seen their numbers decline, in some cases by two-thirds, the scientists said in a pair of studies – one national in scope and the other covering a large agricultural region in central France. “The situation is catastrophic,” said Benoit Fontaine, a conservation biologist at France’s National Museum of Natural History and co-author of one of the studies. “Our countryside is in the process of becoming a veritable desert,” he said in a communique released by the National Centre for Scientific Research (CNRS), which also contributed to the findings.

The common white throat, the ortolan bunting, the Eurasian skylark and other once-ubiquitous species have all fallen off by at least a third, according a detailed, annual census initiated at the start of the century. A migratory song bird, the meadow pipit, has declined by nearly 70%. The museum described the pace and extent of the wipe-out as “a level approaching an ecological catastrophe”. The primary culprit, researchers speculate, is the intensive use of pesticides on vast tracts of monoculture crops, especially wheat and corn. The problem is not that birds are being poisoned, but that the insects on which they depend for food have disappeared.

“There are hardly any insects left, that’s the number one problem,” said Vincent Bretagnolle, a CNRS ecologist at the Centre for Biological Studies in Chize. Recent research, he noted, has uncovered similar trends across Europe, estimating that flying insects have declined by 80%, and bird populations has dropped by more than 400m in 30 years. Despite a government plan to cut pesticide use in half by 2020, sales in France have climbed steadily, reaching more than 75,000 tonnes of active ingredient in 2014, according to EU figures. “What is really alarming, is that all the birds in an agricultural setting are declining at the same speed, even ’generalist’ birds,” which also thrive in other settings such as wooded areas, said Bretagnolle.

Not that it’s just Europe, mind you. Still ‘ove’ this one from Gretchen Vogel in ScienceMag, about a year ago, on a phenomenon most of you stateside will have noticed too:

Where Have All The Insects Gone?

Entomologists call it the windshield phenomenon. “If you talk to people, they have a gut feeling. They remember how insects used to smash on your windscreen,” says Wolfgang Wägele, director of the Leibniz Institute for Animal Biodiversity in Bonn, Germany. Today, drivers spend less time scraping and scrubbing. “I’m a very data-driven person,” says Scott Black, executive director of the Xerces Society for Invertebrate Conservation in Portland, Oregon. “But it is a visceral reaction when you realize you don’t see that mess anymore.”

Some people argue that cars today are more aerodynamic and therefore less deadly to insects. But Black says his pride and joy as a teenager in Nebraska was his 1969 Ford Mustang Mach 1—with some pretty sleek lines. “I used to have to wash my car all the time. It was always covered with insects.” Lately, Martin Sorg, an entomologist here, has seen the opposite: “I drive a Land Rover, with the aerodynamics of a refrigerator, and these days it stays clean.”

Though observations about splattered bugs aren’t scientific, few reliable data exist on the fate of important insect species. Scientists have tracked alarming declines in domesticated honey bees, monarch butterflies, and lightning bugs. But few have paid attention to the moths, hover flies, beetles, and countless other insects that buzz and flitter through the warm months. “We have a pretty good track record of ignoring most noncharismatic species,” which most insects are, says Joe Nocera, an ecologist at the University of New Brunswick in Canada.

After all those numbers, and before they get worse -which they will, it’s already baked in the cake-, you would expect the EU to remember the Precautionary Principle all its member nations signed on to for the Lisbon Treaty. You would expect wrong. Instead Brussels vows to continue with the exact same policies that have led to its mind-boggling biodiversity losses.

EU In ‘State Of Denial’ Over Destructive Impact Of Farming On Wildlife

Europe’s crisis of collapsing bird and insect numbers will worsen further over the next decade because the EU is in a “state of denial” over destructive farming practices, environmental groups are warning. European agriculture ministers are pushing for a new common agriculture policy (CAP) from 2021 to 2028 which maintains generous subsidies for big farmers and ineffectual or even “fake” environmental or “greening” measures, they say. In a week when two new studies revealed drastic declines in French farmland birds – a pattern repeated across Europe – the EU presidency claimed that the CAP continued to provide safe food while defending farmers and “protecting the environment”.

“The whole system is in a state of denial,” said Ariel Brunner, head of policy at Birdlife Europe. “Most agriculture ministers across Europe are just pushing for business as usual. The message is, keep the subsidies flowing.” Farm subsidies devour 38% of the EU budget and 80% of the subsidies go to just 20% of farmers , via “basic payments” which hand European landowners £39bn each year.

Because these payments are simply related to land area, big farmers receive more, can invest in more efficient food production – removing hedgerows to enlarge fields for instance – and put smaller, less intensive farmers out of business. France lost a quarter of its farm labourers in the first decade of the 21st century, while its average farm size continues to rise.

A smaller portion – £14.22bn annually – of EU farm subsidies support “greening” measures but basic payment rules work against wildlife-friendly farming: in Britain, farmers can’t receive basic payments for land featuring ponds, wide hedges, salt marsh or regenerating woodland. Signals from within the EU suggest that the next decade’s CAP [..] will continue to pay farmers a no-strings subsidy, while cash for “greening”, or wildlife-friendly farming, may even be cut. Birdlife Europe said the “greening” was mostly “fake environmental spending” and wildlife-friendly measures had been “shredded” by “loophole upon loophole” introduced by member states.

[..] This week studies revealed that the abundance of farmland birds in France had fallen by a third in 15 years – with population falls intensifying in the last two years. It’s a pattern repeated across Europe: farmland bird abundance in 28 European countries has fallen by 55% over three decades, according to the European Bird Census Council. Conservationists say it’s indicative of a wider crisis – particularly the decimation of insect life linked to neonicotinoid pesticides.

20% of farmers work 80% of the land in Europe. That is used as an argument to single them out to pay them billions in subsidies. But it simply means these 20% use the most detrimental farming methods, most pesticides, most chemicals. The subsidies policy guarantees further deterioration of an already disastrous situation. The polluter doesn’t pay, as the Lisbon Treaty demands, but the polluter gets paid.

And even that is apparently still not enough for the fast growing bureaucracy. In a move perhaps more characteristic of the EU than anything else, it approved something last week that a million people had vehemently protested: the Bayer-Monsanto merger. The European parliament may have thrown out all Monsanto lobbyists recently, and voted to ban Roundup, but the die has been cast.

A million citizens can protest in writing, many millions in France and Germany and elsewhere may do the same on the street, none of it matters. The people who brought you WWII nerve gases and Agent Orange can now come together to take over your food supply.

EU Approves Buyout Of Monsanto By German Chemical Firm Bayer

German conglomerate Bayer won EU antitrust approval on Wednesday for its $62.5bn (£44.5bn) buy of US peer Monsanto, the latest in a trio of mega mergers that will reshape the agrochemicals industry. The tie-up is set to create a company with control of more than a quarter of the world’s seed and pesticides market. Driven by shifting weather patterns, competition in grain exports and a faltering global farm economy, Dow and Dupont, and ChemChina and Syngenta had earlier led a wave of consolidation in the sector. Both deals secured EU approval only after the companies offered substantial asset sales to boost rivals.

Environmental and farming groups have opposed all three deals, worried about their power and their advantage in digital farming data, which can tell farmers how and when to till, sow, spray, fertilise and pick crops based on algorithms. The European Commission said Bayer addressed its concerns with its offer to sell a swathe of assets to boost rival BASF [..] “Our decision ensures that there will be effective competition and innovation in seeds, pesticides and digital agriculture markets also after this merger,” European Competition Commissioner Margrethe Vestager said in a statement. “In particular, we have made sure that the number of global players actively competing in these markets stays the same.”

[..] Vestager said the Commission, which received more than a million petitions concerning the deal, had been thorough by examining more than 2,000 different product markets and 2.7 million internal documents to produce a 1,285-page ruling. [..] Online campaigns group Avaaz criticised the EU approval. “This is a marriage made in hell. The Commission ignored a million people who called on them to block this deal, and caved in to lobbying to create a mega-corporation which will dominate our food supply,” Avaaz legal director Nick Flynn said.

Dow-Dupont, ChemChina and Bayer Monsanto have a lot more political influence than a million Europeans, or ten million Americans. They have even convinced numerous, if not most, people that without their products the world would starve. That their chemicals are needed to feed a growing human population. Farming based on algorythms.

They are not ‘seed companies’. They are ‘seeds-that-need-our-chemicals-to-grow’ companies. And they are out to conquer the entire world. A 100-times worse version of Facebook. And our governments subsidize the use of their products. As we not-so-slowly see our living world be massacred by those products.

We don’t know how bad GMOs will turn out to be. Which is in itself a very good reason to ban them. Since once they spread, they can’t be stopped anymore. Then the chemical boys will own all of our food. But we do know how bad the pesticides and other chemicals they produce are. And we’re not even banning those. We just eat all that sh*t and shut up.

It’s a failure to understand what science is: that you must proof harm first before banning stuff. The only real science is the one that has adopted the Precautionary Principle. Because science is supposed to be smart, and there’s nothing smart about destroying your own world. Because science should never be used to hurt people or nature. Science can only be good if it benefits us. Not our wallets, but our heads and hearts and forests, and our children. Do no harm.

Yeah, I know, who am I fooling, right?

Debt Rattle March 24 2018

Mar 242018

March 24, 2018 Posted by Raúl Ilargi Meijer at 10:07 am Finance Tagged with: cash handout, China, extinction, Facebook, farming, Fed, high street, imports, subsidies, tariffs, wildlife 9 Responses »

Pablo Picasso Don Quixote 1955

• EU In ‘State Of Denial’ Over Destructive Impact Of Farming On Wildlife (G.)

• End the Fed. Are You Nuts? (Claire Connelly)

• Stocks Suffer Biggest Weekly Drop In More Than 2 Years (BI)

• The Stuff The US Imports From China That Causes A Huge Trade Deficit (MW)

• Unspooling (Kunstler)

• The Rise of the Trembling Hands (David Stockman)

• 2.8 Million Hongkongers To Get Cash Handout Of Up To HK$4,000 Each (SCMP)

• Seven Days That Shattered Facebook’s Facade (G.)

• UK Parties Spend Big On Facebook (G.)

• Death Of The High Street (Ind.)

Denial my ass. What’s happening is the EU spends billions in taxpayers money to subsidize the complete demise of their ecosystems as well as their food supplies. The taxpayers may be in denial, but Brussels is not. The Bayer/Monsanto decision is not some stand-alone story.

• EU In ‘State Of Denial’ Over Destructive Impact Of Farming On Wildlife (G.)

Europe’s crisis of collapsing bird and insect numbers will worsen further over the next decade because the EU is in a “state of denial” over destructive farming practices, environmental groups are warning. European agriculture ministers are pushing for a new common agriculture policy (CAP) from 2021 to 2028 which maintains generous subsidies for big farmers and ineffectual or even “fake” environmental or “greening” measures, they say. In a week when two new studies revealed drastic declines in French farmland birds – a pattern repeated across Europe – the EU presidency claimed that the CAP continued to provide safe food while defending farmers and “protecting the environment”.

“The whole system is in a state of denial,” said Ariel Brunner, head of policy at Birdlife Europe. “Most agriculture ministers across Europe are just pushing for business as usual. The message is, keep the subsidies flowing.” Farm subsidies devour 38% of the EU budget and 80% of the subsidies go to just 20% of farmers, via “basic payments” which hand European landowners £39bn each year. Because these payments are simply related to land area, big farmers receive more, can invest in more efficient food production – removing hedgerows to enlarge fields for instance – and put smaller, less intensive farmers out of business. France lost a quarter of its farm labourers in the first decade of the 21st century, while its average farm size continues to rise.

A smaller portion – £14.22bn annually – of EU farm subsidies support “greening” measures but basic payment rules work against wildlife-friendly farming: in Britain, farmers can’t receive basic payments for land featuring ponds, wide hedges, salt marsh or regenerating woodland. Signals from within the EU suggest that the next decade’s CAP – which will be decided alongside the EU budget by 2019 – will continue to pay farmers a no-strings subsidy, while cash for “greening”, or wildlife-friendly farming, may even be cut. Birdlife Europe said the “greening” was mostly “fake environmental spending” and wildlife-friendly measures had been “shredded” by “loophole upon loophole” introduced by member states.

[..] This week studies revealed that the abundance of farmland birds in France had fallen by a third in 15 years – with population falls intensifying in the last two years. It’s a pattern repeated across Europe: farmland bird abundance in 28 European countries has fallen by 55% over three decades, according to the European Bird Census Council. Conservationists say it’s indicative of a wider crisis – particularly the decimation of insect life linked to neonicotinoid pesticides.

Not a general opinion.

• End the Fed. Are You Nuts? (Claire Connelly)

We often see comments on this website from people who want to ‘end the Fed’ because they think it would address the rampant corruption and collusion of governments, central banks and the private sector. In reality, ending the Fed – or any one of the central banks outside of the European Union – would simply give more power to the banks and wealthy elites whose relationships with governments and central banks are already inappropriate. Abolishing central banks would simply formalise this arrangement, undermining democracy and removing the ability of governments to respond to changes in the domestic and global economy.

The claim that banks are privately owned is factually incorrect. With the exception of the EU which began life as an industrial cartel, created and controlled by Europe’s major heavy industries (coal, steel, car manufacturers and farmers), central banks are created by and belong to federal governments. Even the ECB is owned by the central banks of EU member countries, which in turn are owned by their governments, even if most do not have the right to issue their own currencies. The US Federal Reserve was created by Congress, and its chairman is appointed by the President; the Treasury receives nearly all its profits. The same applies to the Bank of England, the Reserve Bank of Australia, Bank of Canada etc which were created by their respective Parliaments.

What do advocates of ‘ending the Fed’ think will happen if the US got rid of central banking altogether? What currency would it use exactly? The only possibility would be to replace the Fed with another, private ‘Fed’ in which case central banks would go from being co-opted by the private sector, to being formally controlled by it. Ending the Fed would make central banks the property of the private sector, which, ironically, some people believe is already the case. So it’s a little bizarre that they think demolishing central banks would somehow address corruption and malfeasance. One need only look at what happened to Greece to understand what happens when a government gives up its central bank, and the right to issue its own currency. Ending central banking is the nail in the coffin of democracy. It is giving capitalism exactly what it wants: the complete takeover of the state by the market.

What happens inside bubbles.

• Stocks Suffer Biggest Weekly Drop In More Than 2 Years (BI)

US stocks sank in trading on Friday afternoon, pushing the S&P 500 to its biggest weekly decline in two years amid concerns about US trade policy and retaliation from China. The Dow Jones industrial average fell 360 points, or 1.5%, to its lowest level since November 22. The S&P 500 fell 56 points, or 2.13%, while the Nasdaq fell 148 points, or 2.23%. On Thursday, China announced planned to impose reciprocal tariffs on 128 US products that had an import value of about $3 billion last year. US President Donald Trump had earlier announced new tariffs on $50 billion worth of Chinese goods, with the aim of reducing the $375 billion trade deficit the US has with China.

The financials sector was the biggest loser among the 11 on the S&P 500. On the Dow, Boeing and Nike were the only stocks in positive territory. The drop on Friday pushed the S&P 500 9% below its peak in late January, just short of the 10% threshold at which the index enters a correction. Meanwhile, Dropbox soared during its trading debut. Shares of the cloud-computing company gained by as much as 44% in trading amid the broader market’s weakness. Treasurys rose slightly, with the 10-year yield up by less than 1 basis point, at 2.823%.

The US will want to halt the selling off of technology.

• The Stuff The US Imports From China That Causes A Huge Trade Deficit (MW)

President Donald Trump intends to apply tariffs on Chinese goods worth up to $60 billion in an effort to slash the huge U.S. trade deficit with China and protect sensitive technologies. It won’t be easy. It might even be impossible. The U.S. has run large deficits with China for years and in some cases no longer produces certain goods such as consumer electronics that are popular with Americans. In 2017, the U.S. posted a $375.2 billion deficit in goods with China. Most glaring is the huge deficit in computers and electronics, but the U.S. is a net importer from China in most market segments except for agriculture. China has been a big buyer of American-grown soybeans and other crops. Planes made by BA also are a product in demand in China.

Little by little, the pieces fall together.

• Unspooling (Kunstler)

With spring, things come unstuck; an unspooling has begun. The turnaround at the FBI and Department of Justice has been so swift that even The New York Times has shut up about collusion with Russia — at the same time omitting to report what appears to have been a wholly politicized FBI upper echelon intruding on the 2016 election campaign, and then laboring stealthily to un-do the election result.

The ominous silence enveloping the DOJ the week after Andrew McCabe’s firing — and before the release of the FBI Inspector General’s report — suggests to me that a grand jury is about to convene and indictments are in process, not necessarily from Special Prosecutor Robert Mueller’s office. The evidence already publicly-aired about FBI machinations and interventions on behalf of Hillary Clinton and against Donald Trump looks bad from any angle, and the wonder was that it took so long for anyone at the agency to answer for it.

McCabe is gone from office and, apparently hung out to dry on the recommendation of his own colleagues. Do not think for a moment that he will just ride off into the sunset. Meanwhile, Peter Strzok, Lisa Page, Bruce Ohr, have been sent to the FBI study hall pending some other shoes dropping in a grand jury room. James Comey is out hustling a book he slapped together to manage the optics of his own legal predicament (evidently, lying to a congressional committee). And way out in orbit beyond the gravitation of the FBI, lurk those two other scoundrels, John Brennan, former head of the CIA (now a CNN blabbermouth), and James Clapper, former Director of National Intelligence, a new and redundant post in the Deep State’s intel matrix (and ditto a CNN blabbermouth). Brennan especially has been provoked to issue blunt Twitter threats against Mr. Trump, suggesting he might be entering a legal squeeze himself.

None of these public servants have cut a plea bargain yet, as far as is publicly known, but they are all, for sure, in a lot of trouble. Culpability may not stop with them. Tendrils of evidence point to a coordinated campaign that included the Obama White House and the Democratic National Committee starring Hillary Clinton. Robert Mueller even comes into the picture both at the Uranium One end of the story and the other end concerning the activities of his old friend, Mr. Comey. Most tellingly of all, Attorney General Jeff Sessions was not shoved out of office but remains shrouded in silence and mystery as this melodrama plays out, tick, tick, tick.

The old Washington insider doesn’t mince words.

• The Rise of the Trembling Hands (David Stockman)

We call it State-Wreck and its been heading this way for a long-time. But the Donald is the coup d’ grace in flesh and blood. He will soon have the Imperial City tied in knots, and that’s even if he doesn’t fire Robert Mueller, which most surely he should and might. Either way, there is a massive partisan blood-letting coming and the ordinarily trans-partisan Deep State will be right in the middle of the brawl. That’s because partisan Democratic hacks – led by the detestable former CIA director John Brennan – got way beyond their skis, and baldly high-jacked the tools of the Deep State in a desperate effort to prevent the election and inauguration of Donald Trump. But the unveiling of what lies in its vasty deep is now beyond recall.

The very real attempt by the Obama/Clinton leadership of the CIA/FBI/NSC/NSA/DNI/State/Homeland Security complex to meddle in the 2016 election against the Donald will all come out – even as the Dems and their legal trolls on Mueller’s witch-hunting squad become ever more shrill in their McCarthyite hysteria about the Russians. Moreover, the coming quasi-civil war will potentially bring both indictments of Obama’s election meddlers and a counter-reaction from a Mueller based campaign to oust the Donald. Indeed, what portends in the months ahead is more incendiary than anything to rock the Imperial City during the last century, at least. But here’s the thing. This is not happening in a splendid vacuum with no import for the other end of the Acela Corridor.

In fact, the entire state-driven economic and financial fantasy that has been building for more than 30 years is now squarely in harm’s way. The former always depended upon Washington based stimulus, subventions, bailouts and booty. But now having attained an asymptotic high, the Great Bubble is stranded with no Washington fixers to keep it going; instead, it is fixing to slide into a long night of deflation, disorder and decay. That is to say, we printed 2870 on the S&P 500, $19.7 trillion of GDP and $97 trillion of household net worth, but those stats weren’t the embodiment of sustainable capitalist prosperity; they were the fruit of a $68 trillion national LBO, a central bank-driven financial asset bubble that has no historical antecedent and the rise of an Imperial Deep State in Washington that is a mortal threat to both democracy and national solvency.

“..an effort to try to respond to the needs of the community in a proactive manner.”

• 2.8 Million Hongkongers To Get Cash Handout Of Up To HK$4,000 Each (SCMP)

Over one-third of Hongkongers, or 2.8 million people who did not benefit from the budget announced last month, will get a cash handout of up to HK$4,000 (US$510) each from the government, Financial Secretary Paul Chan Mo-po said on Friday. Chan’s announcement confirmed reports – including one by the Post – that the government would share the city’s HK$138 billion surplus more broadly. While it faced intense political and public pressure to do more for the needy, the government’s decision to fork out an extra HK$11 billion in handouts was not a U-turn, Chief Executive Carrie Lam Cheng Yuet-ngor insisted.

“First of all, I wouldn’t say that we are bowing to pressure, and secondly, we have not said we would not do something which we describe as a ‘share and care’ programme,” she said. Chan said he had heard the community “loud and clear”. “I think as government officials we need to have the capacity to step back and reflect the various views expressed and see how we may be able to better serve our people,” he explained. “So this scheme … is an effort to try to respond to the needs of the community in a proactive manner.” The money will be given to Hong Kong residents aged 18 years or above (as of December 31 this year) who do not own property, do not receive any government allowances, and will not pay income tax for the financial year ending next week.

The Guardian is gradually shifting its story away from Cambridge Analytica. A bit late?

• Seven Days That Shattered Facebook’s Facade (G.)

There are thousands of other developers, including the makers of dating app Tinder, games such as FarmVille as well as consultants to Barack Obama’s 2012 presidential campaign, who slurped huge quantities of data about users and their friends – all thanks to Facebook’s overly permissive “Graph API”, the interface through which third parties could interact with Facebook’s platform. Facebook opened up in order to attract app developers to join Facebook’s ecosystem at a time when the company was playing catch-up in shifting its business from desktops to people’s smartphones. It was a symbiotic relationship that was critical to Facebook’s growth.

“They wanted to push as much of the conversation, ad revenue and digital activity as possible and made it extremely friendly to app developers,” said Jeff Hauser, of the Center for Economic and Policy Research. “Now they are complaining that the developers abused them. They wanted that. They were encouraging it. They may now regret it but they knowingly unleashed the forces that have led to this lack of trust and loss of privacy.” The terms were updated in April 2014 to restrict the data new developers could get hold of, including to people’s friends’ data, but only after four years of access to the Facebook firehose. Companies that plugged inbefore April 2015 had another year before access was restricted.

“There are all sorts of companies that are in possession of terabytes of information from before 2015,” said Jeff Hauser of the Center for Economic Policy and Research. “Facebook’s practices don’t bear up to close, informed scrutiny nearly as well as they look from the 30,000ft view, which is how people had been viewing Facebook previously.” [..] “This is the biggest issue I’ve ever seen any technology company face in my time,” said Roger McNamee, Zuckerberg’s former mentor. “It’s not like tech hasn’t had a lot of scandals,” he said, mentioning the Theranos fraud and MiniScribe packing actual bricks into boxes instead of hard drives. “But no one else has played a role in undermining democracy or the persecution of monitories before. This is a whole new ball game in the tech world and it’s really, really horrible.”

Isn’t it wonderful? When are people going to demand they stop doing this? But no political party can resist the temptation of influencing voters behavior, by whatever means.

• UK Parties Spend Big On Facebook (G.)

Figures released this week by the Electoral Commission are the simplest way to demonstrate the growing influence of Facebook on British politics. Political parties nationally spent about £1.3m on Facebook during the 2015 general election campaign; two years later the figure soared to £3.2m. In each election it was the Conservatives that spent the most, with decidedly mixed results. For David Cameron’s successful re-election in 2015, the party spent £1.2m; that rose to £2.1m in 2017, but it was far less help to Theresa May. Sam Jeffers, the co-founder of Who Targets Me, a body that tries to monitor political Facebook advertising, says the difference stems from the fact that the Conservatives had a better overall strategy in 2015.

“In 2015 they targeted Lib Dem seats in the south-west; in 2017 they targeted Labour seats in London boroughs, spending money on seats they thought they would win but didn’t,” he says. Nevertheless, the Conservative success was so striking in 2015 that every other political party and campaign group felt it had to follow suit. The idea of marketing on Facebook was brought to the UK by the US political consultant Jim Messina, the campaign manager for Barack Obama in 2012, who Tory officials like to say boasted he had “1,000 pieces of data on every voter in the UK”.

It was a big change on the traditional model of supplementing canvass returns with broad demographic data supplied by Experian’s Mosaic, which divides people into groups such as “metro high flyers”, “classic grandparents” and “disconnected youth” – the kind of data used by all the main parties to help deliver targeted mailshots. The idea rapidly took hold – and was arguably tailor-made for the EU referendum in 2016. One of the reasons why the Conservatives made heavy use of Facebook marketing was because its canvassing operation is far weaker than Labour’s, forcing it to try to identify potential voters using technology.

All sorts of theories and explanations; just admitting that people are dead broke remains a big taboo.

• Death Of The High Street (Ind.)

On Friday, Next – broadly considered a bellwether of the UK fashion retail market – reported a punishing slump in profits, attributing the fall to a weak clothing market coinciding with “self-inflicted product ranging errors and omissions”. “In many ways,” Next said, “2017 was the most challenging year we have faced for 25 years.” Earlier in the week data from the Office for National Statistics showed that retail sales volumes had picked up by 0.8 per cent in February – which was significantly ahead of analyst expectations – but forecasters and economists are pessimistic. Volumes contracted in January, meaning that British retailers this year suffered their worst start to any year since 2013 and the headwinds are still raging.

Commenting on the latest data, economists Sreekala Kochugovindan and Fabrice Montagne at investment bank Barclays said that despite some relief in February, the rebound was not enough to offset the “Christmas drag”, when consumers largely shunned the high street in favour of the internet. And HSBC economist Elizabeth Martins dubbed February’s reading “the bounce before the beast”. She warned that figures next month would likely be additionally burdened by adverse weather conditions that disrupted transport links and kept shoppers from leaving their homes during the early part of March. “The data are better than expected, but considering they do not take into account the effects of the snow at all, they are not brilliant,” she said. “They reflect a small increase after two months of falls, and still point to underlying weakness in household spending.”

The British Retail Consortium, the trade association representing the UK retail sector, has also warned that sales are likely to remain sluggish throughout the rest of the year – a prognosis that will particularly pain shops like Ali’s on Oxford Street that sell items considered non-essential, like clothes, furniture and electronics, and those with a with a large bricks-and-mortar presence. Sarah Garrett, a 51-year old self-employed company director who lives in Notting Hill, speaks for many when she says that she’s of the opinion that “the high street is now a thing of the past”. “Online is definitely where it is at. Maybe I am lazy, but I just prefer home deliveries [from the likes of] Amazon,” she says. “Who wants to lug heavy bags from the supermarket anyway?”

Debt Rattle March 23 2018

Mar 232018

March 23, 2018 Posted by Raúl Ilargi Meijer at 9:48 am Finance Tagged with: Bannon, collapse, extinction, Facebook, fishing nets, plastic, Russia, Superflux, tariffs, trade war, Trump 2 Responses »

Edvard Munch Spring 1889

• China Hits Back on Trump Tariffs as Europe Off the Hook for Now (BBG)

• Asian Stocks Plunge As Trump’s Trade War Heats Up (MW)

• Dow Jones Closes Down More Than 700 Points (Ind.)

• UK Politicians To Be Exempt From Data Crackdown (Ind.)

• Steve Bannon: ‘Facebook Data Is For Sale All Over The World’ (G.)

• Facebook Gave Data About 57 Billion Friendships To Academic (G.)

• The Digital Military Industrial Complex (NYBooks)

• EU Countries Prepare To Follow May And Expel Russian Diplomats (G.)

• Number Of British Children In Poverty Surges By 100,000 In A Year (Ind.)

• UK Rebel Bank Prints Its Own Notes And Buys Back People’s Debts (G.)

• Shaking the Superflux (Varoufakis)

• ‘Great Pacific Garbage Patch’ 16 Times Larger Than Previously Estimated (G.)

• Great Pacific Garbage Patch Is Rapidly Accumulating Plastic (Nature)

• ‘Collapse Of Civilisation Is A Near Certainty Within Decades’ – Ehrlich (G.)

• Mammoth Survey Of Nature’s Vital Signs Released (AFP)

All involved know a realignment was inevitable. This is simply the art of the deal.

• China Hits Back on Trump Tariffs as Europe Off the Hook for Now (BBG)

The trade conflict between China and the U.S. escalated, with Beijing announcing its first retaliation against metals levies hours after President Donald Trump outlined fresh tariffs on $50 billion of Chinese imports and pledged there’s more on the way. On Friday, China unveiled tariffs on $3 billion of U.S. imports in response to steel and aluminum duties ordered by Trump earlier this month. The White House then declared a temporary exemption for the European Union and other nations on those levies, making the focus on China clear. Though Beijing’s actions so far are seen by analysts as measured, there may be more to come.

Equity indexes from Tokyo to Shanghai tumbled more than 3% and U.S. stock futures fell, signaling a further retreat for the S&P 500 Index after it fell 2.5%, on risks a further escalation in trade tensions will undermine an unusual phase of synchronized global economic growth. Suppliers to Apple were among the hardest hit in Hong Kong and mainland markets on Friday, as investors focused on potential losers from the trade spat. “China’s response is surprisingly modest in light of the U.S. actions, suggesting there could be a good deal more to come,” said Stephen Roach, a former non-executive chairman for Morgan Stanley in Asia and now a senior fellow at Yale University. “As America’s third largest and most rapidly growing export market and as the largest foreign owner of Treasuries, China has considerably more leverage over the U.S. than Washington politicians care to admit.”

[..] The White House gave the European Union, Argentina, Australia, Brazil, Canada, Mexico, and South Korea, until May 1 to negotiate levies on steel and aluminum. The administration said the suspensions can be renewed or revoked then, “pending discussions of satisfactory long-term alternative means to address the threatened impairment to U.S. national security.” “This has been long in the making,” Trump said signing the intellectual-property order, adding that the tariffs could affect as much as $60 billion in goods. He told reporters, “This is the first of many.”

There’ll be a bit of to and fro, with big words and big numbers and big threats, and then everyone will get back to business.

• Asian Stocks Plunge As Trump’s Trade War Heats Up (MW)

The global equities swoon rolled over to Asia on Friday, where markets reacted negatively to the Trump administration’s trade broadside against China. Although the import tariffs had been telegraphed for weeks, Thursday’s package, covering about $60 billion in goods, sent investors running for havens. Bonds and gold prices rose and the Japanese yen hit its highest point against the U.S. dollar since Donald Trump won the presidential election. “Yes, the news was out for a while, but the actual action was a bit of a surprise to the market,” said Shinchiro Kadota, a senior forex and rates strategist at Barclays. “Maybe they thought it would be smaller, maybe later.”

China’s commerce ministry responded Friday morning and announced it would levy tariffs against $3 billion worth of U.S. goods including pork and recycled aluminum. Japan’s Nikkei Stock Average closed down 4.5% as the yen’s sharp gains on Thursday also pressured stocks lower. The yen rose further on Friday, hitting 16-month highs as the dollar went below ¥105. The WSJ Dollar Index fell 0.2% in Asia, extending the afternoon pullback seen during U.S. trading. Stocks in China also fell with the Shanghai Composite Index down 4%, the Shenzhen Composite Index down 5.3% and the small-cap-heavy Chinext Index down 5.1%.

Realignment.

• Dow Jones Closes Down More Than 700 Points (Ind.)

The Dow Jones Industrial Average closed down more than 700 points, with investors fearing that trade tensions will spike between the US and China after President Donald Trump unveiled new tariffs against Beijing. Industrial and technology companies, which depend heavily on foreign trade, took some of the worst losses with Boeing, Caterpillar and Microsoft all falling sharply. The Dow sank 724 points, or 2.9%, to 23,957. The Nasdaq lost 178 points, or 2.4%, to 7,166. The S&P 500 index dropped 68 points, or 2.5%, to 2,643, erasing its gain for the year. It is the fifth-worst daily point drop ever for the Dow and the worst since the beginning of February.

Earlier on Thursday, Mr Trump unveiled a plan to impose up to $60bn in new tariffs on Chinese goods, as well as limiting the country’s investment in the US as payback for what his administration alleges is years of intellectual property theft. The president’s order – which report from the White House had previously suggested would be nearer $50bn – is likely to trigger retaliation by Beijing and could further stoke fears of a global trade war. Just before signing the trade action, Mr Trump said it was “the first of many” as he looks to correct what has repeatedly called “unfair” trade deals with nations around the world.

“Markets are saying that these tariffs are going to cut into the global growth story that looked pretty strong just a few weeks ago. The prospect of more tariffs is making markets very unsettled and you’re going to see choppy trading until we see the effect they are having on earnings,” Jamie Cox, a managing partner for Harris Financial Group told Reuters.

All you need to know about the Cambridge Analytica outrage. It’s theater.

• UK Politicians To Be Exempt From Data Crackdown (Ind.)

Britain’s political parties are poised to grant themselves special powers to use personal data to find out how people are likely to vote, despite the Cambridge Analytica scandal, The Independent can reveal. Legislation set to clear Parliament within weeks will allow the profiling of voters to help infer their political opinions, privacy campaigners have warned. The move comes as controversy has engulfed Cambridge Analytica over its collection of Facebook data, with the aim of using it to profile and target people during election campaigns. Even before the scandal erupted, political parties had faced questions about their use of social media to carry out online campaigning.

All the major parties have agreed to the exemption from new data protection laws, arguing it clarifies their widely recognised right to canvas voters in order to target possible supporters. But critics say technological advances now enable such data to be mined to discover people’s opinions without their active consent. Organisations outside of the main political parties will be barred from collating voting data in this way. Ailidh Callander, a lawyer at the group Privacy International, told The Independent that “no meaningful justification” had been given for the powers in the Data Protection Bill. “This exemption is open to abuse by political parties and those working for them and can be used to facilitate targeted and exploitative political advertising,” she warned.

[..] “As we can see from the work of Cambridge Analytica, personal data that might not have previously revealed political opinions can now be used to infer information about the political opinions of an individual,” Ms Callander added. It would allow private firms, under contract to political parties, to “process personal data revealing political opinions for a wide range of purposes” without the explicit consent of the person concerned, Ms Callander said. Mr Bernal said data that could reveal voting preferences should be given “more protection”, warning: “Almost anything can be used to at least have a guess at your political leanings.”

Business model. And if anyone can buy this stuff, you wonder what the NSA keeps for itself.

• Steve Bannon: ‘Facebook Data Is For Sale All Over The World’ (G.)

Steve Bannon tried to distance himself from the Cambridge Analytica scandal on Thursday, claiming: “I didn’t even know anything about the Facebook mining.” Bannon is a former vice-president and board member of the political consultancy, which he agreed he “put together.” He claimed to a conference in New York that neither he nor Cambridge Analytica had anything to do with “dirty tricks” in the use of information harvested from Facebook to make computer models to sway elections. Besides, he said, “Facebook data is for sale all over the world”.

Bannon – Donald Trump’s former chief strategist – later said outside the conference room that he “did not remember” being part of any scheme to buy data that came from Facebook and divert it to use for election propaganda, as the Observer revealed last weekend. He blamed any “dirty tricks” on Cambridge Analytica’s parent company, SCL, which he described as “the British guys, old Etonians and guys from Oxford and Cambridge” [..] Bannon denied there was any scandal involving companies acquiring people’s personal information from Facebook and using it for other purposes.

“It’s just about the cost of it. It’s bought and sold every day, it’s just a marketplace,” he said, adding: “I didn’t even know about the Facebook mining, that’s Facebook’s business … They went to Barack Obama’s campaign in 2008 and told him all about the power of personal data.” Bannon turned to the conference audience and said: “You’re all serfs. Well paid serfs, but still serfs … The data is all out there, they [Facebook] take your stuff for free and monetize it for huge margins, they take over your life.”

About that claim that Facebook was cheated, it wasn’t. It was always part of the whole thing. This is not something Kogan ‘harvested’, Facebook had already done that.

• Facebook Gave Data About 57 Billion Friendships To Academic (G.)

Before Facebook suspended Aleksandr Kogan from its platform for the data harvesting “scam” at the centre of the unfolding Cambridge Analytica scandal, the social media company enjoyed a close enough relationship with the researcher that it provided him with an anonymised, aggregate dataset of 57bn Facebook friendships. Facebook provided the dataset of “every friendship formed in 2011 in every country in the world at the national aggregate level” to Kogan’s University of Cambridge laboratory for a study on international friendships published in Personality and Individual Differences in 2015. Two Facebook employees were named as co-authors of the study, alongside researchers from Cambridge, Harvard and the University of California, Berkeley. Kogan was publishing under the name Aleksandr Spectre at the time.

A University of Cambridge press release on the study’s publication noted that the paper was “the first output of ongoing research collaborations between Spectre’s lab in Cambridge and Facebook”. Facebook did not respond to queries about whether any other collaborations occurred. “The sheer volume of the 57bn friend pairs implies a pre-existing relationship,” said Jonathan Albright, research director at the Tow Center for Digital Journalism at Columbia University. “It’s not common for Facebook to share that kind of data. It suggests a trusted partnership between Aleksandr Kogan/Spectre and Facebook.”

Facebook downplayed the significance of the dataset, which it said was shared with Kogan in 2013. “The data that was shared was literally numbers – numbers of how many friendships were made between pairs of countries – ie x number of friendships made between the US and UK,” Facebook spokeswoman Christine Chen said by email. “There was no personally identifiable information included in this data.”

Excellent long background by Tamsin Shaw for the Facebook story. It’s a who’s who.

• The Digital Military Industrial Complex (NYBooks)

In a 2014 interview, Lt. Gen. Michael Flynn, speaking then as head of the Defense Intelligence Agency, said that such open-source data initiatives, and in particular the study of social media such as Facebook, had entirely transformed intelligence-gathering. He reported that traditional signals intelligence and human intelligence were increasingly being replaced by this open-source work and that the way in which intelligence agents are trained had been modified to accommodate the shift. A growing portion of the military’s $50 billion budget would be spent on this data analytics work, he claimed, creating a “gold rush” for contractors. A few weeks after this interview, Flynn left the DIA to establish the Flynn Intel Group Inc. He later acted as a consultant to the SCL Group.”

Carole Cadwalladr reported in The Observer last year that it was Sophie Schmidt, daughter of Alphabet founder Eric Schmidt, who made SCL aware of this gold rush, telling Alexander Nix, then head of SCL Elections, that the company should emulate Palantir, the company set up by Peter Thiel and funded with CIA venture capital that has now won important national security contracts. Schmidt threatened to sue Cadwalladr for reporting this information. But Nix recently admitted before a parliamentary select committee in London that Schmidt had interned for Cambridge Analytica, though he denied that she had introduced him to Peter Thiel. Aleksandr Kogan and Christopher Wylie allowed Cambridge Analytica to evolve into an extremely competitive operator in this arena.

Proof is overrated.

• EU Countries Prepare To Follow May And Expel Russian Diplomats (G.)

EU leaders have thrown their weight behind Theresa May’s stance on Russia, with several countries poised to announce expulsions of diplomats, in a bid to dismantle Vladimir Putin’s spy network. Following a summit in Brussels to discuss the response to the Salisbury nerve agent attack, EU leaders gave their full-throated backing to the prime minister by adopting a statement declaring it was “highly likely Russia is responsible” for poisoning Sergei Skripal and his daughter, Yulia. Donald Tusk, the president of the European council, tweeted that all leaders agreed Russia’s responsibility for the attack was highly likely. In a significant point for May, the statement goes further than a declaration by foreign ministers earlier this week, which avoided pinning the blame on Russia.

British diplomats believe that a strong message of solidarity with the UK, from Russia’s closest European neighbours, will hit home with President Putin. France, Poland, Estonia, Latvia and Lithuania are understood to be considering expelling Russian diplomats, as requested by the UK government, in a coordinated strike against Moscow. The Lithuanian president, Dalia Grybauskaite, said: “All of us, we are considering such measures.” She added that she had not congratulated Putin on his election victory. EU leaders discussed their response to the Salisbury poisoning over a European council summit dinner in Brussels. The UK prime minister told her fellow leaders the attack formed part of a long-term pattern of behaviour by Russia, and urged them to present a united front.

What all the talk about Russia serves to hide…

• Number Of British Children In Poverty Surges By 100,000 In A Year (Ind.)

The number of children in poverty across the UK has surged by 100,000 in a year, new figures show, prompting calls for ministers to urgently review cuts to child welfare. Government statistics published on Thursday show 4.1 million children are now living in relative poverty after household costs, compared with four million the previous year, accounting for more than 30% of children in the country. Compared to the overall population, children remained the most likely to be in relative poverty, at almost one in three compared with 21% of working age adults and 16% of pensioners.

The figures will fuel concerns that benefit cuts and tax credits under the Tory Government are seeing children hardest hit, with around one and a half million more under-18s forecasted to live in households below the relative poverty line by 2022. Relative child poverty is measured as children living in homes where the income is 60% of the median household income in the UK, adjusted for family size and after housing costs. Separate government statistics published on Thursday show the number of households in temporary accommodation has surged 64% since the Tories came to power in 2010, of which more than 2,000 had children.

Responding to the rise in child poverty levels, Labour MP Margaret Greenwood, the Shadow Work and Pensions Secretary, said: “These figures show that after eight years of Conservative austerity, Labour’s progress in tackling child poverty has been reversed with a shocking increase in the numbers of children living in poverty.

Don’t get too successful, or else…

• UK Rebel Bank Prints Its Own Notes And Buys Back People’s Debts (G.)

First there were the banks. Sending credit cards through the post, offering easy loans. They overstretched, teetered. Then came the billion-dollar bailouts, recession, austerity, poverty and payday loans. Then, slowly, came the movement: a piecemeal, sporadic effort to buy back the debt of ordinary people. Now in north-east London, an enterprise that is part art installation, part stunt and part charitable endeavour, has brought all the threads together: a bank that prints its own money, sells it for real tender and uses the proceeds to buy back the debt.

Hilary Powell and Dan Edelstyn have taken over an old Co-op Bank on a high street in Walthamstow and are printing money featuring the faces of people behind four local services – a primary school, a foodbank, a youth project and a soup kitchen. As well as raising money for those projects, Hoe Street Central Bank aims to raise enough money to buy out £1m of debt owned by people within the E17 postcode, in a London borough ranked 35th most deprived in the country.

“We see it as a community heist taking on the economic discourse,” says Powell. One of the delightful ironies of the undertaking is that the ‘bank’ could only have to raise as little as £20,000 to buy out £1m of local debt, because bad loans are often written down to a fraction of their face value in the secondary market. “The system forces people into debt for basic needs,” says Powell. “We are the forerunners of what we hope will be a bigger movement for debt abolition.” As the bank did its unusual trade this week, schoolchildren were invited in to watch a batch of £5, £10 and £20 notes, all designed by artists, roll off the presses. After all, it’s not every day that you see your headteacher’s face on a fiver.

Varoufakis’ Shakespeare lecture. The recent Facebook and Novichok stories would fit right in.

• Shaking the Superflux (Varoufakis)

As is, alas, well known, my country went bankrupt in 2010. And the oligarchies, Greek and European, in power decided to cover it up by means of largest loan in History to the most bankrupt European state – money that was, always, meant to flow on to France’s and Germany’s bankrupt bankers while the Greeks were thrown indefinitely into debtor’s prison and treated to the harshest austerity this planet has ever seen. Yes, there was method to the madness of the powers-that-be, just as in any Shakespearean play. Watching them stumble from one idiotic decision to the next, making things up as they were going along, and intensifying the crisis that they were trying to quell, was like watching a version of Othello, wondering how smart people could be so foolish, or of a Macbeth scheming in the land of Oedipus.

Like King Laius of Thebes unwittingly brought about his own murder by his son Oedipus because he believed the prophecy that Oedipus would kill him once he grew up, so too did Europe’s Deep Establishment, in a bid to save their bankers while safeguarding their legitimacy, undermined their legitimacy by committing successive, Macbeth-like, crimes against logic – so much so that, today, the so-called political centre traditionally in the service of the Establishment lays in ruins everywhere in Europe: Think France, Austria, Germany, recently Italy, where political monsters are rising up across Europe bringing to mind Brutus’ line in Julius Caesar about the hatchling of the serpent’s egg that must be “killed in the shell” before it emerges. Except that, instead of crushing the shell before the new serpents hatched, the Establishment kept it warm, facilitated its hatching, and is now repeatedly bitten by them.

Global plastic production is increasing exponentially.

• ‘Great Pacific Garbage Patch’ 16 Times Larger Than Previously Estimated (G.)

An enormous area of rubbish floating in the Pacific Ocean is teeming with far more debris than previously thought, heightening alarm that the world’s oceans are being increasingly choked by trillions of pieces of plastic. The sprawling patch of detritus – spanning 1.6m sq km, (617,763 sq miles) more than twice the size of France – contains at least 79,000 tons of plastic, new research published in Nature has found. This mass of waste is up to 16 times larger than previous estimates and provides a sobering challenge to a team that will start an ambitious attempt to clean up the vast swath of the Pacific this summer.

The analysis, conducted by boat and air surveys taken over two years, found that pollution in the so-called Great Pacific garbage patch is almost exclusively plastic and is “increasing exponentially”. Microplastics, measuring less than 0.5cm (0.2in), make up the bulk of the estimated 1.8tn pieces floating in the garbage patch, which is kept in rough formation by a swirling ocean gyre. While tiny fragments of plastic are the most numerous, nearly half of the weight of rubbish is composed of discarded fishing nets. Other items spotted in the stew of plastic include bottles, plates, buoys, ropes and even a toilet seat.

“I’ve been doing this research for a while, but it was depressing to see,” said Laurent Lebreton, an oceanographer and lead author of the study. Lebreton works for the Ocean Cleanup, a Dutch-based non-profit that is aiming to tackle the garbage patch. [..] The organization is developing a system of large floating barriers with underwater screens that capture and concentrate plastics into one area ready to be scooped out of the ocean. A prototype, to be launched from San Francisco this summer with the aim of spawning a clutch of devices each of which can collect five tons of waste a month, will, if successful, be followed by dozens of other boom-like systems measuring up to 2km (1.2 miles) long.

The project comes with caveats, however – its system will not catch the proliferation of microplastics measuring under 10 millimeters (0.39in) and the whole operation will require further funding from next year. Any successful clean-up may also be overwhelmed by a global surge in plastic production – a recent UK government report warned the amount of plastic in the ocean could treble within the next decade. “There is a big mine of microplastics there coming from larger stuff that’s crumbling down, so we need to get in there quickly to clean it up,” said Joost Dubois, a spokesman for the Ocean Cleanup.

The official report. Half of the garbage is fishing nets. A recent report estimated 70% of all visible plastic is discarded nets.

• Great Pacific Garbage Patch Is Rapidly Accumulating Plastic (Nature)

Ocean plastic can persist in sea surface waters, eventually accumulating in remote areas of the world s oceans. Here we characterise and quantify a major ocean plastic accumulation zone formed in subtropical waters between California and Hawaii: The Great Pacific Garbage Patch (GPGP). Our model, calibrated with data from multi-vessel and aircraft surveys, predicted at least 79 (45-129) thousand tonnes of ocean plastic are floating inside an area of 1.6 million km2; a figure four to sixteen times higher than previously reported.

We explain this difference through the use of more robust methods to quantify larger debris. Over three-quarters of the GPGP mass was carried by debris larger than 5 cm and at least 46% was comprised of fishing nets. Microplastics accounted for 8% of the total mass but 94% of the estimated 1.8 (1.1-3.6) trillion pieces floating in the area. Plastic collected during our study has specific characteristics such as small surface-to-volume ratio, indicating that only certain types of debris have the capacity to persist and accumulate at the surface of the GPGP. Finally, our results suggest that ocean plastic pollution within the GPGP is increasing exponentially and at a faster rate than in surrounding waters.

Global annual plastic consumption has now reached over 320 million tonnes with more plastic produced in the last decade than ever before. A significant amount of the produced material serves an ephemeral purpose and is rapidly converted into waste. A small portion may be recycled or incinerated while the majority will either be discarded into landfill or littered into natural environments, including the world’s oceans. While the introduction of synthetic fibres in fishing and aquaculture gear represented an important technological advance specifically for its persistence in the marine environment, accidental and deliberate gear losses became a major source of ocean plastic pollution. Lost or discarded fishing nets known as ghostnets are of particular concern as they yield direct negative impacts on the economy and marine habitats worldwide.

Ehrlich still claims it’s preventable. Why?

• ‘Collapse Of Civilisation Is A Near Certainty Within Decades’ – Ehrlich (G.)

A shattering collapse of civilisation is a “near certainty” in the next few decades due to humanity’s continuing destruction of the natural world that sustains all life on Earth, according to biologist Prof Paul Ehrlich. In May, it will be 50 years since the eminent biologist published his most famous and controversial book, the Population Bomb. But Ehrlich remains as outspoken as ever. The world’s optimum population is less than two billion people – 5.6 billion fewer than on the planet today, he argues, and there is an increasing toxification of the entire planet by synthetic chemicals that may be more dangerous to people and wildlife than climate change.

Ehrlich also says an unprecedented redistribution of wealth is needed to end the over-consumption of resources, but “the rich who now run the global system – that hold the annual ‘world destroyer’ meetings in Davos – are unlikely to let it happen”. The Population Bomb, written with his wife Anne Ehrlich in 1968, predicted “hundreds of millions of people are going to starve to death” in the 1970s – a fate that was avoided by the green revolution in intensive agriculture. Many details and timings of events were wrong, Paul Ehrlich acknowledges today, but he says the book was correct overall. “Population growth, along with over-consumption per capita, is driving civilisation over the edge: billions of people are now hungry or micronutrient malnourished, and climate disruption is killing people.”

I doubt that “it’s not too late”.

• Mammoth Survey Of Nature’s Vital Signs Released (AFP)

Scientists will deliver a comprehensive assessment Friday of the state of biodiversity — the animals and plants that humankind depends on to survive but has driven into a mass species extinction. The labor of some 600 scientists over three years, four reports will be unveiled in Medellin, Colombia, under the umbrella of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). The diagnosis is expected to be dire. “If we continue the way we are, yes the… sixth mass extinction, the first one ever caused by humans, will continue,” IPBES chairman Robert Watson told AFP ahead of the much-anticipated release. But the good news, he said, “It’s not too late” to slow the rate of loss.

Scientists say mankind’s voracious consumption and wanton destruction of Nature has unleashed the first mass species die-off since the demise of the dinosaurs – only the sixth on our planet in half-a-billion years. The first major biodiversity assessment in 13 years comes in the same week that Sudan, the world’s last male northern white rhino, died in Kenya – a stark reminder of the stakes. “The IPBES conference is going to tell us that the situation is continuing to deteriorate, they are going to tell us some ecosystems are being brought to the brink of collapse,” WWF director general Marco Lambertini told AFP on Thursday. “The IPBES is going to make a strong case for the importance of protecting Nature for our own wellbeing.”

Debt Rattle March 4 2018

Mar 042018

March 4, 2018 Posted by Raúl Ilargi Meijer at 10:58 am Finance Tagged with: austerity, boomers, clean coal, debt bondage, distorted, extinction, farming, Greece, Merkel, Oscars, pedophilia, Putin, war 13 Responses »

James McNeill Whistler Nocturne: Blue and Silver – Chelsea 1871

• Global Bond Markets Have Become Grotesquely Distorted – Jim Grant (ZH)

• From Currency War To Trade War To Shooting War (Rickards)

• Central Banks Are The Agents Of Baby Boomers (G.)

• Osborne’s Austerity Has Left UK Social Fabric In Tatters (Pettifor)

• How America’s Clean Coal Dream Unravelled (G.)

• Putin’s Megyn Kelly Interview (ZH)

• Germany’s SPD Votes For Coalition Handing Merkel Fourth Term (G.)

• Europe’s Band-Aid Ensures Greece’s Debt Bondage (Varoufakis)

• Modern Food Farming Puts UK Wildlife Species At Risk Of Extinction (Ind.)

• Three Billboards In Hollywood, California (TAM)

It’s all just one giant distortion.

• Global Bond Markets Have Become Grotesquely Distorted – Jim Grant (ZH)

Jim Grant, the world’s most famous interest rate observer, ventured on CNBC this week to expose and explain the utterly farcical world of financial markets (and in particular, risk assets) and how grotesquely distorted global bond markets have become. He began with an example… “As an example of where the world is mispricing interest rates… look to Italy, which is having a big [potentially disruptive] election on Sunday… …there is a speculative grade Italian security, Telecom Italia, the 5 1/4’s of 2022 are trading at 0.61 percent, that is a junk bond with a zero handle.” This bond traded with almost a 6 handle just 5 years ago… Thank you Mr Draghi. But it doesn’t stop there, Grant warns…

“…and since interest rates are critical in the pricing of financial instruments, these distortions preceded the uplift in all asset values.. and the manifestation of this manipulation is in many ways responsible for what we are now seeing in the markets.” These distortions and the chaotic aftermath of their withdrawal are exactly what current Fed Chair Powell warned of in 2013… “[W]hen it is time for us to sell, or even to stop buying, the response could be quite strong; there is every reason to expect a strong response. So there are a couple of ways to look at it. It is about $1.2 trillion in sales; you take 60 months, you get about $20 billion a month. That is a very doable thing, it sounds like, in a market where the norm by the middle of next year is $80 billion a month. Another way to look at it, though, is that it’s not so much the sale, the duration; it’s also unloading our short volatility position.

“I think we are actually at a point of encouraging risk-taking, and that should give us pause. Investors really do understand now that we will be there to prevent serious losses. It is not that it is easy for them to make money but that they have every incentive to take more risk, and they are doing so. Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy.”

But history merely rhymes.

• From Currency War To Trade War To Shooting War (Rickards)

Currency wars do not exist all the time; they arise under certain conditions and persist until there is either systemic reform or systemic collapse. The conditions that give rise to currency wars are too much debt and too little growth. In those circumstances, countries try to steal growth from trading partners by cheapening their currencies to promote exports and create export-related jobs. The problem with currency wars is that they are zero-sum or negative-sum games. It is true that countries can obtain short-term relief by cheapening their currencies, but sooner than later, their trading partners also cheapen their currencies to regain the export advantage. This process of tit-for-tat devaluations feeds on itself with the pendulum of short-term trade advantage swinging back and forth and no one getting any further ahead.

After a few years, the futility of currency wars becomes apparent, and countries resort to trade wars. This consists of punitive tariffs, export subsidies and nontariff barriers to trade. The dynamic is the same as in a currency war. The first country to impose tariffs gets a short-term advantage, but retaliation is not long in coming and the initial advantage is eliminated as trading partners impose tariffs in response. Despite the illusion of short-term advantage, in the long-run everyone is worse off. The original condition of too much debt and too little growth never goes away. Finally, tensions rise, rival blocs are formed and a shooting war begins. The shooting wars often have a not-so-hidden economic grievance or rationale behind them.

The sequence in the early 20th century began with a currency war that started in Weimar Germany with a hyperinflation (1921–23) and then extended through a French devaluation (1925), a U.K. devaluation (1931), a U.S. devaluation (1933) and another French/U.K. devaluation (1936). Meanwhile, a global trade war emerged after the Smoot-Hawley tariffs (1930) and comparable tariffs of trading partners of the U.S. Finally, a shooting war progressed with the Japanese invasion of Manchuria (1931), the Japanese invasion of Beijing and China (1937), the German invasion of Poland (1939) and the Japanese attack on Pearl Harbor (1941). Eventually, the world was engulfed in the flames of World War II, and the international monetary system came to a complete collapse until the Bretton Woods Conference in 1944.

We’re going to be watching this unfold until it’s too late.

• Central Banks Are The Agents Of Baby Boomers (G.)

The greatest threat to our economy comes from its ageing population. With the baby-boomer generation making up a large proportion of society, we find ourselves in a situation where public policy is mostly geared towards shoring up the gains made by boomers over the past 40 years, and industrial disputes are driven by an ageing union membership most worried about its pension entitlements. It is a problem that Britain shares with its continental cousins, the US and Japan, now that all are struggling with a situation where a fifth of their populations is aged over 65 and the proportion is rising fast. Ageing populations have many effects on an economy, not least the desire among those nearing retirement age to save excessively.

Each country’s baby boomers pursue the holy grail of wealth slightly differently, but in the main, property and pensions are the twin pillars supporting decades of retirement. When wealth is your goal, there is one evil monster that needs slaying, and that is inflation. This is one of the main reasons that since the 1990s the Bank of England is under instruction to keep inflation anchored around 2%. A recent blog by economists at the Bank has caused a stir by arguing that far from the baby-boomer savings glut being a passing phase – or at least a situation that will fade as the boomers die off – it will be with us for decades to come.

They argue that boomers have shown that they want to keep saving even as they move into their 80s and 90s, to fund possible extra health and care costs, and to pass on the maximum amount of wealth they can to their heirs. Some academics have argued that boomers will be forced to spend more than they save in later life to pay for health and long-term care, but that doesn’t appear to be happening. The $100 trillion of savings sloshing round the global financial system just keeps growing. This is not just because people in young nations such as Indonesia and India are starting to build up savings, but because older Brits, Germans and Swedes are doing the same when there had been an expectation that they would switch to spending.

[..] The Bank of England blog argues that the persistent glut of savings in stocks, bonds and property will maintain the trend of the past 30 years – of an excess of money chasing too few investment opportunities. And if older savers resist spending some of their pension, demand for goods is lower than expected, and inflation stays low. Central banks, in seeking to maintain a 2% inflation target, are the agents of baby boomers. It is their savings and wealth that are protected, not those of the young, who have much less, if any.

This is not typical for Osborne or the UK. ‘Saving’ the economy by making the poor, poorer, is widely accepted.

• Osborne’s Austerity Has Left UK Social Fabric In Tatters (Pettifor)

There is growing consensus among economists that Osborne’s post-crisis austerity programme deepened and lengthened Britain’s post-crisis recession, causing public and private investment to fall further and real wages to decline. Making large reductions to government spending is itself a major reason why the economy has been so slow in recovering. (Consider the multiplier effect where an injection of public money helps generate income and tax revenues.) In his first budget (June 2010) Osborne told parliament: “We are on track to have debt falling and a balanced structural current budget by the end of this parliament” (ie March 2015).

He slashed welfare as promised, but the economy slowed further. While employment revived, jobs have been recast as part-time, temporary and insecure. As a result, productivity stalled. These declines will cause permanent damage to the British economy. Convinced that a chancellor should “never let a crisis go to waste”, Osborne used the opportunity to shrink the state, as cuts to government spending tore into welfare provision and public services. Real spend per head of population fell, and the real spend per head was particularly felt by the vulnerable citizen, as the population grew older and more fragile. Under his watch, total managed expenditure was cut in real terms by £14bn (2016-17 prices).

These cuts were made worse by a 3-4% rise in population, and by the increasing needs of an ageing population. Public sector net investment was allowed to fall from £60bn in 2010 to £35bn in 2016. It caused intense suffering to small and large firms and suppliers, many of which went and are going bust, laying off staff. The insistence on balancing the current budget also hurt millions of individuals innocent of the causes of the crisis.

Oxymoron self-immolation.

• How America’s Clean Coal Dream Unravelled (G.)

High above the red dirt and evergreen trees of Kemper County, Mississippi, gleams a 15-story monolith of pipes surrounded by a town-sized array of steel towers and white buildings. The hi-tech industrial site juts out of the surrounding forest, its sharp silhouette out of place amid the gray crumbling roads, catfish stands and trailer homes of nearby De Kalb, population: 1,164. The $7.5bn Kemper power plant once drew officials from as far as Saudi Arabia, Japan and Norway to marvel at a 21st-century power project so technologically complex its builder compared it to the moonshot of the 1960s. It’s promise? Energy from “clean coal”. “I’m impressed,” said Jukka Uosukainen, UN director for the Climate Technology Centre and Network, after a 2014 tour: “maybe using coal in the future is possible”.

Kemper, its managers claimed, would harness dirt-cheap lignite coal – the world’s least efficient and most abundant form of coal – to power homes and businesses in America’s lowest-income state while causing the least climate-changing pollution of any fossil fuel. It was a promise they wouldn’t keep. Last summer the plant’s owner, Southern Company, America’s second-largest utility company, announced it was abandoning construction after years of blown-out budgets and missed construction deadlines. “It hit us hard,” said Craig Hitt, executive director of the Kemper County Economic Development Authority. Some 75 miners, roughly half living inside Kemper County, have already been affected in a region where unemployment is 7.1% compared to a national average of just 4.1%. “It was going to be the biggest project in the history of the county, possibly in the state of Mississippi,” Hitt said.

Instead, this year, Kemper County was home to one of the first large coalmining layoffs of the Trump era. It’s failure is also likely to have a profound impact on the future of “clean coal”. “This was the flagship project that was going to lead the way for a whole new generation of coal power plants,” said Richard Heinberg, senior fellow at the Post Carbon Institute. “If the initial project doesn’t work then who’s going to invest in any more like it?” [..] a review by the Guardian of more than 5,000 pages of confidential company documents, internal emails, white papers, and other materials provided anonymously by several former Southern Co insiders, plus on- and off-record interviews with other former Kemper engineers and managers, found evidence that top executives covered up construction problems and fundamental design flaws at the plant and knew, years before they admitted it publicly, that their plans had gone awry.

“If you were to speak about an arms race, then an arms race began exactly at the time and moment the U.S. opted out of the Anti-Ballistic Missile Treaty..”

• Putin’s Megyn Kelly Interview (ZH)

NBC’s Megyn Kelly has tried to establish herself as the US media’s preeminent “Putin whisperer” since confronting the Russian president last year over allegations he sanctioned interference by hacking groups in the 2016 US presidential election. In a formal interview with the Russian president, Kelly asked the Russian leader about the latest development in the ongoing controversy, Mueller’s indictment of 13 Russians and 3 Russian entities for election meddling. Ignoring that the indictment stated that the alleged activities of the trolls at the Internet Research Agency had no impact on the outcome of the election, Kelly insisted on pressing the Russian president about why Russia hadn’t acted to prosecute the men – including Yevgeniy Prigozhin, a wealthy Russian businessman.

Putin pointed out that no formal requests had been made by the US government, and no effort to share the incriminating information had been made. “I have to see first what they’ve done. Give us a document, give us an official request” Putin said in the NBC interview adding that “We can not respond to that if they do not violate Russian laws.” Kelly responded by listing some of the allegations, before Putin insisted that they shouldn’t be presented to him personally – but to Russia’s general prosecutor. “This has to go through official channels, not through the press, or yelling and hollering in the United States Congress,” Putin said. The broadcast aired a day after Putin grabbed headlines in Western media by revealing that Russia had recently finished testing a range of nuclear weapons that were capable of evading US anti-ballistic missile batteries, showing animated footage and digital representations of the missiles’ capabilities striking Florida which prompted an uproar at the US State Department.

Meanwhile, even though Russia has repeatedly criticized the US and NATO for installing anti-ballistic missile shields in Eastern Europe that Russia says more closely resemble offensive missile batteries, Putin pushed back against questions about whether the US and Russia were entering a new Cold War. The Russian leader said anybody spreading these accusations are more concerned with propaganda than accurate representations of the relationships between the two countries. “My point of view is that the individuals that have said that a new Cold War has started are not analysts. They do propaganda.” Repeating a claim that has been made by many Russian officials, Putin said the arms race between the US and Russia began when George W Bush withdrew from the anti-ballistic missile treaty in 2002. “If you were to speak about an arms race, then an arms race began exactly at the time and moment the U.S. opted out of the Anti-Ballistic Missile Treaty,” he said.

Never a good idea for a party that losses big in elections to be in government; what are elections for? The SPD is so divided now it could turn its back on Merkel at literally any moment over the nexy 4-5 years.

• Germany’s SPD Votes For Coalition Handing Merkel Fourth Term (G.)

Germany’s Social Democratic party has agreed to form another “grand coalition” government with the conservative CDU, ending months of political uncertainty in Europe and guaranteeing Chancellor Angela Merkel a fourth term in office. Sunday’s announcement by the party’s leadership ends almost six months of uncertainty in German politics, the longest the country has been without a government in its postwar history. A majority of 66.02% members of 463,723 eligible SPD members voted in favour of renewing the constellation that has governed Germany for the last four years, its treasurer, Dietmar Nietan, confirmed at the party’s headquarters in Berlin.

“We now have some clarity”, said the Social Democrats’ caretaker leader, Olaf Scholz, a contender for the role of finance minister, speaking at the Willy Brandt House. “The SPD will enter into government”. The leadership of the SPD had initially ruled out joining Merkel in government in the wake of historically disappointing results at federal elections in September last year. But the collapse of talks to form an unorthodox “Jamaica” coalition between Merkel’s conservatives, the pro-business Free Democrats and the Green party forced the German centre-left back to the negotiating table, where it managed to secure a surprising victory in getting the chancellor to cede control of the influential finance ministry.

“..to borrow that €3 billion on behalf of its creditors, the Greek state added €816 million in interest payments to its debt repayments for 2025. Germany’s cost for rolling over the same sum, on the same day, was a mere €63 million…”

• Europe’s Band-Aid Ensures Greece’s Debt Bondage (Varoufakis)

The big moment, it is said, will come in August, when Greece will be pronounced a “normal” European country again. Recently, in preparation for the government’s return to the money markets – from which it has been effectively excluded since 2010 – Greece’s public-debt authority has been testing the waters with a long-term bond issue. Unfortunately, all the happy talk about impending “debt relief” and a “clean exit” from Greece’s third “bailout” obscures an uglier truth: the country’s debt bondage is being extended to 2060. And, by ossifying Greece’s insolvency, while pretending to have overcome it, Europe’s establishment is demonstrating its dogged refusal to address the eurozone’s underlying fault lines. This augurs ill for ALL Europeans.

For an EU country to be considered “normal,” it should be subject to the scrutiny facing countries that were never bailed out. That means the standard twice-yearly checks of compliance with the EU’s Stability and Growth Pact, as performed by the European Commission under the so-called European Semester procedure. Nevertheless, for countries like Ireland or Portugal, a tougher “post-program surveillance” procedure was designed following their bailouts: quarterly checks conducted not only by the European Commission but also by the European Central Bank.

It is plain to see why Greece’s road will be much bumpier than Ireland’s or Portugal’s. The ECB had already begun purchasing Irish and Portuguese debt in the secondary markets well before these countries’ bailout exit, as part of its “quantitative easing” program. This enabled the Irish and Portuguese governments to issue large quantities of new debt at low interest rates. Greece was never included the ECB’s quantitative easing program, for two reasons: its debt burden was too large to service in the long term, even with the help of ECB-sponsored low interest rates, and the ECB was under pressure, mainly from Germany, to wind down the program. Moreover, the post-program surveillance procedure does not give the “troika” of official creditors the leverage over Greece that they desire.

In celebrating Greece’s “clean exit,” while retaining its iron grip on the Greek government and withholding debt restructuring, Europe’s establishment is once again displaying its skill at inventing neologisms. Until 75% of Greece’s public debt is repaid – in 2060, at the earliest – the country, we are told, will be subject to “enhanced surveillance” (a term with unfortunate echoes of “enhanced interrogation”). In practice, this means 42 years of quarterly reviews, during which the European Commission and the ECB “in collaboration with the IMF” may impose new “measures” on Greece (such as austerity, fire sales of public property, and restrictions on organized labor). In short, the next two generations of Greeks will grow up with the troika and its “process” (perhaps under a different name) as a permanent fixture of life.

The celebration of Greece’s return to normality began a few weeks ago with the government’s oversubscribed €3 billion issue of its first seven-year bond in years. What the revelers failed to note, however, was that, to borrow that €3 billion on behalf of its creditors, the Greek state added €816 million in interest payments to its debt repayments for 2025. Germany’s cost for rolling over the same sum, on the same day, was a mere €63 million. Will Greece’s income rise by a similar amount between now and 2025 to make this sustainable?

“The agricultural feed companies, the chemical companies, the pharmaceutical companies that provide the antibiotics fed en masse to factory-farmed animals, the equipment manufacturers that sell cages and tractors – they all benefit.”

• Modern Food Farming Puts UK Wildlife Species At Risk Of Extinction (Ind.)

Some of Britain’s favourite wildlife is at risk of becoming extinct unless there is a new, 21st-century agricultural revolution, experts are warning. Species from hedgehogs to skylarks and birds of prey are being wiped out – in part by companies with vested interests in “destructive” factory farming, it was claimed on World Wildlife Day, which takes place today. The “alarming” declines in wildlife will threaten not just the richness of the planet but also our ability to grow food, according to the RSPB. After scientists warned last year that the world is facing a sixth mass extinction, turtle doves are on the brink of being wiped out, the latest survey figures show. Numbers of grey partridges, corn buntings and tree sparrows have dropped by at least 90 per cent in 40 years, leaving them all at risk of vanishing from Britain.

Earlier this month, a new report revealed that the number of hedgehogs in the countryside had more than halved since 2000. Nearly two-thirds of Britain’s skylarks and lapwings have disappeared, the European bird census showed, while Birdlife International says 95 per cent of turtle doves have vanished in 20 years. Just days after Environment Secretary Michael Gove unveiled plans to reward farmers who care for the environment, ornithologist Philip Lymbery warned of a culture among government policymakers and scientists of blaming biodiversity declines on climate change – instead of tackling those with “vested interests” in “disastrous” modern farming practices – because it was easier to avoid blaming anyone.

Mr Lymbery, head of charity Compassion in World Farming (CiWF), said changes in farming in the past half-century to drastically and artificially push up quantities of food produced were destroying species from nightingales to butterflies and peregrines. “I’m worried that policymakers and some scientists duck the issue by blaming all the things damaging nature on climate change,” he told The Independent. [..] “The agricultural feed companies, the chemical companies, the pharmaceutical companies that provide the antibiotics fed en masse to factory-farmed animals, the equipment manufacturers that sell cages and tractors – they all benefit. “It’s not the average farmer who benefits from industrial agriculture. And it needs to change.”

Hollywood mirrors international charities like Oxfam. Pedophilia rules both.

• Three Billboards In Hollywood, California (TAM)

Just days before the first Academy Awards ceremony since Hollywood was hit with allegations of rampant sexual harassment, assault, and pedophilia, a Los Angeles street artist made a bold statement just a few miles from the Dolby Theater where the Oscars will be held. Sabo, a conservative-leaning artist who has previously tagged the city with art referencing former President Obama’s drones, purchased three billboards, echoing the sentiment of a Academy Award-nominated film, Three Billboards Outside Ebbing, Missouri, which tells the story of a mother who seeks accountability for her daughter’s rape and murder, which police in her small town have failed to solve. In the film, the mother purchases three billboards that read:

“RAPED WHILE DYING”

“AND STILL NO ARRESTS?”

“HOW COME CHIEF WILLOUGHBY?”

In Sabo’s version, the billboards plastered in Hollywood read:

“AND THE OSCAR FOR BIGGEST PEDOPHILE GOES TO…”

“WE ALL KNEW AND STILL NO ARRESTS”

“NAME NAMES ON STAGE OR SHUT THE HELL UP!”

Kevin Spacey’s career went down in flames last year amid the fallout of widespread allegations of abuse by now-scorned producer Harvey Weinstein. Anthony Rapp accused the actor of making advances on him in 1986, when Rapp was only 14. Other accusations against Spacey followed, including some others that alleged Spacey attempted to take advantage of the victims when they were under the age of 18. Further, Corey Feldman, who has long warned of predatory, pedophilic behavior in Hollywood, revealed several of his accused abusers last year, citing John Grissom, former talent manager Marty Weiss, and Alphy Hoffman, who was the son of a high-power producer and ran the trendy Soda Pop Club, where Feldman claims widespread harassment took place in the 1980s.

Feldman claimed there were six abusers total, saying one is an A-list actor who might kill him. He has previously said his fellow child star, Corey Haim, now deceased, received worse abuse than he did. In a 2011 appearance on Nightline, Feldman said: “[T]he No. 1 problem in Hollywood was and is and always will be pedophilia…that’s the biggest problem for children in this industry… It’s the big secret.”

Debt Rattle September 26 2017

Sep 262017

September 26, 2017 Posted by Raúl Ilargi Meijer at 8:33 am Finance Tagged with: AfD, casino, EU, extinction, Greece, Macron, Merkel, pesticides, Puerto Rico, Trump 2 Responses »

Paul Cézanne Curtains 1885

• Lenders Loosen Mortgage Standards as Demand Falls (WS)

• Levered Loan Volumes Soar Past 2007 Levels As “Cov-Lite” Deals Surge (ZH)

• China’s Crackdown Brings Developers Crashing Back to Earth (BBG)

• The Next Crisis Will Start in Silicon Valley (BBG)

• King Cash May Reign For Weeks In Storm-Ravaged Puerto Rico (BBG)

• The White House as Donald Trump’s New Casino (Nomi Prins)

• Large Parts Of America Are Being Left Behind (ZH)

• ‘A Lot Of People Feel Left Behind’ – Why Far Right Won In Germany (G.)

• Macron Presses Ahead With His Vision for Europe As Merkel Calls For Calm (BBG)

• EU Presidency Calls For Massive Internet Filtering (EDRi)

• EU Officially Ends Excessive Deficit Procedure Against Greece (R.)

• ECB May Frontload 2018 Bank Stress Tests With View To Greece – Draghi (R.)

• French Government Declares War On Pesticides (AFP)

• Our Food Crops Face Mass Extinction Too (G.)

• Sixth Mass Extinction Of Wildlife Also Threatens Global Food Supplies (G.)

The last step before the fall.

• Lenders Loosen Mortgage Standards as Demand Falls (WS)

The toxic combination of “competition from other lenders” and slowing mortgage demand is cited by senior executives of mortgage lenders as the source of all kinds of headaches for the mortgage lending industry. Primarily due to this competition amid declining of demand for mortgages, the profit margin outlook has deteriorated for the fourth quarter in a row, according to Fannie Mae’s Q3 Mortgage Lender Sentiment Survey. And the share of lenders that blamed this competition as the key reason for deteriorating profits “rose to a new survey high.” Demand is down for all three types or mortgages: • Mortgages eligible for guarantees by Government Sponsored Enterprises, such as Fannie Mae and Freddie Mac (“GSE Eligible”), indirectly backed by taxpayers. • Mortgages not eligible for GSE guarantees (“Non-GSE Eligible”), not backed by taxpayers. • Mortgages guaranteed by Government agencies, such as Ginnie Mae, directly backed by taxpayers.

And how are lenders combating this lack of demand and the deteriorating profit margins that are being pressured by competition? They’re loosening lending standards. Fannie Mae’s report: Lenders further eased home mortgage credit standards during the third quarter, continuing a trend that started in late 2016. In particular, both the net share of lenders reporting easing on GSE-eligible loans for the prior three months and the share expecting to ease standards on those loans over the next three months increased to survey highs. Lenders’ comments suggest that competitive pressure and more favorable guidelines for GSE loans have helped to bring about more easing of underwriting standards for those loans. This chart shows the net share of lenders reporting loosening their lending standards for each type of loan (= the share of lenders reporting loosening credit standards minus those reporting tightening standards):

In many urban markets home prices have soared far beyond their peaks during the prior crazy housing bubble. That bubble ended with such spectacular results, in part because lending standards had been loosened so that more people could be stuffed into more homes, and more expensive homes that they couldn’t afford, and whose prices then plunged when the scheme fell apart. This time around, home prices, according to the national Case-Shiller Home Price Index, are now about 5% above the prior crazy bubble peak that imploded with such fanfare:

Everything’s a casino now.

• Levered Loan Volumes Soar Past 2007 Levels As “Cov-Lite” Deals Surge (ZH)

If a surge in covenant-lite levered loans is any indication that debt and equity markets are nearing the final stages of their bubbly ascent, then perhaps now is a good time for investors to take their profits and run. As the Wall Street Journal points out this morning, levered loans volumes in the U.S. are once again surging, eclipsing even 2007 levels, despite the complete implosion of bricks-and-mortar retailers and continued warnings that “the market is getting frothy.” Volume for these leveraged loans is up 53% this year in the U.S., putting it on pace to surpass the 2007 record of $534 billion, according to S&P Global Market Intelligence’s LCD unit. n Europe, recent loans offer fewer investor safeguards than in the past. This year, 70% of the region’s new leveraged loans are known as covenant-lite, according to LCD, more than triple the number four years ago.

Covenants are the terms in a loan’s contract that offer investor protections, such as provisions on borrowers’ ability to take on more debt or invest in projects. “If feels like the market is getting frothy,” said Henrik Johnsson at Deutsche Bank. “We’re overdue a correction.” Meanwhile, volumes are surging even as traditional lender protections have become basically nonexistent. As S&P LCD points out, over 70% of levered loans issued so far in 2017 are considered “covenant-lite” versus only 30% of those issued in 2007. Before the financial crisis, the boom in leveraged loans was one of the signs of markets overheating. As the crisis intensified in 2008, investors in U.S. leveraged loans lost nearly 30%, according to the S&P/LSTA Leveraged Loan Index.

Regulators are taking note. In its last quarterly report, the Bank for International Settlements noted the growth of covenant-lite loans and pointed out that U.S. companies are more leveraged than at any time since the beginning of the millennium. That could harm the economy in the event of a downturn or a rise in interest rates, said the BIS consortium of central banks.

Not quite yet. But they will.

• China’s Crackdown Brings Developers Crashing Back to Earth (BBG)

The world’s most extreme stock rally is getting a reality check. After share price gains at Chinese property developers accelerated at a breathtaking pace in the past month, led by an 87% surge in Sunac, the momentum has started to turn as authorities have taken a harder line on reining in financial risks. Six of the 10 best performers on the MSCI All-Country World Index in the one month through Sept. 21 were Chinese real estate firms. Chinese developers had their biggest slump in six years on Monday, before some rebounded on Tuesday. Record home sales and buoyant earnings helped spur an unprecedented rally this year for Chinese developers, especially large firms positioned to wrest market share through debt-fueled acquisitions.

Top of that list are the nation’s two most indebted developers – China Evergrande Group and Sunac – whose shares swelled 459% and 391% respectively. Some investors were starting to question how long the astonishing share gains could last, even before a raft of housing curbs over the weekend. “The drop of property stocks today brings a reality check,” Andy Wong at Pictet Asset Management said in a briefing Monday. “In the past few months investors have been focusing purely on growth. But it’s never wise to totally ignore the risk of leverage.” Sunac shares have plunged almost 16% from a Sept. 19 high, amid the general pall over the sector and news that a financial firm is scrutinizing its loans to Sunac, China’s most leveraged developer.

Evergrande shares have tumbled more than 12% in the past three trading sessions, matching the decline in a Bloomberg index of 22 mainland developers. Even with the recent selloff, Chinese developers remain among the world’s best-performing stocks this year. Evergrande and Sunac two top stocks in the MSCI All-Country World Index this year. Part of that rally was stoked by a housing market boom that buoyed developers’ earnings in the first half, sending sales soaring and boosting profit margins to the highest levels in three years, according to calculations based on earnings reports.

It’s where the excess cash has gone.

• The Next Crisis Will Start in Silicon Valley (BBG)

Since 2007, a tremendous wave of innovation has swept across the financial sector, affecting almost every aspect of finance. New robo-adviser startups like Betterment and Wealthfront have begun dispensing financial advice based on algorithmic calculations, with little to no human input. Crowdfunding firms like Kickstarter and Lending Club have created new ways for companies and individuals to raise money from dispersed networks of individuals. New virtual currencies such as Bitcoin and Ethereum have radically changed our understanding of how money can and should work. These financial technology (or “fintech”) markets are populated by small startup companies, the exact opposite of the large, concentrated Wall Street banks that have for so long dominated finance.

And they have brought great benefits for investors and consumers. By automating decision-making and reducing the costs of transactions, fintech has greased the wheels of finance, making it faster and more efficient. It has also broadened access to capital to new and underserved groups, making finance more democratic than it has ever been. But revolutions often end in destruction. And the fintech revolution has created an environment ripe for instability and disruption. It does so in three ways. First, fintech companies are more vulnerable to rapid, adverse shocks than typical Wall Street banks. Because they’re small and undiversified, they can easily go under when they hit a blip in the market. Consider the case of Tokyo-based Mt. Gox, which was the world’s biggest bitcoin exchange until an apparent security breach took it down in 2014, precipitating losses that would be worth more than $3.5 billion in today’s prices.

Second, fintech companies are more difficult to monitor than conventional financial firms. Because they rely on complex computer algorithms for many of their essential functions, it’s hard for outsiders to get a clear picture of the risks and rewards. And because many of their technologies are so new and innovative, they may fall outside the reach of old and outdated regulatory structures. The recent proliferation of “initial coin offerings,” for example, has left regulators around the world scrambling to figure out how to respond. Third, fintech has not developed the set of unwritten norms and expectations that guide more traditional financial institutions.

In 2008, when Lehman Brothers was teetering on the brink of bankruptcy, the heads of the largest Wall Street investment banks gathered in New York to coordinate their actions and prevent further panic. It’s hard to imagine something like that happening in the fintech world. The industry is so new, and the players so diverse, that companies have little incentive to cooperate for the greater good. Instead, they prioritize aggressive growth and reckless behavior.

If this is not a wake-up call for you…

• King Cash May Reign For Weeks In Storm-Ravaged Puerto Rico (BBG)

In post-hurricane San Juan on Monday, commerce picked up ever so slightly. With a little effort, you could get the basics and sometimes more: diapers, medicine, or even a gourmet hamburger smothered in fried onions and Gorgonzola cheese. But almost impossible to find was a place that accepted credit cards. “Cash only,” said Abraham Lebron, the store manager standing guard at Supermax, a supermarket in San Juan’s Plaza de las Armas. He was in a well-policed area, but admitted feeling like a sitting duck with so many bills on hand. “The system is down, so we can’t process the cards. It’s tough, but one finds a way to make it work.” The cash economy has reigned in Puerto Rico since Hurricane Maria decimated much of the U.S. commonwealth last week, leveling the power grid and wireless towers and transporting the island to a time before plastic existed.

The state of affairs could carry on for weeks or longer in some remote parts of the commonwealth, and that means it could be impossible to trace revenue and enforce tax rules. The situation further frustrates one of the many challenges already facing a government that has sought a form of bankruptcy protection after its debts swelled past $70 billion: boosting revenue by collecting money that slips through the cracks. In fact, the power blackout only exacerbates a situation that has always been, to a degree, a fact of life in Puerto Rico. Outside the island’s tourist hubs, many small businesses simply never took credit cards, with some openly expressing contempt for tax collectors and others claiming it was just a question of not wanting to deal with the technology.

But those were generally vendors of bootleg DVDs, fruit stands, barbers — not major supermarkets. Now, the better part of the economy is in the same boat. Cash was in short supply. Many Puerto Ricans were still living off what money they thought to withdraw ahead of the storm. Most ATMs on the island still weren’t working because of the power outage or because no one had refilled them. In Fajardo, a hard-hit coastal area, the paper printouts taped to sheet metal storm shutters read: “Cash only, thank you.”

Washington has been a casino for decades.

• The White House as Donald Trump’s New Casino (Nomi Prins)

During the 2016 election campaign, Donald Trump repeatedly emphasized that our country was run terribly and needed a businessman at its helm. Upon winning the White House, he insisted that the problem had been solved, adding, “In theory, I could run my business perfectly and then run the country perfectly. There’s never been a case like this.” Sure enough, while Hillary Clinton spent her time excoriating her opponent for not releasing his tax returns, Americans ultimately embraced the candidate who had proudly and openly dodged their exposure. And why not? It’s in the American ethos to disdain “the man” – especially the taxman. In an election turned reality TV show, who could resist watching a larger-than-life conman who had taken money from the government?

Now, give him credit. As president, The Donald has done just what he promised the American people he would do: run the country like he ran his businesses. At one point, he even displayed confusion about distinguishing between them when he said of the United States: “We’re a very powerful company – country.” Of course, as Hillary Clinton rarely bothered to point out, he ran many of them using excess debt, deception, and distraction, while a number of the ones he guided personally (as opposed to just licensing them the use of his name) – including his five Atlantic City casinos, his airline, and a mortgage company – he ran into the ground and then ditched. He escaped relatively unscathed financially, while his investors and countless workers and small businesses to whom he owed money were left holding the bag.

We may never fully know what lurks deep within those tax returns of his, but we already know that they were “creative” in nature. As he likes to put it, not paying taxes “makes me smart.” To complete the analogy Trump made during the election campaign, he’s running the country on the very same instincts he used with those businesses and undoubtedly with just the same sense of self-protectiveness. Take the corporate tax policy he advocates that’s being promoted by his bank-raider turned Treasury secretary, Steve Mnuchin. It’s focused on lowering the tax rate for multinational corporations from 35% to 15%, further aiding the profitability of companies that already routinely squirrel away profits and hide losses in the crevices of tax havens far removed from public disclosure.

People are being left behind everywhere.

• Large Parts Of America Are Being Left Behind (ZH)

Economic prosperity is concentrated in America’s elite zip codes, but in an interesting report on Distressed Communities, from The Economic Innovation Group, it is increasingly clear that economic stability outside of those communities is rapidly deteriorating. As Axios noted, this isn’t a Republican or Democratic problem. At every level of government, both parties represent distressed areas. But the economic fortunes of the haves and have-nots have only helped to widen the political chasm between them, and it has yet to be addressed by substantial policy proposals on either side of the aisle.

Economic Prosperity Quintiles

As MishTalk.com’s Mike Shedlock writes below, the study notes: “America’s elite zip codes are home to a spectacular degree of growth and prosperity. However, millions of Americans are stuck in places where what little economic stability exists is quickly eroding beneath their feet.” Distress is based on an evaluation of seven metrics.
• No high school diploma
• Housing vacancy rate
• Adults not working
• Poverty rate
• Median income ratio
• Change in employment
• Change in business establishments

Change in Distress Quintiles

Merkel acts like an empress.

• ‘A Lot Of People Feel Left Behind’ – Why Far Right Won In Germany (G.)

Despite gains made by the far-right Alternative für Deutschland (AfD), the breaking up of the ‘grand coalition’ could mark a positive step for Germany, according to voters who responded to our online callout. Here voters in Germany tell us why they think the AfD made gains, and what hopes they have for the future of the country’s politics.

‘A lot of people feel left behind’ – Sarah, 37, teacher, Bonn My second vote was a tactical one. I gave it to the Linke. I knew that we’ll need a very strong voice against the AfD. I am pleased though, that the SPD decided to go into opposition to redefine themselves. A lot of people feel left behind. They are looking for scapegoats. It is the easy way to deal with problems. The AFD makes use of this feeling. With the grand coalition, there was no real debating culture left. The CDU went too much into the middle, leaving the right out. Just like the SPD under Schröder left the left-wing out.

The impact of the newly arrived is big. Some people are scared. Some that have been living in Germany for a long time feel disadvantaged. We can live together and be united in our diversity. I see this in school every day. If we treat each other with respect, then we do not need to fear. It is a long and strenuous way. But it is also very rewarding and fun to walk down that lane. At dinner I really had to get hold of myself to not cry in front of my children. I physically felt sick. A Nazi party being the third biggest party in Germany! I am still devastated.

More Europe is dead.

• Macron Presses Ahead With His Vision for Europe As Merkel Calls For Calm (BBG)

German Chancellor Angela Merkel already faces complex coalition negotiations with at least three other parties. Now French President Emmanuel Macron wants in on the act. In a speech at the Sorbonne in Paris on Tuesday, Macron will make proposals for re-shaping Europe that he acknowledges will require Merkel’s support to push through. While he isn’t seeking to interfere in German domestic politics, it makes sense to air the ideas before a coalition is formed rather than after, an official in his office told reporters. Macron needs Germany’s backing for planned overhauls of areas ranging from defense and immigration to the economy. Yet with Merkel weakened in Germany’s vote and her potential Free Democratic coalition partner even more hostile to aspects of euro-area integration than her own party, the prospect of radical change in Europe looks to have diminished.

“There was this expectation that the election would strengthen the German-French alliance, all kinds of reforms would be tackled and then we’re on the road to fiscal union,” Oliver Adler, head of economic research at Credit Suisse in Zurich, said in an interview. “This now seems politically very unlikely.” Macron will press ahead with his vision of remaking European institutions anyway, seeking to set the direction of debate. While a key element of his reform package is intended to reinforce the euro against future shocks, his speech won’t be all about the single currency area. Macron will propose as many as 10 projects in his speech, including a European agency for innovation and a system to improve start-up funding, a larger Erasmus student-exchange project, increased anti-terrorism cooperation, and a “digital plan” that includes a joint effort to push the EU Commission for a plan to tax Internet giants such as Apple and Google.

The goal is to have a roadmap in place by the summer of 2018 that will equip the EU for its next decade, according to the French official. Macron intends to discuss his plans with fellow EU leaders at a summit in the Estonian capital Tallinn at the end of this week. He may struggle to engage Merkel after Martin Schulz, her Social Democratic election challenger, upset her own plans by announcing his intention not to renew their respective parties’ coalition of the past four years.

Politicians don’t understand technology.

• EU Presidency Calls For Massive Internet Filtering (EDRi)

A Council of the European Union document leaked by Statewatch on 30 August reveals that during the summer months, that Estonia (current EU Presidency) has been pushing the other Member States to strengthen indiscriminate internet surveillance, and to follow in the footsteps of China regarding online censorship. Standing firmly behind its belief that filtering the uploads is the way to go, the Presidency has worked hard in order to make the proposal for the new copyright Directive even more harmful than the Commission’s original proposal, and pushing it further into the realms of illegality. According to the leaked document, the text suggests two options for each of the two most controversial proposals: the so-called “link tax” or ancillary copyright and the upload filter. Regarding the upload filter, the text offers two alternatives:

Option A maintains the Commission’s original proposal of having in place an upload filter which will be under the control of platforms and other companies that are hosting online content. Although it removes mentions to “content recognition technologies”, in reality, there is no way to “prevent the availability” (another expression which remains in the text) of certain content without scanning all the content first. Option B is, at best, a more extreme version of Option A. In fact, it seems so extreme that it almost makes the first option look like a reasonable compromise. This may, of course, be the “diplomatic” strategy. In this extreme option, the text attacks again the liability regime of the e-commerce Directive – which, bizarrely, would not be repealed, leaving us with two contradictory pieces of EU law but adds a “clarification” of what constitutes a “communication to the public”.

This clarification establishes that platforms (and its users) would be liable for the copyright infringing content uploaded by its users. The proposals in this leak highlight a very dangerous roadmap for the EU Member States, if they were to follow the Presidency’s lead. The consequences of these flawed proposals can only be prevented if civil society and EU citizens firmly raise their voices against having a censorship machine in the EU. We will be turning on our call tool at savethememe.net before each of the key votes in the European Parliament. Make use of the tool, and call your representatives to stop the #censorshipmachine!

Oh, get real: “a recognition of the tremendous efforts and sacrifices the Greek people have made to restore stability to their country’s public finances.”

• EU Officially Ends Excessive Deficit Procedure Against Greece (R.)

European Union states decided on Monday to close disciplinary procedures against Greece over its excessive deficit after improvements in Greece’s fiscal position, confirming the country’s recovery is on the right track. The move, although largely symbolic, sends a new signal that Greece’s public finances are again under control, facilitating the country’s plans to tap markets after a successful issue of bonds in July which ended a three-year exile. EU fiscal rules oblige member states to keep their budget deficits below 3% of their economic output or face sanctions that could entail hefty fines, although so far no country has received a financial penalty.

Greece had a 0.7% budget surplus in 2016, and is projected to maintain its fiscal position within EU rules’ limits this year. “In the light of this, the Council (of EU states) found that Greece fulfils the conditions for closing the excessive deficit procedure,” the EU said in a note. “After many years of severe difficulties, Greece’s finances are in much better shape. Today’s decision is therefore welcome”, Estonia’s finance minister Toomas Toniste said. The EU states’ decision confirmed a proposal by the EU executive commission in July to end the disciplinary procedure for Greece. The economics commissioner Pierre Moscovici said the decision was “a recognition of the tremendous efforts and sacrifices the Greek people have made to restore stability to their country’s public finances.”

Good cop bad cop. Rinse and repeat.

• ECB May Frontload 2018 Bank Stress Tests With View To Greece – Draghi (R.)

The ECB may ‘frontload’ its bank stress test next year, ECB President Mario Draghi said on Monday, when asked if supervisors plan any early checks on the health of Greek lenders. The IMF has been pushing for a fresh asset quality review at Greek banks, possibly as part of an bailout review that is slated to start soon. The ECB has rejected the call, saying that the next check is the regular 2018 stress test, but Draghi’s words suggest that ECB may be somewhat flexible with its timeline. “The SSM (Single Supervisory Mechanism) will take its decision with full independence,” Draghi told members of the European Parliament. “And what the SSM plans to do next year is to have a stress test, possibly frontloading the stress test, and basically the SSM sent a letter to the IMF concerning exactly this expected line of action,” Draghi said.

Maybe Macron can do some good too.

• French Government Declares War On Pesticides (AFP)

France is planning to cut back on use of all pesticides, the government said Monday, though it rowed back on an announcement of an outright ban on controversial chemical glyphosate. Government spokesman Christophe Castaner had said earlier Monday that France – Europe’s biggest food producer a- intended to phase out glyphosate completely by 2022 over fears that it may cause cancer. But he later reversed his comments, saying that by the end of President Emmanuel Macron’s five-year term “the government is committed to seeing significant progress on all pesticides”. Glyphosate is the active ingredient in one of the world’s most widely used weedkillers, Roundup, produced by the US agro-chemicals giant Monsanto. The European Commission has proposed extending the licence for the use of the chemical for 10 years, which France has said it will vote against and try to block.

France’s biggest farming union, the FNSEA, said Monday that it was “out of the question” for the country to go it alone, worrying that a French ban could put them at a disadvantage against European competitors. “A sudden ban, no — a path for reducing it and finding solutions, if the solutions are good economically and technically, we can see it happening,” said FNSEA chief Christiane Lambert. Europe limited use of glyphosate last year pending further research. The EU’s chemical agency said glyphosate should be not be classified as cancer-causing. But this is challenged by scientists and environmentalists who point to a finding by the International Agency for Research on Cancer that glyphosate is “probably carcinogenic”. Some 1.3 million people have signed an online petition calling for a ban on the chemical.

Can mankind rid the earth of its presence? Stay tuned.

• Our Food Crops Face Mass Extinction Too (G.)

A “sixth mass extinction” is already under way, scientists are now warning us. Species such as the Bengal tiger and blue whale are vanishing at an alarming rate, and mournful eulogies are being written on how those born in 20 years’ time may never see an African elephant. But who is writing the eulogy for our food? Huge proportions of the plant and animal species that form the foundation of our food supply -known as agrobiodiversity- are just as endangered and are getting almost no attention. Take some consumer favourites: chips, chocolate and coffee. Up to 22% of wild potato species are predicted to become extinct by 2055 due to climate change. In Ghana and Ivory Coast, where the raw ingredient for 70% of our chocolate is grown, cacao trees will not be able to survive as temperatures rise by two degrees over the next 40 years. Coffee yields in Tanzania have dropped 50% since 1960.

These crops are the tip of the iceberg. Across the world, 940 cultivated species are threatened. Agrobiodiversity is a precious resource that we are losing, and yet it can also help solve or mitigate many challenges the world is facing. It has a critical yet overlooked role in helping us improve global nutrition, reduce our impact on the environment and adapt to climate change. According to the World Health Organisation, poor diet is the biggest cause of early death and disability. Globally, 2 billion people are undernourished, while 2 billion are obese and at risk of contracting diabetes, heart disease and cancer. Focusing on large-scale intensive production of starchy crops for calories rather than nutritious diets has led to serious levels of obesity around the world, from the US to Kenya. Our agrobiodiversity base can be a source of affordable, nutritious food – provided we don’t let it disappear.

[..] About 33% of the world’s farmland is estimated to be degraded, lacking the nutrients essential for growing crops. Agrobiodiversity once again has a solution. Planting cold-tolerant legumes and forages throughout winter has helped farmers in France naturally reduce weed infestation as well as increasing soil’s nutrient content and capacity to hold water. Natural remedies such as this can enhance the sustainability of farms worldwide, reducing the sector’s impact on the environment.

“Three-quarters of the world’s food today comes from just 12 crops and five animal species”. In India, there used to be 100,000 varieties of rice. Today, there’s a big struggle going on to preserve a few dozen. There are many different banana species, but we all eat just one, the Cavendish. Which is under severe threat from a global fungus and could be gone in 5-10 years.

• Sixth Mass Extinction Of Wildlife Also Threatens Global Food Supplies (G.)

The sixth mass extinction of global wildlife already under way is seriously threatening the world’s food supplies, according to experts. “Huge proportions of the plant and animal species that form the foundation of our food supply are just as endangered [as wildlife] and are getting almost no attention,” said Ann Tutwiler, director general of Bioversity International, a research group that published a new report on Tuesday. “If there is one thing we cannot allow to become extinct, it is the species that provide the food that sustains each and every one of the seven billion people on our planet,” she said in an article for the Guardian. “This ‘agrobiodiversity’ is a precious resource that we are losing, and yet it can also help solve or mitigate many challenges the world is facing. It has a critical yet overlooked role in helping us improve global nutrition, reduce our impact on the environment and adapt to climate change.”

Three-quarters of the world’s food today comes from just 12 crops and five animal species and this leaves supplies very vulnerable to disease and pests that can sweep through large areas of monocultures, as happened in the Irish potato famine when a million people starved to death. Reliance on only a few strains also means the world’s fast changing climate will cut yields just as the demand from a growing global population is rising. There are tens of thousands of wild or rarely cultivated species that could provide a richly varied range of nutritious foods, resistant to disease and tolerant of the changing environment. But the destruction of wild areas, pollution and overhunting has started a mass extinction of species on Earth.

The focus to date has been on wild animals – half of which have been lost in the last 40 years – but the new report reveals that the same pressures are endangering humanity’s food supply, with at least 1,000 cultivated species already endangered. Tutwiler said saving the world’s agrobiodiversity is also vital in tackling the number one cause of human death and disability in the world – poor diet, which includes both too much and too little food. “We are not winning the battle against obesity and undernutrition,” she said. “Poor diets are in large part because we have very unified diets based on a narrow set of commodities and we are not consuming enough diversity.”

Debt Rattle September 21 2017

Sep 212017

September 21, 2017 Posted by Raúl Ilargi Meijer at 8:57 am Finance Tagged with: crash, deflation, extinction, Fed, inflation, Maria, peace, rate hike, Trump, Yellen 3 Responses »

Pablo Picasso Jacqueline in Turkish costume 1955

• Yellen Brushes Aside Inflation ‘Mystery’ While Fed Eyes Rate Hike (BBG)

• Federal Reserve Will Continue Cutting Economic Life Support (Smith)

• What Shiller Says Is Preventing A 1929-Like Stock Market Crash (CNBC)

• Stock Market Bubbles in Perspective (Ma)

• We’re Officially In The 2nd-Largest Bull Market Since World War II (BI)

• Who’s Pulling The Strings? (Ren.)

• 144 Years Ago A Panic Shut Down The Stock Market For The First Time (Cashin)

• China’s Dangerous House Price Boom Is Spreading (BBG)

• Japan’s “Deflationary Mindset” Grows (ZH)

• Greece Considers Bond Swap As It Looks To Bailout Exit (R.)

• Abbas Says Trump May Have Mideast ‘On the Verge’ of Peace Deal

• 4-6 Months To Restore Puerto Rico Electricity After Hurricane Maria (NBC)

• Global Mass Extinction Set To Begin By 2100 (Ind.)

Inflation is arguably the Fed’s no. 1 concern left. Yellen admits they don’t know what it is or does, though. Still, decisions concerning billions and trillions are taken. No direction home.

• Yellen Brushes Aside Inflation ‘Mystery’ While Fed Eyes Rate Hike (BBG)

Federal Reserve Chair Janet Yellen acknowledged that the fall in inflation this year was a bit of a “mystery” but suggested that the central bank was on course to raise interest rates again in 2017 nonetheless. She told reporters on Wednesday that the economy was robust enough to withstand further rate increases and an imminent reduction in the Fed’s $4.5 trillion balance sheet, as it exits from a crisis-era policy a decade after the onset of the Great Recession.“We continue to expect that the ongoing strength of the economy will warrant gradual increases” in rates, she told a press conference after the Federal Open Market Committee announced that it will slowly begin to pare its bond holdings next month. As expected, the target range for the federal funds rate was held at 1% to 1.25%. The central bank’s intention to press ahead with another rate hike this year and three more in 2018 caught investors by surprise, sending bond yields and the dollar higher.

The strategy represents a bit of a gamble because it risks cementing inflation permanently below the Fed’s 2% target. As measured by the personal consumption expenditures price index, inflation has ebbed this year even as the economy and the labor market have continued to improve. After briefly poking above 2% earlier this year, it fell to 1.4% in June and July. “I will not say that the committee clearly understands what the causes are of that,” Yellen, 71, said. While transitory forces such as a one-time cut in mobile-phone service charges were part of the story, they did not fully explain the shortfall, she said. The Fed chief though argued that the ongoing strength of the economy and the labor market would ultimately help lift inflation, while she kept open the possibility the central bank would alter course if that proved not to be the case.

The Fed doesn’t serve the people. Never forget.

• Federal Reserve Will Continue Cutting Economic Life Support (Smith)

First, let’s be clear, historically the Fed’s predictable behavior has been to skip major policy actions in September and then startle markets with renewed and aggressive actions in December. People placing bets on a Fed rate hike in September would look at this pattern and say “no way.” However, the narrative I see building in Fed rhetoric and in the mainstream media is that stock markets have become “unruly children” and that the Fed must become a “stern parent,” reigning them in before they are crushed under the weight of their own naive enthusiasm. In my view, the Fed will continue to do what it says it is going to do — raise interest rates and reduce and remove stimulus, and that the mainstream narrative will soon be adjusted to suggest that this is “necessary;” that stock markets need a bit of tough love.

If the Fed means to follow through with its stated plans for “financial stability” in markets, then the only measure that would be effective in shell-shocking stocks back to reality would be a surprise hike, a surprise announcement of balance sheet reduction or both at the same time If the Fed intends to continue cutting off life support to equities and bonds in preparation for a controlled demolition of the U.S. economy, then there is a high probability at the very least of a balance sheet reduction announcement this week with strong language indicating another rate hike in December. I also would not completely rule out a surprise rate hike even though September is usually a no-action month for central banks. This would fit the trend of central banks around the globe strategically distancing themselves from artificial support for the financial structure.

Last week, the Bank of England surprised investors with an open indication that they may begin raising interest rates “in the coming months.” The Bank Of Canada surprised some economists with yet another rate hike this month and mentions of “more to come.” The European Central Bank has paved the way for a tapering of stimulus measures according to comments made during its latest meeting early this month. And, the Bank of Japan initiated taper measures in July. Even Forbes is admitting that there appears to be a “coordinated tightening of monetary policy” coming far sooner than the mainstream expects. If you understand how the Bank for International Settlements controls policy initiatives of national central bank members, then you should not be surprised that central banks all over the world are pursuing the same actions and the same rhetoric. The only difference between any of them is the pace they have chosen in taking the punch bowl away from the party.

Psychology and obesity. Gee, thanks Bob! Feel much more confident now.

• What Shiller Says Is Preventing A 1929-Like Stock Market Crash (CNBC)

It’s a comparison no one wants to hear — that this stock market bears striking similarities to that of 1929. The observation is coming from Nobel Prize-winning economist Robert Shiller, who’s been arguing valuations are extremely expensive. But instead of predicting an epic stock market crash, he’s finding reasons to be optimistic. “The market is about as highly priced as it was in 1929,” said Shiller on Tuesday’s “Trading Nation.” “In 1929 from the peak to the bottom, it was 80% down. And the market really wasn’t much higher than it is now in terms of my CAPE [cyclically adjusted price-to-earnings] ratio. So, you give pause when you notice that.” In his first interview since penning an op-ed on Sept. 15 in The New York Times, the Yale University economics professor reiterated to CNBC that there’s one vital characteristic protecting investors from losing their nest eggs: Market psychology.

“It’s not just a matter of low interest rates, it’s something about the American atmosphere. It’s partly the Trump atmosphere. Investors love this. I can’t exactly explain – maybe it has something to do with prospective tax cuts. But I don’t think it’s just that. It’s something deeper, and it’s pushing the American market up,” he added. Unlike 1929, Shiller points out there’s not much talk about people borrowing exorbitant amounts of money to buy stocks. Plus, he notes there’s now more regulation. But don’t mistake the Yale University economics professor for a bull. “I don’t want to encourage people too much to put a lot into the most expensive market in the world,” said Shiller. “The U.S. has the highest CAPE ratio of 26 countries. We are number one.”

[..] Shiller may see red flags, but he isn’t ruling out a market that continues to churn out fresh records for months, if not years. “I wouldn’t call it healthy, I’d call it obese. But you know, some of these obese people live to be 100 years, so you never know,” said Shiller.

Still feeling good, Shiller?

• Stock Market Bubbles in Perspective (Ma)

A better type of average would be the median. It literally represents the middle of a sequence of ranked numbers. In most cases, it is not influenced by outliers. By using median (instead of mean) earnings, I refer to this valuation approach as the CAPME ratio. It currently shows the S&P Composite is not the second or third most expensive stock market cycle. This finding supports those who criticize the traditional CAPE ratio of overstating the valuation of the S&P Composite Index. The problem for critics though is using the CAPME ratio still shows the U.S. stock market is very expensive right now. In fact, it is the fourth most expensive, behind the stock market cycle that occurred during the Subprime Mortgage Bubble. Based on the data Professor Shiller uses, you can see this in the graph below that looks back 135 years.

You will notice in the graph above that the past 5 stock market bubbles were all valued at one point at more than 20-times median, annual, inflation-adjusted earnings. The valuation range of those peaks is wide though given the Tech Bubble was valued at more than 40-times at its peak. This makes the Tech Bubble potentially an outlier. Furthermore, all 5 stock market bubbles did not last long. They were fleeting. To put this all into perspective, consider these valuations by their percentile ranks. You can see this from the orange lines in the graph below. [It] shows the aforementioned 5 stock market cycles turned into bubbles when their CAPME valuation ratios reached a very high level of roughly the 90th percentile (red dotted line). In other words, these bubbles formed when their valuations were near or at the most expensive decile.

Investors beware: the valuation of the S&P Composite Index is currently ranked at the 94th percentile. This puts the U.S. stock market smack-dab at the heart of bubble territory. It has been argued lots that the high stock market valuation is justified by low interest rates. This argument does not work for me. Let me tell you why. Yields on 10-year U.S. treasury bonds in early-1941 were lower than they are now. Despite lower interest rates in early-1941, the stock market CAPME valuation ratio was quite low at that time ranking at around the 30th percentile. Furthermore, the amount of debt provided by stock brokers used to fuel the current stock market cycle is at a record level. This could prove problematic given bubbles driven by financial leverage are particularly dangerous.

The aforementioned 5 stock market cycles turned into bubbles when their CAPME valuation ratios reached the 90th percentile. The U.S. stock market is back there again. Its valuation is squarely in the middle of that very expensive decile looking back 135 years. The 5 previous instances of stock market bubbles suggest this will not end well. Bubbles never do, particularly ones driven by financial leverage.

Whcih goes to show how easily markets are manipulated.

• We’re Officially In The 2nd-Largest Bull Market Since World War II (BI)

We’re officially in the second-largest bull market since World War II. A week ago Monday, the S&P 500 index’s bull market became the second-best performing in the modern economic era. Stocks have climbed by about 270% from their March 2009 low over the past eight years, according to data from LPL Financial. Today’s bull market has eclipsed the 267% gain seen from June 1949 to August 1956. But the bull market from October 1990 to March 2000 remains in the top spot. “The logical question we continue to receive is: how much further can it go? We have an old bull market and an old expansion. When will the music stop?” Ryan Detrick, the senior market strategist for LPL Financial, wrote in commentary. “The current bull market is officially 101 months old, which might sound old (and it is), but remember that bull markets don’t die of old age, they die of excesses.”

“The central bankers of the world have dumped $30 trillion into the global economy over the last eight years and we’ve got 2% growth and change..”

• Who’s Pulling The Strings? (Ren.)

Feierstein cited the Resolution Trust debacle as an example of what should have happened. The Trust was declared insolvent as a consequence of the 1980s Savings and Loans Crisis and up to 300 bankers were jailed. “This is what should have happened this time around, instead of taking hundreds of trillions of dollars taxpayer’s money and placing the taxpayer at incredible peril and just added liquidity to the markets,” he said. “Giving more money to an insolvent institution is not the solution. You cannot pay your way out of debt with borrowed money. It’s not going to cure the underlying problem of insolvency.” This is why Feierstein refers to the entire global economy as a Ponzi scheme. “The amount of debt in the global financial system is a Ponzi scheme because the United States government has over $240 trillion in debt which is more than three times global GDP.

That’s the sum of all goods and services produced with zero consumption for three years. We’ll never pay out the debt that’s owed.” Feierstein says the government has tried to replace consumer demand with debt and printed money and consumers haven’t come back into the market. “That’s why we’ve got a huge government that thinks they can control everything and price action manipulating volatility to unrealistically low levels,” he said. “They think the consumer will eventually come back but they won’t because the jobs have disappeared and the unemployment rate which we’ve spoken about before is a lie. It’s not 4.3%, it’s closer to 20% because you’ve got people who aren’t participating in the workforce. And that’s probably over 100 million people in America.” Financial times journalist, Rana Foroohar says consumers are all tapped out.

“Credit is what we do to sort of keep middle class voters happy,” she said. “We’re tapped out.” The good news and the bad news is that when the next financial crisis comes the US government will not have as much firepower to throw at it. “The central bankers of the world have dumped $30 trillion into the global economy over the last eight years and we’ve got 2% growth and change,” she said. “It’s pathetic.” Feierstein said it is important to highlight how derivative products have contributed massively to this problem. “When I say there is too much leverage, basically derivative products allows financial institutions and investors to create 100 to 1 leverage. You put up $1 to control $100, or $500 dollars in assets. Think about that on a big scale. If you take $1 million you can control something worth $100 million, or even $500 million depending upon how you gear the leverage ratio.

Art Cashin tells a story.

• 144 Years Ago A Panic Shut Down The Stock Market For The First Time (Cashin)

“[O]n Saturday, September 20, 1873, for the first time in its history, the NYSE closed in response to a panic. (The word circuit breaker had not been invented yet….er…..neither had circuits.) A week or more before, one of the most renowned firms in American finance and especially U.S. Treasury auctions came under a cloud of suspicion. The firm was Jay Cooke & Company. And, on most continents, it was seen as a key player. After all, its aggressive style had made it the key underwriter for the billions of Treasury bonds issued during and after the Civil War. (Contemporary competitors had shied back fearing that deficit spending had gotten out of control.) Anyway, the concern about in this key brokerage firm only confused the market at first. But as this day approached, there were hints that the problems would spread to other brokers. On the 18th, liquidation of equities showed up at the ‘first call.’

For most of its first century of existence, the NYSE was a ‘call market.’ The chairman, or other senior officer, would call out the name of one of the listed issues. Brokers who had an interest in that ‘issue’ would arise from their ‘seats’ and begin to bargain with any other brokers arisen from their ‘seats’. When transactions ended in that issue (assuming they were not all buyers), brokers returned to their ‘seats’ and the chairman called the next issue on the roll. When the last issue was called, the session officially ended. There were two sessions each day. […] So, here they were. Rumors surfaced that, perhaps some other brokers were involved and the first call on the 18th turned soft. The second call turned soggy. Prices were down and with no on-going after market; all you could do (as the banks did) is await the next call.

The morning call on the 19th was messy and the afternoon call was just a disaster. Outside, in a heavy rain, crowds gathered on Wall Street to withdraw securities and money from brokers. By the morning of the 20th anyone who was in the phone book (if there had been one at the time) was rumored to have been impacted by the problem. So, naturally the morning call on Saturday the 20th was a disaster. So much so that the Exchange opted to close until the crisis calmed (skipping the P.M. call). Close they did and for a lot more than one ‘call.’ But, but perhaps because banks and investors naturally needed some means of evaluating holdings, they reopened about ten days later. However, the rumors would not go away and liquidations and defaults continued. The history books call it the Panic of 1873. And, it put the American economy in a tailspin for years. (Nearly 10,000 businesses failed.)”

Until recently, Chinese hardly borrowed at all. Now, debt is the only way to keep up.

• China’s Dangerous House Price Boom Is Spreading (BBG)

Hefty mortgages have pushed up Chinese household debt, reducing their room for maneuver should income growth stall, according to recent research by Gene Ma, chief China economist at the Institute of International Finance in Washington. In general, it’s debt that’s the warning sign. As developers and households become more leveraged, the risk is that a price downturn doesn’t remain contained within the property market. “The high leverage will amplify the damage to the economy if a property bust happens,” said Bloomberg Intelligence economist Fielding Chen. “The shock wave will be passed onto the entire financial system, and losses will be greater,” he said. Once home prices tumble, about 40% of Chinese banks will be hit hard, according to a recent research note from Ping An Securities.

Analysts have argued that the debt load in the Chinese property market is far from a carbon copy of the situation in Japan’s bubble era before its bust in the 1990s, nor is it similar to the sub-prime crisis in the U.S. a decade ago. With down payment requirements of at least 20% for first purchases and as much as 70% for second homes, China’s household mortgages still stand at relatively safe levels, said Wang Qiufeng, an analyst at China Chengxin International in Beijing. Ping An Securities also argues that the odds of a property crash happening in the near term are very small. But as household debt-to-income ratios have risen almost to levels seen in advanced economies, the potential impact on the economy of a popping bubble would be considerable.

Abenomics is (was) an attempt to force people into spending. That scares them into not spending. It doesn’t come any simpler.

• Japan’s “Deflationary Mindset” Grows (ZH)

After being force-fed more stimulus than John Belushi, and endless rounds of buying any and every asset that dares to expose any cracks in the potemkin village of fiat folly, Japan remains stuck firmly in what Abe feared so many years ago – a “deflationary mindset.” As Bloomberg reports, cash and deposits held by Japanese households rose for 42nd straight quarter at the end of June as the nation’s consumers continued to favor saving over spending. The “deflationary mindset” that the Bank of Japan is battling to overcome was also evident in the money laying idle in corporate coffers, which stayed near an all-time high, according to quarterly flow of funds data released by the BOJ on Wednesday. Still, as Bloomberg optimistically notes, with the economy expanding much faster than its potential growth rate, greater inflationary pressures could be on the way, which may prompt a shift in behavior by consumers and companies… or not!

Musical chairs.

• Greece Considers Bond Swap As It Looks To Bailout Exit (R.)

Greece is considering swapping 20 small bond issues for four or five new ones, government sources said, as it prepares to exit its international bailout and resume normal financing operations. The country has been surviving on rescue funds since 2010 and is anxious to draw a line under its bailout phase next year. The government is considering a swap that would consolidate the secondary market into a few benchmark issues, replacing 20 separate bonds with a face value of around 32 billion euros, said officials familiar with the proposal. “We are planning to proceed with some debt management actions … to improve liquidity and tradeability,” one senior government official said. Officials said the move was still under discussion and did not say when it might happen, adding that bondholders had yet to be sounded out.

The 20 bonds were issued in 2012 in a voluntary scheme whereby private bondholders took a 53.5% haircut on their investments. It was the world’s biggest debt restructuring involving bonds with a total face value of 206 billion euros. Major holders included banks and pensions funds in Greece and abroad. Two years later in 2014, Greece made two forays as part of a plan to regain full bond market access. This time the plan is more modest but would represent a major step toward for bigger debt issues. Greece issued a five-year bond in July, and investors that bought the new bond are already making a profit of about 1.5% since the beginning of the year. Greece’s borrowing costs have fallen sharply this year back to pre-crisis levels, as investors see the prospect further bailouts diminishing as well as signs of economic improvement.

Wouldn’t that be something.

• Abbas Says Trump May Have Mideast ‘On the Verge’ of Peace Deal

Palestinian Authority President Mahmoud Abbas said Wednesday that President Donald Trump’s diplomatic efforts in the Mideast give him confidence that the region is “on the verge” of peace. Abbas said his government has met with U.S. diplomats more than 20 times since Trump took office in January. “If this is an indication of anything, it indicates how serious you are about peace in the Middle East,” Abbas said through a translator at a meeting with the U.S. president during the United Nations General Assembly in New York. “I think we have a pretty good shot, maybe the best shot ever,” Trump said. “I certainly will devote everything within my heart and within my soul to get that deal made.” “Who knows, stranger things have happened,” he added. “No promises, obviously.”

Trump met with Abbas two days after a similar meeting with Israeli Prime Minister Benjamin Netanyahu, where the U.S. president said he was hopeful Israelis and Palestinians would be able to come to a peace agreement during his presidency. The president recently dispatched his son-in-law and senior adviser, Jared Kushner, to the region in a bid to restart peace talks. Kushner was joined by Jason Greenblatt, the president’s envoy for Israeli-Palestinian peace, and deputy national security adviser Dina Powell. The White House is trying to take advantage of a period of relative calm following violent clashes earlier this summer over Israeli security arrangements at the Jerusalem shrine known to Jews as Temple Mount and to Muslims as Haram al-Sharif, said a senior administration official who requested anonymity to discuss the negotiations.

Trump has said he’s hopeful Kushner can help restart a peace process that has made little headway over the past 25 years. He made addressing the Israeli-Palestinian conflict an early priority, hosting both Abbas and Netanyahu at the White House during the opening months of his presidency and visiting Israel during his first international trip as president. The last round of U.S.-led talks, a pet project of former Secretary of State John Kerry, broke down three years ago amid mutual recriminations.

How does a country, state, territory survive without power for half a year?

• 4-6 Months To Restore Puerto Rico Electricity After Hurricane Maria (NBC)

Hurricane Maria is likely to have “destroyed” Puerto Rico, the island’s emergency director said Wednesday after the monster storm smashed ripped roofs off buildings and flooded homes across the economically strained U.S. territory. Intense flooding was reported across the territory, particularly in San Juan, the capital, where many residential streets looked like rivers. The National Weather Service issued a flash flood warning for the entire island shortly after 12:30 a.m. ET. Yennifer Álvarez Jaimes, Gov. Ricardo Rosselló’s press secretary, told NBC News that all power across the island was knocked out. “Once we’re able to go outside, we’re going to find our island destroyed,” Emergency Management Director Abner Gómez Cortés said at a news briefing. [..] Maria, the strongest storm to hit Puerto Rico since 1928, had maximum sustained winds of 155 mph when it made landfall as a Category 4 storm near the town of Yabucoa just after 6 a.m. ET.

But it “appears to have taken quite a hit from the high mountains of the island,” and at 11 p.m. ET, it had weakened significantly to a Category 2 storm, moving away from Puerto Rico with maximum sustained winds of 110 mph, the agency said. [..] “Extreme rainfall flooding may prompt numerous evacuations and rescues,” the agency said. “Rivers and tributaries may overwhelmingly overflow their banks in many places with deep moving water.” San Juan San Juan Mayor Carmen Yulín Cruz told MSNBC that the devastation in the capital was unlike any she had ever seen. “The San Juan that we knew yesterday is no longer there,” Yulín said, adding: “We’re looking at four to six months without electricity” in Puerto Rico, home to nearly 3.5 million people. “I’m just concerned that we may not get to everybody in time, and that is a great weight on my shoulders,” she said.

Nice math, but many questions.

• Global Mass Extinction Set To Begin By 2100 (Ind.)

Planet Earth appears to be on course for the start of a sixth mass extinction of life by about 2100 because of the amount of carbon being pumped into the atmosphere, according to a mathematical study of the five previous events in the last 540 million years. Professor Daniel Rothman, co-director of MIT’s Lorenz Centre, theorised that disturbances in the natural cycle of carbon through the atmosphere, oceans, plant and animal life played a role in mass die-offs of animals and plants. So he studied 31 times when there had been such changes and found four out of the five previous mass extinctions took place when the disruption crossed a “threshold of catastrophic change”. The worst mass extinction of all – the so-called Great Dying some 248 million years ago when 96 per cent of species died out – breached one of these thresholds by the greatest margin.

Based on his analysis of these mass extinctions, Professor Rothman developed a mathematical formula to help predict how much extra carbon could be added to the oceans – which absorb vast amounts from the atmosphere – before triggering a sixth one. The answer was alarming. For the figure of 310 gigatons is just 10 gigatons above the figure expected to be emitted by 2100 under the best-case scenario forecast by the IPCC. The worst-case scenario would result in more than 500 gigatons. Some scientists argue that the sixth mass extinction has already effectively begun. While the total number of species that have disappeared from the planet comes nowhere near the most apocalyptic events of the past, the rate of species loss is comparable. Professor Rothman stressed that mass extinctions did not necessarily involve dramatic changes to the carbon cycle – as shown by the absence of this during the Late Devonian extinction more than 360 million years ago.

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