Dec 132017
 
 December 13, 2017  Posted by at 10:22 am Finance Tagged with: , , , , , , , , , ,  7 Responses »
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MC Escher Relativity 1953

 

‘Buy the Dip’ Has Never Been More Popular in US Stocks (BBG)
Bitcoin Bears Soon Able to Short Futures Through Interactive Brokers (BBG)
China’s GDP Growth Set To Plunge To Near 30-Year Low In 2018 – ADB (CNBC)
Free Money From China Comes With Strings (CNBC)
2700 By Christmas? (Roberts)
The Great Globalisation Lie (Rodrik)
Britain Doesn’t Appear To Be Collapsing As A Result Of Brexit (Bilbo)
Abracadabra (Jim Kunstler)
FBI Officials Said Clinton ‘Has To Win’ Race To White House (R.)
Former Facebook Executive: Social Media Is Ripping Society Apart (G.)
Japan Court Bars Restart of Nuclear Reactor Shut After Fukushima (BBG)
Greeks Crushed By Tax Burden (K.)
The Refugee Crisis In Greece Hasn’t Gone Away And Our Leaders Don’t Care (NS)
Arctic Permafrost Thawing Faster Than Ever (AP)

 

 

Full blast casino.

‘Buy the Dip’ Has Never Been More Popular in US Stocks (BBG)

“Buy the dip” has never been so popular. The practice of treating any and all pullbacks in risk assets as opportunities to accumulate more has become entrenched in global equity markets, especially in the U.S., according to analysts at Bank of America Merrill Lynch. “Investors no longer fear shocks but love them,” a team led by global equity derivatives researcher Nitin Saksena wrote in a note Tuesday. “Since 2013, central banks have stepped in (or communicated that they may step in) to protect markets, leaving investors confident enough to ‘buy-the-dip.’” Intraday realized volatility for the S&P 500 Index relative to the realized volatility in the open-close ratio for the benchmark gauge has soared to record highs this year, emblematic of an environment in which buying the dip has become gospel for traders, according to the bank’s analysis of price action going back to 2003.

This ratio is also above the 90th%ile for the Euro Stoxx 50 Index and Nikkei 225. In practice, this suggests any early weakness in stocks is being met with an onslaught of buying that propels the index back to where it opened by the time the closing bell sounds. BofA equity derivatives strategist Clovis Couasnon puts it this way: Imagine the S&P 500 Index is down 1% at midday, only to rebound and finish broadly unchanged. The open-to-close return would be close to zero, but under the surface there were two moves of about 1%. “So if the buy-the-dip behavior is strong enough to cause mean reversion, this will cause intraday vol to be more supported than open-to-close vol,” he explained.

Read more …

Buy the dip 2.0. Why does this make me feel nervous?

Bitcoin Bears Soon Able to Short Futures Through Interactive Brokers (BBG)

Interactive Brokers plans to let bitcoin bears bet against the digital currency’s recently debuted futures contracts. Starting this week, the brokerage will allow its users to take short positions on bitcoin futures under certain conditions, according to company spokeswoman Kalen Holliday, who said the decision was made “in response to client demand.” Interactive Brokers has accepted long positions with a margin requirement of at least 50% since the contracts debuted Sunday on Cboe Global Markets Inc. Shorting bitcoin futures, or betting that their price will fall, is potentially an even riskier strategy.

It’s possible to lose an unlimited amount of money on a short position, particularly if the cost of the digital currency and its derivatives continues to climb. Interactive Brokers has a few requirements for shorting bitcoin futures: the spread must be one-to-one, and the short leg must have the earlier expiry date so that once it expires the surviving leg will be long, according to Holliday. Trading won’t be offered in retirement accounts or to Japanese residents.

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That’s going to hurt.

China’s GDP Growth Set To Plunge To Near 30-Year Low In 2018 – ADB (CNBC)

China’s economy will expand a bit faster than expected this year on resilient consumption but growth will stutter in 2018, the Asian Development Bank said Wednesday. Growth on the mainland is now expected at 6.8% in 2017, up from the previous forecast of 6.7%, the Asian Development Bank (ADB) said in its latest forecasts released on Wednesday. Growth prospects in China for 2017 have been revised upward as spending by households has held up reasonably well. Still, persisting headwinds will weigh on economic impulses next year. The world’s second-largest economy is likely to grow by 6.4% in 2018 due to “controlled moderation” in the economy, Joseph Zveglich, ADB’s macroeconomic research director told CNBC. That would mark the slowest pace of expansion since 1990, according to World Bank data.

The Chinese government is treading a thin line between deleveraging and keeping its debt-fueled economy humming. Growth in the wider region will also be a bit better this year. Stronger-than-expected exports and domestic consumption likely lifted economic growth in developing Asia in 2017, the ADB said. The upgraded outlook saw GDP growth in the region of developing Asia moving up 0.1 percentage point to 6% in 2017. The region includes 45 ADB members including China, Hong Kong, South Korea and Singapore, but excludes Japan. The rosier prediction came after a year of uncertainty due to fears of trade protectionism. There was “stronger-than-expected growth in most of our economies especially in terms of the pickup in trade,” Zveglich said.

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Said it often before: China is exporting its credit Ponzi and its overcapacity. The countries along the Belt Road will end up paying.

Free Money From China Comes With Strings (CNBC)

China giveth, and China taketh away. Across Asia, the world’s second-largest economy has financed infrastructure projects as part of its massive, so-called Belt and Road program. But it’s entirely up to Beijing to decide which countries get funding and when — and Pakistan offers a cautionary tale. Pakistan is home to one of China’s central infrastructure schemes: a near $60 billion collection of land and sea projects known as the China-Pakistan Economic Corridor (CPEC). But Chinese President Xi Jinping’s administration said it would halt funding for three major roads that are part of the corridor, Pakistani newspaper Dawn reported last week, citing an Islamabad official. Beijing will resume funding after it releases “new guidelines,” the newspaper said.

[..] If true, the news is proof of China’s unilateral management style, analysts said. “What Beijing giveth, Beijing can also taketh away,” Ian Bremmer, president and founder of political consultancy Eurasia Group, wrote in a recent note. Unlike the Asian Infrastructure Investment Bank, another China-led program, Belt and Road projects “aren’t transparent or consensus driven,” he said. “The nature of Chinese economic decision-making has the potential to cause significant downside risks for those countries that become most dependent on the Belt Road initiative,” he said. Nations that suddenly fall out of political favor with Beijing, for whatever reason, could subsequently suffer weighty economic consequences.

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The Fed hasn’t even started to tighten yet. The feast of liquidity just goes on. But it can’t going forward, or Fed credibility is gone.

2700 By Christmas? (Roberts)

Following the early 2016 correction, the “carry trade” has picked up steam and has continued to force asset prices higher as liquidity seeks opportunity. With the “carry trade” now extremely extended currently, which is also highly leveraged, watch for a triggering of a “sell signal” as a sign to temporarily reduce equity-related risk. But wait, the Fed is reducing their liquidity flows into the financial system, right? Not so much. As shown in the first chart below, the Fed’s balance sheet continues to remain stable even as asset prices surge.

With global Central Banks still flooding the system with liquidity, the Fed has yet to begin rolling off their reinvestments as expected. In fact, the Fed made a timely reinvestment during the “Senate Tax Bill” debacle earlier this month.

Of course, that bump of liquidity sent asset prices rocketing higher. The question becomes just what will happen to the markets when the Fed actually does begin to aggressively decrease their “reinvestments” in the coming year. The projected decline in the balance sheet looks like the following. One can only imagine how a market which has been repeatedly driven higher on a “feast of liquidity,” either from the Fed or other Central Banks, will react to being put on a diet.

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“The gain to the US from Nafta: just 0.1 per cent of GDP. If the same effort had gone into creating decent jobs, would we have Trump?”

Globalization automatically leads to Misallocation.

The Great Globalisation Lie (Rodrik)

According to the celebrated Stolper-Samuelson theorem of trade theory, in places—like the US and western Europe—where skilled workers are plentiful, unskilled workers will see their wages decline under freer trade. Openness to trade always hurts some people in society, except in the extreme case (not relevant for any large economy) where the only things imported are things that are never produced at home. In theory, countries could always compensate their losers by redistributing from the winners, and in practice they sometimes did. With its extensive safety nets, Europe in the second half of the 20th century was relatively well prepared to deal with disruptive trade flows. In addition, trade negotiators initially carved out special regimes for garments and textiles exporters in the advanced economies, limiting their exposure.

Even in the best of circumstances, however, freeing up trade caused pain as well as gain. After the 1980s, the balance began to look worse and worse. When tariffs (like taxes) are too high they distort economic behaviour more, and do more damage to prosperity. Back in the 1950s and 1960s, tariffs were often very high and so their reduction did much to grow the overall economic pie. But four or five decades later, in a world where typical tariffs were in single figures, the picture was different. If you’re starting off with the tariffs of the post-war era, the standard economic models suggest that to achieve an overall net gain of $1 in national income through liberalising trade, you could expect to see around $4 or $5 of income being reshuffled across different groups within a particular country.

But under the tariffs that applied by the end of the 20th century, achieving that overall dollar of gain would be associated with as much as $20 being redistributed, implying the creation of an awful lot of losers. And what’s more, by the 1990s we were into an era of welfare state retrenchment rather than expansion. So it became less plausible than it used to be to believe that those losses will be compensated.

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Long read.

Britain Doesn’t Appear To Be Collapsing As A Result Of Brexit (Bilbo)

Do you remember back to May 2016, when the British Treasury, which is clearly full of mainstream macroeconomists who have little understanding of how the system actually operates released their ‘Brexit’ predictions? The ‘study’ (putting the best spin possible on what was a tawdry piece of propaganda) – HM Treasury analysis: the immediate economic impact of leaving the EU – was strategically released to have maximum impact on the vote, which would come just a month later. Fortunately, for Britain and its people, the attempt to provide misinformation failed. As time passes, while the British government and the EU dilly-dally about the ‘divorce’ details, we are getting a better picture of what is happening post-Brexit as the ‘market’ sorts what it can sort out.

Much has been said about the destructive shifts in trade that will follow Brexit. But these scaremongers fail to grasp that Britain has been moving away from trade with the EU for some years now and that process will continue into the future. I come from a nation that was dealt a major trading shock at the other end of Britain’s ill-fated dalliance with Europe. It also made alternative plans and prospered as a result. The outcomes of Brexit will be in the hands of the domestic policies that follow. Stick to neoliberalism and there will be a disaster. But the opportunity is there for British Labour to recast itself and seize the scope for better public infrastructure, better services and stronger domestic demand. Then the nation will see why leaving the corporatist, austerity-biased failure that the EU has become was a stroke of genius.

The only good thing about the Treasury Report was that it was “Printed on paper containing 75% recycled bre content minimum” but even then it was a waste of real resources.

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“.. the money that the Fed loaned to the US government (in exchange for a bond) was never there in the first place. The Fed prestidigitated it out of an alternate universe.”

Abracadabra (Jim Kunstler)

So, the Fed has this thing called a balance sheet, which is actually a computer file, filled with entries that denote securities that it holds. These securities, mostly US government bonds of various categories and bundles of mortgages wrangled together by the mysterious government-sponsored entity called Freddie Mac, represent about $4.5 trillion in debt. They’re IOUs that supposedly pay interest for a set number of years. When that term of years expires, the Fed gets back the money it loaned, which is called the principal. Ahhhh, here’s the cute part! You see, the money that the Fed loaned to the US government (in exchange for a bond) was never there in the first place. The Fed prestidigitated it out of an alternate universe. They gave this money to a “primary dealer” bank in exchange for the bond, which the bank abracadabraed up for the US Treasury.

Well, not really. In fact, the Fed just made a notation on the bank’s “reserve” account that the money from the alternate universe appeared there. Somehow that money was sent via a virtual pneumatic tube to the US Treasury, where it was used to pay for drones to blow up Yemeni wedding parties, and for the Secret Service to visit pole dancing bars when the president traveled to foreign lands. Here’s the fun part. The Fed announces that it is going to shed this nasty debt, at about $10 billion worth a month starting this past October. Their stated goal is to reach an ultimate wind-down velocity of $50 billion a month (cue laugh track). If they ever get there (cue laugh track) it would take 20 years to complete the wind-down. The chance of that happening is about the same as the chance that Janet Yellen will come down your chimney on December 24 with a sack-full of chocolate Bitcoins.

But never mind the long view for the moment. One way they plan to accomplish this feat is to “roll off” the bonds. That is, when the bonds mature — i.e. come to the end of their term — they will cease to exist. Poof! Wait a minute! When a bond matures, the issuer has to send the principal back to the lender. After all, the Fed lent the US Treasury X-billion dollars, the US Treasury paid interest on the loan for X-years, and now it has to fork over the full value of the loan (hopefully in dollars that have magically inflated over the years and are now worth less than when they were borrowed — another magic trick!). But that doesn’t happen.

Read more …

More calls for more special counsels.

FBI Officials Said Clinton ‘Has To Win’ Race To White House (R.)

Senior FBI officials who helped probe Donald Trump’s 2016 presidential campaign told a colleague that Democratic Presidential candidate Hillary Clinton had to win the race to the White House, the New York Times reported on Tuesday. Peter Strzok, a senior FBI agent, said Clinton “just has to win” in a text sent to FBI lawyer Lisa Page, the Times reported. The messages showed concern from Strzok and Page that a Trump presidency could politicize the FBI, the report said, citing texts turned over to Congress and obtained by the newspaper.

Justice Department Inspector General Michael Horowitz is investigating the texts in a probe into FBI’s handling of its investigation into Clinton’s use of a private email server for official correspondence when she was Secretary of State under former President Barack Obama, the report added. Strzok was removed from working on the Russia probe after media reports earlier this month suggested he had exchanged text messages that disparaged Trump and supported Clinton. Strzok was involved in both the Clinton email and Russia investigations.

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You don’t say.

Former Facebook Executive: Social Media Is Ripping Society Apart (G.)

A former Facebook executive has said he feels “tremendous guilt” over his work on “tools that are ripping apart the social fabric of how society works”, joining a growing chorus of critics of the social media giant. Chamath Palihapitiya, who was vice-president for user growth at Facebook before he left the company in 2011, said: “The short-term, dopamine-driven feedback loops that we have created are destroying how society works. No civil discourse, no cooperation, misinformation, mistruth.” The remarks, which were made at a Stanford Business School event in November, were just surfaced by tech website the Verge on Monday. “This is not about Russian ads,” he added. “This is a global problem. It is eroding the core foundations of how people behave by and between each other.”

Palihapitiya’s comments last month were made a day after Facebook’s founding president, Sean Parker, criticized the way that the company “exploit[s] a vulnerability in human psychology” by creating a “social-validation feedback loop” during an interview at an Axios event. Parker had said that he was “something of a conscientious objector” to using social media, a stance echoed by Palihapitaya who said that he was now hoping to use the money he made at Facebook to do good in the world. “I can’t control them,” Palihapitaya said of his former employer. “I can control my decision, which is that I don’t use that shit. I can control my kids’ decisions, which is that they’re not allowed to use that shit.” He also called on his audience to “soul-search” about their own relationship to social media. “Your behaviors, you don’t realize it, but you are being programmed,” he said. “It was unintentional, but now you gotta decide how much you’re going to give up, how much of your intellectual independence.

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It often seems that the only thinking people are in courts.

Japan Court Bars Restart of Nuclear Reactor Shut After Fukushima (BBG)

A Japanese court overturned a ruling that allowed a nuclear reactor in the country’s south to operate, frustrating the government’s push to bring online dozens of plants shut in the wake of the 2011 Fukushima disaster. The decision by the Hiroshima High Court, which cited risks from nearby volcanoes, sides with local citizens and reverses a lower court’s ruling that had cleared the way for Shikoku Electric Power to operate its Ikata No. 3 unit, according to an emailed statement Wednesday from the company. The reactor, which restarted last year under stricter safety regulations, has been shut for maintenance and was scheduled to restart on Jan. 20. Shikoku Electric fell as much as 11% in Tokyo, the biggest decline in more than four years, before paring the drop to 8.3%.

The injunction issued by the court is a blow to Prime Minister Shinzo Abe’s goal of having nuclear power account for as much as 22% of the nation’s electricity mix by 2030. Public opposition through local courts and municipal governments has emerged as one of the biggest obstacles to that plan. Just four of Japan’s 42 operable nuclear reactors are currently online. The ruling was the first time a high court in Japan has overturned a lower court on the issue of nuclear restarts since the Fukushima disaster. A district court in Hiroshima sided with the utility in March in deciding not to issue a temporary injunction. Shikoku called Wednesday’s ruling “unacceptable” and said it will try to get it reversed. The injunction is effective through Sept. 30, 2018, according to court documents.

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That loud sucking sound.

Greeks Crushed By Tax Burden (K.)

Tax authorities have confiscated the salaries, pensions and assets of more that 180,000 taxpayers since the start of the year, but expired debts to the state have continued to rise, reaching almost €100 billion, as the taxpaying capacity of the Greeks is all but exhausted. In the month of October, authorities made almost 1,000 confiscations a day from people with debts to the state of more than €500. In the first 10 months of the year, the state confiscated some €4 billion, and the plans of the Independent Authority for Public Revenue provide for forced measures to be imposed on 1.7 million state debtors next year. IAPR statistics show that in October alone, the unpaid tax obligations of households and enterprises came to €1.2 billion. Unpaid taxes from January to October amounted to €10.44 billion, which brings the total including unpaid debts from previous years to almost €100 billion, or about 55% of the country’s GDP.

The inability of citizens and businesses to meet their obligations is also confirmed by the course of public revenues, which this year have declined by more than €2.5 billion. The same situation is expected to continue into next year, as the new tax burdens and increased social security contributions look set to send debts to the state soaring. Notably, since 2014, there has been a consolidated trend of a €1 billion increase each month in expired debts to the state. There are now 4.17 million taxpayers who owe the state money. This means that one in every two taxpayers is in arrears to the state, with 1,724,708 taxpayers facing the risk of forced collection measures. Of the €99.8 billion of total debt, just €10-15 billion is still considered to be collectible, as the lion’s share concerns debts from previous years, in many cases of bankrupt enterprises and deceased individuals.

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“It’s a spot where one can buy and sell drugs, or the bodies of underage boys who are stuck in Greece thanks to a recent law change that dictates they must stay here until they come of age.”

The Refugee Crisis In Greece Hasn’t Gone Away And Our Leaders Don’t Care (NS)

It’s just after nine on an ordinary Thursday night. About 50 people are gathered next to the main entrance of Pedion Tou Areos, the park at the northern limits of central Athens. The weather is now unmistakably cold, but the refugees gathering every night here seem to be increasing in number. It’s a spot where one can buy and sell drugs, or the bodies of underage boys who are stuck in Greece thanks to a recent law change that dictates they must stay here until they come of age. Both the drugs and the boys are cheap. A few euros for a hit of sisa, a synthetic drug called “the cocaine of the poor”, and a tenner for a session in the park’s bushes with kids as young as 14. The faces change, but the situation remains the same, or worse.

A 14-year-old boy from Afghanistan called Mohammed who was working in the park disappeared over the summer without a trace. He most probably made his way towards the border, to be smuggled out. If he’s lucky he will have made it to northern Europe. If not, he will just be one of thousands who have vanished in the Balkan corridor. It’s now December and winter is being felt across the country. Storms in October and November flooded parts of Greece, turning the open air camps that still hold thousands of refugees in more than 50 locations into mudpits. A video shared by refugees currently staying in Moria, the camp on the island of Lesvos that sits at the forefront of the Greek refugee crisis, shows a small child crying while walking through the camp’s grounds. Tents provided by the UNHCR and the Greek state are in bad shape.

Some have caved in. Floors are under mud and water. “They are trying to turn the island into Greece’s Guantanamo,” said the mayor of Mytilene, the capital of Lesvos, at a press conference. If you climb up a little hill on the side of the camp, you can get a good view of the compound. A year ago, the refugees had mostly been staying in prefabs, but fires, accidents and overcrowding brought the tents back. [..] An emergency relief programme is relocating people from Lesvos to camps across Greece, 30 to 50 at a time. But the rest of the camps are in is no better shape. Recently, a nine-year-old boy from Afghanistan tried to commit suicide on Chios, another Greek island. The doctors treating him suspected he had been abused inside the camp. It’s no suprise. Médecins Sans Frontières Greece said that “in our clinic in Lesvos, we have at least ten people per day who have self-harmed or attempted suicide. The situation in the islands is beyond desperate.”

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“The Arctic has traditionally been the refrigerator to the planet, but the door of the refrigerator has been left open..”

Arctic Permafrost Thawing Faster Than Ever (AP)

Permafrost in the Arctic is thawing faster than ever, according to a new US government report that also found Arctic seawater is warming and sea ice is melting at the fastest pace in 1,500 years. The annual report released on Tuesday by the National Oceanic and Atmospheric Administration showed slightly less warming in many measurements than a record hot 2016. But scientists remain concerned because the far northern region is warming twice as fast as the rest of the globe and has reached a level of warming that’s unprecedented in modern times. “2017 continued to show us we are on this deepening trend where the Arctic is a very different place than it was even a decade ago,” said Jeremy Mathis, head of NOAA’s Arctic research program and co-author of the 93-page report.

Findings were discussed at the American Geophysical Union meeting in New Orleans. “What happens in the Arctic doesn’t stay in the Arctic; it affects the rest of the planet,” said acting NOAA chief Timothy Gallaudet. “The Arctic has huge influence on the world at large.” Permafrost records show the frozen ground that many buildings, roads and pipelines are built on reached record warm temperatures last year nearing and sometimes exceeding the thawing point. That could make them vulnerable when the ground melts and shifts, the report said. Unlike other readings, permafrost data tend to lag a year. Preliminary reports from the US and Canada in 2017 showed permafrost temperatures are “again the warmest for all sites” measured in North America, said study co-author Vladimir Romanovsky, a professor at the University of Alaska in Fairbanks.

Arctic sea ice usually shrinks in September and this year it was only the eighth lowest on record for the melting season. But scientists said they were most concerned about what happens in the winter – especially March – when sea ice is supposed to be building to its highest levels. Arctic winter sea ice maximum levels in 2017 were the smallest they’ve ever been for the season when ice normally grows. It was the third straight year of record low winter sea ice recovery. Records go back to 1979. About 79% of the Arctic sea ice is thin and only a year old. In 1985, 45% of the sea ice in the Arctic was thick, older ice, said NOAA Arctic scientist Emily Osborne

Read more …

Oct 292017
 
 October 29, 2017  Posted by at 2:17 pm Finance Tagged with: , , , , , , , , , , ,  16 Responses »
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Salvador Dalí The discovery of America by Christopher Columbus 1959

 

Let’s get one thing straight: Donald Trump is as American as apple pie (even if both are imports). He’s brash and loud and abrasive and entirely focused on money, he’s given to exaggeration, he stretches the truth, he constantly seeks to appear bigger and richer than he really is; he ticks all the boxes of what it is to be American.

Trump’s role in US society is that he’s a mirror for America, he’s not just holding up a mirror, he is the mirror. But many Americans don’t like what they see reflected in him. They’re really just looking at themselves, and their society, but they don’t want to acknowledge that. They just want to get away from the mirror, or preferably, break it. But when someone holds up a mirror to you, the idea is for you to learn something, not break it.

Of course not every individual American fits the picture, but he’s very much the almost perfect reflection of what the country, the society, has become. And one point in which Trump is different from other ‘leaders’ is that he doesn’t try to look different from what he is, he doesn’t play a role like just about every other politician does.

He has that in common with Bernie Sanders, which is ironic given how different the two men are. Neither tries to, or even has the ability to, concoct a cool and calculated attempt at pleasing their viewers and listeners and voters at every twist and turn. With both Bernie and the Donald what you see is what you get.

That they appeal to different groups of people is obvious. As is the fact that Sanders is much less of an (arche)typical American than Trump is. Which means he has to work harder to get his points across. Sanders appeals to a part of America that people have largely forgotten.

Another thing that is true for both is that they are candidates for parties that are deeply broken, and inside a system that has no tolerance for other parties. Which makes you wonder whether it’s not the system itself that is broken. Where Hillary Clinton’s people managed to shove aside Sanders in the Democratic primaries, Trump’s Republican party had no such ‘luck’. Trump’s too all-American.

Of course the next issue must be that neither truly represent either party. They’re both ‘outsiders’ who’ve taken over existing -but failing- structures. Where this leads is unclear. Trump is busy ‘sanitizing’ the GOP, aka draining the swamp’, a process that may or may not cost him his job, and the Democrats would do well to undertake a similar spring cleaning. But the incumbent squids have their tentacles everywhere. Then again, that didn’t stop Trump. So far.

 

Then we get to the litany in investigations that are being conducted. Special Counsel Robert Mueller has apparently laid the first charges in the Russia collusion investigation. Of course, like every single move in the case, this one too has to be as confusing and murky as possible. The indictment was sealed by a judge, and subsequently leaked to the press. Which is probably highly illegal.

We have no idea who’s going to be indicted, it will all be revealed on Monday. Or not. If Mueller’s team has confined itself to investigating whether the Trump campaign has colluded with the Russians, there wouldn’t seem to be too much at hand. But Deputy AG Rod Rosenstein authorized Mueller to pursue “any matters that arose or may arise directly from the investigation”, so the net is cast so broadly it sounds like anything goes.

They may go after Paul Manafort, known for his involvement with people in Russia and the Ukraine. Whether that included anything illegal is unclear. That it would have amounted to outright collusion by the Trump campaign is highly unlikely. Manafort has been gone from the Trump entourage since August 2016.

But there are so many people involved in the campaign, who knows? If you have a former FBI head hiring lawyers and researchers left and right for six months without any constraints, budgetary or otherwise, it would be baffling if they found nothing at all. Michael Flynn, Jared Kushner?

 

What’s more interesting to come out of this circus is the picture of Washington -all of it- as an absolute cesspool and shithole. That these are the people, on either side of the aisle, that get to make the decisions is so worrisome it should make people think of leaving the country.

You have a conservative group led by the Free Beacon, funded by hedge-funder Paul Singer, that starts an ‘opposition research’ project to dig up dirt on Trump during the primaries. When that fails to halt Trump, the DNC and Clinton campaign take over the funding and expand it to include Washington dirt digger firm Fusion GPS, who in turn hire Christopher Steele to produce a very dubious dossier. Fusion GPS execs all took the fifth when asked.

Somewhere along the way the FBI got involved too. That means James Comey and Robert Mueller. Who has such a ‘great reputation’ for being impartial. What a swamp it is. The echo chambers on both sides know exactly, and in advance, who’s to blame. But anyone who finds those chambers too deafening must be awfully confused and conflicted by now. Who to believe?

The Russia collusion thing has been going on for a long time, first in the press, then on Capitol Hill, in the FBI and then the Special Counsel. During the process, both the same FBI and the Hillary camp, including the DNC have been exposed as having ties to Russian elements.

No proof has been presented of Putin supporting Trump through illegal channels. Will Mueller’s indictment(s) be the turning point? If Mueller doesn’t deliver clear and strong, if he doesn’t have something and someone too obvious to dispute, the whole scene may get a lot more hostile.

 

Over the past week, we’ve witnessed the exits stage left of Senators Bob Corker and Jeff Flake, in sometimes dramatic fashion decrying anything Trump. Who simply reacts by saying neither would have been re-elected anyway (about Corker: “he couldn’t get elected dog-catcher in Tennessee”).

Essentially, what these guys do is try and play Trump’s game. But he’s much better at it than they are. The game has changed profoundly, and they missed out on that. Which is the number one reason why Trump got elected president, and none of the ‘old guard’ did. Well, that and all GOP candidates in the primary debates looked completely lost.

A description from the Guardian:

Battle Hymns of the Republicans: Trump Civil War is Just Getting Started

“It is time for our complicity and our accommodation for the unacceptable to end,” Flake said, in explosive remarks that were instantly labeled as a historic act of defiance. “There are times when we must risk our careers in favor of our principles. Now is such a time.” The senator delivered a 17-minute speech, framing the moment as an existential crisis for the party, taking direct aim at Trump’s conduct and what his presidency symbolized in a lacerating critique. It was an extraordinary event that would have otherwise been regarded as a major breach of decorum. But this is Washington in 2017. The norms have already been broken.

A handful of Flake’s colleagues sat stony-faced in the chamber as he implored Republicans not to acquiesce on core principles in the pursuit of appeasing Trump’s angry nationalist base. “We must stop pretending that the degradation of our politics and the conduct of some in our executive branch are normal,” he said. Flake went on, thrusting the knife even further into Trump, though avoiding naming him: “Reckless, outrageous, and undignified behavior has become excused and countenanced as ‘telling it like it is’ when it is actually just reckless, outrageous, and undignified.”

Among those who bore witness to Flake’s remarks was John McCain, the senior senator from Arizona who just a week previously blasted “half-baked, spurious nationalism” in a coded attack on so-called “Trumpism”. Mitch McConnell, the Senate majority leader, looked on stoically. As the speech reached its conclusion, one senator applauded: Ben Sasse, a young Republican from Nebraska who, like Flake, declined to endorse Trump in the 2016 election. Many of the Senate’s 52 Republicans were nowhere to be found.

They had just left a closed-door lunch with the president, dining over chicken marsala, green beans and Trump’s favorite, meatloaf, before a major push to overhaul the tax code. Much of the meeting featured Trump – characteristically – singing his own praises, according to some attendees. There was general discussion of taxes, but few specifics from a president who takes little interest in the policy details. It was nonetheless a cordial meeting, by Trump’s standards, embodied by the takeaway quote of John Kennedy, of Louisiana: “Nobody called anyone an ignorant slut.”

Many anti-Trump voices now speculate that he will try to fire Robert Mueller. Given how close the longtime FBI chief is to many of the parties involved, that might not be that crazy, but it would be explosive. He could also recuse himself on exactly those grounds. He won’t.

Then again, if he stays on, he will have to broaden his investigation to include the Clintons, the DNC and possibly the FBI itself. From the New York Post, and yes, I know what they are, but if I quote one article each from both sides of the echo chamber, maybe I find some balance:

Robert Mueller Should Resign

Their claim that nobody in the campaign or the DNC knew anything about the deal doesn’t pass the smell test. When as much as $12 million goes out the window for a document that aimed to win the election — and failed — everybody knows something. While the link to Clinton answers some questions, it raises others. For example, while it is certain her campaign spread the dossier among the media last summer, it remains uncertain whether the dossier was used by the White House and the FBI to justify snooping on the Trump campaign. One hint that it was is that Comey, while still in office, called the document “salacious and unverified,” but briefed Obama and President-elect Trump on its contents last January.

[..] the FBI never denied reports that it almost hired Steele, the former British spy, to continue his work after the campaign. The mystery might soon be solved because the FBI, after months of stonewalling, agreed last week to tell Congress how it used the dossier and detail its contacts with Steele. If the bureau did use the dossier to seek FISA warrants to intercept communications involving the Trump campaign, it would mean the FBI used a dirty trick from the candidate of the party in power as an excuse to investigate the candidate from the opposition party. Somewhere, Richard Nixon is wondering why he didn’t think of that.

There is also the issue of the “unmasking” of Trump associates caught up in the snooping, with the names leaked to anti-Trump media. It is essential to investigate that angle, but it would lead right to the Obama White House, which is why Mueller is not the man for the job. As for Clinton, the dossier revelation was not her only new problem. In fact, the second blow might be the most serious yet. At the urging of Congress and Trump, the Justice Department lifted its gag order on an informant who can now testify to Congress about bribery and other wrongdoing surrounding Moscow’s gaining control of 20% of US uranium production.

The 2010 transaction was approved by Obama officials, including Clinton, then secretary of state. About the same time, Bill Clinton was paid $500,000 for a speech to a Russian bank involved in the transaction. Later, tens of millions of dollars — $145 million by one estimate — were said to be donated to the Clinton Foundation by individuals having a stake in the deal. The informant’s lawyer, Victoria Toensing, told Fox News the speech fee and the donations amount to a “quid pro quo” for Hillary Clinton’s help. “My client can put some meat on those bones and tell you what the Russians were saying during that time,” Toensing said.

Is it a disgrace that Trump is president? Perhaps it is. Ideally, the country should do much better. But he didn’t get America into the troubled situation it’s in. He is not the rot in the system, he just lays it bare. He simply came along at the appropriate moment to expose what the country has become, and to what extent its political system has devolved into a veritable swamp of special interests and incumbent squids.

And Trump hasn’t won a thing yet. Don’t be surprised if the whole sordid Harvey Weinstein tale is used, if not set up from the start, to go after the Donald. In a cynical link to that, George H.W. Bush has been accused of groping women, at the same time his role in the JFK assassination was questioned. He was the only American who didn’t remember where he was when the murder took place. Turns out, the CIA operative happened to be in Dallas.

Interestingly, Trump will fly to Asia on November 3. By then we should know who Mueller has indicted. Will Trump even be allowed to return? It would be better for America if he is, because there are a lot of lessons left to be learned.

 

 

Oct 292017
 
 October 29, 2017  Posted by at 9:10 am Finance Tagged with: , , , , , , , , ,  4 Responses »
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Springenberg Luther nails his theses to the church door

 

Trump Frustrated By Secrecy With JFK Files (AP)
Battle Hymns of the Republicans (G.)
Markets Await Trump’s Decision on Fed Chair (Rickards)
The Informant Cometh (Jim Kunstler)
In 2019, Central Bank Liquidity Finally Turns Negative (ZH)
All Hail British Banks: Self-absorbed, Short-termist And Spivvy (G.)
Sacked Catalonia Leader Calls For Opposition To Madrid’s Rule (R.)
Latin America and Caribbean No Longer US Backyard – Russia (TSur)
HUD Explores Temporarily Housing Puerto Ricans on US Mainland (BBG)
Barbuda PM Calls For Help From Britain To Rebuild Island (G.)
We Need A 21st-Century Martin Luther To Challenge The Church Of Tech (G.)

 

 

And released it all anyway. Still not besties with US Intelligence.

Trump Frustrated By Secrecy With JFK Files (AP)

Just before the release Thursday, Trump wrote in a memorandum that he had “no choice” but to agree to requests from the CIA and FBI to keep thousands of documents secret because of the possibility that releasing the information could still harm national security. Two aides said Trump was upset by what he perceived to be overly broad secrecy requests, adding that the agencies had been explicitly warned about his expectation that redactions be kept to a minimum. “The president and White House have been very clear with all agencies for weeks: They must be transparent and disclose all information possible,” White House Principal Deputy Press Secretary Raj Shah said Friday.

Late last week, Trump received his first official briefing on the release in an Oval Office meeting that included Chief of Staff John Kelly, White House Counsel Don McGahn and National Security Council legal adviser John Eisenberg. Trump made it clear he was unsatisfied with the pace of declassification. Trump’s tweets, an official said, were meant as a signal to the intelligence community to take seriously his threats to release the documents in their entirety. According to White House officials, Trump accepted that some of the records contained references to sensitive sources and methods used by the intelligence community and law enforcement and that declassification could harm American foreign policy interests. But after having the scope of the redactions presented to him, Trump told aides he did not believe them to be in the spirit of the law.

On Thursday, Trump’s top aides presented him with an alternative to simply acquiescing to the agency requests: He could temporarily allow the redactions while ordering the agencies to launch a new comprehensive examination of the records still withheld or redacted in part. Trump accepted the suggestion, ordering that agencies be “extremely circumspect” about keeping the remaining documents secret at the end of the 180-day assessment. “After strict consultation with General Kelly, the CIA and other agencies, I will be releasing ALL JFK files other than the names and addresses of any mentioned person who is still living,” Trump wrote in a Friday tweet. “I am doing this for reasons of full disclosure, transparency and in order to put any and all conspiracy theories to rest.”

Read more …

Is the swamp being drained?

Battle Hymns of the Republicans (G.)

The November election did not put an end to the Republican Party’s civil war – a chasm between the establishment in Washington and grassroots activists that deepened with the rise of the Tea Party movement of 2009. Trump has only amplified it. Flake, after all, was not alone in his scathing criticism of the president. All week, a feud between Trump and Bob Corker, the Republican chair of the Senate foreign relations committee, soared to new heights – or depths. It culminated in Corker issuing his own stunning rebuke of Trump. “When his term is over, the constant non-truth-telling, the name-calling, the debasement of our nation, will be what he will be remembered most for,” Corker told CNN. Corker announced his own retirement last month, joining the ranks of a small but growing number of Republicans who have come to see Trump’s presidency as a moment of reckoning.

On one side is Trump, the most unpopular president in modern US history, ushered in by a grassroots movement with Steve Bannon, the former White House chief strategist, at its helm. On the other is the old guard of Republican leaders, struggling to distance themselves from Trump’s toxicity and a party base that he increasingly drives with racially motivated nationalism. Critics like Flake, Corker and McCain subscribe to the views espoused by Republican presidents back to Ronald Reagan – a belief in limited government, moderate positions on immigration and trade – but Bannonites have waged war on “globalists” and used race and class to drive a wedge between the establishment and a rancorous base unmoored by the economic and cultural dislocation of the last 20 years.

The friction has prompted a battle for the soul of the Republican party. A strategist aligned with Bannon told the Guardian that Trump’s victory unleashed an insurgent movement that wants to overthrow the party establishment in Washington. “The strategy is to make everyone look over their shoulders,” the Bannon ally said, “so they understand that they are no longer in charge of the Republican party.” As reports of Flake’s retirement surfaced, another ally of Bannon swiftly celebrated the news by claiming “another scalp”. The departure of another moderate senator – at least, a moderate within the current Republican party – was the latest victory in Bannon’s mission to reshape the conservative movement.

Read more …

White House leaks say Powell will be next Fed head. Rickards expects Kevin Warsh. But yeah, Trump will be in Asia after November 3. What effect does that have on the Mueller thingy?

Markets Await Trump’s Decision on Fed Chair (Rickards)

President Trump is expected to nominate the next Federal Reserve chair within a matter of days. As I’ve explained before, Donald Trump has the opportunity to appoint a higher percentage of the Board of Governors of the Federal Reserve system at one time than any president since Woodrow Wilson. President Wilson signed the Federal Reserve Act during the creation of the Fed in 1913 when they had a vacant board. At that time, the law said the secretary of the Treasury and the comptroller of the currency were automatically on the Fed’s board of governors. But besides that, President Wilson selected all of the other participating members. Due to vacancies he inherited and key resignations, Trump now has the opportunity to fill more seats on the Fed’s Board of Governors than any president since then. That’s pretty amazing when you think about it.

To review, the Federal Reserve’s Board of Governors is made up of seven appointees. That means that they can make a majority decision with four votes. If you’re reading about the Fed, you might also see reference to “regional reserve bank presidents.” These are roles within the Federal Reserve System, but the real power is found on seven-member Board of Governors. Trump will own the Fed. Meaning, whatever the president wants monetary policy to be, he’ll get. In other words, Donald Trump will be able to shape the Fed’s majority. But the tricky part is figuring out how he plans to shape it… During the campaign season, Trump called China and other nations currency manipulators. That signaled he believed the dollar was too strong and wanted it to weaken. But then the North Korean nuclear crisis rose to the fore.

Trump backed off his threats against China because China has the most economic influence over North Korea, and Trump wanted China to use that leverage to convince the North to back off its nuclear program. But China didn’t deliver as Trump had hoped, and a trade war with China is now likely. That’s especially true now. Chinese president Xi Jinping has solidified his hold on power after the Chinese Politburo re-appointed him yesterday. Xi had avoided rocking the boat in recent months while his position was uncertain. But now that his lock on power is secure, Xi can afford to be much more confrontational with Trump. Trump’s trade policy has led many to believe that Trump will appoint a lot of “doves” to the Board. But don’t be surprised if Trump goes with a hard-money board. In fact, that’s what I expect. These will be hard-money, strong-dollar people, contrary to a lot of expectations.

Read more …

The Fed’s credibility. And Mueller’s. And Comey’s.

The Informant Cometh (Jim Kunstler)

Now, it also happens that the deal for Tenex to buy Uranium One had to be approved by nine federal agencies and signed off on by Secretary of State Hillary Clinton, which she did shortly after her husband Bill Clinton was paid $500,000 to give a speech in Moscow sponsored by a Russian bank. The Clinton Foundation also received millions of dollars in “charitable” donations from parties with an interest in the Tenex / Uranium One deal. It happened, too, that the CEO of Uranium One at the time of the Tenex sale, Frank Guistra, was one of eleven board members of the Clinton Foundation. The informant remained undercover for the FBI for five years. None of the Clinton involvement was included in the previously mentioned federal bribery and racketeering prosecutions.

Meanwhile, the informant had signed a nondisclosure agreement with the Obama Justice Department, only just lifted last week. As of this morning, the story is absent from The New York Times, formerly the nation’s newspaper of record. The FBI’s credibility is at stake in this case. Robert Mueller, who was Director of the agency during the Tenex/Uranium One deal, with all its Clintonian-Russian undertones, is in the peculiar position now as special prosecutor for the Russian election “meddling” alleged to involve President Trump. Whatever that investigation has turned up is not known publicly yet, but the massive leaking from government employees that turned the story into roughly 80% of mainstream legacy news coverage the past year, has ceased — either because Mueller has imposed Draconian restraints on his own staff, or because there is nothing there.

The FBI has a lot to answer for in overlooking the Clinton connection to the Uranium One deal. The informant, soon to be attached to a name and a face, is coming in from the cold, to the warm, wainscoted chambers of the house and senate committees. I wonder if Mr. Trump, or his lawyers, will find grounds to attempt to dismiss Special Prosecutor Mueller, given what looks like Mueller’s compromised position vis-à-vis Trump’s election opponent, HRC. It’s hard to not see this thing going a long way — at the same time that financial markets and geopolitical matters are heading south. Keep your hats on.

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Once people start thinkng they’re actually going to do this, the effects will be felt way before 2019.

In 2019, Central Bank Liquidity Finally Turns Negative (ZH)

[..] the great Central Bank liquidity tide, which generated over $2 trillion in central bank purchasing power in 2017 alone – and which as Bank of America said last month is the only reason why stocks are at record highs, is now on its way out. This was a point first made by Deutsche Bank’s Alan Ruskin two weeks ago, who looked at the collapse in global vol, and concluded that “as we look at what could shake the panoply of low vol forces, it is the thaw in Central Bank policy as they retreat from emergency measures that is potentially most intriguing/worrying.

We are likely to be nearing a low point for major market bond and equity vol, and if the catalyst is policy it will likely come from positive volatility QE ‘flow effect’ being more powerful than the vol depressant ‘stock effect’. To twist a phrase from another well know Chicago economist: Vol may not always and everywhere be a monetary phenomena – but this is the first place to look for economic catalysts over the coming year.” He showed this great receding tide of liquidity in the following chart projecting central bank “flows” over the next two years, and which showed that “by the end of next year, the combined expansion of all the major Central Bank balance sheets will have collapsed from a 12 month growth rate of $2 trillion per annum to zero.”

Shortly after, Fasanara Capital’s Francesco Filia used this core observation in his own bearish forecast, when he wrote that “the undoing of loose monetary policies (NIRP, ZIRP), and the transitioning from ‘Peak Quantitative Easing’ to Quantitative Tightening, will create a liquidity withdrawal of over $1 trillion in 2018 alone. The reaction of the passive community will determine the speed of the adjustment in the pricing for both safe and risk assets.”

Fast forward to today, when Bank of America’s Barnaby Martin is the latest analyst to pick up on this theme of great liquidity withdrawal. Looking at (and past) the ECB’s announcement, Martin writes that “as expected, Mario Draghi took a knife to the ECB’s quantitative easing programme yesterday. From January 2018, monthly asset purchases will decline from €60bn to €30bn, and continue for another 9m (and remain open ended). The ECB now joins an array of central banks across the globe that are either shrinking their balance sheets or heavily scaling back bond buying.” [..] However, as Ruskin and Filia warn, Martin underscores that it is the bigger point that is ignored by markets, namely that it is all about the “flow” of central bank purchases.

And in this context, the BofA strategist warns that it will take just over a year before the global liquidity tide not only reaches zero, but turns negative… some time in early 2019. Chart 1 shows year-over-year changes in global asset purchases by central banks (we also include China FX reserves here). Given this year’s slowdown in ECB and BoJ QE (the latter, in particular, is striking in USD terms), we are well past the peak in global asset buying by central banks. But with the Fed now embarking on balance sheet shrinkage, the start of 2019 should mark the point where year-over-year asset purchases finally turn negative – a trend change that will come after four straight years of expansion.

Read more …

Government and banks want one thing: keep housing prices high.

All Hail British Banks: Self-absorbed, Short-termist And Spivvy (G.)

It’s not only the government that is obsessed with lending to prop up property owners and developers – the banking sector is keen, too. The report sets out the way UK banks mostly lend abroad, with loans to UK businesses accounting for just 5% of total UK bank assets, compared with 11% in France, 12% in Germany and 14% on average across the rest of the eurozone. Property loans to businesses and individuals in the UK account for more than 78% of all loans to individuals and non-financial businesses – which means those outside the Square Mile. After stripping out real estate, loans to UK businesses account for just 3% of all banking assets. As a transmission mechanism for diverting the nation’s savings into worthwhile, productive businesses, the banks fail miserably. And the rest of the financial sector is just as bad.

The IPPR report accused hedge funds, proprietary traders (which use investment bank cash) and high-frequency traders – a group that collectively makes up 72% of trades in on the London market – of paying themselves depending on performance against rivals and over short timescales, “not long-term value creation”. This spivvy trading arena has the knock-on effect of making short-term demands on the boards of listed companies. Such is the pressure to avoid being caught in traders’ headlights that in a survey of more than 400 executives, some 75% said they “would sacrifice positive economic outcomes” if it helped smooth their profit figures from one quarter to the next. The report argues that this self-absorbed world of stock market trading needs to support longer-term investment in a way that also benefits savers and business owners.

Read more …

At least for now it’s peaceful. But Puidgemont seems to have weakened.

Sacked Catalonia Leader Calls For Opposition To Madrid’s Rule (R.)

Sacked Catalonian president Carles Puigdemont on Saturday called for peaceful “democratic opposition” to the central government’s takeover of the region following its unilateral declaration of independence from Spain. Puigdemont, whose regional government was dismissed by Spanish Prime Minister Mariano Rajoy on Friday, accused Madrid of “premeditated aggression” against the will of the Catalans. Rajoy removed Puigdemont, took over the administration of the autonomous region and called a new election after Catalonia’s parliament declared itself an independent nation on Friday. The bold if to all appearances futile action marked a potentially dangerous escalation of Spain’s worst political crisis in the four decades since its return to democracy.

“It’s very clear that the best form of defending the gains made up until now is democratic opposition to Article 155,” Puigdemont said in a brief statement he read out in the Catalan city of Girona, referring to the legal trigger for the takeover. But he was vague on precisely what steps the secessionists would take as the national authorities are already moving into Barcelona and other parts of Catalonia to enforce control. Spanish government spokesman Inigo Mendez de Vigo said it would welcome Puigdemont’s participation in the regional elections it has called for Dec. 21. “I‘m quite sure that if Puigdemont takes part in these elections, he can exercise this democratic opposition,” Mendez de Vigo told Reuters TV in an interview.

[..] Puigdemont signed the statement as President of Catalonia, demonstrating he did not accept his ousting. “We continue persevering in the only attitude that can make us winners. Without violence, without insults… and also respecting the protests of the Catalans who do not agree with what the parliamentary majority has decided,” he said.

Read more …

“All actors must respect international law instead of ignoring it and proclaiming themselves special states..”

Latin America and Caribbean No Longer US Backyard – Russia (TSur)

A Russian official said the region no longer can be treated inappropriately by the United States. The Russian Foreign Ministry has warned the United States that Latin American and the Caribbean are no longer its “backyard.” Foreign Affairs spokesperson Maria Zajarova said the region has tired of the United State’s attempt to control its people by political, social or military force. “The countries of Latin America and the Caribbean have long ceased to be the U.S. backyard,” Zajarova said. In addition, she said the region has had many opportunities to “put Washington in its place on the inappropriateness of its conduct regarding Latin America,” urging the United States to respect international law and the sovereignty of nations, in order to “avoid conflicts.”

“Each state has its objectives, but we should start from common game rules and, at the same time, respect national interests,” she said. “All actors must respect international law instead of ignoring it and proclaiming themselves special states, this is the only way of preserving our own interests, and interacting and avoiding conflicts,” Zajarova added. The Russian official said development in the region in economics, politics, and science has shown “such potential that they can’t be treated as if an older brother were addressing other members of the lesser developed family.” Russia recently said it hopes countries around the world “refrain from the policy of pressure and sanctions” against countries in the region such as is being done in Venezuela, calling the attempts “counterproductive.”

Read more …

No matter what they do, it must be massive.

HUD Explores Temporarily Housing Puerto Ricans on US Mainland (BBG)

The Trump administration is exploring ways to relocate tens of thousands of Puerto Ricans to the U.S. mainland for an extended period as parts of the territory remain devastated more than a month after Hurricane Maria. Officials at the U.S. Department of Housing and Urban Development late last week started to develop a plan to provide housing to some of Puerto Rico’s displaced population, according to people familiar with the matter. And given the shortage of available options on the island, the possibility of evacuating large numbers to the mainland has emerged as an option. Two of the people who spoke to HUD officials said using large commercial cruise liners had been suggested to move residents en masse.

The most recent push for a solution began after a meeting on Friday that included officials from HUD, the Federal Emergency Management Agency, the White House and others, according to the people. But it’s unclear if the White House or any agencies outside of HUD are coordinating with the housing agency, or if the ideas are only being developed within the department for now. Agency officials in the past two days have contacted executives in the housing industry, investment managers with ties to Puerto Rico, and others in an attempt to brainstorm potential solutions, said the people [..] Thousands of Puerto Rico residents have already fled to Florida and elsewhere since Maria struck as a Category Four storm on Sept. 20.

Much of the territory, including the outer islands of Vieques and Culebra, remains without electricity. Potable drinking water is scarce in some areas, and thousands of miles of roads are still closed. The evacuation idea is in the earliest stages, and given immense logistical challenges it may never come to pass. An orchestrated mass movement and temporary resettlement would require coordination between various parts of the government and a willingness by local communities to house any evacuees, at a substantial cost.

Read more …

Poorer nations offer help, the rich do not.

Barbuda PM Calls For Help From Britain To Rebuild Island (G.)

Independent islands in the Caribbean are fearful that their infrastructure will be left in ruins as countries such as the UK focus relief and aid efforts on their own overseas territories. Gaston Browne, prime minster of Antigua and Barbuda, said his country was being overlooked in relief efforts because it was an independent island and had a higher per capita income than some Caribbean countries. “Technically, the Queen is still our head of state, which means there should be some empathy,” he said. “But I think because we are independent, and they’re looking at some artificial per capita income criteria, we are being overlooked.” The island of Barbuda was devastated by Hurricane Irma in September, with 95% of all properties on the island destroyed. When it was feared Barbuda would be struck again by Hurricane Jose a few days later, all 2,000 residents were evacuated to the larger sister island of Antigua.

The evacuees are living with friends and family on Antigua, or in large shelters run by the government in technical colleges, churches and a cricket stadium. People have begun to return to the island for a few days at a time to start the clear-up, often sleeping in tents on their lawns. Barbuda still has no water or electricity. Browne praised developing countries that had offered help, naming Cuba, Venezuela and the Dominican Republic, as well as Qatar, China and India. Even the small Caribbean island of Dominica pledged $250,000 before Dominica itself was hit and devastated by Hurricane Maria, Browne said. “We reciprocated afterwards by pledging $300,000,” he added “Even among countries that were devastated, there is a form of human cooperation to help each other.”

Read more …

He’s actually written 95 theses.

We Need A 21st-Century Martin Luther To Challenge The Church Of Tech (G.)

A new power is loose in the world. It is nowhere and yet it’s everywhere. It knows everything about us – our movements, our thoughts, our desires, our fears, our secrets, who our friends are, our financial status, even how well we sleep at night. We tell it things that we would not whisper to another human being. It shapes our politics, stokes our appetites, loosens our tongues, heightens our moral panics, keeps us entertained (and therefore passive). We engage with it 150 times or more every day, and with every moment of contact we add to the unfathomable wealth of its priesthood. And we worship it because we are, somehow, mesmerised by it. In other words, we are all members of the Church of Technopoly, and what we worship is digital technology.

Most of us are so happy in our obeisance to this new power that we spend an average of 50 minutes on our daily devotion to Facebook alone without a flicker of concern. It makes us feel modern, connected, empowered, sophisticated and informed. Suppose, though, you were one of a minority who was becoming assailed by doubt – stumbling towards the conclusion that what you once thought of as liberating might actually be malign and dangerous. But yet everywhere you look you see only happy-clappy believers. How would you go about convincing the world that it was in the grip of a power that was deeply hypocritical and corrupt? Especially when that power apparently offers salvation and self-realisation for those who worship at its sites?

It would be a tough assignment. But take heart: there once was a man who had similar doubts about the dominant power of his time. His name was Martin Luther and 500 years ago on Tuesday he pinned a long screed on to the church door in Wittenberg, which was then a small and relatively obscure town in Saxony. The screed contained a list of 95 “theses” challenging the theology (and therefore the authority) of the then all-powerful Catholic church. This rebellious stunt by an obscure monk must have seemed at the time like a flea bite on an elephant. But it was the event that triggered a revolution in religious belief, undermined the authority of the Roman church, unleashed ferocious wars in Europe and shaped the world in which most of us (at least in the west) grew up. Some flea bite.

[..] Why not, I thought, compose 95 theses about what has happened to our world, and post them not on a church door but on a website? Its URL is 95theses.co.uk and it will go live on 31 October, the morning of the anniversary. The format is simple: each thesis is a proposition about the tech world and the ecosystem it has spawned, followed by a brief discussion and recommendations for further reading. The website will be followed in due course by an ebook and – who knows? – perhaps eventually by a printed book. But at its heart is Luther’s great idea – that a thesis is the beginning, not the end, of an argument.

Read more …

Jan 062017
 
 January 6, 2017  Posted by at 10:23 am Finance Tagged with: , , , , , , , , ,  2 Responses »
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Joel Meyerowitz Girl On A Scooter 1965

Intel Report Says US Identifies Go-Betweens Who Gave Emails To WikiLeaks (CNN)
All US Envoys Appointed By Obama Told To Quit By Inauguration Day (R.)
FBI Never Requested Access To Allegedly Hacked DNC Server (DM)
The Coup Against Truth (Paul Craig Roberts)
Rebuild the Fed From the Bottom Up (DiMartino Booth)
Annual US Auto Sales Fell for First Time since 2009 (WS)
Dismal Holiday Sales At Macy’s And Kohl’s Cast Gloom Over Sector (R.)
Half Of Jobless US Men Not In The Labor Force Take Daily Pain Medication (AP)
The Real Reasons Brexit Is Succeeding (Ashoka Mody)
Economics is in Crisis – BOE’s Haldane (G.)
Why Has The UK Economy Defied Predictions Of Doom? (G.)
UK Unsecured Consumer Credit Grows At Annual Rate Of 11% (G.)
No End In Sight For Europe’s Banking Troubles (CNBC)

 

 

What a circus this has become. No matter how hard they try, they still have to admit that “..there is no single intercepted communication that qualifies as a “smoking gun” on Russia’s intention to benefit Trump’s candidacy or to claim credit for doing so.” As for the go-betweens, WikiLeaks will never give info on sources.

Intel Report Says US Identifies Go-Betweens Who Gave Emails To WikiLeaks (CNN)

US intelligence has identified the go-betweens the Russians used to provide stolen emails to WikiLeaks, according to US officials familiar with the classified intelligence report that was presented to President Barack Obama on Thursday. In a Fox News interview earlier this week, WikiLeaks founder Julian Assange denied that Russia was the source of leaked Democratic emails that roiled the 2016 election to the detriment of President-elect Donald Trump’s rival, Democrat Hillary Clinton. Meanwhile, US intelligence has received new information following the election that gave agencies increased confidence that Russia carried out the hack and did so, in part, to help Trump win. Included in that new information were intercepted conversations of Russian officials expressing happiness at Trump’s win. Another official described some of the messages as congratulatory.

Officials said this was just one of multiple indicators to give them high confidence of both Russian involvement and Russian intentions. Officials reiterated that there is no single intercepted communication that qualifies as a “smoking gun” on Russia’s intention to benefit Trump’s candidacy or to claim credit for doing so. Vice President Joe Biden said in an interview with PBS NewsHour that an unclassified version of an intel report provided to him will be released “very shortly” and will “lay out in bold print what” the US knows about the hacking. “I think it will probably confirm what a lot of the American people think,” he said, adding that it would “state clearly” the Russians involvement in the hacking.

In response to the interview, Trump tweeted on Wednesday, “Julian Assange said “a 14 year old could have hacked Podesta” – why was DNC so careless? Also said Russians did not give him the info!” Trump has been publicly skeptical of Russia’s involvement in the hacking, as well as has been publicly deriding the US intelligence community for its unanimous conclusion that Russia hacked Democratic Party groups and individuals to interfere in the US presidential election. Officials told CNN there’s been a disconnect between Trump’s remarks about the intelligence community and his behind-the-scenes behavior when he’s present at private intel briefings.

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Oh lovely.

All US Envoys Appointed By Obama Told To Quit By Inauguration Day (R.)

U.S. President-elect Donald Trump’s transition team has issued a blanket mandate requiring politically appointed ambassadors installed by President Barack Obama to leave their posts by Inauguration Day, the U.S. ambassador to New Zealand said on Friday. “I will be departing on January 20th,” Ambassador Mark Gilbert said in a Twitter message to Reuters. The mandate was issued “without exceptions” through an order sent in a State Department cable on Dec. 23, Gilbert said. He was confirming a report in the New York Times, which quoted diplomatic sources as saying previous U.S. administrations, from both major political parties, have traditionally granted extensions to allow a few ambassadors, particularly those with school-age children, to remain in place for weeks or months.

The order threatens to leave the United States without Senate-confirmed envoys for months in critical nations like Germany, Canada and Britain, the New York Times reported. A senior Trump transition official told the newspaper there was no ill will in the move, describing it as a simple matter of ensuring Obama’s overseas envoys leave the government on schedule, just as thousands of political aides at the White House and in federal agencies must do. Trump has taken a strict stance against leaving any of Obama’s political appointees in place as he prepares to take office on Jan. 20, aiming to break up many of his predecessor’s signature foreign and domestic policy achievements, the newspaper said.

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And why not? Throw on some more…

FBI Never Requested Access To Allegedly Hacked DNC Server (DM)

The FBI never asked the Democratic National Committee if it could examine a computer server that was the subject of cyber attacks last year. Instead federal law enforcement relied on data that, Crowdstrike, a private computer security company, gathered from the device. The FBI later endorsed the conclusion that Russian intelligence services were behind the hacking, and that their goal was to help Donald Trump win the November presidential election. ‘The DNC had several meetings with representatives of the FBI’s Cyber Division and its Washington Field Office, the Department of Justice’s National Security Division, and U.S. Attorney’s Offices, and it responded to a variety of requests for cooperation,’ DNC deputy communications director Eric Walker told BuzzFeed, ‘but the FBI never requested access to the DNC’s computer servers.’

Trump’s incoming press secretary Sean Spicer told reporters on a Thursday morning conference call that ‘the DNC is on the record saying the FBI never contacted them to validate claims by Crowdstrike, which is the third-party tech security firm, and never actually requested the hacked server.’ ‘You know, I would equate this to no one actually going to a crime scene to actually look at the evidence,’ Spicer declared. Walker said there were no restrictions on what the FBI could request from its private security company’s findings. ‘Beginning at the time the intrusion was discovered by the DNC, the DNC cooperated fully with the FBI and its investigation, providing access to all of the information uncovered by CrowdStrike – without any limits,’ he said.

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Restructuring US intelligence can be a hazardous occupation.

The Coup Against Truth (Paul Craig Roberts)

Washington is so intent on its anti-Russian propaganda that Congress has passed, and Obama has signed, an intelligence bill that contains a section, Title V, that authorizes active measures to counter purveyors of false news. These purveyors are alternative media websites, such as this one, that challenge the official lies. The truthful alternative media is accused of being under Russian influence. Last summer a website shrouded in secrecy was created that recently posted a list of 200 websites alleged to be under Russian influence, either directly or indirectly. The Washington Post irresponsibly published a long article endorsing the fake news of 200 websites working for the Russian government. In other words, the suppression of the truth is the last defense of the corrupt American ruling establishment.

During the last 24 years three Washington regimes have murdered millions of peoples in nine or more countries along with US civil liberty. To cover up these vast crimes, unparalleled in history, the presstitutes have lied, slandered, and libeled. And the Washington criminal regime holds itself up to the world as the indispensable protector of democracy, human rights, truth, and justice. As the Russian Foreign Ministry spokeswoman said recently, what makes America exceptional is the use of might in the service of evil. Washington brands not only its opponents but all who speak the truth “Russian agents,” hoping that the demonization of Russia has sufficiently frightened the population that Americans will turn their backs to those who speak the truth.

It would seem obvious even to the insouciant that an establishment that has gone so far out on a limb that the CIA director publicly attributes the election of Donald Trump to Russian interference but is unable to produce a shred of evidence—indeed in the face of totally conclusive evidence to the contrary—is determined to hold on to power at all costs. The CIA’s open, blatant, and unprecedented propaganda attack against a president-elect has caused Trump to throw down the gauntlet to CIA director John Brennan. There are reports that Trump intends to revamp and reorganize the intelligence agency. The last president who said this, John F. Kennedy, was murdered by the CIA before he could strike against them. Kennedy believed that he could not take on the CIA until he was re-elected. The delay gave the CIA time to arrange his assassination.

Trump appears to understand his danger. He has announced that he intends to supplement his Secret Service protection (which was turned against JFK) with private security. Isn’t it striking? The president of Russia states publicly that Washington is driving the world to thermo-nuclear war and that his warnings are ignored. The president-elect of the United States is under full-scale attack from the CIA and knows that he cannot trust his official security force. One might think that these extraordinary topics would be the only ones under discussion. But you can find such discussion only on a few alternative media websites, such as this one, branded by PropOrNot and the Washington Post as “under Russian influence.”

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Why am I under the impression that what Danielle DMB is describing is still an inside(r) job? Can economists clean up the Fed? Can it be cleaned up at all?

Is it as hazardous as redoing intelligence?

Rebuild the Fed From the Bottom Up (DiMartino Booth)

Today the institution of the Fed is as intellectually entrenched as it has ever been. It has become the largest employer of people with doctorates in economics. It has hired or contracted with more than 1,000 of these economists, who actively endeavor to validate, rather than question, orthodox theories and policies. The pipeline of talent filling new positions at the Fed is sourced from the same stagnant academic pool that produced the current leadership. Is it any wonder criticism within the Fed has been quashed? Now the door is open for an outsider to bring the outside world back into the Fed. The last time that all seven governor positions on the Federal Reserve Board were occupied was in 2013. Trump can expeditiously fill these seats, but, more important, he can remake the culture inside the Fed.

Armies of consultants have presumably been busy making a list of potential board nominees. If these advisers have the interests of those who voted for Trump at heart, they will look for individuals who have been on the receiving end of monetary policy and therefore understand it. They will find CEOs who would rather have invested in the future of their companies, thus creating more jobs and opportunities, rather than be pressured to buy back their shares with cheap debt because of regulatory uncertainty. They will seek out the handful of pension fund managers who have insisted on using assumptions for lower rates of return, to better reflect the reality of lower returns on fixed-income securities, and who resisted the siren call of inappropriate investments to offset the dearth of options in a low-interest-rate world.

They will seek rational critics of Fed policy who empathize with, not roundly dismiss, the plight of savers in this environment. Once a full complement of possible nominees is in place, the new administration can concentrate on redrawing the institution to reflect the tremendous change the U.S. economy has undergone in the more than 100 years since the Fed first came into being. Right now, there are 12 Fed districts. Some regions of the U.S. have become more economically powerful over the years. California is the largest economy followed by Texas. They should have their own Fed districts. A third one could encompass most of the rest of the West. At the same time, the regions that have become less economically relevant should be consolidated.

For example, Missouri no longer merits two Feds. St. Louis can be incorporated into the Chicago Fed, along with Cleveland. New York is the third-largest state economy. It seems economically reasonable, from Philadelphia north, to have two Fed districts rather than three. Then give the presidents of the 10 districts that remain permanent votes on the Federal Open Market Committee. This is a necessary act to begin dismantling the over-concentration of power at the board in Washington and at the New York Fed.

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Turning their back on their gods?

Annual US Auto Sales Fell for First Time since 2009 (WS)

The media hoopla has been deafening. In December, “new vehicles sales” – defined as the number of new cars, trucks, and SUVs that dealers sold to their customers, including fleets – rose 3.1%. That was stronger than “expected.” And in the media reports, there was euphoria between the lines. Automakers and dealers had certainly tried. Inventories are high, layoffs and plant closings have already been announced, and so every effort was made to move the iron and pull out the year. No incentive was spared to get the job done. With this gain in December, total sales for 2016 edged up 0.4% to a record 17.55 million vehicles, according to Autodata. Sales of light trucks and SUVs rose 7.2% for the year, but sales of cars sagged 8.1%. Gasoline is cheap, and Americans love big implements.

Car sales at GM dropped 4.3% in 2016, at Ford 13.0%, and at Fiat Chrysler a catastrophic 33.5%! Plants that build cars were the ones mostly (but not exclusively) hit by shutdowns and layoffs. Then there was the whole to-do about Trump, Ford, and the plant in Mexico. Alas, while some automakers posted record sales for the year, the biggest automakers were not among them. And you probably didn’t see this in the media unless you started digging through the data yourself. Somehow this one slipped by the media’s attention. Because something ugly happened in 2016, something we haven’t seen since 2009. For ALL of the big three US automakers, plus for a number of others, sales in 2016 actually fell. For them it was the first annual sales decline since nightmare-year 2009.

Here they are, in terms of the annual decline in their total vehicles sales, as measured by dealer sales to their customers (in descending order of sales): • GM -1.3% • Ford -0.1% • Toyota -2.0% • Fiat-Chrysler -0.4% • Volkswagen -3.3% • BMW -9.7% • Mazda -6.7%. The sales of these seven automakers combined amounted to 11.5 million vehicles in 2016, or 65% of total US sales! And combined, their sales were down 1.5% from the prior year. So this is what Ford meant earlier this year, when it began mentioning the “car recession.”

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‘T is the season to be folly.

Dismal Holiday Sales At Macy’s And Kohl’s Cast Gloom Over Sector (R.)

Disappointing holiday-season sales at Macy’s and Kohl’s underscored the uphill task facing department stores to win back shoppers, who are increasingly turning to online retailers and spending less on apparel. Macy’s shares fell as much as 14% on Thursday, their biggest percentage drop in seven months. Kohl’s stock dropped as much as 20.5%, its biggest decline in more than 14 years. Both reported lower-than-expected sales for November and December and cut their full-year profit forecasts on Wednesday. Macy’s, known the world over for its flagship Herald Square store in Manhattan and its annual Thanksgiving Day parade, is considered a bellwether for department stores. However, it is expected to relinquish its position as the largest U.S. apparel retailer to Amazon.com as soon as this year as it struggles to compete on prices and the convenience offered by online shopping.

Amazon said last week it had its “best ever” holiday season, shipping more than 1 billion items worldwide. Shares of other department store operators, including J.C. Penney and Nordstrom also fell as the dismal showing took investors by surprise. Expectations were high that department stores would get a good boost from a strong holiday shopping season. The National Retail Federation had forecast that 2016 holiday period sales would rise 3.6% to $656 billion. A jump in spending in the last days of December was expected to make up for a slow start to the shopping season. “The strength around Thanksgiving and Christmas was insufficient to offset the sales weakness in the balance of the quarter,” Stifel, Nicolaus & Co analyst Richard Jaffe wrote. “In addition, these peak selling periods were characterized by greater promotions which contributed to weaker than anticipated gross margin as well,” he said in a client note. Struggling Sears, the operator of Sears and Kmart stores, reported a 12-13% drop in same-store sales for November and December on Thursday.

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Brought up as a mere detail in the AP article, but what a striking one. We’re talking many millions of men: “Health problems and the opioid epidemic may also be a major barrier to work, according to research by Alan Krueger, a Princeton economist and former Obama adviser. Nearly half of men ages 25 through 54 who are neither working nor looking for work take pain medication daily, Krueger found.” Go back 100 years and imagine this then.

Half Of Jobless US Men Not In The Labor Force Take Daily Pain Medication (AP)

If President-elect Donald Trump is going to meet his pledge to energize the U.S. economy, there’s a simple yet tough way to do so: Put more men to work. The proportion of men in their prime working years who either have a job or are looking for one has been dropping for decades — and limiting economic growth in the process. The full brunt of the 60-year decline burst into view during the 2016 election. Trump triumphed in part by vowing to restore jobs at steel mills, auto plants and coal mines — the types of work that had once employed legions of men who lacked a college education. Bringing more non-college-educated men into the workforce is a Herculean challenge that has long bedeviled economists. Among the root causes:

• Automation. Factory robots and computer software have eliminated the need for many workers, wiping out an array of jobs that once provided a middle class lifestyle. • Global competition. U.S. workers have been competing for jobs with cheaper foreign workers, a trend that’s led to some offshoring of jobs and curbed pay in some industries. • Criminal records. Stricter criminal laws have left over 20 million Americans with felony convictions and prison records — a fourfold increase from 30 years earlier. That background has made it hard for them to get hired. • Prescription drug use. Nearly half of jobless men who are no longer looking for work are on pain medication, research has found.

Still, Trump appears to endorse a straightforward fix: Bump up economic growth, and workers will land good jobs at decent wages. “Many are dropping out of the labor force because they cannot find good-paying jobs in an economy operating near stall-speed,” the Trump campaign said before the election. To chart the problem and any progress Trump might achieve over the next four years, his team has pointed to an obscure gauge called the “labor force participation rate.” This is the proportion of people who are either working or looking for work. It excludes anyone who’s stopped searching for a job.

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Mody’s been smoking the real good stuff. Bankers leave? Great! Housing market crashes? Even better! Pound plummets? Fantastic!

It’ll all add up to Britain becoming “a beacon amidst the desolate and depressing decay of Western politics and social norms.”

The Real Reasons Brexit Is Succeeding (Ashoka Mody)

Banks are expected to leave for the European continent, taking with them jobs and tax revenues. But if banks do leave, that would be another good outcome for the British economy. Banks have fuelled the finance-property price nexus and have drawn the best talent to flip financial assets. A smaller banking sector will mean a more balanced British economy. And as for those who expect that the economy will suffer when the details of the divorce with the European Union are revealed, their logic does not work. It is the uncertainty of what lies ahead that should depress the economy. Once details become clearer, businesses will adapt. The fact that six months after the decision, the economy is doing so well is a judgement that Brexit could deliver a net economic dividend.

But the greater prize from Brexit lies in a possible political dividend. Western democracy is under the threat of authoritarian populism. Mainstream political parties, having for long failed to heed the calls of those being left behind, are being pushed aside by charlatans. The Brexit vote was a cry of despair by the poorly educated and those employed in dead-end jobs; many such Brexiters have reason to fear that their children will do even worse than them. Through their vote to leave the European Union, the most vulnerable have given another opportunity to the Conservative Party rather than to a Government run by self-promoting and destructive extremists.

Brexit will happen. Prime Minister Theresa May’s Government must heed the true message of the Brexit vote. The task is to regenerate the communities that have turned into wastelands and spread quality education to prepare ever larger numbers of British citizens for the rigours of a 21st century competitive global economy. If the Government succeeds in this greater task, then Britain would not only have done well for itself, it would become a beacon amidst the desolate and depressing decay of Western politics and social norms.

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The crisis in economics should not be confused with that inside the BOE, where Carney turned political to influence the Brexit vote. In vain.

Economics is in Crisis – BOE’s Haldane (G.)

The Bank of England’s chief economist has admitted his profession is in crisis having failed to foresee the 2008 financial crash and having misjudged the impact of the Brexit vote. Andrew Haldane, said it was “a fair cop” referring to a series of forecasting errors before and after the financial crash which had brought the profession’s reputation into question. Blaming the failure of economic models to cope with “irrational behaviour” in the modern era, the economist said the profession needed to adapt to regain the trust of the public and politicians. Haldane described the collapse of Lehman Brothers as the economics profession’s “Michael Fish moment” (a reference to when the BBC weather forecaster predicted in 1987 that the UK would avoid a hurricane that went on to devastate large parts of southern England).

Speaking at the Institute for Government in central London, Haldane said meteorological forecasting had improved markedly following that embarrassing mistake and that the economics profession could follow in its footsteps. The bank has come under intense criticism for predicting a dramatic slowdown in the UK’s fortunes in the event of a vote for Brexit only for the economy to bounce back strongly and remain one of the best performing in the developed world. Haldane is known to be concerned about mounting criticism of experts and the potential for Threadneedle Street’s forecasts to be dismissed by politicians if errors persist. Former Tory ministers, including the former foreign secretary William Hague and the former justice secretary Michael Gove, last year attacked the Bank of England governor, Mark Carney, for predicting a dramatic slowdown in growth if the country voted to leave the EU.

Prominent Brexit campaigners have also besieged the central bank. Before the vote, the foreign secretary, Boris Johnson accused the bank of risking undermining economic confidence by issuing warnings about the potential effects of a vote for Brexit. During her conference speech following the vote, on 6 October, the prime minister, Theresa May, criticised the bank’s reaction to the vote after it cut interest rates further and boosted its package of stimulus measures by £60bn to £435bn.Gove said last week that when he said experts needed to be challenged, he meant economists in particular. In a debate with Stephanie Flanders, the former BBC economics editor, he cited an academic study to support his argument that expert economists were not good at making predictions.

Gove said: “Sometimes we’re invited to take experts as though they were prophets, as though their words were carved in tablets of stone and that we had to simply meekly bow down before them and accept their verdict. “I think the right response in a democracy, to assertions made by experts, is to say ‘show us the evidence, show us the facts’. And then, if experts or indeed anyone in the debate can make a strong case, draw on evidence and let us think again – then of course they deserve respect.”

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For the answer, check the article below this one.

Why Has The UK Economy Defied Predictions Of Doom? (G.)

First it was manufacturing. Then it was construction. Now the hat-trick of upbeat economic news has been completed by the strongest performance by the services sector in 17 months. It goes without saying that this is not what the Treasury or the Bank of England expected at the time of the EU referendum last June. At the time, there was talk of the economy plunging straight into recession. This week’s reports from purchasing managers point to growth of 0.5% in the final three months of 2016 compared with 0.6% in the third quarter. Post-referendum forecasts for 2016 were quickly shredded by the Bank of England when it became clear that activity had not collapsed. Likewise, predictions for 2017 may also soon be revised upwards. There are a number of reasons for this. Firstly, the economy had momentum in late 2016 which will persist into the first few months of 2017.

Secondly, the international outlook is looking brighter than it was a few months ago. Donald Trump’s tax-cutting agenda means the US economy is going to grow rapidly this year and that’s good news for UK exporters. Finally, the stance of both fiscal and monetary policy in the UK has become more growth friendly since the referendum. Philip Hammond throttled back on the government’s austerity plans in last November’s autumn statement, reinforcing the impact of Bank of England’s decision three months earlier to cut interest rates and embark on a new round of quantitative easing. When it cut rates to 0.25% in August the Bank signalled that a further cut was likely to be needed. Clearly, that is no longer going to happen. Official borrowing costs will remain where they are for now but there is a good chance of the next move from Threadneedle Street being a rate rise.

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This is why “The UK Economy Defied Predictions Of Doom”.

UK Unsecured Consumer Credit Grows At Annual Rate Of 11% (G.)

Britain went on a bit of a borrowing binge as Christmas approached. Unable to resist all the bargains on offer on Black Friday, shoppers pulled out the plastic. The rise in unsecured consumer debt in November was the biggest for more than a decade. News of the increase in consumer debt is not exactly a surprise. When the Bank of England cut interest rates in August last year, the aim was to making borrowing cheaper and therefore more attractive. The message came through loud and clear: UK households need little encouragement to buy on the never-never. Unsecured credit is growing at an annual rate just shy of 11% Rising consumer debt is not necessarily a problem. When unemployment is low and real incomes are rising, it can make perfectly good sense to borrow for a big-ticket item, especially when, as on Black Friday, it is on offer at a knockdown price and when interest rates are so low.

But anybody who believes consumers can continue to amass credit at 11% a year is living in cloud cuckoo land. The UK has been through these credit cycles many times in the past, and things have never ended well. Annual growth in unsecured borrowing is edging back up towards the 16% peak reached in the early 2000s, as is unsecured debt as a proportion of disposable income. The danger comes when unemployment rises, real incomes are squeezed or interest rates start to go up. At that point, borrowing becomes less a matter of personal choice and more a sign of financial distress. Britain is not at that point – yet. Consumers are not optimistic about the outlook for the economy but they are relatively happy about the state of their own finances. That could change as inflation starts to climb.

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100% guaranteed.

No End In Sight For Europe’s Banking Troubles (CNBC)

There is another pressing issue to solve in Europe’s banking system: Novo Banco – a Portuguese bank that emerged from the collapse of the country’s biggest lender. The Portuguese Central Bank and government have to find a solution for Novo Banco by August – a deadline agreed with European regulators, after previous failed attempts to recover the 4.9 billion euros ($5.2 billion) used to save the bank. Portugal’s Finance Minister Mario Centeno told a newspaper on Wednesday that “all options are on the table”, including a nationalization. Earlier last year, the government had rebuffed calls for the nationalization of the bank. Such a solution could spark further political turmoil at a sensitive time in European Union politics.

“It’s here (in the stability of the Portuguese government) where I find risks,” Diogo Teixeira dos Santos, chief executive officer at Optimize Investment Partners, told CNBC over the phone. Nationalizing the bank would be more of a political problem rather than an economic issue, he explained. Portugal is being governed by a minority-socialist led government, who enjoys parliamentary support from two leftist parties (the Left Bloc and the Communist Party). Though there are no general elections scheduled for 2017, it is clear that there are divergent views between the three parties when it comes to Novo Banco, which could shake the stability of the government.

The Left Bloc has previously mentioned that Novo Banco should be state owned, but the government continues to push for a private solution – just like the Italian government did for Monte dei Paschi, until the political turmoil forced a state intervention. More importantly, the leftist parties want the solution to have zero impact for taxpayers. The government lent nearly 4 billion euros to the rescue of the bank – an amount that it hopes to recover with a sale. Any losses from the sale will have to be paid gradually by the other Portuguese banks. But, even the best private option at the moment has “a potential impact on public accounts,” Lisbon’s central bank said Wednesday. The bank announced that an offer from Lone Star, a U.S. fund, is the best placed in ongoing negotiations.

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Jan 012017
 
 January 1, 2017  Posted by at 11:29 am Finance Tagged with: , , , , , , , , , ,  3 Responses »
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Claude Monet The Japanese Bridge 7 1924

Trump Leaves Open Possible Taiwan Meet, Questions Russia Hacking (R.)
Was Claim by DHS and FBI About Russian Hacking Fake News? (Spring)
Is the “Trump Trade” Already Unwinding? (WS)
Senator McCain Says US Stands With Ukraine Against Russia (R.)
Here’s How Much Each EU Nation Puts In And Takes Out Of The EU Budget (BI)
Universal Basic Income Trials Being Considered In Scotland (G.)
China’s Xi Offers Populist Message In New Year’s Eve Address (AP)
Narendra Modi Just Dug Himself a Great Big Hole (Varadarajan)
Turkish Policy Sets Syria On New Path (Sayigh)
Humanity May Self-Destruct, But The Universe Can Cope Perfectly Without Us (G.)

 

 

Trump’s been -partially- briefed: ”I also know things that other people don’t know so we cannot be sure..”. And he’s obviously not convinced, to say the least.

Trump Leaves Open Possible Taiwan Meet, Questions Russia Hacking (R.)

U.S. President-elect Donald Trump on Saturday left open the possibility of meeting with Taiwan’s president if she visits the United States after he is sworn in on Jan. 20 and also expressed continued skepticism over whether Russia was responsible for computer hacks of Democratic Party officials. In remarks to reporters upon entering a New Year’s Eve celebration at his Mar-a-Lago estate, Trump said, “We’ll see,” when pressed on whether he would meet Tsai Ing-wen, Taiwan’s president if she were to be in the United States at any point after he becomes president. Taiwan’s president will be in transit in Houston on Jan. 7 and again will be in transit in San Francisco on Jan. 13. Beijing bristled when Trump, shortly after his Nov. 8 victory, accepted a congratulatory telephone call from the Taiwan leader and has warned against steps that would upset the “one-China” policy China and the United States have maintained for decades.

Talk of a stop-over in the United States by the Taiwan president has further rattled Washington-Beijing relations. On another foreign policy matter, Trump warned against being quick to pin the blame on Russia for the hacking of U.S. emails. The Washington Post also reported on Friday that Moscow could be behind intrusion into a laptop owned by a Vermont electric utility. U.S. intelligence officials have said that they are confident Russia was behind the hacks, which could have played a role in Trump’s defeat over Democratic presidential candidate Hillary Clinton. “I think it’s unfair if we don’t know. It could be somebody else. I also know things that other people don’t know so we cannot be sure,” Trump said. Asked what that information included, the Republican President-elect said, “You will find out on Tuesday or Wednesday.” He did not elaborate.

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Seems to depend on who reports on it.

Was Claim by DHS and FBI About Russian Hacking Fake News? (Spring)

An important research principle is to follow the money. People around the world need to ask themselves who has the money and technical ability to be running hundreds and perhaps thousands of real servers and real IP addresses from fake corporations using fake websites in fake locations in more than 40 nations around the world? What agency has already been proven to be running mass surveillance on billions of people in more than 40 nations all around the world? Whose military cyber budget is more than 10 times larger than the cyber warfare budget of the rest of the world combined? There is certainly an elephant in the room – but it is not a Russian elephant. At a televised press conference in April 2016, former NSA agent Edward Snowden asked the Russian leader Vladimir Putin if the Russian government engaged in mass surveillance of millions of people in a manner similar to the NSA.

Putin replied that Russian law prohibited the Russian government from engaging in mass surveillance. Putin then pointed out that the Russian military budget was less than 10% of the US military budget. So even if they wanted to engage in mass surveillance, they simply did not have the money. People also need to ask themselves why the FBI/DHS chose to place their evidence in a CSV file and XML file rather than a normal document or spreadsheet. If this were real evidence, it would have been placed directly in the PDF report for everyone to read – not hidden away in a file the general public has little ability to read. Finally, for the FBI or the DHS to claim that the XML-CSV file contains evidence or even indicators of Russian hacking is simply a false statement. It is a perfect example of fake news. Any news agency promoting this claim without doing even the most basic of research that would easily confirm it is false should be listed as a fake news agency.

The real question that we should all be asking is why the DHS and FBI would destroy their reputation by posting such a fake report? Several years ago, our CIA claimed that Iraq had weapons of mass destruction. We now know that Iraq had no weapons of mass destruction – meaning that we went to war and spent over a trillion dollars on a fake report. Is this new fake report a pretext for launching a cyber war against Russia? Is it intended to justify increasing US military spending? It is hard to say what the real purpose of this fake DHS-FBI report is. But the fact that this silly list of IP addresses was the best evidence they could provide should be a strong indication that there really is no evidence of Russian hacking. Instead, it is more likely that Wikileaks is telling the truth in stating that they got the emails from a disgruntled Democratic Party insider.

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There’s so much downside there it’s scary.

Is the “Trump Trade” Already Unwinding? (WS)

The S&P 500, after having ended 2015 down 0.7%, ended 2016 up 9.5%, including a big swoon early in the year. From February 11, when it bottomed out at 1,810, it has surged 23.6%. And bonds went on a wild ride. The 10-year Treasury yield ended 2016 at 2.445% up from 2.273% at end of 2015. It hit 2.57% at peak Trump Trade, up over a full percentage point from the summer. Over the fourth quarter, the yield jumped 84 basis points, the largest quarterly jump since 1994. And prices, which move inverse to yields, clobbered bondholders. But note the decline in yield since December 20:

And stocks partied. Since the election, financials surged, bringing the gain for the year to 29.1%, the best-performing sector in the S&P 500. Goldman Sachs, whose ex-executives are now heavily represented in the Trump administration, shot up 36% since the election and 51% since the beginning of October when Trump’s victory became more than just a possibility. GS was one of the best Trump Trades out there. Alas, it too has started to peter out. GS is now down 2.5% from peak Trump-Trade, and other banks have followed. Insiders at the banks were preparing for it, it seems, because on December 9, just before bank stocks started losing ground, we found…

Mortgage rates have soared from around 3.4% for much of the summer to 4.32%, according to Freddie Mac. This is now reverberating through the housing market in multiple ways, with some people rushing to buy to lock in the rates before they go even higher, and others waiting for rates to come down and not buying, and still others being completely priced out by mortgage rates that are nearly a percentage point higher than they’d been a few months ago, and the first red flags on home sales are now cropping up:

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Oh, go away!

Senator McCain Says US Stands With Ukraine Against Russia (R.)

Republican U.S. Senator John McCain promised on Saturday continued support for Kiev in the face of aggression from Moscow, as he spent New Year’s Eve on the front line in Ukraine’s eastern conflict zone. McCain was one of a bipartisan group of 27 U.S. senators who sent a letter to President-elect Donald Trump in December, urging him to take a tough line against Russia over what they termed its “military land grab” in Ukraine. “I send the message from the American people – we are with you, your fight is our fight and we will win together,” McCain was quoted as saying by Ukrainian President Poroshenko’s press service. “In 2017 we will defeat the invaders and send them back where they came from. To Vladimir Putin – you will never defeat the Ukrainian people and deprive them of their independence and freedom,” McCain said after a visit to a military base in the southeastern town of Shyrokyne.

Trump signaled during his campaign that he might take a softer line in dealings with Moscow, repeatedly praising Russian President Putin’s leadership. Trump’s election caused jitters in Ukraine but officials in Kiev hope that the incoming president’s policies, influenced by Republican hawks and a Republican-voting Ukrainian diaspora, will be friendlier towards Ukraine than his campaign rhetoric might have suggested. Ukraine has relied on Western support and economic aid since street protests in 2014 which toppled a Kremlin-backed president and were followed by a war with pro-Russian separatists and Russia’s annexation of the Crimea peninsula from Ukraine.

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The enormous amounts going to France, Spain, Italy, Belgium are something to be very concerned about.

Here’s How Much Each EU Nation Puts In And Takes Out Of The EU Budget (BI)

One of the biggest political stories of 2016 has been Brexit and much of the debate both before and after June’s vote to leave the EU has focused around whether Britain will be financially better or worse off after leaving the EU. The “Vote Leave” campaign famously emblazoned their battle bus with a figure of £350 million, claiming that was what the UK sent to Brussels each week and that sum could be spent on the NHS instead. The figure was subsequently discredited, as it was a gross sum and didn’t take into account the fact that Britain also benefits from EU grants and funding. However, a recent House of Commons briefing paper on the UK’s funding from the EU shows that Britain does, in fact, put more into the EU budget than it takes out.

The UK has averaged around €12 billion in EU funding each year between 2011-15 but over that same period made an average net contribution of €15 billion. Britain is one of nine EU members that are net contributors to the European Union’s budget (meaning they put in more money than they take out.) Here’s the House of Commons chart showing each member states net contributions against their EU funding:EU funding House of Commons Briefing Paper The fact that Britain is a net contributor means that, in theory, the UK could stand to gain money after it leaves the EU. However, this does not account for any potential economic fluctuations as a result of Brexit — if the economy suffers then any gains from not paying into the budget could easily be wiped out by falling tax receipts.

There is also a very real possibility that the UK may have to keep paying into the EU budget if it wants to maintain access to the EU Single Market. The UK will also have to continue paying into the EU budget until it formally leaves the EU and senior European negotiators have signalled they will try and make Britain pay up to €60 billion to leave, to cover previous budget commitments, pension liabilities, and other costs. In other words, while on paper it might look like leaving the EU will give Britain more money for inward investment, Brexit could end up costing the UK just as much as EU membership — or worse, more.

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I’m all for a good basic income trial. But I’m very afraid that none of them will be adequate, and that this will be used to discredit the entire idea. And please don’t use the term universal for small scale experiments, it’s misleading.

Universal Basic Income Trials Being Considered In Scotland (G.)

Scotland looks set to be the first part of the UK to pilot a basic income for every citizen, as councils in Fife and Glasgow investigate trial schemes in 2017. The councillor Matt Kerr has been championing the idea through the ornate halls of Glasgow City Chambers, and is frank about the challenges it poses. “Like a lot of people, I was interested in the idea but never completely convinced,” he said. But working as Labour’s anti-poverty lead on the council, Kerr says that he “kept coming back to the basic income”. Kerr sees the basic income as a way of simplifying the UK’s byzantine welfare system. “But it is also about solidarity: it says that everyone is valued and the government will support you. It changes the relationship between the individual and the state.”

The concept of a universal basic income revolves around the idea of offering every individual, regardless of existing welfare benefits or earned income, a non-conditional flat-rate payment, with any income earned above that taxed progressively. The intention is to provide a basic economic platform on which people can build their lives, whether they choose to earn, learn, care or set up a business. The shadow chancellor, John McDonnell, has suggested that it is likely to appear in his party’s next manifesto, while there has been a groundswell of interest among anti-poverty groups who see it as a means of changing not only the relationship between people and the state, but between workers and increasingly insecure employment in the gig economy.

Kerr accepts that, while he is hopeful of cross-party support in Glasgow, there are “months of work ahead”, including first arranging a feasibility study in order to present a strong enough evidence base for a pilot. “But if there is ever a case to be made then you need to test it in a place like Glasgow, with the sheers numbers and levels of health inequality. If you can make it work here then it can work anywhere.”

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Now Xi is designated populist too, because he said: “On this new year, I am most concerned about the difficulties of the masses: how they eat, how they live, whether they can have a good New Year, or a good Spring Festival..” And I thought when incumbents say these things, that’s not populist. I may never understand.

China’s Xi Offers Populist Message In New Year’s Eve Address (AP)

Chinese President Xi Jinping said Saturday that his government would continue to focus on poverty alleviation at home and resolutely defending China’s territorial rights on the foreign front. Xi made the televised remarks in his annual New Year’s Eve address, in which he touted China’s scientific accomplishments, highlighting its large new radio telescope and space missions, and the country’s growing role as a leader in global affairs. Standing before a mural of the Great Wall, Xi said his administration successfully hosted a G-20 summit, pushed forward with China’s “One Belt One Road” pan-Eurasian infrastructure project and established the Asian Infrastructure Investment Bank.

China has upheld its peaceful development while resolutely defending its territorial sovereignty and maritime rights, Xi said, making a reference to an international tribunal ruling last summer against China’s claims in the contested South China Sea. “If anyone makes this an issue of question, the Chinese people will never agree!” he said, one of the few points in his 10-minute address when his voice rose noticeably. For most of his address, Xi struck a populist tone, saying he was above all concerned about the living conditions of the people and vowed that improving employment, education, housing and health care would be a responsibility that his ruling Communist Party would never shirk from. China lifted 10 million people out of poverty in 2016, Xi said.

“On this new year, I am most concerned about the difficulties of the masses: how they eat, how they live, whether they can have a good New Year, or a good Spring Festival,” Xi said, as the television broadcast cut to footage of his visits this year to impoverished rural areas. Xi also promised to shore up Communist Party discipline and “unwaveringly” maintain his anticorruption campaign against high- and low-ranking officials alike. He said that “supply-side” economic reforms were making progress and that the party would continue to push reform and rule by law during the 19th National Congress, scheduled for late 2017. “As long as the party forever stands with the people, we will be able to walk the long march of our generation,” he said.

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A Lakh is one hundred thousand. Still confusing as f**k.

Narendra Modi Just Dug Himself a Great Big Hole (Varadarajan)

It was a speech of not just shifting goalposts but vanishing playing fields, and yet Narendra Modi couldn’t resist making a rhetorical point about black money that might well prove costly for him by the time 2019 comes around. “I wish to share some information with you, which will either make you laugh, or make you angry,” he said, with a flourish half-way through his speech. This was the point where everyone expected him to reveal how many old Rs 500 and 1000 notes had become ‘worthless paper’ thanks to demonetisation but he had another number in mind: “According to information with the government, there are only 24 lakh people in India who accept that their annual income is more than 10 lakh rupees. Can we digest this? Look at the big bungalows and big cars around you… If we look at any big city, it would have lakhs of people with annual income of more than 10 lakh.”

Until then, the prime minister had sought to sweep the growing public concerns about the effects of his demonetisation decision under a fraying carpet of nationalism. But by drawing attention to a stark statistic in an attempt to provide some justification for the chaos he has unleashed in the lives of hundreds of millions of poor Indians, Modi has unwittingly laid down a new metric by which the success or failure of his supposed drive against black money must be judged: will he manage to add the “lakhs of people” who have an income of more than Rs 10 lakh to the list of those who pay income tax? If he doesn’t, then what was the point of subjecting the whole country to so much disruption and pain? Finance minister Arun Jaitley initially claimed that a certain proportion of the demonetised notes would remain outside the banking system and get extinguished, thus providing a blow to the black economy and a fiscal boost to the government.

When they realised there was unlikely to be significant extinguishing and that most of the high denomination notes in circulation would probably end up getting deposited, Modi and Jaitley claimed the income tax authorities would be able to track down the owners of black money since their funds had entered the banking system. Now that it is apparent the IT department will not find it that easy to undertake such a massive exercise – its inefficiency is the reason the list of those with official incomes of Rs 10 lakh and over is just 24 lakh to begin with and is unlikely to grow – Modi has tried to sell another bizarre idea to the public about why the cashless hardship they are putting up with is in the national interest.

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Putin is tightening his grip on Erdogan. Who held a speech yesterday proclaiming that Turkey is in the first independence war in 93 years, or something like that. But that’s strictly for domestic use.

Turkish Policy Sets Syria On New Path (Sayigh)

Turkish policy has been evolving at a quickening pace. The decision to lean on the opposition to allow thousands of its fighters to abandon the effort to lift the regime siege of eastern Aleppo in order to spearhead a Turkish-backed push against Kurdish-held areas to the north last August ensured the fall of one of the most important opposition strongholds in Syria four months later. Remaining opposition forces in the northwest have significant stockpiles of weapons and ammunition, but are wholly dependent on Turkey for further military resupply and for the flow of trade and international humanitarian assistance. Turkey has not abandoned the opposition completely, but it is clearly working to a new set of policy assumptions and objectives in Syria.

That these include a strategic decision to abandon the effort to force Assad from power is already plain. Talk of setting up a safe zone in northern Syria has never been credible, despite considerable bluster. Moscow insiders claim Turkish President Recep Tayyip Erdogan is also abandoning his categorical rejection of significant Kurdish autonomy in northern Syria, so long as he can block the same thing in Turkey. With President-Elect Donald Trump about to take office in the US, there is little reason for Turkey to expect to counter-balance Russian policy proposals on Syria. These calculations prompted Turkey to accept the fate of Aleppo – which it had long presented as a “red line” that the Assad regime should not cross – and then to broker a ceasefire with Russia immediately after its fall.

The alacrity with which the main political and military opposition groupings have announced their support for the latest ceasefire is the surest measure of the extent of the shift in Turkey’s policy and of its determination to enforce compliance, whatever the provocations from the government side. The real question, then, is not whether the latest ceasefire will hold, but how far Turkey will go in making the Syrian opposition accept what comes next, should the peace talks jointly sponsored by Russia and Turkey take place within the next month as officially scheduled. Indeed, even if the ceasefire fails or if the talks are unsuccessful – or not held at all – Turkish policy towards Syria is set on a new path.

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Destruction as a religious comfort zone. Oh well, people go for what feels good.

Humanity May Self-Destruct, But The Universe Can Cope Perfectly Without Us (G.)

In a Scandinavian hotel a few years ago, I came across a documentary I didn’t expect to watch for more than a minute or two, but at least it was in English. It was past time to go to bed, but I ended up watching the whole thing. Aftermath: Population Zero imagines that overnight humanity vanishes from the planet. You may have seen it. The immediate effects of human departure are sentimentally saddening: pets die, no longer competent to fend for themselves. Some livestock fares poorly, though other domesticated animals romp happily into the wild. Water cooling fuel rods of nuclear power plants evaporate, and you’d think that would be the end of everything – but it isn’t. Radioactivity subsides. Mankind’s monuments to itself decay, until every last skyscraper has rusted and returned to dirt.

Animals proliferate, flora thrive, forests rise. Bounty, abundance and beauty abound. Antelopes leap from wafting golden grasses. It was all very exhilarating, really. I went to sleep that night with a lightened heart. Ever since, that wafting grasses image has been a comforting touchstone. We speak often of “destroying the planet” when what we mean is destroying its habitability for humans. The humblingly immense else-ness of what is, in which our species is collectively a speck, extant for an eye blink, lets us off the hook. Global warming, Syrian civil war, domestic violence, Donald Trump? This too shall pass.

I’m not a religious person. Chances are that the universe neither treasures nor regrets us. It permits us, with a marvellous neutrality, and later it may permit artificial intelligence, humanity 2.0, or a lot more bugs instead. We can’t comprehend all that phantasmagorical stuff out there, but we also can’t kill it. That gives me hope. Although we’re a remarkably successful biological manifestation – and so is mould – our aptitude for annihilation is largely limited to wiping ourselves out. The gift of self-destruction is a minor, not to mention stupid, power, and apparently humanity’s suicide would be relatively safe, like a controlled explosion. The universe would get on perfectly well without us once we’d gone.

I strongly associate the notion of aftermath with TC Boyle’s short story Chicxulub. While relating the intimate, personal account of learning that his teenage daughter has been hit, perhaps fatally, by a car, the narrator digresses to explain the shockingly high likelihood that our planet will be hit by an asteroid large enough to extinguish our species. For the narrator, his daughter’s death and the end of the world are indistinguishable. The text is shot through with a piercing sorrow, over all our pending losses – of children, of the world we’ve made together as a race. This, too, gives me hope – that I’m not a misanthrope after all. I would miss my brother, my husband; with all our shortcomings, I would also miss the family of man. The capacity for grief, the flipside of love, consoles me as much as the detached long view of aftermath.

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Dec 192016
 
 December 19, 2016  Posted by at 9:23 am Finance Tagged with: , , , , , , , , , , ,  2 Responses »
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Oil wells in Venice, California, bringing oil up from beach area 1952

Amid The Bombs of Aleppo, All You Can Hear Are The Lies (Peter Hitchens)
Coup Or No Coup: The Electoral College Votes On Monday (ZH)
A Spy Coup in America? (Robert Parry)
Trump Wants To Hear Hacking Evidence Direct From FBI (WSJ)
The $12 Trillion Credit Risk Juggle (BBG)
Gone in 60 Seconds: Chinese Snap Up Dollars as Yuan Tanks (BBG)
As Yuan Weakens, Chinese Rush To Open Foreign Currency Accounts (R.)
China Central Bank Presses Banks To Help After Interbank Lending Freezes (R.)
China To Strictly Limit Property Speculation In 2017 (R.)
Italy Banking Crisis is Also a Huge Crime Scene (DQ)
Ireland Appeals EU Order To Collect €13 Billion In Back Taxes From Apple (AP)
Apple To Appeal EU Tax Ruling, Says It Was A ‘Convenient Target’ (R.)
India Has Less And Less Reason To Exist In Its Current Form (Bhandari)
Greek Migration Minister Eyes ‘Closed’ Facilities On Islands (Kath.)
The Seven Deadly Things We’re Doing To Trash The Planet (John Vidal)

 

 

Hitchens is a veteran. And western propaganda on Aleppo has gotten way out of hand.

Amid The Bombs of Aleppo, All You Can Hear Are The Lies (Peter Hitchens)

[..] the old cliche ‘the first casualty of war is truth’ is absolutely right, and should be displayed in letters of fire over every TV and newspaper report of conflict, for ever. Almost nothing can be checked. You become totally reliant on the people you are with, and you identify with them. If you can find a working phone, you will feel justified in shouting whatever you have got into the mouthpiece – as simple and unqualified as possible. And your office will feel justified in putting it on the front page (if you are lucky). And that is when you are actually there, which is a sort of excuse for bending the rules.

In the past few days we have been bombarded with colourful reports of events in eastern Aleppo, written or transmitted by people in Beirut (180 miles away and in another country), or even London (2,105 miles away and in another world). There have, we are told, been massacres of women and children, people have been burned alive. The sources for these reports are so-called ‘activists’. Who are they? As far as I know, there was not one single staff reporter for any Western news organisation in eastern Aleppo last week. Not one. This is for the very good reason that they would have been kidnapped and probably murdered. The zone was ruled without mercy by heavily armed Osama Bin Laden sympathisers, who were bombarding the west of the city with powerful artillery (they frequently killed innocent civilians and struck hospitals, since you ask).

That is why you never see pictures of armed males in eastern Aleppo, just beautifully composed photographs of handsome young unarmed men lifting wounded children from the rubble, with the light just right. The women are all but invisible, segregated and shrouded in black, just as in the IS areas, as we saw when they let them out. For reasons that I find it increasingly hard to understand or excuse, much of the British media refer to these Al Qaeda types coyly as ‘rebels’ (David Cameron used to call them ‘moderates’). But if they were in any other place in the world, including Birmingham or Belmarsh, they would call them extremists, jihadis, terrorists and fanatics. One of them, Abu Sakkar, famously cut out and sank his teeth into the heart of a fallen enemy, while his comrades cheered. This is a checked and verified fact, by the way.

Sakkar later confirmed it to the BBC, when Western journalists still had contact with these people, and there is film of it if you care to watch. There is also film of a Syrian ‘rebel’ group, Nour al-din al Zenki, beheading a 12-year-old boy called Abdullah Issa. They smirk a lot. It is on the behalf of these ‘moderates’ that MPs staged a wholly one-sided debate last week, and on their behalf that so many people have been emoting equally one-sidedly over alleged massacres and supposed war crimes by Syrian and Russian troops – for which I have yet to see a single piece of independent, checkable evidence.

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A real American Christmas comedy.

Coup Or No Coup: The Electoral College Votes On Monday (ZH)

With even Harvard’s Larry Lessig admitting that his efforts to flip the Electoral College against Trump have failed miserably, it’s a near certainty that Trump will, in fact, be elected President when the Electoral College casts their votes tomorrow. That said, there could always be surprises and, as such, The Hill has published a list of five things you should keep an eye on as electors get set to cast their ballots. First, here is how the 538 electors should cast their ballots if they all strictly follow the will of the voters in their respective states.

That said, we know that at least one Texas elector, Chris Suprun, has vowed to go rogue tomorrow and anxious eyes will be waiting to see if anyone decides to join him. As The Hill points out, there hasn’t been an election since 1836 in which more than 1 elector changed his vote, so even 2 defectors would make history.

There’s no evidence of a widespread number of Republican defections—just one Republican elector from Texas has gone public with plans to break from Trump. But there hasn’t been an election in which more than one elector jumped ship for reasons other than the death of a candidate since 1836, according to the nonprofit FairVote. So a defection by even one more Republican elector would make history.

The next thing to watch is whether any Democrat electors will cast protest votes. A small group of Democratic electors had vowed to join Larry Lessig’s coup attempt by throwing their support behind an alternative Republican candidate. While this now seems like a remote possibility, it is something to watch for.

Democratic electors are the ones beating the drums for the revolt, yet they’re largely powerless to change the outcome. A handful of electors are already planning on uniting around a Republican alternative as a protest, but it’s still unclear how many are willing to join the protest. In theory, a unified front of the 232 Democrats could join with 38 Republicans to elect an alternative president. But in practice, the anti-Trump electors will be lucky if more than a dozen Democrats break.

With 29 states and the District of Columbia binding their electors by law, it will also be interesting to see if anyone in those states choose to defect, and if so, what penalties will be levied upon them.

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Lots of info from Parry, but basically just confirms what we already knew.

A Spy Coup in America? (Robert Parry)

As Official Washington’s latest “group think” solidifies into certainty – that Russia used hacked Democratic emails to help elect Donald Trump – something entirely different may be afoot: a months-long effort by elements of the U.S. intelligence community to determine who becomes the next president. I was told by a well-placed intelligence source some months ago that senior leaders of the Obama administration’s intelligence agencies – from the CIA to the FBI – were deeply concerned about either Hillary Clinton or Donald Trump ascending to the presidency. And, it’s true that intelligence officials often come to see themselves as the stewards of America’s fundamental interests, sometimes needing to protect the country from dangerous passions of the public or from inept or corrupt political leaders.

It was, after all, a senior FBI official, Mark Felt, who – as “Deep Throat” – guided The Washington Post’s Bob Woodward and Carl Bernstein in their Watergate investigation into the criminality of President Richard Nixon. And, I was told by former U.S. intelligence officers that they wanted to block President Jimmy Carter’s reelection in 1980 because they viewed him as ineffectual and thus not protecting American global interests. It’s also true that intelligence community sources frequently plant stories in major mainstream publications that serve propaganda or political goals, including stories that can be misleading or entirely false. So, what to make of what we have seen over the past several months when there have been a series of leaks and investigations that have damaged both Clinton and Trump — with some major disclosures coming, overtly and covertly, from the U.S. intelligence community led by CIA Director John Brennan and FBI Director James Comey?

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The WSJ headline is: “Donald Trump’s Team Tones Down Skepticism on Russia Hacking Evidence”. But all he does is say: “show us the proof, show me and the American people.” So let’s have it.

Trump Wants To Hear Hacking Evidence Direct From FBI (WSJ)

Fresh signs emerged Sunday that President-elect Donald Trump could embrace the intelligence community’s view that the Russians were behind a computer-hacking operation aimed at influencing the November election. A senior Trump aide said Mr. Trump could accept Russia’s involvement if there is a unified presentation of evidence from the Federal Bureau of Investigation and other agencies. This followed weeks of skepticism from the president-elect and his supporters that there is sufficient evidence that Russia was responsible for cyberattacks against the Democratic National Committee or leak of stolen emails.

Speaking on Fox News Sunday, Mr. Trump’s incoming chief of staff, Reince Priebus, said the president-elect “would accept the conclusion if these intelligence professionals would get together, put out a report, show the American people that they are actually on the same page.” His statement follows an intensifying bipartisan push on Capitol Hill to launch a separate investigation into the matter. Mr. Trump has called for opening up new lines of cooperation with Russia, and some of his critics in both parties have said his refusal so far to say Russia tried to interfere in the election was a sign that he doesn’t believe that Moscow is a U.S. adversary.

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That’s quite the shift.

The $12 Trillion Credit Risk Juggle (BBG)

After the financial crisis, regulators were worried about too much risk being concentrated in too few hands.They are still concerned, but the hands have changed. The U.S. Treasury’s Office of Financial Research is devoted to worrying about everything and anything that could spur another financial crisis, and near the top of the list is the post-crisis explosion in corporate credit. This pile of debt is “a top threat to stability,” according to this Treasury unit’s latest report, as Bloomberg’s Claire Boston wrote on Tuesday. In particular, these researchers are wary of the changing composition of who owns these bonds. Big banks and hedge funds own a much smaller proportion, while insurers and mutual funds own much more of it.


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More specifically, banks and household and nonprofits, a category that includes hedge funds, have reduced their holdings of U.S. corporate credit by $1.6 trillion since 2008, while insurers, mutual funds and the rest of the world have increased it by $3.6 trillion, according to data compiled by Goldman Sachs that includes foreign sovereign debt and asset-backed securities. This is a salient matter. The Federal Reserve just raised rates for a second time in two years and predicts three rate increases next year, possibly marking the end of this era of financial repression that’s spurred a record pace of corporate-debt sales.

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With Goldman predicting the biggest fall for the yuan in 20 years, Beijing is in a bind.

Gone in 60 Seconds: Chinese Snap Up Dollars as Yuan Tanks (BBG)

Chinese savers, eager to convert their yuan before the currency keeps depreciating, are snapping up U.S. dollar investment products that offer options for keeping money at home instead of sending it overseas. The latest wealth management products from China Merchants Bank last week, paying 2.37% annual interest on U.S. dollars, sold out in 60 seconds flat. “You won’t be able to get it online because it’s gone in less than a minute,” said a branch manager, who would only give the surname Xu, and encourages customers to book a day in advance next time. A growing number of offerings of such U.S. dollar funds and how quickly they’re being purchased show the surging demand for foreign currency amid outflows that are estimated to have totaled more than $1.5 trillion since the beginning of 2015.

By shifting into dollars – U.S., Australian and Hong Kong are among the favorites – deposit holders are shielded from the yuan’s losses without having to take their money out of the country to seek returns. “It seems an attractive choice to convert the yuan into the dollar sooner rather than later,” Harrison Hu at NatWest Markets, a unit of RBS, wrote in a note. He estimates that household purchases of foreign exchange could double to $15 billion a month in the coming quarter, absent new controls. A more hawkish than expected outlook from the U.S. Federal Reserve after it lifted interest rates last week has helped accelerate a dollar rally, with analysts predicting further gains. As the yuan has declined, China’s authorities have tried to vigorously enforce strict rules on moving cash over the border, where it is often invested in purchases such as real estate.

In recent weeks, policy makers in Beijing have put the brakes on everything from companies buying assets overseas to offshore purchases of life insurance to stem the tide of cash outflows. The fresh measures include checks by the currency regulator on any capital account transactions involving foreign exchange of $5 million or more. That followed steps earlier this year to ban the sharing of foreign-exchange quotas. In November, banks sold 49% more foreign-currency denominated wealth management products, most of them in U.S. dollars, than in October, according to PY Standard. November’s foreign currency deposits increased 11.4% from a year earlier, more than double the 4.8% rise in October, according to the People’s Bank of China.

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If you’re really a market economy, what do you do?

As Yuan Weakens, Chinese Rush To Open Foreign Currency Accounts (R.)

Zhang Yuting lives and works in Shanghai, has only visited the United States once, and rarely needs to use foreign currency. But that hasn’t stopped the 29-year-old accountant from putting a slice of her bank savings into the greenback. She is not alone. In the first 11 months of 2016, official figures show that foreign currency bank deposits owned by Chinese households rose by almost 32%, propelled by the yuan’s recent fall to eight-year lows against the dollar. The rapid rise – almost four times the growth rate for total deposits in the yuan and other currencies as recorded in central bank data – comes at a time when the yuan is under intense pressure from capital outflows. The outflows are partially a result of concerns that the yuan is going to weaken further as U.S. interest rates rise, and because of lingering concerns about the health of the Chinese economy.

U.S. President-elect Donald Trump’s threats to declare China a currency manipulator and to impose punitive tariffs on Chinese imports into the U.S., as well as tensions over Taiwan and the South China Sea, have only added to the fears. “Expectations of capital flight are clear,” said Zhang, who used her yuan savings to buy $10,000 this year. “I might exchange more yuan early next year, as long as I’ve got money.” Household foreign currency deposits in China are not huge compared to the money that companies, banks and wealthy individuals have been directing into foreign currency accounts and other assets offshore. All up, households had $118.72 billion of foreign money in their bank accounts at the end of November, while total foreign currency deposits were $702.56 billion. But the high growth rate in the household forex holdings are symbolic of a growing headache for the government as it struggles to counter the yuan’s weakness

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Liquidity is one of the things central banks do not control. Not in the way China sees control.

China Central Bank Presses Banks To Help After Interbank Lending Freezes (R.)

China’s central bank stepped in to urge major commercial banks to lend to non-bank financial institutions on Thursday afternoon after many suspended interbank operations amid tight liquidity conditions, Caixin reported. The People’s Bank of China intervened to help institutions such as securities firms and fund managers after banks, including the big four state-owned banks, became reluctant to make loans, the financial magazine said, citing traders and institutional sources. Caixin said that traders pointed to worsening sentiment among banks about market conditions and growing caution over interbank lending, especially after the U.S. Fed triggered a sell-off in the bond futures market on Thursday by signaling more rate hikes in 2017. Liquidity has become a major factor affecting the market after the central bank increased the cost of capital through open market operations in the past month, the magazine added.

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Don’t believe a word of it.

China To Strictly Limit Property Speculation In 2017 (R.)

China will strictly limit credit flowing into speculative buying in the property market in 2017, top leaders said at an economic conference on Friday, as reported by the official Xinhua news agency. “Houses are for people to live in, not for people to speculate,” Xinhua said, citing a statement issued by the leaders after the Central Economic Work Conference concluded. “We must control credits in the macro sense,” they said in the statement. China will also boost the supply of land for cities where housing prices face stiff upward pressure, they said. China must quickly establish a long-term mechanism to restrain property bubbles and prevent price volatility in 2017, Xinhua said. Top leaders began the conference on Wednesday to map out economic and reform plans. The annual event is keenly watched by investors for clues to policy priorities and economic targets in the year ahead.

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That’s what the country always used to be good at after all.

Italy Banking Crisis is Also a Huge Crime Scene (DQ)

The Bank of Italy’s Target 2 liabilities towards other Eurozone central banks — one of the most important indicators of banking stress — has risen by €129 billion in the last 12 months through November to €358.6 billion. That’s well above the €289 billion peak reached in August 2012 at the height of Europe’s sovereign debt crisis. Foreign and local investors are dumping Italian government bonds and withdrawing their funding to Italian banks. The bank at the heart of Italy’s financial crisis, Monte dei Paschi di Siena (MPS), has bled €6 billion of “commercial direct deposits” between September 30 and December 13, €2 billion of which since December 4, the date of Italy’s constitutional referendum.

Italy’s new Prime Minister Paolo Gentiloni, who took over from Matteo Renzi after his defeat in the referendum,said his government — a virtual carbon copy of the last one — is prepared to do whatever it takes to stop MPS from collapsing and thereby engulfing other European banks. His options would include directly supporting Italy’s ailing banks, in contravention of the EU’s bail-in rules passed into law at the beginning of this year. Though now, that push comes to shove, the EU seems happy to look the other way. While attention is focused on the rescue of MPS, news regarding another Italian bank, Banca Etruria, has quietly slipped by the wayside. On Friday it was announced that the first part of an investigation concerning fraudulent bankruptcy charges, in which 21 board members are implicated, had been closed.

This strand of the investigation concerns €180 million of loans offered by the bank which were never paid back, leading to the regional lender’s bankruptcy and eventual bail-in/out last November that left bondholders holding virtually worthless bonds. The Banca Etruria scandal is a reminder — and certainly not a welcome one right now for Italian authorities — that a large part of the €360 billion of toxic loans putrefying on the balance sheets of Italy’s banks should never have been created at all and were a result of the widespread culture of corruption, political kickbacks, and other forms of fraud and abuse infecting Italy’s banking sector. Etruria is also under investigation for fraudulently selling high-risk bonds to retail investors — a common practice among banks in Italy (and Spain) during the liquidity-starved years of Europe’s sovereign debt crisis.

Put simply, “misselling” subordinated debt to unsuspecting depositors was “the way they recapitalized the banking system,” as Jim Millstein, the U.S. Treasury official who led the restructuring of U.S. banks after the financial crisis, told Bloomberg earlier this year.

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Yeah, it’s unfair!!

Ireland Appeals EU Order To Collect €13 Billion In Back Taxes From Apple (AP)

Ireland will appeal the European Union’s order to force it to collect a record €13bn in taxes from Apple, the Irish government has said. The Irish finance department’s announcement on Monday comes nearly four months after EU competition authorities hit Apple with the back-tax bill based on its longtime reporting of European-wide profits through Ireland. The country charges the American company only for sales on its own territory at Europe-low rates that in turn have been greatly reduced by the controversial use of shell companies at home and abroad. In its formal legal submission, the Dublin says its low taxes are the whole point of its sales pitch to foreign investors — and said it is perfectly legal to levy far less tax on profits than imposed by competitors.

It accuses EU competition authorities of unfairness, exceeding their competence and authority, and seeking to breach Ireland’s sovereignty in national tax affairs. The ruling unveiled 30 August by the European competition commissioner Margrethe Vestager called on Apple to pay Ireland the €13bn for gross underpayment of tax on profits across the bloc from 2003 to 2014. Her report concluded that Apple used two shell companies incorporated in Ireland to permit Apple to report its Europe-wide profits at effective rates well under 1%. The scope of the order could have been even greater because EU time limits meant the judgment could include potential tax infringements dating only from 2003, not all the way back to Apple’s original 1991 tax deal with Ireland. But Irish specialists in corporate tax estimate that the EU’s order, if enforced, actually would total €19bn because of compounding interest from delayed payment.

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Everybody appeals.

Apple To Appeal EU Tax Ruling, Says It Was A ‘Convenient Target’ (R.)

Apple will launch a legal challenge this week to a record $14 billion EU tax demand, arguing that EU regulators ignored tax experts and corporate law and deliberately picked a method to maximize the penalty, senior executives said. Apple’s combative stand underlines its anger with the European Commission, which said on Aug. 30 the company’s Irish tax deal was illegal state aid and ordered it to repay up to €13 billion to Ireland, where Apple has its European headquarters. European Competition Commissioner Margrethe Vestager, a former Danish economy minister, said Apple’s Irish tax bill implied a tax rate of 0.005% in 2014. Apple intends to lodge an appeal against the Commission’s ruling at Europe’s second highest court this week, its General Counsel Bruce Sewell and CFO Luca Maestri told Reuters.

The iPhone and iPad maker was singled out because of its success, Sewell said. “Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates lots of headlines. It allows the commissioner to become Dane of the year for 2016,” he said, referring to the title accorded by Danish newspaper Berlingske last month. Apple will tell judges the Commission was not diligent in its investigation because it disregarded tax experts brought in by Irish authorities. “Now the Irish have put in an expert opinion from an incredibly well-respected Irish tax lawyer. The Commission not only didn’t attack that – didn’t argue with it, as far as we know – they probably didn’t even read it. Because there is no reference (in the EU decision) whatsoever,” Sewell said.

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A police state that bans gold and creates a huge underground market in it.

India Has Less And Less Reason To Exist In Its Current Form (Bhandari)

Assaults on people’s private property and the integrity of their homes through tax-raids continue. In a recent notification, government has made it clear that any ownership of jewelry above 500 grams of gold per married woman will be put under the microscopic scrutiny of tax authorities. Steep taxes and penalties will be imposed on those who cannot prove the source of their gold. In India’s Orwellian new-speak this means that because bullion has not been explicitly mentioned, its ownership will be deemed to be illegal. Courts will do what Modi wants. Huge bribes will have to be paid. Sane people are of course cleaning up their bank lockers. The secondary consequence of this will be a steep increase in unreported crimes, for people will be afraid of going to the police after a theft, fearing that the tax authorities will then ask questions.

At the same time, the gold market has mostly gone underground, and apparently the volume of gold buying has gone up. The salaried middle class is the consumption class, often heavily indebted. Poor people have limited amounts of gold. The government is merely doing what pleases the majority and their sense of envy, to the detriment of small businesses and savers. Now, the middle class is starting to face problems as well. This will worsen once the the impact of the destruction of small businesses becomes obvious. India has always had a negative-yielding economy. It has suddenly become even more negative-yielding. Business risk has gone through the roof. Savers will be victimized. It is because of negative yields that Indian savers buy gold. They will buy more going forward.

Sane Indians should stay a step ahead of their rapacious government and the evolving totalitarian society, which are less and less inhibited by any institutions or values in support of liberty. India will become a police state, likely with the full support of most Indians. Nationalism will be the thread that weaves them together. But it is a fake thread, devoid of any value. Eventually, there will be far too many stresses in the system, whose institutions are already in an advance stage of decay. India as it exists today is a British creation. With the British now gone for 69 years, it is an entity has less and less reason to exist in its current form.

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Yeah, let’s all get crazy when Brussels says so.

Greek Migration Minister Eyes ‘Closed’ Facilities On Islands (Kath.)

Despite widespread opposition in the ranks of SYRIZA to such a prospect, Migration Minister Yiannis Mouzalas has called for the creation of “closed” reception centers for migrants on Aegean islands, saying they will help minimize tensions amid local communities. A key reason for building tensions at existing centers on the islands is the slow pace at which migrants’ asylum applications are being processed. German Chancellor Angela Merkel made a pointed reference to the slow pace of migrant returns from Greece to Turkey last week. However, official figures show that an agreement signed in March between the European Union and Ankara significantly curbed arrivals in Greece. Of the 172,699 migrants that arrived in Greece from Turkey this year, only 20,457 have landed on the islands since the beginning of April, when the EU-Turkey deal went into effect.

Asylum officials on the Aegean islands have received a total of 21,314 applications, while 2,110 have appealed against initial rejections. The government hopes to create new facilities to accommodate migrants who have displayed delinquent behavior in a bid to curb the outbreak of rioting at larger centers and to stop thefts and other petty crimes that have been testing tolerance in local communities. “We propose small facilities for 150-200 people,” Mouzalas told Kathimerini, adding that authorities were not seeking the tolerance but the “solidarity” of islanders to help “normalize the situation.” As for the prospect of transferring some migrants from island centers to facilities on the mainland, Athens has asked EU officials about it but has failed to receive a response amid fears that such a move would constitute a violation of the EU-Turkey pact, Mouzalas said.

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There’s far more than seven, but hey, it’s John Vidal. Who spent half his life doing this.

The Seven Deadly Things We’re Doing To Trash The Planet (John Vidal)

A baby ibex on a precipitous cliff edge. The hyenas of Harar eating from a human hand. Leopards in Mumbai, whales breaching and baby turtles heading blindly away from the sea. We are amazed by images of wildlife seen in ever more beautifully filmed natural history documentaries. They raise awareness, entertain, inform and amuse. We weep when we hear there are fewer birds in the sky, or that thousands of species are critically endangered. But there are some metaphorical megafauna that the BBC and we in the media really do not want everyone to see. After half a lifetime writing for the Guardian about the decline of the natural world, I have to report that there is a herd of enormous elephants in the forest that are trashing the place. We avert our eyes and pretend they are not there. We hope they will go away, but they appear to be breeding. But it is now clear that they are doing so much damage that unless confronted, there is little chance that the rest of the animals, including us, will survive very long.

Hyper-consumerism is the dominant matriarch of this destructive herd and the dysfunctional economic model that supports it, generating waste and ecological damage on a massive scale. The average US supermarket offers nearly 50,000 products; in the UK we throw away millions of tonnes of food a year; mobile phones have an average lifespan of just over a year; computers and cars just a few years more. The free market economy that has been built around it celebrates speed, obsolescence and quantity over longevity and efficiency. But we know that hyper-consumerism leads directly to deforestation, over-extraction of minerals, the waste of natural resources and pollution. We simply have too much stuff that no one possibly needs. To avoid ecological disaster, it must be culled.

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Nov 132016
 
 November 13, 2016  Posted by at 9:56 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »
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Andy Thomas: Grand Ol’ Gang

Stupid Americans Elect An Absurd and Dangerous President (Spiegel)
Trump Adviser Scaramucci Takes Aim at Conservatives’ Budgetary Restraint (BBG)
Trump’s Truthful Heresy On Globalization And Free Trade (Steve Keen)
Clinton Blames FBI’s Comey For Her Defeat In Call With Donors (R.)
Sidney Blumenthal: Right-Wing FBI Agents Took Down Hillary In Coup D’État (ZH)
NY Times Publisher Vows To ‘Rededicate’ Paper To Reporting Honestly (Fox)
President Trump: How & Why… (Jonathan Pie)
Putin Aide: Trump Could Build Confidence With NATO Pullback (AP)
S&P Predicts Hard Brexit And Fresh Downgrade For UK (G.)
Obama: Greeks ‘Need Hope’ (Kath.)
Erdogan: If 3 Million Refugees March To Europe, EU Won’t Know What To Do (TM)
US To Accept Refugees That Australia Refuses To Resettle (BBC)

 

 

Just trying to make friends.

Stupid Americans Elect An Absurd and Dangerous President (Spiegel)

Although Trump will become the democratically elected 45th president of the United States on January 20, he remains a dangerous man. He is dangerously indifferent, unbalanced and inexperienced — and he is dangerously racist. Trump believes in the superiority of the white race, and if he implements the worst of his campaign promises, he will not be the first elected leader to do so. In other words, 60 million Americans acted stupidly. They cast their votes for xenophobia, racism and nationalism, the end of equal rights and social conscience, for the end of climate treaties and health insurance. Sixty million people followed a demagogue who will do little for them. And yet… this election goes deeper than that.

It says more than that, and all of us, including the media, politicians and civil societies, and unfortunately the entire West, which is now threatened, would be wise to pay far closer attention. Those who have lived in New York or experienced dinner conversations in Georgetown and debates at Harvard University’s Kennedy School of Government, know how brilliantly intelligent and worldly Americans can be. But these are closed circles – ones that are unfortunately nowhere near as open as they like to claim, inaccessible as they are to the vast majority of Americans who could never afford access. Once you get outside such circles, such cosmopolitan thinking isn’t nearly as widespread.

Those who have traveled recently from the East Coast to the West Coast, and witnessed the neglect and deterioration of entire towns and cities in states like Georgia, Alabama and Louisiana, have seen with their own eyes that connections have been severed in American society. Those who have seen what the disappearance of the steel industry has done and what the computer chip has wrought is familiar with the widespread frustration among the white working class, a group that has been left behind. Harvard University and Akron, Ohio, or Wall Street and Birmingham, Alabama, no longer have anything in common when 0.1% of society possesses 90% of the wealth. This is when the American dream is dead and when hate thrives – hate for immigrants, women, the media, and hate for anything that seems elitist or is simply different.

This doesn’t justify the hate – it simply explains it. The tragedy here is that Clinton offered ideas to fight the roots of this hatred, ideas like a higher minimum wage and investments in infrastructure and education. It is tragic because it was too late for credible plans. Trump had no ideas, but he sensed that the left-behinds yearn for strength. After Barack Obama’s victories, the pundits said that demographic change meant that no US election could be won again without the Latino vote. But Trump gave the Latinos a big fuck you, insinuating that the left-behinds are superior. His words were as crude as those spoken in Germany 80 years ago.

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“Business people like Mr. Trump understand you can grow yourself out of excessive debt.”

Trump Adviser Scaramucci Takes Aim at Conservatives’ Budgetary Restraint (BBG)

Don’t expect President-elect Donald Trump to adhere consistently to traditional Republican economic policy, or even to positions Trump staked out during his election campaign. That’s the message in an opinion piece written in the Financial Times by Trump economic adviser Anthony Scaramucci that took a swipe at the budgetary discipline promoted for years by fiscal conservatives in the U.S. and Europe. It may point to a coming rift between the new executive branch and the Republican-controlled Congress. “Mr. Trump is a different type of leader not burdened by rigid ideology,” Scaramucci said. “He is not dogmatic about policy positions. Rather, he has set bold targets from which to begin negotiations.”

Scaramucci ran though some of Trump’s previously-announced plans, including a proposal for a 10-percent one-off repatriation fee for companies. Trump would “ideally” like to see corporate tax rates cut to 15% from 35%, he said, adding that even a reduction to equal the U.K. rate of 20% would add nearly $600 billion to U.S. GDP. Founder of the investment firm SkyBridge Capital, Scaramucci, 52, was named on Friday to the executive committee of Trump’s transition team. The 16-person list also includes Dune Capital CEO Steve Mnuchin, who was finance chairman of Trump’s campaign; Reince Priebus, chairman of the Republican National Committee; and three of the president-elect’s children.

Scaramucci said global economies are still battling deflation largely because of a movement toward fiscal austerity that followed the 2008-2009 global economic crisis. “While easy-money monetary policies have exacerbated the income divide, central bankers handcuffed by political dysfunction have had little choice but to provide extraordinary accommodation,” he said. “Business people like Mr. Trump understand you can grow yourself out of excessive debt.”

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Steve illustrates his view with an excellent critique of David Ricardo, but I have no space for that here. Read the article.

Trump’s Truthful Heresy On Globalization And Free Trade (Steve Keen)

Dear President Trump, Nothing shuts a loud party down faster than the neighbours bashing the door in. You have just done that to the Washington Party, which—regardless of whether the President has been a Republican or a Democrat—has been the party of Globalisation and Free Trade ever since the 1970s. You declared that this party might have been good for the Washington and Wall Street elites, but it’s been bad for their neighbours, “the forgotten people” of America who once made up its manufacturing workers. So forget it folks, the party’s over. Go home. You’re right. Plenty of people will try to convince you that globalization and free trade could benefit everyone, if only the gains were more fairly shared.

The only problem with the party, they’ll say, is that the neighbours weren’t invited. We’ll share the benefits more equally now, we promise. Let’s keep the party going. Globalization and Free Trade are good. This belief is shared by almost all politicians in both parties, and it’s an article of faith for the economics profession. You are right to reject it. It’s a fallacy based on a fantasy.. [..] the gains from trade for everyone and for every country that could supposedly be shared more fairly simply aren’t there in the first place. Specialization is a con job—but one that the Washington elite fell for (to its benefit, of course). Rather than making a country better off, specialization makes it worse off, with scrapped machinery that’s no longer useful for anything, and with less ways to invent new industries from which growth actually comes.

Excellent real-world research by Harvard University’s “Atlas of Economic Complexity” has found diversity, not specialization, is the “magic ingredient” that actually generates growth. Successful countries have a diversified set of industries, and they grow more rapidly than more specialized economies because they can invent new industries by melding existing ones. My favourite example here is sailboards. To invent them in the first place, it helps to have local industries producing both surfboards and sails. Of course, specialization, and the trade it necessitates, generates plenty of financial services and insurance fees, and plenty of international junkets to negotiate trade deals. The wealthy elite that hangs out in the Washington party benefits, but the country as a whole loses, especially its working class. Forget it folks, the party’s over. Go home.

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It couldn’t have been her own fault, could it?

Clinton Blames FBI’s Comey For Her Defeat In Call With Donors (R.)

Hillary Clinton blamed FBI director James Comey for her stunning defeat in Tuesday’s presidential election in a conference call with her top campaign funders on Saturday, according to two participants who were on the call. Clinton was projected by nearly every national public opinion poll as the heavy favorite going into Tuesday’s race. Instead, Republican Donald Trump won the election, shocking many throughout the nation and prompting widespread protests. Clinton has kept a low profile since her defeat after delivering her concession speech on Wednesday morning. Clinton told her supporters on Saturday that her team had drafted a memo that looked at the changing opinion polls leading up to the election and that the letter from Comey proved to be a turning point.

She said Comey’s decision to go public with the renewed examination of her email server had caused an erosion of support in the upper Midwest, according to three people familiar with the call. Clinton lost in Wisconsin, the first time since 1984 that the state favored the Republican candidate in a presidential election. Although the final result in Michigan has still not been tallied, it is leaning Republican, in a state that last favored the Republican nominee in 1988. Comey sent a letter to Congress only days before the election announcing that he was reinstating an investigation into whether Clinton mishandled classified information when she used a private email server while secretary of state from 2009 to 2012.

Comey announced a week later that he had reviewed emails and continued to believe she should not be prosecuted, but the political damage was already done. Clinton told donors that Trump was able to seize on both of Comey’s announcements and use them to attack her, according to two participants on the call.

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Blumenthal’s the Clinton ally that Obama told her to stop conferring with. He’s rumored to be the main reason she set up her private server, in order to keep talking to me regardless, and keep it all secret.

Sidney Blumenthal: Right-Wing FBI Agents Took Down Hillary In Coup D’État (ZH)

After weeks/months of the Hillary campaign bashing Trump for “irresponsibly” questioning the legitimacy of the election process, Clinton-insider, Sid Blumenthal, is apparently making the media rounds in Europe attributing her loss to a “coup d’etat” organized by “a cabal of right-wing agents of the FBI in the New York office attached to Rudy Giuliani.” “It was the result of a cabal of right-wing agents of the FBI in the New York office attached to Rudy Giuliani, who was a member of Trump’s campaign.”I think it’s not unfair to call it a coup. Yeah, a coup d’etat.” Of course, Blumenthal is well known within Clinton world for his wild conspiracy theories as John Podesta pointed out he is “lost in his own web of conspiracies.” “Sid is lost in his own web of conspiracies. I pay zero attention to what he says.” It would probably be pointless to highlight for Sydney that there would never have been an FBI investigation had Hillary not blatantly violated multiple federal laws for her “convenience”…details.

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If the NYT had actually “reported on both candidates fairly”, the change wouldn’t have been necessary. Then again, the Dems are blaming the press for having been biased AGAINST HER! Anything goes.

NY Times Publisher Vows To ‘Rededicate’ Paper To Reporting Honestly (Fox)

The publisher of The New York Times penned a letter to readers Friday promising that the paper would “reflect” on its coverage of this year’s election while rededicating itself to reporting on “America and the world” honestly. Arthur O. Sulzberger Jr., the paper’s embattled publisher, appealed to Times readers for their continued support. “We cannot deliver the independent, original journalism for which we are known without the loyalty of our subscribers,” the letter states. New York Post columnist and former Times reporter Michael Goodwin wrote, “because it (The Times) demonized Trump from start to finish, it failed to realize he was onto something. And because the paper decided that Trump’s supporters were a rabble of racist rednecks and homophobes, it didn’t have a clue about what was happening in the lives of the Americans who elected the new president.

Sulzbergers letter was released after the paper’s public editor, Liz Spayd, took the paper to task for its election coverage. She pointed out how its polling feature Upshot gave Hillary Clinton an 84% chance as voters went to the polls. She compared stories that the paper ran about President-elect Donald Trump and Clinton, where the paper made Clinton look functional and organized and the Trump discombobulated. Spayd wrote, “Readers are sending letters of complaint at a rapid rate. Here’s one that summed up the feelings succinctly, from Kathleen Casey of Houston: “Now, that the world has been upended and you are all, to a person, in a state of surprise and shock, you may want to consider whether you should change your focus from telling the reader what and how to think, and instead devote yourselves to finding out what the reader (and nonreaders) actually think.”

She wrote about another reader who asked that the paper should focus on the electorate instead of “pushing the limited agenda of your editors.” “Please come down from your New York City skyscraper and join the rest of us.” Sulzberger—who insisted that the paper covered both candidates fairly- also sent a note to staffers on Friday reminding the newsroom to “give the news impartially, without fear or favor.” “But we also approach the incoming Trump administration without bias,” he said.

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Jonathan Pie is a spoof news reporter played by actor Tom Walker. Not a bad rant. h/t Nicole

President Trump: How & Why… (Jonathan Pie)

In case you missed it, I shot my bolt early this week & went viral in the process.

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Stop blaming Russia for NATO making up a reason to continue to exist.

Putin Aide: Trump Could Build Confidence With NATO Pullback (AP)

Vladimir Putin’s spokesman says one way Donald Trump could help build confidence with Russia after he becomes president would be to persuade NATO to slow down its expansion or withdraw its forces from Russia’s borders. Dmitry Peskov said in an interview with AP that this “would lead to a kind of detente in Europe.” But unfortunately, he said, Russia now sees “NATO’s muscles … getting bigger and bigger and closer and closer to Russian borders.” At a NATO summit in July, the Western alliance said it is building up positions in Poland, Estonia, Latvia and Lithuania in response to what it sees as escalating tensions with Russia. The United States is sending 1,000 troops to Poland next year. Trump has praised Putin as a strong leader and suggested that the U.S. could abandon its NATO commitments, which include mutual defense in case of attack.

The president-elect says NATO was created to confront a threat — the Soviet Union — that no longer exists and has called the alliance “obsolete” and a bad deal for America. He argues that the U.S. gets too little out of decades-old security partnerships like NATO, which is anchored in Europe but traditionally led by the United States. Peskov, who is considered one of Putin’s closest aides, called NATO “an instrument of confrontation.” When its forces are being enlarged and deploying closer and closer to Russia’s borders, he said, “we do not feel ourselves safe.” “Of course, we have to take measures to counter,” Peskov said. As “confidence-building measures” to reduce U.S.-Russia tensions in a Trump presidency “let’s say slow down or withdrawal of NATO’s military potential from our borders potentially would ease this situation,” he said.

It’s highly unusual for Peskov to travel abroad separately from Putin, but he is chairman of the board of the Russian Chess Federation and came to New York to attend Friday’s opening of the world championship match between Russia’s Sergei Karyakin and Norway’s Magnus Carlsen. The organizers invited Trump to attend but he did not show up. On other global issues, Peskov said in an interview Thursday at the venue for the championship that there is no possibility of “a breakthrough” to end the more than five-year Syria conflict unless the so-called moderate opposition is separated from “terrorist groups” including the Nusra Front and Islamic State extremists. The U.S. was supposed to do this under a Russia-U.S.-brokered cease-fire, but Peskov said Washington, unfortunately, was unable to do so. The cease-fire collapsed in September as the Syrian army launched an offensive on rebel-held eastern Aleppo under the cover of Russian warplanes.

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Within a year lots of Britons will realize that being out of the EU is a blessing.

S&P Predicts Hard Brexit And Fresh Downgrade For UK (G.)

Britain is in store for a hard Brexit that will hit the UK economy and lay bare the deep divisions in British society, a leading ratings agency has warned. In a bleak assessment of the UK’s prospects following the EU referendum, Standard & Poor’s said Britain was a diminishing global economic power on the verge of losing the ability to freely export goods and services to the EU. S&P said the UK was at risk of a further downgrade, following its unusual decision to slash the rating by two notches from the top AAA rating to AA, following the 23 June referendum. Moritz Kraemer, S&P global ratings chief sovereign credit officer, described that downgrade as “an extraordinary rating action, underlining the unprecedented step that is Brexit”.

He added: “Far from healing festering wounds, as was then PM David Cameron’s intention, the referendum has deepened and laid bare the schisms in British society. “Most of the economic impact will hit Britain itself. The second-round effect on the world economy is likely to be more limited, as the UK economy accounts for a small and shrinking share of global GDP.” The agency cited data from the International Monetary Fund, which suggested the UK’s share of the world economy will shrink from about 5% in 1980 to just over 3% in 2020. Kraemer said: “It is hard to fathom how a rather hard Brexit can be avoided unless both sides become much more flexible than they appear today. Nothing today suggests that a common quest for compromise will overcome the gulf that now looks as wide as the English Channel.”

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He could do much more, or have done at least, and all there is is words.

Obama: Greeks ‘Need Hope’ (Kath.)

You have played an important role in making sure that Greece remains in the eurozone and have repeatedly stated that it should get serious debt relief. Why did you do this and what should the way forward be in terms of promoting reforms, dealing with the debt issue and the strengthening of European institutions? How can the US help Greece in this, in practical terms? Is this going to be a priority during your visit to Berlin? Greece is a democracy, and the future of Greece will be decided by the Greek people. I have strongly supported efforts to keep Greece in the eurozone because I share the view of the vast majority of Greeks that this outcome is in Greece’s best interest. I believe that European integration is one of the greatest political and economic achievements of modern times, with benefits for EU members, the United States and the entire world.

Europe is our largest economic partner and we have a profound economic interest in a Europe that is stable and growing. Without question, Greece had to take steps to reform its economy, and I want to commend the Greek government, including Prime Minister Tsipras, and the Greek people for the very difficult and painful steps they’ve taken to show that Greece is working to help itself. The Greek budget is now in surplus and Parliament has passed tough reforms that will help make the Greek economy more competitive.

But there’s still clearly more to be done. My visit will therefore be an opportunity to reaffirm US support for reforms that improve the business climate, ensure that the imbalances that caused the crisis don’t re-emerge, and lay the foundation for a stronger economic recovery that helps improve the daily lives of the Greek people. I am a strong believer that to make reforms sustainable, people need hope. The IMF has said that debt relief is crucial to put Greece’s economy on a sustainable path and set the stage for a return to prosperity. This is why I will continue to urge Greece’s creditors to take the steps needed to ensure the country is well placed to return to robust economic growth, including by providing meaningful debt relief. Getting that done would not only fuel the Greek economic recovery, it would also show that Europe can make its economy work for everyone.

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How many times have I said the refugee deal would backfire on the EU?

Erdogan: If 3 Million Refugees March To Europe, EU Won’t Know What To Do (TM)

In yet another veiled threat to the European Union, President Recep Tayyip Erdogan said that Turkey currently hosts 3 million refugees and that if they were to march to Europe, the EU would not know what to do with them. In an interview with the Qatar-based Al Jazeera TV, Erdogan said the 3 million refugees in Turkey could march to Europe, without explaining how they might do that. In a progress report released earlier this week, the EU severely criticized Turkey for backsliding in democracy but praised its efforts to contain refugees inside the country. Criticizing Europe for not accepting even 100 or 500 refugees, Erdogan brought to mind the EU’s promise to give Turkey 3 billion euros in June in addition to another 3 billion.

“As far as I can remember, until now the EU has only given Turkey 250-300 million euros”, Erdogan said. The EU has been criticized for not taking any concrete action against Turkey despite growing despotism in the country for the sake of a refugee deal that was agreed earlier this year. Following a further crackdown on media and the opposition last week, several EU politicians called for a suspension of accession talks with Turkey until the rule of law is restored. Erdogan’s veiled threat to Europe came amid increasing criticism from the continent. Meanwhile, Galip Ozturk, the owner of one of the largest passenger bus fleets in Turkey, wrote on Twitter on Friday that he is ready to transport migrants to the EU border upon Erdogan’s orders.

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Aussies are good at cattle trade?!

US To Accept Refugees That Australia Refuses To Resettle (BBC)

Australia and the US have reached a resettlement deal for asylum seekers held in offshore detention centres in Papua New Guinea and Nauru. Under the agreement, the migrants there will be assessed and the most vulnerable will be resettled in the US. About 1,200 people are being held in the asylum centres on Manus Island in Papua New Guinea and on Nauru island. Australia’s policy of sending migrants who arrive by boat to offshore facilities has been criticised. Announcing the deal with the US on Sunday, Prime Minister Malcolm Turnbull said the resettlement process would be gradual. “US authorities will conduct their own assessment of refugees and decide which people are resettled in the US,” he said.

He did not say how many refugees would be relocated, but said that women, children and families would be prioritised. The agreement, to be administered with the United Nations refugee agency UNHCR, is available only to those currently in the processing centres. “It is a one-off agreement. It will not be repeated,” Mr Turnbull said. US Secretary of State John Kerry confirmed the arrangement, adding that his country was “very engaged” with the UNHCR and helping refugees “there and in other parts of the world”. Refugees who are eligible for asylum in the US but reject it would be offered a 20-year Nauru visa instead.

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Nov 052016
 
 November 5, 2016  Posted by at 10:36 am Finance Tagged with: , , , , , , , , ,  2 Responses »
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Harris&Ewing House-Capitol tunnel, Washington, DC Feb 3 1939

S&P 500 Down For 9th Straight Day; Longest Losing Streak In 36 Years (R.)
FB, AMZN, NFLX, GOOGL Stocks Lose Over $100 Billion In A Week (ZH)
Americans Not In Labor Force Surge By 425,000 To 94,609,000 (ZH)
Theresa May Told To Act To Calm Brexit ‘Mob’ Anger (G.)
Assange: ‘Clinton and ISIS Funded By Same Money’ (Ind.)
Many More Voters Think Hillary Actions Illegal, Trump Unethical (McC.)
Clinton Charity Confirms $1 Million Qatar Gift While She Was At State Dept (R.)
Clinton Foundation Being Investigated by IRS, FBI & Intelligence (Armstrong)
Chelsea Manning Attempts Suicide In Prison For Second Time This Year (AP)
3 New Scandals Show Pervasive and Dangerous Mass Surveillance in West (GG)

 

 

Still a shallow loss. But 1980 seems a distant memory.

S&P 500 Down For 9th Straight Day; Longest Losing Streak In 36 Years (R.)

The S&P 500 ended lower on Friday for a ninth straight day, the longest losing streak for the benchmark index in more than 35 years, as investors stayed on edge ahead of an uncertain U.S. election. The Nasdaq also ended lower for a ninth-consecutive session, while the Dow industrials closed down for a seventh straight day. Investors have been unnerved by signs of a tightening presidential race between Clinton and Trump. Clinton had been thought to have a clear lead until the re-emergence last week of a controversy over her use of a private email server while secretary of state. “Investors are uncertain about the outcome of the election, and they have grown more uncertain since last Friday,” said Walter Todd, CIO with Greenwood Capital.

The Dow Jones industrial average fell 42.39 points, or 0.24%, to 17,888.28, the S&P 500 lost 3.48 points, or 0.17%, to 2,085.18 and the Nasdaq Composite dropped 12.04 points, or 0.24%, to 5,046.37. Despite the historic run, the S&P has pulled back by only about 3.1% over that time. For the year, the index is up 2%. It was the 14th time since 1928 that the S&P 500 had declined for nine sessions in a row, according to S&P Dow Jones Indices. On Friday, Wall Street had posted solid gains as of the afternoon, spurred by a strong U.S. employment report, but then lost steam and sold off into the close.

“Obviously the big concern this week has been the shift in the polls in the election. We did have a bounce for a period of time, but when it didn’t hold and people just decided to liquidate going into the close to reduce exposure in case any more news hits over the weekend,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. “There’s a lot of headline risk out there.”

Read more …

“..the four horsemen of the Fed’s wealth creation bubble…”

FB, AMZN, NFLX, GOOGL Stocks Lose Over $100 Billion In A Week (ZH)

In the last week the so-called FANG stocks (FB, AMZN, NFLX, GOOGL) have stumbled. As earnings and outlooks disappointed, shareholders have awoken to the new normal low growth world and wiped over $100 bilion in market capitalization of the four horsemen of the Fed’s wealth creation bubble. FANGs are now down 8 days in a row…

 

 

Losing a massive $108 billion in that time…

 

This is the biggest drop since the February growth scare – which was only saved by massive coordinated global central bank money-printing… which is simply not about to happen this time.

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The only stat from the BLS report that tells a real story.

Americans Not In Labor Force Surge By 425,000 To 94,609,000 (ZH)

On the surface, the establishment survey print of 161K jobs was just good enough when taking into account the 44,000 in upward revisions to August and September jobs. However, the household survey was less impressive, with the number of workers employed declining by 43,000 to 151,925 even as the number of persons unemployed declined from 7,939K to 7,787K.

So how did the unemployment rate drop? Because contrary to expectations that people are rushing back into the labor force, in October the number of Americans who were not in the labor force rose by a substantial 425,000 to 94,609, the highest print in the series since May, and suggests that the exodus of Americans out of the labor force has resumed.

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Civilized society attacked from all sides.

Theresa May Told To Act To Calm Brexit ‘Mob’ Anger (G.)

Theresa May’s government has been accused of failing to restrain the furious backlash against this week’s high court judgment about article 50, as one of her own MPs resigned, stepping up the political pressure as she battles to stick to her Brexit timetable. Stephen Phillips, the MP for Sleaford and North Hykeham in Lincolnshire, stepped down on Friday with immediate effect. He was unhappy that the government had not planned to consult parliament before triggering article 50 – the issue that led to Thursday’s ruling. Former ministers warned that the febrile tone of media coverage, which included the judges who ruled against the government being condemned as “enemies of the people” by the Daily Mail, risked poisoning public debate.

Dominic Grieve, the Conservative former attorney general, said reading hostile coverage in the Mail and the Daily Telegraph “started to make one think that one was living in Robert Mugabe’s Zimbabwe .. I think there’s a danger of a sort of mob psyche developing – and mature democracies should take sensible steps to avoid that”. Labour also raised concerns about the absence of a ministerial response to the media coverage. Lord Falconer, who was lord chancellor under Labour between 2003 and 2007, said faith in the “independence and quality” of the judiciary was being undermined “by this Brexit-inspired media vitriol” in an article written for the Guardian. Jeremy Corbyn will accuse the government of opposing democratic scrutiny because “frankly, there aren’t any plans, beyond the hollow rhetoric of Brexit means Brexit”.

In a speech on Saturday, the Labour leader will say: “Thursday’s high court decision underlines the necessity that the prime minister brings the government’s negotiating terms for Brexit to parliament without delay. “Labour accepts and respects the decision of the British people to leave the European Union. But there must be transparency and accountability to parliament about the government’s plans.” May called European leaders to tell them again that she would meet her self-imposed deadline and trigger article 50 by the end of March 2017, despite losing the high court case. The prime minister otherwise refused to be drawn into the row. Her spokesman refused to condemn the media coverage on Friday, saying: “I don’t think the British judiciary is being undermined.” But the pro-remain former business minister Anna Soubry told the Guardian: “I think we have to call this out and say ‘not in my name’.”

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“..Trump will not be permitted to win..”

Assange: ‘Clinton and ISIS Funded By Same Money’ (Ind.)

Wealthy officials from Qatar and Saudi Arabia who donated money to Hillary Clinton’s charitable foundation also provided financial support to Isis, WikiLeaks founder Julian Assange has claimed. In an extended interview at the Ecuadorian embassy in London with documentary maker John Pilger for RT, Mr Assange said the same Saudi and Qatari officials could be seen to be supporting both the Clinton Foundation – founded by Mrs Clinton’s husband Bill – and funding the activities of Isis. Mr Pilger asked if Mr Assange believed that “this notorious jihadist group, called Isil or Isis, is created largely with money from people who are giving money to the Clinton Foundation” “Yes,” Mr Assange replied.

The WikiLeaks founder pointed to an email exchange between presidential hopeful Ms Clinton and her campaign manager John Podesta, leaked by his organisation last month, which he believes “is the most significant email in the whole collection”. In the email sent on August 17 2014, Ms Clinton asked Mr Podesta, who at that time worked under president Barack Obama, to help put “pressure” on Qatar and Saudi Arabia regarding the countries’ alleged support for the terrorist group Isis. “We need to use our diplomatic and more traditional intelligence assets to bring pressure on the governments of Qatar and Saudi Arabia, which are providing clandestine financial and logistic support to Isil and other radical Sunni groups in the region,” Ms Clinton wrote.

Mr Assange noted the US government had never acknowledged governments of Middle East nations had financially supported Isis, instead arguing such support was isolated to “some rogue princes using their cut of the oil money to do whatever they like, although the government disapproves”, according to the WikiLeaks founder. According to the Clinton Foundation, the Saudi Arabian government has donated between $10m (£8m) and $25million since the foundation was set up in 1997. Last month it was reported the government of Qatar offered to donate $1m to the foundation in celebration of Bill Clinton’s birthday. Representatives from the Clinton Foundation have repeatedly denied accusations Ms Clinton has solicited funds and used donations to boost her campaign.

There were no donations from Saudi Arabia while she was acting as secretary of state between 2009 and 2013. Mr Assange also used the interview to dismiss the prospect of a Donald Trump victory in next week’s election, which the polls show will be close. “My analysis is that Trump will not be permitted to win. Why do I say that? Because he has had every establishment against him. Trump does not have one establishment, maybe with the exception of the Evangelicals, if you can call them an establishment. “Banks, intelligence, arms companies, foreign money, etc are all united behind Hillary Clinton. And the media as well. Media owners, and the journalists themselves.”

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“..51% saying she did something illegal..” “..Just 26% think he’s done something illegal..”

Many More Voters Think Hillary Actions Illegal, Trump Unethical (McC.)

A majority of voters believe Hillary Clinton has done something illegal, according to a new McClatchy-Marist Poll days before the presidential election. A total of 83% of likely voters believe that Clinton did something wrong – 51% saying she did something illegal and 32% saying she something unethical but not illegal. Just 14% said she’s done nothing wrong. By comparison, 79% think Donald Trump did something wrong, though not nearly as many think he did something illegal. Just 26% think he’s done something illegal, while 53% think he’s dome something unethical but not illegal. Just 17% think he’s done nothing wrong. The deep suspicion of Clinton is likely a top reason she’s lost much of her lead and the race for the White House has tightened in the race’s closing days.

In a four-way race, the two are neck and neck with Clinton supported by 44% and Trump by 43%. Libertarian Gary Johnson has 6%, and the Green Party’s Jill Stein has 2%. In a two-way match up, Clinton has 46%, Trump 44%. Both candidates are disliked. Clinton gets a favorable rating from just 40% while 57% have unfavorable views of her. Voters have a 61% to 36% unfavorable-favorable rating of Trump. “This is practically off the charts,” said Lee Miringoff, the director of the Marist Institute for Public Opinion in New York, which conducted the nationwide survey. “You have candidates coming before the electorate with enormous baggage.”

Even 57% of those who are supporting Trump and 58% of Republicans think he acted unethically. 55% of voters said the accusations against Trump would make a difference in how they vote. At the same time stories about the FBI inquiry may have raised more suspicion about Clinton, they also may have energized the vote for Trump. The poll shows Trump gaining support among Republicans, as running mate Mike Pence and others have urged GOP voters in recent weeks to “come home.” Trump enters the final weekend with the support of 92% of Republicans. That’s more than Clinton, who has 89% support of Democrats.

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The irony of people voting for her because Hillary’s a woman is dazzling given how Qatar thinks about women.

Clinton Charity Confirms $1 Million Qatar Gift While She Was At State Dept (R.)

The Clinton Foundation has confirmed it accepted a $1 million gift from Qatar while Hillary Clinton was U.S. secretary of state without informing the State Department, even though she had promised to let the agency review new or significantly increased support from foreign governments. Qatari officials pledged the money in 2011 to mark the 65th birthday of Bill Clinton, Hillary Clinton’s husband, and sought to meet the former U.S. president in person the following year to present him the check, according to an email from a foundation official to Hillary Clinton’s presidential campaign chairman, John Podesta. The email, among thousands hacked from Podesta’s account, was published last month by WikiLeaks. Clinton signed an ethics agreement governing her family’s globe-straddling foundation in order to become secretary of state in 2009.

The agreement was designed to increase transparency to avoid appearances that U.S. foreign policy could be swayed by wealthy donors. If a new foreign government wished to donate or if an existing foreign-government donor, such as Qatar, wanted to “increase materially” its support of ongoing programs, Clinton promised that the State Department’s ethics official would be notified and given a chance to raise any concerns. Clinton Foundation officials last month declined to confirm the Qatar donation. In response to additional questions, a foundation spokesman, Brian Cookstra, this week said that it accepted the $1 million gift from Qatar, but this did not amount to a “material increase” in the Gulf country’s support for the charity. Cookstra declined to say whether Qatari officials received their requested meeting with Bill Clinton.

[..] At least eight other countries besides Qatar gave new or increased funding to the foundation, in most cases to fund its health project, without the State Department being informed, according to foundation and agency records. They include Algeria, which gave for the first time in 2010, and the United Kingdom, which nearly tripled its support for the foundation’s health project to $11.2 million between 2009 and 2012. Foundation officials have said some of those donations, including Algeria, were oversights and should have been flagged, while others, such as the UK increase, did not qualify as material increases. The foundation has declined to describe what sort of increase in funding by a foreign government would have triggered notification of the State Department for review.

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IRS. New kid on the block.

Clinton Foundation Being Investigated by IRS, FBI & Intelligence (Armstrong)

The internal war we have warned is unfolding with Intelligence and Law Enforcement standing against Obama and the corrupt DOJ under Lynch is really heating up. The FBI realizes that Lynch’s DOJ will protect Hillary at all costs and will never allow her to be criminally charged. They have no choice now but to leak everything they can to show the corruption going on in the Department of Justice (see Daily Mail). There are 650,000+ emails on Weiner’s laptop. Meanwhile, Huma Abedin is preparing for her own criminal changes of obstruction of justice. She did not turn over that laptop when ordered to do so. She is now crying “she doesn’t know how her emails wound up on her husband’s computer” according to the Washington Post. She is saying that and it is not plausible. She had to be using that computer.

Oh she may try to claim that her husband hacked her emails to escape the criminal charges. But that will get really messy. It would also mean there was a MAJOR breach of security. Now the FBI is letting the press know that Clinton’s server was hacked by at least five foreign intelligence agencies. There are now also two addition investigations into Hillary on that score. State Department has revealed there were 10 attempts to hack Hillary in just 2 days. Let’s face it, if Hillary is elected, she will most likely be IMPEACHED as was her husband, but this time she would be removed. This is not a Monica deal. This election is going down in history as the tipping point for the United States. It has revealed how corrupt Congress really is. We have even former Bush Sr saying he will vote for Hillary.

He just lost all my respect for he has chosen the status quo to save the politicians rather than his country. This is just over the top. Even Podesta began a lobbying firm with his brother, which now collects $120,000 PER MONTH in a fee from Saudi Arabia. Hillary has tried to slander Assange saying all these hacks came from Russia. Assange has come out and bluntly said the hacked Clinton emails didn’t come from Russia government. They may be coming from sources inside the USA. Do not forget, to my surprise, there is one source that has EVERYTHING. Hello – NSA! Anyone remember they are storing everyone’s emails, text messages, and phone calls? Nobody want to order the NSA to turn it all over because it will reveal treason, where Hillary took money from foreign government and they approved arms deals.

If Hillary is elected, it will be by rigging the election. Our computer has NEVER been wrong on this score. So if she takes office, this will be the worst administration in history and may very will set in motion the phase transition where capital flees to bonds and we see a significant rise in civil unrest.

Read more …

Say a prayer, light a candle.

Chelsea Manning Attempts Suicide In Prison For Second Time This Year (AP)

An attorney for Chelsea Manning says the transgender soldier imprisoned in Kansas has tried to kill herself for the second time in recent months. Vincent Ward said Friday that Manning attempted suicide last month at the military prison at Fort Leavenworth, though the attorney declined to divulge specifics. Manning also tried to take her own life in July. Wayne Hall, an Army spokesman, on Friday would not discuss the latest attempt, citing medical privacy laws. Manning is serving a 35-year sentence. She was arrested in 2010 as Bradley Manning and was convicted in 2013 in military court of leaking more than 700,000 secret military and State Department documents to WikiLeaks. Manning was an intelligence analyst in Iraq at the time.

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Everyday practices.

3 New Scandals Show Pervasive and Dangerous Mass Surveillance in West (GG)

[..] three major events prove how widespread, and dangerous, mass surveillance has become in the west. Standing alone, each event highlights exactly the severe threats which motivated Edward Snowden to blow his whistle; taken together, they constitute full-scale vindication of everything he’s done. Earlier this month, a special British court that rules on secret spying activities issued an emphatic denunciation of the nation’s domestic mass surveillance programs. The court found that “British security agencies have secretly and unlawfully collected massive volumes of confidential personal data, including financial information, on citizens for more than a decade.” Those agencies, the court found, “operated an illegal regime to collect vast amounts of communications data, tracking individual phone and web use and other confidential personal information, without adequate safeguards or supervision for 17 years.”

On Thursday, an even more scathing condemnation of mass surveillance was issued by the Federal Court of Canada. The ruling “faulted Canada’s domestic spy agency for unlawfully retaining data and for not being truthful with judges who authorize its intelligence programs.” Most remarkable was that these domestic, mass surveillance activities were not only illegal, but completely unknown to virtually the entire population in Canadian democracy, even though their scope has indescribable implications for core liberties: “the centre in question appears to be the Canadian Security Intelligence Service’s equivalent of a crystal ball – a place where intelligence analysts attempt to deduce future threats by examining, and re-examining, volumes of data.”

The third scandal also comes from Canada – a critical partner in the Five Eyes spying alliance along with the U.S. and UK – where law enforcement officials in Montreal are now defending “a highly controversial decision to spy on a La Presse columnist [Patrick Lagacé] by tracking his cellphone calls and texts and monitoring his whereabouts as part of a necessary internal police investigation.” The targeted journalist, Lagacé, had enraged police officials by investigating their abusive conduct, and they then used surveillance technology to track his calls and movements to unearth the identity of his sources. Just as that scandal was exploding, it went, in the words of the Montreal Gazette, “from bad to worse” as the ensuing scrutiny revealed that police had actually “tracked the calls and movements of six journalists that year after news reports based on leaks revealed Michel Arsenault, then president of Quebec’s largest labour federation, had his phone tapped.”

Read more …

Nov 032016
 
 November 3, 2016  Posted by at 3:56 pm Finance Tagged with: , , , , , , , , ,  23 Responses »
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London 1877

 

Amidst the epic flood of political statements and media commentary that keeps on rolling in and on, there’s something that doesn’t seem to occur to most people, and it should. That is, the unfortunate but apparently inevitable discussion about all the unfortunate and/or illegal things that either candidate may or may not have done, must be seen in the light of the capacity in which -perceived- errors or even crimes are committed. It is essential to this issue.

What far too many people are far too eager to ignore is that everything Donald Trump may have done that may have been illegal or on the edge, he did as a private person, and most of what Hillary Clinton has done in that same category was as a representative of the American government and hence the American people. The demands and standards when it comes to behavior are much higher for people in representative government positions than they are for private citizens, and they are so for good reason.

One may try and argue that this is not fair, but that’s a moot argument. One may also argue that everyday news strongly suggests that Washington is the very place where moral standards seem to count least, but that is also moot. What others do today, or have done in the past, can never be an excuse for eroding the standards to which government officials should be held. If anything, it should be reason to hold all of them to higher standards going forward.

This is the only way The Office of the President of the United States, and the US political system as a whole, can be expected to retain, or regain, the respect it badly needs to command, both domestically and on the international front. It is for this very reason that on the political scene, actors need to “do the right thing”, or “draw the consequences”, when the situation so demands. Respect for the office must always come before personal gain, or the whole edifice will crumble.

This also means that a president and his secretaries have much less room to move on their public statements on issues than ‘civilians’ do. And in that regard President Obama, though he seemed to be doing well, is now moving onto dangerous ground. On Monday, Obama seemed to back FBI director Jim Comey, or at least he refused to join his party in attacking Comey.

Note that the president can’t do anything even remotely perceived as attacking the head of the FBI. Not in public. And that would be true even if Comey were not his own appointment. The NY Post wrote:

While top Democrats are attacking James Comey, President Obama’s spokesman on Monday described the FBI director as a man of “integrity” and “good character” and said he is not trying to tilt the election. “I’ll neither defend nor criticize Director Comey,” said White House Press Secretary Josh Earnest. “The president doesn’t believe that Director Comey is intentionally trying to influence the outcome of an election. He doesn’t believe he’s secretly strategizing to benefit one candidate or one political party. He is in a tough spot.”

Still, some sort of caveat was inserted by Press Secretary Earnest:

Earnest rebuked those who were assailing Comey for saying last Friday the FBI was reopening the Hillary Clinton e-mail probe just days before the Nov. 8 election. “There are other people that have the luxury of being able to opine, writing op-eds or serving as anonymous sources for reporters to weigh in with their own view, but when I stand here representing the institution of the presidency, I don’t have that luxury,” he said.

But not long after, the president joined the Clinton campaign choir after all, in a move that smells not at all presidential. Mother Jones headlined: Obama Slams FBI Over New Hillary Clinton Emails . This is a risky move not worthy of a president, who represents not a party but an entire nation, and all Americans.

President Barack Obama harshly criticized the FBI’s actions informing Congress about the discovery of new Hillary Clinton emails, suggesting to NowThisNews on Wednesday that the much-criticized letter was outside of law enforcement protocol. “We don’t operate on innuendo,” Obama said in his first remarks since the FBI’s announcement last Friday. “We don’t operate on incomplete information and we don’t operate on leaks. We operate based on concrete decisions that are made.”

Obama acted presidential on Monday; he did not on Wednesday. And that’s not all. On Monday, Obama had already made another questionable move. Not only did he seem to ‘support’ Comey, he also lavished praise on Donna Brazile, the -interim- head of the Clinton campaign.

He did so mere hours (!) after Brazile had been fired by CNN, a network that drools Clinton 24/7. So when even CNN had had enough, Obama found it appropriate to say “she is a person of high character”. That does not add up. Here’s from Adriana Cohen at the Boston Herald in one of the best pieces I’ve read on the whole issue:

To put how serious this is into context, if Brazile traded stocks off inside information, the SEC would toss her in jail faster than you can say Martha Stewart. Yet, despite all of the above, the White House yesterday praised her integrity. You read that right. When asked about the hacked emails White House spokesman Josh Earnest said, “No, the president believes she has done a fine job stepping in during a very difficult situation to lead the Democratic Party … she is a person of high character. She is a true professional who is a tenacious and effective advocate for Democrats.”

Why was Brazile sacked? For feeding the Clintonians debate questions. As per The Hill:

In an email dated March 5, 2016 — the day before a CNN debate in Flint, Mich. — Brazile sent Clinton campaign chairman John Podesta and communications director Jennifer Palmieri an email with the subject line, “One of the questions directed to HRC tomorrow is from a woman with a rash.” “Her family has lead poison and she will ask what, if anything, will Hillary do as president to help the ppl of Flint,” she wrote.

Think about this for a second. Donna Brazile gets fired by CNN for -very illegally- letting the Clinton campaign in on a question that will be asked in a debate (with Bernie Sanders). Now, I think we can all agree that CNN does not have excessively high moral standards. And perhaps they don’t have to. But the president of the United States does.

Ergo: while the network said they were ‘completely uncomfortable’ with Brazile’s ‘interactions with campaign’, the same Donna Brazile was not only praised by the president, who is supposed to stand above all parties and divisions by the very nature of the Office he holds, she is also still the head of the Democratic campaign.

In other words, the sender of the messages containing debate questions (there were more than one) gets fired by one end of the ‘transaction’, but the receiving end has no problems with that exact same action, and then even sees that decision sanctioned by the nation’s president.

As if it wasn’t not illegal for Hillary to have those questions before the debate. There’s a sender and a receiver, and both are equally to blame. And so is Hillary, because of course she knew the questions had to have been obtained illegally. But she keeps on Brazile, the sender, as head of her campaign, as well as Podesta and Palmieri, the receivers, despite all this.

What does that tell you? Regardless of legal implications, doesn’t that scream out something in the vein of: “When we go low, but do we go really low”? What does it tell you when the Clintonians, and Obama, are fine with something even CNN won’t stand for? It can only mean that a network like CNN, not exactly famous for its moral stances, has higher moral standards than the campaign for a candidate for the presidency of the United States, a position where moral standards are a high priority.

These are the things that drag down the entire American political system. Obama’s statements on the FBI and Donna Brazile drag down the office of the president. And if Hillary would be elected on November 8, that office would be dragged down that much more.

And not only can we now foresee, and must we prepare for, serious domestic unrest no matter what the election result will be (I liked the notion I read somewhere of ‘America between 9/11 and 11/9’), the damage will also reverberate globally. I’ve said it before, I don’t see how Hillary and her people can still backtrack on all the innuendo they spread on Russia, but to be presidential, she will not have a choice.

Or she would risk getting stuck somewhere in the middle of all the untruths and outright lies about Putin, Assange and now James Comey, and that would mean a behemoth blemish on the presidency, something neither she nor the American political system can afford. You need more than just insinuations, you need at least kernels of truth if you want to be president.

When even the NY Times reports that the FBI Finds No Clear Link Between Trump and Russia, the Democratic campaign will have no choice but to step back or double down:

For much of the summer, the FBI pursued a widening investigation into a Russian role in the American presidential campaign. Agents scrutinized advisers close to Donald J. Trump, looked for financial connections with Russian financial figures, searched for those involved in hacking the computers of Democrats, and even chased a lead – which they ultimately came to doubt – about a possible secret channel of email communication from the Trump Organization to a Russian bank. Law enforcement officials say that none of the investigations so far have found any conclusive or direct link between Mr. Trump and the Russian government.

[..] Senator Harry Reid of Nevada, the minority leader, responded angrily on Sunday with a letter accusing the FBI of not being forthcoming about Mr. Trump’s alleged ties with Moscow. “It has become clear that you possess explosive information about close ties and coordination between Donald Trump, his top advisers, and the Russian government – a foreign interest openly hostile to the United States, which Trump praises at every opportunity,” Mr. Reid wrote. “The public has a right to know this information.”

And maybe that’s another reason for them to go after Comey, that the FBI would not support the claims that Russia is linked with Trump. Regardless, we now see the FBI biting back. On just about all fronts. What exactly Comey’s role is in that is not 100% clear, but what is, is that Hillary would probably face two separate -criminal- investigations even before she could be inaugurated, if she’s elected.

One for the Clinton Foundation (pay-for-play), and one for her email server issue. About which, incidentally, Bret Baier at Fox said yesterday:

.. we learned there is a confidence from these sources [with intimate knowledge of the FBI investigations] that her server had been hacked. And that it was a 99% accuracy that it had been hacked by at least five foreign intelligence agencies, and that things had been taken from that…

It’s starting to feel like the nets are closing in on the Clintons. And they may hope that there’s just enough time to get the election and win it, but that may well turn out to be a Pyrrhic victory. US law has many provisions that shield the president from persecution, but even if she would get elected, Hillary wouldn’t be sworn in for another ten weeks or so.

If Hillary wins, it may feel like it’s open season on her, and there’s no one to blame but herself. She’s incurred the wrath of so many parties, it’s hard to keep track. Donald Trump may be the least of her worries.

One last word, and this on the Huma Abedin related emails on Anthony Weiner’s laptop. I see a lot of suggestions that no FBI agent has seen any of the mails, but that makes no sense. Comey would have never sent his letter to Congress on Friday if that were true. It might have gotten him accused of partisanship.

In reality, one or more agents have seen one or more mails. And they had permission for that. Note also that they had had access to the laptop for weeks before Comey’s letter. How much of the 650,000 they’ve seen we don’t know, but they’ve seen some. They had permission to read the mails, but under a warrant that pertained to the Weiner investigation, not the Hillary one.

Under the ‘Weiner warrant’, they undoubtedly read enough of them to know they’re hot stuff, and at some point someone decided reading any further would -for one thing- put the option of using them against Hillary at -grave- risk. This may well be a contentious point right now: how the evidence was obtained.

Whether Comey himself read anything is less clear: if they really kept him out of the loop for weeks because they were pissed off at him -as has been suggested-, perhaps not. But others have. And as we are seeing more and more, they are an angry bunch. In their eyes -and many others- Comey made a mistake, alright, but he did not do that last Friday. His huge error came in July, when he decided not to file charges against Hillary.

The July decision was probably due to a large extent to an ‘inner quarrel’ between the DOJ and FBI, and now that’s out in the open, it’s the classic genie and the bottle tale. It’ll be interesting to see how much of that genie is going to come out before Tuesday.

 

 

Nov 032016
 
 November 3, 2016  Posted by at 9:46 am Finance Tagged with: , , , , , , , ,  Comments Off on Debt Rattle November 3 2016
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Lewis Wickes Hine Berrie pickers, Seaford, Delaware. ’17 children and 5 elders live here’ 1910

S&P 500 Logs Longest Losing Streak Since 2011 (CNBC)
EU Plans New Rules To Cap US, UK’s £440bn Per Day Derivatives Business (Ind.)
Vancouver Home Sales Plunge 39% as New Rules Chill Market (BBG)
Clinton Foundation Case Moving Towards “Likely an Indictment” (RCP)
Obama Slams FBI Over New Hillary Clinton Emails (MJ)
Secret Recordings Fueled FBI Feud in Clinton Probe (WSJ)
Senior FBI Officials Were Told Of New Emails In Early October (WaPo)
South Korea’s Out-of-Control Presidential Crisis (CNBC)
UK High Court To Declare If Government Has Right To Trigger Brexit (G.)
Car Makers To Get More In Brexit Subsidies From UK Than They Pay Workers (R.)
Make Finance The Servant, Not The Master (Pettifor)
Western Australia: Masterclass In What Not To Do With A Resources Boom (Con.)

 

 

Long but shallow. There’s another 7 days of suspense. The next bombshell might energize the decline.

S&P 500 Logs Longest Losing Streak Since 2011 (CNBC)

The S&P 500 has fallen in seven straight sessions through Wednesday, the first time the large-cap index has done that since 2011. The last streak also came in a November, culminating with a 0.27% slip on Nov. 25. And while the market’s past can never predict its future, it is notable that the November 2011 seven-session losing streak was immediately followed by a jump of nearly 3%. Yet even amid all of the declines, the S&P has fallen less than 2.5% in the past seven sessions. To put that into context, the market has suffered a greater%age drop on two separate days this year.

And some see a bright side in all the losses. For Frank Cappelleri, a trader and technical analyst at Instinet, the losing streak is a sign that “the [S&P 500] SPX is sequentially oversold and seemingly ready for at least a counter-trend bounce.” However, he added in his Wednesday morning note that since the S&P hasn’t fallen by all that much, “the index doesn’t exactly appear washed out at this stage.” The recent market decline has come as oil has slid, and as Republican Donald Trump’s perceived chances of winning the presidential election have risen. Meanwhile, Wednesday afternoon’s Federal Reserve statement, which could have been the event of the week, delivered little that was unexpected.

Read more …

The insanity of the world of finance. “The loss of euro clearing would cost 100,000 UK jobs..”

EU Plans New Rules To Cap US, UK’s £440bn Per Day Derivatives Business (Ind.)

EU officials have discussed new laws to undermine the UK’s multi-billion pound clearing business after Brexit, London Stock Exchange chief executive, Xavier Rolet told a House of Lords Committee. Financial transactions can currently be cleared anywhere in the world and London has a dominant position in the market, processing £440 billion of trades every day and supporting 100,000 jobs. But the EU is now considering limiting the amount of euro transactions that can be processed outside the EU, so that it can force the industry to move within its borders after Brexit, according to Rolet Millions of euro-denominated transactions are currently cleared in New York, but a cap on US trades is now being considered, so that similar restrictions can be placed on London when it is outside the EU, a move that could fatally undermine the industry.

“I understand that some discussions have already originated in the EU for limiting the ability of US-based clearinghouses to clear euro-denominated securities by capping or somehow restricting their ability to engage meaningfully in their business,“ Rolet said. The loss of euro clearing would cost 100,000 UK jobs, fragment markets and force banks to tie up an extra £70 billion in “margin” or cash to back up trades. That money that could otherwise aid economic growth, Rolet said. If customers decided they cannot wait for the outcome of Britain’s trade negotiations with the EU, then the “whole engine” of clearing across all major currencies in London would be at risk, he added.

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But prices still rise.

Vancouver Home Sales Plunge 39% as New Rules Chill Market (BBG)

Vancouver home sales plunged 39% in October from a year earlier, the biggest drop since 2010, as new regulations chill Canada’s most expensive property market. Sales in the Pacific coast city fell to 2,233 in the month, from 3,646 a year earlier, the Real Estate Board of Greater Vancouver said Wednesday. That was 15% below the 10-year average for October. The slowdown follows a series of measures aimed at curbing price gains in Vancouver, which topped a list of global cities identified by UBS as most at risk of a housing bubble. The British Columbia government imposed a 15% tax on foreign buyers in August, the city plans to start taxing vacant homes next year and the federal government tightened mortgage insurance eligibility requirements on Oct. 3.

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If elected, Hillary will have two separate major investigations running against her.

Clinton Foundation Case Moving Towards “Likely an Indictment” (RCP)

BRET BAIER: Here’s the deal: We talked to two separate sources with intimate knowledge of the FBI investigations. One: The Clinton Foundation investigation is far more expansive than anybody has reported so far… Several offices separately have been doing their own investigations. Two: The immunity deal that Cheryl Mills and Heather Samuelson, two top aides to Hillary Clinton, got from the Justice Department in which it was beleived that the laptops they had, after a narrow review for classified materials, were going to be destroyed. We have been told that those have not been destroyed – they are at the FBI field office here on Washington and are being exploited. .

Three: The Clinton Foundation investigation is so expansive, they have interviewed and re-interviewed many people. They described the evidence they have as ‘a lot of it’ and said there is an ‘avalanche coming in every day.’ WikiLeaks and the new emails. They are “actively and aggressively pursuing this case.” Remember the Foundation case is about accusations of pay-for-play… They are taking the new information and some of them are going back to interview people for the third time. As opposed to what has been written about the Clinton Foundation investigation, it is expansive. The classified e-mail investigation is being run by the National Security division of the FBI. They are currently combing through Anthony Weiner’s laptop.

They are having some success – finding what they believe to be new emails, not duplicates, that have been transported through Hillary Clinton’s server. Finally, we learned there is a confidence from these sources that her server had been hacked. And that it was a 99% accuracy that it had been hacked by at least five foreign intelligence agencies, and that things had been taken from that… There has been some angst about Attorney General Loretta Lynch — what she has done or not done. She obviously did not impanel, or go to a grand jury at the beginning. They also have a problem, these sources do, with what President Obama said today and back in October of 2015… I pressed again and again on this very issue… The investigations will continue, there is a lot of evidence. And barring some obstruction in some way, they believe they will continue to likely an indictment.

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Not particularly presidential.

Obama Slams FBI Over New Hillary Clinton Emails (MJ)

President Barack Obama harshly criticized the FBI’s actions informing Congress about the discovery of new Hillary Clinton emails, suggesting to NowThisNews on Wednesday that the much-criticized letter was outside of law enforcement protocol. “We don’t operate on innuendo,” Obama said in his first remarks since the FBI’s announcement last Friday. “We don’t operate on incomplete information and we don’t operate on leaks. We operate based on concrete decisions that are made. “When this was investigated thoroughly, the last time, the conclusion of the FBI, the conclusion of the Justice Department, the conclusion of repeated congressional investigations was that she had made some mistakes but that there wasn’t anything there that was prosecutable.”

The president also reiterated his support for Clinton and urged young people not to allow the ongoing email investigation affect their votes. “I trust her, I know her,” he said. “I wouldn’t be supporting her if I didn’t have absolute confidence in her integrity and her interest in making sure that young people have a better future.” The interview comes just one day after White House Press Secretary Josh Earnest refused to defend or criticize FBI Director James Comey over the decision. Since the ambiguous letter was released on Friday, the Clinton campaign has accused Comey of improperly interfering with the election, thus benefiting her opponent. “That announcement has allowed for Donald Trump to take advantage of the absence of facts to wildly speculate and lie about Hillary Clinton,” campaign manager Robby Mook said on Monday.

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Is obstruction of FBI agents equal to obstruction of justice?

Secret Recordings Fueled FBI Feud in Clinton Probe (WSJ)

Secret recordings of a suspect talking about the Clinton Foundation fueled an internal battle between FBI agents who wanted to pursue the case and corruption prosecutors who viewed the statements as worthless hearsay, people familiar with the matter said. Agents, using informants and recordings from unrelated corruption investigations, thought they had found enough material to merit aggressively pursuing the investigation into the foundation that started in summer 2015 based on claims made in a book by a conservative author called “Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich,” these people said. The account of the case and resulting dispute comes from interviews with officials at multiple agencies.

Starting in February and continuing today, investigators from the Federal Bureau of Investigation and public-corruption prosecutors became increasingly frustrated with each other, as often happens within and between departments. At the center of the tension stood the U.S. attorney for Brooklyn, Robert Capers, who some at the FBI came to view as exacerbating the problems by telling each side what it wanted to hear, these people said. The roots of the dispute lie in a disagreement over the strength of the case, these people said, which broadly centered on whether Clinton Foundation contributors received favorable treatment from the State Department under Hillary Clinton. Senior officials in the Justice Department and the FBI didn’t think much of the evidence, while investigators believed they had promising leads their bosses wouldn’t let them pursue, they said.

These details on the probe are emerging amid the continuing furor surrounding FBI Director James Comey’s disclosure to Congress that new emails had emerged that could be relevant to a separate, previously closed FBI investigation of Mrs. Clinton’s email arrangement while she was secretary of state. [..] Amid the internal finger-pointing on the Clinton Foundation matter, some have blamed the FBI’s No. 2 official, deputy director Andrew McCabe, claiming he sought to stop agents from pursuing the case this summer. His defenders deny that, and say it was the Justice Department that kept pushing back on the investigation.

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Comey seems to have been prudent.

Senior FBI Officials Were Told Of New Emails In Early October (WaPo)

Senior FBI officials were informed about the discovery of new emails potentially relevant to the investigation of Hillary Clinton’s private email server at least two weeks before Director James B. Comey notified Congress, according to federal officials familiar with the investigation. The officials said that Comey was told that there were new emails before he received a formal briefing last Thursday, although the precise timing is unclear. The information goes beyond the details provided in the letter that Comey sent to lawmakers last week declaring that he was restarting the inquiry into whether Clinton mishandled classified material during her tenure as secretary of state. He wrote in the Friday letter that “the investigative team briefed me yesterday” about the additional emails.

[..] senior officials had been informed weeks earlier that a computer belonging to former congressman Anthony Weiner contained emails potentially pertinent to the Clinton investigation. [..] Comey did not notify Congress as soon as he learned about the emails because officials wanted additional information before proceeding, the officials said. [..] It is unclear what FBI agents have learned since discovering the emails in early October. But officials say they gained enough information from the email metadata to take the next step, seeking a warrant to review the actual emails. That legal step prompted Comey’s letter to Congress, which has made him a central figure during the stretch run of the presidential campaign. “He needed to make an informed decision, knowing that once he made that decision, he was taking it to another level,” an official said.

Soon after the investigators found the new trove of thousands of emails, they notified the separate team of FBI agents in Washington that worked on the probe into Clinton’s private email server, officials said. Comey said in July that the investigation was complete and that he would recommend to prosecutors that no charges be brought. After the agents on the Clinton case were notified in early October about the newly discovered emails, they in turn told FBI leaders about them. At that point, the leaders did not believe they had enough information to make a decision about what to do next, officials said.

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There was a time when this would have been crazier than what happens stateside.

South Korea’s Out-of-Control Presidential Crisis (CNBC)

South Korean President Park Geun-Hye, under fire in what critics are calling the nation’s biggest-ever political scandal, seems to be digging herself into a deeper hole. The President replaced her prime minister, finance minister and public safety minister on Wednesday in an attempt to contain public anger over a spiraling corruption scandal that has hit the ruling Saenuri party. But the surprise cabinet reshuffle may do more harm than good. “Despite her expectations, these snap nominations backfired. Critics angrily charged that the move is part of a strategy to maintain control and does not jive with plans being discussed to form a neutral cabinet with a prime minister empowered to dominant policymaking, with Park taking a back seat,” Scott Seaman, senior Asia analyst at Eurasia, explained in a note.

Opposition parties will now likely use their combined majority in the National Assembly to hinder Park’s attempts to install her candidates, he continued. Furthermore, Park is essentially powerless to ignore their objections given her current fragile standing, he added. Park, 64, faces calls to resign or face impeachment for allowing a close friend, Choi Soon-Sil, to interfere in state affairs. Choi reportedly had access to classified documents without security clearance and was involved in presidential decision making, local media said. Choi, 60, is also accused of embezzlement, forcing conglomerates to make massive donations to nonprofit foundations, and getting preferential treatment from banks for loans.

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Super Thursday today in Britain.

UK High Court To Declare If Government Has Right To Trigger Brexit (G.)

The lord chief justice is to deliver the high court’s momentous decision on whether parliament or the government has the constitutional power to trigger Brexit. After less than three weeks considering the politically charged case with two other senior judges, Lord Thomas of Cwmgiedd will read out a summary of their decision at 10am on Thursday to a packed courtroom in London’s Royal Courts of Justice. In order to prevent leaks of the market-sensitive ruling, which involves a large number of parties, preliminary drafts of the judgment have unusually not been sent out in advance to the lawyers. The outcome of the case, which ventures into constitutionally untested ground, will resolve whether MPs or ministers have the authority to formally inform Brussels about whether the UK intends to leave the EU.

The legal dispute focuses on article 50 of the treaty on EU, which states that any member state may leave “in accordance with its own constitutional requirements” – an undefined term that has allowed both sides to pursue rival interpretations. The arguments deployed during the three-day hearing last month appear, at the very least, to have reinforced political pressure for parliament to be given a greater role in negotiating Brexit. Whether the high court finds in favour of the claimants or Theresa May’s assertion that the prime minister has power under the royal prerogative to inform Brussels of the UK’s intention to leave, one side or the other is likely to appeal to the supreme court. However, there has been speculation that the government could decide not to appeal if it loses, calculating that enough MPs will feel bound by the result of the referendum to vote to leave the EU. There may be stiffer opposition in the House of Lords.

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What’s this other than a major step towards universal income?

Car Makers To Get More In Brexit Subsidies From UK Than They Pay Workers (R.)

Compensating carmakers in Britain for any post-Brexit tariffs on exports to Europe could see the government hand the companies more money than they need to pay the salaries of all their British workers, a Reuters analysis of corporate filings shows. Japan’s Nissan said in September it would only commit to new UK investment if it received a guarantee of compensation to offset any such tariffs. Last week, it agreed to build new models in the country after Prime Minister Theresa May assured it the government would provide support to preserve its competitiveness in the EU market after Brexit. The nature of the Nissan deal – which gave Britain a crucial corporate endorsement as it prepares for life outside the European Union – is unknown. The government said there hadn’t been a “detailed and specific” agreement on tariffs.

If Britain does not secure a free-trade deal with the EU, car makers in the country could face export tariffs of 10% – the level the EU imposes on cars imported from outside the bloc. The cost of compensating Nissan, which has £2.9 billion ($3.5 billion) of annual EU exports, would be £290 million a year. That would exceed the company’s British wage bill, which was £288 million in 2015, accounts for Nissan’s main UK operating unit show. The pattern is followed across Britain’s car-making industry. Reuters examined the accounts of eight of the biggest car exporters, including Jaguar Land Rover, Toyota, Bentley, Mini, Rolls-Royce, Aston Martin and Honda, which are all foreign-owned. Their wage bills averaged 7.5% of total operating costs and 7.7% of turnover. This suggests the cost of tariffs on vehicles exported from Britain to the continent – levied at 10% of turnover – would exceed the wages paid to British workers to build those vehicles.

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Long read by Ann Pettifor on the history of the growth paradigm, and what needs to be done now it’s dead.

Make Finance The Servant, Not The Master (Pettifor)

Before the Second World War the concept of ‘growth’ scarcely existed, as Geoff Tily explains in his PRIME essay On Prosperity, Growth and Finance. “National accounts and measures of national income (the forerunners of GDP) were devised in the 1930s, in the wake of the great depression. Policymakers and economists were preoccupied by getting the economy and financial system to function and addressing a crisis in unemployment. Later in the Second World War economic statistics were needed to try and prevent inflation, given that all resources – especially labour – were fully utilized. Then, later in the Bretton Woods era, full employment was regarded as the proper goal of economic policy-making.” With financial liberalization all this was to change.

Financiers could make extraordinary capital gains from financial speculation – far more than the average industrial capitalist could make in profits. This was largely because financiers can gamble and make gains in money markets without engaging with either the land – in the broadest sense of the word – or labour. Industrial capitalists by contrast have to engage with both land and labour. The substantial capital gains made from speculation by increasingly deregulated financiers were then pitted against the lower profits made by industrial capitalists from investment, employment and output. As financiers became more dominant, competition with industrial capitalists intensified. It is hard to pinpoint the exact timing for the shift of emphasis, but under the surface changes were underway from at least the 1950s.

The pressure on industrial capital was applied by both the finance sector, but also by friends in the economics profession, and in particular economic commentators. The latter began to reframe the key concept of levels of economic activity, and invented the term growth. Growth follows the trajectory of capital gains more closely than it follows that of more volatile profits. Capital gains – like those made from winning the lottery – can rise exponentially (until they crash). Profits rise and fall as capitalists battle the land and labour. In the UK one of the most prominent campaigners for the concept of ‘growth’ was Samuel Brittan of the Financial Times: he proudly identified himself as a ‘growthman’. At a time of full employment, he and other economists castigated the government (and industry) for what they regarded as an economy less profitable or dynamic than that seen in other countries.

To apply pressure on those active in the real economy, they had to raise the bar of economic expectations. Full employment was not a sufficient goal. It was to be abandoned. The concept of growth was subsequently adopted as the goal of all economy policy by the newly-founded OECD in 1961. In that year the organisation agreed an extraordinary fifty per cent growth target for the whole of the 1960s, as Tily explains: The aim of fixing the level of employment and output to sustainable levels had been abandoned. Instead the world had officially been set a systematic and improbable target: to chase growth. Nobody seems to have paused to consider whether growth derived as the rate of change of a continuous function was a meaningful or valid way to interpret changes in the size of economies over time.”

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Transferring back into a wasteland.

Western Australia: Masterclass In What Not To Do With A Resources Boom (Con.)

Every policymaker in Australia should be made to read Paul Cleary’s excellent analysis of the way Norway handled its boom: Trillion Dollar Baby. The experience could hardly be more different and the comparison would be laughable were it not for the fact that future generations will come to rue the folly and myopia of our current leaders. The key lesson that emerges from Cleary’s analysis is that even small states can have a big say in determining what happens to the windfall revenues booms generate – but only if they understand what is happening at present and have a plan for the long-term future of the country. Norway had both. First, they had a capable government and skilled bureaucrats (yes, they are valuable and important) who quickly realised that Norway’s oil boom had to be managed for the benefit of Norway, not the multinational oil companies.

This meant not being intimidated by powerful multinational corporations and recognising the inherent bargaining strength of national governments. You can only exploit resources where they are. Host governments can – and should – determine how they are developed. In contrast to successive state and federal governments in Australia, this is precisely what the Norwegians did. Firstly, they compelled the oil majors to build their required oil platforms in Norway, developing a world class manufacturing capability in the process. Secondly, and in another unflattering and revealing contrast to Australia, they ensured 90% of the windfall revenues derived from the oil boom in Norway remained there.

Norway’s “problem”, unlike ours, has been what to do with the astounding amounts of wealth generated as a direct consequence of its activist and enlightened policies. A third critical innovation was establishing a sovereign wealth fund. Sovereign wealth funds serve two purposes. First, they put aside the windfall revenues of today for future generations – a possibility our own leaders seem incapable of contemplating given their truncated political horizons. Second, by investing most of the wealth overseas, they put downward pressure on the domestic currency, allowing other domestic industries to survive. At a time when we are collectively waving farewell to much of the manufacturing sector, this is another sobering lesson – especially for the young who will not benefit from all that squandered wealth and may wonder where they will actually work.

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