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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 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.”

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“..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.

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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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Nov 022016
 
 November 2, 2016  Posted by at 10:11 am Finance Tagged with: , , , , , , , , , , ,  2 Responses »
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Unknown Petersburg, Virginia. Group of Company B, U.S. Engineer Battalion 1864

Asian Markets Show Jitters as Polls Narrow Gap Between Trump and Clinton (G.)
Goldman Says Weakening Yuan Is Behind Iron Ore Rally (BBG)
Maersk’s Profit Drops 43% On Overcapacity In Shipping Industry (BBG)
In Greece, Property Is Debt (NY Times)
Hillary Clinton Is Irreparably Damaged, Even If She Wins (MW)
370 Economists, Including 8 Nobel Laureates: ‘Do Not Vote for Trump’ (WSJ)
Clintons Are Under Multiple FBI Investigations as Agents Are Stymied (Martens)
Five Separate FBI Cases Are Probing Clinton’s Inner Circle (DM)
Top DOJ Official In Clinton Probe ‘Kept Podesta Out Of Jail’ in 1998 (F.)
Hillary Clinton: Wall Street’s Favorite Enemy (R.)
Can The American People Defeat The Oligarchy That Rules Them? (PCR)
Why Is MI5 Making Such A Fuss About Russia? (G.)
Central Banks and the Revenge of Politics (Issing)
Brexit Complexity Set to Overwhelm Politicians (G.)
Oil Drilling Thought To Have Caused 1933 Killer Earthquake In California (R.)
Turkey Rejects Europe’s ‘Red Line’ On Press Freedom After Detentions (R.)
It’s Now -Temporarily- Legal to Hack Your Own Car (IEEE)

 

 

Time to get nervous.

Asian Markets Show Jitters as Polls Narrow Gap Between Trump and Clinton (G.)

Asian shares stumbled and the US dollar was on the defensive on Wednesday amid signs investors were becoming spooked by polls narrowing the gap between US presidential nominees Donald Trump and Hillary Clinton. Market anxiety has deepened over a possible Trump victory given uncertainty on the Republican candidate’s stance on issues including foreign policy, trade relations and immigration, while Clinton is viewed as a candidate of the status quo. Stocks across Asia Pacific saw a broad selloff on Wednesday with the Nikkei in Japan down by 1.8% at 4am GMT. There were also steep falls in Australia where the ASX/S&P 200 benchmark index was down almost 1.5%, with falls of 1.3% in South Korea and Hong Kong as markets took a lead from a sharp drop on Wall Street overnight.

The main European markets were also expected to begin the day in the red when they open later, according to futures trading. The tumultuous presidential race appeared to tighten after news that the FBI was reviewing more emails as part of a probe into Clinton’s use of a private email server. While Clinton held a five-percentage-point lead over Trump, according to a Reuters/Ipsos opinion poll released on Monday, other polls showed Trump ahead by 1-2 %age points. That pushed the US S&P500 Index down to a four-month closing low on Tuesday. The CBOE volatility index, often seen as an investors’ fear gauge, briefly rose to a two-month high, above 20%.

In the currency market, traders sold the dollar partly as they suspect Trump would prefer a weaker dollar given his protectionist stance on international trade. The euro rose to a three-week high of $1.1069, up about 2% from its seven-and-a-half-month low of $1.0851 hit just over a week ago. Against the yen, the dollar slipped to 104.03 yen from three-month high of 105.54 yen set on Friday. Koichi Yoshikawa at Standard Chartered Bank said: “If you had a long dollar position on the view that the dollar would gain because Clinton would win, you would surely close that position because her victory is less certain.”

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There’s that picture again of massive inventory in ports.

Goldman Says Weakening Yuan Is Behind Iron Ore Rally (BBG)

Iron ore’s eye-catching rally to the highest since April is probably due to the weakening of the yuan, according to Goldman Sachs, which said that China’s currency may decline further against the dollar and help to sustain prices of the raw material. Prices surged last month as losses in the yuan prompted some local investors to move into dollar-linked assets, including iron ore, analysts Hui Shan, Amber Cai and Christian Lelong said in a report received Wednesday. Should the Federal Reserve raise interest rates by the end of the year, there’s scope for further yuan weakness, they wrote in the Nov. 1 note. Iron ore has rallied even as signs of robust supply multiply, including a buildup in stockpiles at ports in China.

While some analysts have sought to explain the jump by pointing to higher coal prices as a driver, Goldman said that didn’t stack up as a reason, targeting the yuan’s drop instead. The Chinese currency has sagged as local policy makers signaled they are willing to allow greater currency flexibility amid a slump in exports and rise in the dollar. “By our estimates, about 60% of the iron ore price rally in October can be explained by the yuan depreciation,” the analysts said. Iron ore may be the first in line to benefit from onshore investment flows into commodities as the “futures curve is almost always backwardated, making long iron ore a positive-carry trade,” they said, referring to bets on gains.

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Global trade bites again.

Maersk’s Profit Drops 43% On Overcapacity In Shipping Industry (BBG)

A.P. Moller-Maersk, owner of the world’s largest container line, reported a 43% decline in third-quarter profit as the shipping industry suffers from overcapacity. Net income fell to $429 million in the third quarter compared with $755 million in the same period a year earlier, the Copenhagen-based company said in a statement Wednesday. That missed the average estimate of $501 million in a Bloomberg survey of 15 analysts. “The result is unsatisfactory, but driven by low prices,” Chief Executive Officer Soren Skou said in the statement. “We generally perform strongly on cost and volume across businesses.” Maersk said its underlying profit for 2016 will be “below” $1 billion. Previously, the company had said the full-year result would be “significantly” below 2015’s $3.1 billion.

An excess of vessels and weak trade growth have driven container lines to try to under-bid each other on the rates they offer clients. The climate has proven lethal for some industry members, with South Korea’s biggest line Hanjin Shipping Co. filing for bankruptcy protection in August. Earlier this week, Japan’s three biggest container lines said they plan to merge their operations in an efforts to return to profit. Maersk’s response has been to cut costs. On Wednesday it said costs at Maersk Line declined 14% in the quarter, but that was outpaced by a 16% decline in freight rates. The shipping line reported a net operating loss after tax of $116 million compared with a profit by the same measure of $264 million a year earlier as freight rates fell 16%.

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The destruction continues unabated and unopposed. “Construction of homes has collapsed, dropping by 95% from 2007 to 2016.”

In Greece, Property Is Debt (NY Times)

At law courts throughout Greece, people are lining up to file papers renouncing their inheritance. Not necessarily because some feckless uncle left them with a pile of debt at the end of his revels; they are turning their backs on what used to be a pillar of Greece’s economy and society: real estate. Growing personal debt, declining incomes and ever higher taxes as Greece’s depression grinds on have turned property and the dream of easy money into dread of a catastrophic burden. The figures are clear. In 2013, two years after a property tax was introduced (previously, real estate tax revenue came mainly from transfers or conveyance taxes), 29,200 people declined to accept their inheritance, according to the Justice Ministry. In 2015, the number had climbed to 45,627, an increase of 56% in two years.

Reports from across the country suggest that this year, too, large numbers of people are refusing to inherit. “This can be very painful,” said Giorgos Voukelatos, a lawyer. “People may lose their family home. Because if the father or mother had debts, the child might be unemployed and unable to carry this weight as well.” The growing aversion to property is evident in the drop in business at notaries public. The national statistics service, Elstat, reported in July that in 2014 there were 23,221 deeds in which living parents transferred property to their children, down from 90,718 in 2008. The number of wills drawn up or notarized has been steady through the crisis, at around 30,000 annually, suggesting that many inheritances being rejected were not part of formal wills. (More than 120,000 people die each year.)

The desire to inherit used to be so great that some took it upon themselves to give fortune a hand. Greeks were stunned in 1987 when the police uncovered a gang that had killed at least eight rich elderly people after forging their wills. The plot’s leader was a lawyer and former mayor of an Athens suburb; accomplices included a notary public and a gravedigger. Murder Inc., as the news media called it, was seared into popular consciousness as an instance in which criminals acted out a common desire. Today, people are more likely to run away from real estate than be tempted to kill for it.

The collapse of the real estate market shows why. The total number of transactions dropped by 74% from 2004 to 2014. People once hoped that if they came into property they could sell it and live easier; now they fear that they will be unable to sell it and the taxes will drag them down. If they did find a buyer, they would be unlikely to gain much, as prices of apartments have fallen by 41% since 2008, according to the Bank of Greece. Construction of homes has collapsed, dropping by 95% from 2007 to 2016. With no end to the crisis in sight, people will continue to dread coming into property.

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An entire campaign blinded by hubris.

Hillary Clinton Is Irreparably Damaged, Even If She Wins (MW)

We don’t know whether the reopening of the FBI probe of Hillary Clinton’s emails will cost her the election. It may be that she will still emerge the winner after next Tuesday’s vote, or that Donald Trump’s momentum from the Wikileaks emails, Obamacare’s failures, and Clinton’s flawed candidacy were going to carry him to victory in any case. What we do know is that whoever wins, we are in for a fiasco in politics that will make even this fiasco of a campaign pale by comparison. There is hardly any scenario that is too far-fetched. Even if the polls are right and Clinton’s lead translates into an electoral victory, she will be so damaged going into office that her chances of getting anything done will be virtually nil. In this sense alone, Trump’s claim that this scandal is “worse than Watergate” could prove to be true.

As an incumbent, Richard Nixon at least had an administration in place when he won re-election in 1972, though it took nearly another two years before he was forced to resign under threat of impeachment. Clinton is likely to be stymied from the start, especially if the ongoing investigations into her email practices and the Clinton Foundation lead to further damaging disclosures. For one thing, we now have the precedence of Watergate, and Republicans, who are sure to retain the House and now probably the Senate, will not let go. There is hardly a chance that it will all end well for Clinton and that she will be exonerated because what is already known has many Republicans convinced that she is guilty at the very least of mishandling classified documents and perhaps obstruction of justice.

While the immediate attention in the wake of last week’s disclosure about reopening the email investigation has focused on FBI Director James Comey, the real conundrum in all this concerns his boss, Attorney General Loretta Lynch. Lynch fatally compromised her position by meeting with former President Bill Clinton just days before the original investigation was closed without a grand jury ever considering the evidence. And now her failure to block Comey’s disclosure — while leaking that she wanted to — is another ethical lapse. Other reports indicate that she attempted to quash the investigation into the Clinton Foundation. It is hard to see how she can remain in office even if Clinton wins and wants to keep her. Her resignation — or even impeachment — seems inevitable with Republicans out for blood.

The damage done to the whole Clinton entourage through the machinations exposed in the Wikileaks emails means that many of them – Huma Abedin, Cheryl Mills, John Podesta, Neera Tanden – will be virtually untenable in any position of responsibility in a new Clinton administration. And this is the best-case scenario for Clinton. We all know what the worst-case scenario is.

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Hilarious. 370 economists making Trump’s case for him: “The economists object to Mr. Trump for questioning the legitimacy of economic data produced by institutions such as the Bureau of Labor Statistics.” Everybody questions the BLS. Except for 370 economists?!

370 Economists, Including 8 Nobel Laureates: ‘Do Not Vote for Trump’ (WSJ)

A group of 370 economists, including eight Nobel laureates in economics, have signed a letter warning against the election of Republican nominee Donald Trump, calling him a “dangerous, destructive choice” for the country. Signatories include economists Angus Deaton of Princeton University, who won the economics Nobel last year, and Oliver Hart of Harvard University, who was one of the two Nobel winners this year. The letter is notable because it is less partisan or ideological than such quadrennial exercises, and instead takes issue with Mr. Trump’s history of promoting debunked falsehoods.

“He misinforms the electorate, degrades trust in public institutions with conspiracy theories and promotes willful delusion over engagement with reality,” said the signatories, which also include Paul Romer, the new chief economist at the World Bank, and Kenneth Arrow, the 1972 Nobel winner. The economists object to Mr. Trump for questioning the legitimacy of economic data produced by institutions such as the Bureau of Labor Statistics. They say he hasn’t proposed credible solutions to reduce budget deficits and that he has promoted misleading claims about trade and tax policy. They also chide Mr. Trump for failing to “listen to credible experts” and for promoting “magical thinking and conspiracy theories over sober assessments of feasible economic policy options.”

[..] Peter Navarro, a Trump adviser and professor at the University of California, Irvine, said the economics profession has been so wrong about the impact of trade deals, including both the North American Free Trade Agreement in 1994 and the accession of China to the World Trade Organization in 2001, that it has little standing to criticize Mr. Trump’s position on those pacts. Tuesday’s letter “is a headline, whatever, and then they wind up being just so horribly wrong,” Mr. Navarro said. “You shouldn’t believe economists or Nobel Prize winners on trade.”

“You don’t need a Ph.D. in economics to know Trump’s plan to cut taxes, reduce regulation, increase oil, gas, and clean coal production, and eliminate our trade deficit by increasing exports and reducing imports will significantly increase growth, boost wages and generate trillions in new tax revenues,” he said. “This new letter is an embarrassment to an economics profession which continues to insist bad trade deals are good for America—a classic case of reality running roughshod over textbook trade theory.”

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“Not only was Bill Clinton’s wife under an FBI investigation at the time [..] but his own charitable foundation was also under investigation, a fact that was unknown at the time to the public and the media.

Clintons Are Under Multiple FBI Investigations as Agents Are Stymied (Martens)

Current and former FBI officials have launched a media counter-offensive to engage head to head with the Clinton media machine and to throw off the shackles the Loretta Lynch Justice Department has used to stymie their multiple investigations into the Clinton pay-to-play network. Over the past weekend, former FBI Assistant Director and current CNN Senior Law Enforcement Analyst Tom Fuentes told viewers that “the FBI has an intensive investigation ongoing into the Clinton Foundation.” He said he had received this information from “senior officials” at the FBI, “several of them, in and out of the Bureau.” That information was further supported by an in-depth article in the Wall Street Journal by Devlin Barrett. According to Barrett, the “probe of the foundation began more than a year ago to determine whether financial crimes or influence peddling occurred related to the charity.”

Barrett’s article suggests that the Justice Department, which oversees the FBI, has attempted to circumvent the investigation. The new revelations lead to the appearance of wrongdoing on the part of U.S. Attorney General Loretta Lynch for secretly meeting with Bill Clinton on her plane on the tarmac of Phoenix Sky Harbor International Airport on the evening of June 28 of this year. Not only was Bill Clinton’s wife under an FBI investigation at the time over her use of a private email server in the basement of her New York home over which Top Secret material was transmitted while she was Secretary of State but his own charitable foundation was also under investigation, a fact that was unknown at the time to the public and the media.

The reports leaking out of the FBI over the weekend came on the heels of FBI Director James Comey sending a letter to members of Congress on Friday acknowledging that the investigation into the Hillary Clinton email server was not closed as he had previously testified to Congress, but had been reopened as a result of “pertinent” emails turning up.

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The Daily Mail reoprts on ‘persons of interest’: Huma Abedin, Terry McAuliffe, Cheryl Mills, Phillipe Reines, John Podesta, Tony Podesta, Doug Band, Justin Cooper, Anthony Weiner

Five Separate FBI Cases Are Probing Clinton’s Inner Circle (DM)

The extent to which Hillary Clinton’s key advisers are now the focus of major FBI investigations is becoming clear. The Clintons’ long-term inner-circle – some of whom stretch back in service to the very first days of Bill’s White House – are being examined in at least five separate investigations. The scale of the FBI’s interest in some of America’s most powerful political fixers – one of them a sitting governor – underlines just how difficult it will be for Clinton to shake off the taint of scandal if she enters the White House. There are, in fact, not one but five separate FBI investigations which involve members of Clinton’s inner circle or their closest relatives – the people at the center of what has come to be known as Clintonworld.

The five known investigations are into: Anthony Weiner, Huma Abedin’s estranged husband sexting a 15-year-old; the handling of classified material by Clinton and her staff on her private email server; questions over whether the Clinton Foundation was used as a front for influence-peddling; whether the Virginia governor broke laws about foreign donations; and whether Hillary’s campaign chairman’s brother did the same. The progress of the Clinton Foundation investigation and that into McAuliffe was first reported by the Wall Street Journal. The FBI does not generally comment on investigations, so it is entirely possible there are more under way. Here are the advisers and consiglieri – and how the FBI is looking at them:

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Rep. Gowdy has said he thinks Kadzik will do his job properly.

Top DOJ Official In Clinton Probe ‘Kept Podesta Out Of Jail’ in 1998 (F.)

The Justice Department official in charge of informing Congress about the newly reactivated Hillary Clinton email probe is a political appointee and former private-practice lawyer who kept Clinton Campaign Chairman John Podesta “out of jail,” lobbied for a tax cheat later pardoned by President Bill Clinton and led the effort to confirm Attorney General Loretta Lynch. Peter Kadzik, who was confirmed as assistant attorney general for legislative affairs in June 2014, represented Podesta in 1998 when independent counsel Kenneth Starr was investigating Podesta for his possible role in helping ex-Bill Clinton intern and mistress Monica Lewinsky land a job at the United Nations.

“Fantastic lawyer. Kept me out of jail,” Podesta wrote on Sept. 8, 2008 to Obama aide Cassandra Butts, according to emails hacked from Podesta’s Gmail account and posted by WikiLeaks. Kadzik’s name has surfaced multiple times in regard to the FBI’s investigation of Democratic presidential nominee Hillary Clinton for using a private, homebrewed server. After FBI Director James Comey informed Congress on Thursday the FBI was reviving its inquiry when new evidence linked to a separate investigation was discovered, congressional leaders wrote to the Department of Justice seeking more information. Kadzik replied. “We assure you that the Department will continue to work closely with the FBI and together, dedicate all necessary resources and take appropriate steps as expeditiously as possible,” Kadzik wrote on Oct. 31.

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Can’t keep your enemies any closer than this.

Hillary Clinton: Wall Street’s Favorite Enemy (R.)

Hillary Clinton began her presidential campaign by promising to do what it takes to rein in Wall Street. Boosted by Wall Street’s toughest critics, U.S. senators Bernie Sanders and Elizabeth Warren, the Democratic candidate has declared “the deck is still stacked in favor of those at the top” and said she would raise bank fees and tighten banking regulations. She has encouraged regulators to break up too-risky banks. And yet, Wall Street appears unperturbed by the prospect of a Clinton presidency. In fact, the banking industry has supported Clinton with buckets of cash and stocks have sold off on days when the Clinton campaign stumbles. Privately, bankers say that they trust her to remain a pragmatist who will keep the current regulatory regime laid down by the Dodd-Frank Wall Street reform legislation passed in 2010.

“I don’t think Clinton wakes up thinking about Wall Street,” one senior banking industry lobbyist said. There are hints in apparently leaked email discussions among Clinton’s campaign staff that bankers are not far off the mark when they count on her to tread lightly. Pressed during the campaign by progressive Democrats to call for a revival of the Glass-Steagall Act that would require separation of commercial and investment banking, Clinton ultimately refused. She also weighed another progressive favorite – a tax on financial transactions- but instead recommended a far narrower plan to tax only canceled orders by high speed traders. Ultimately, what bankers most like about Clinton is that she is not Donald Trump.

Many financiers fear her unorthodox Republican rival could disrupt global trade, damage geopolitical relationships and rattle markets, industry analysts and participants say. “Those are the kind of things that corner offices think about,” said Karen Shaw Petrou of Federal Financial Analytics, whose firm advises financial firms about U.S. regulatory policy. “The overriding concern about Trump has dominated people’s thinking.” [..] People who work for hedge funds and private equity firms have contributed more than $56 million to Clinton’s presidential campaign and the supporting groups that face no legal cap on donations. Trump’s campaign and related groups received just $243,000 from donors in the same sector, according to data from the Center for Responsive Politics.

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“During an election it is OK to announce that a candidate for president is cleared but it is not OK to say that a candidate is under investigation.”

Can The American People Defeat The Oligarchy That Rules Them? (PCR)

Aren’t you surprised that Hillary and the presstitutes haven’t blamed Putin for FBI director Comey’s reopening of the Hillary email case? But the presstitutes have done the next best thing for Hillary. They have made Comey the issue, not Hillary. According to US Senator Harry Reid and the presstitutes, we don’t need to worry about Hillary’s crimes. After all, she is only a political woman feathering her nest, just as political men have done for ages. Why all this misogynist talk about Hillary? The presstitutes’ cry is that Comey’s alleged crime is far more important. This woman-hating Republican violated the Hatch Act by telling Congress that the investigation he said was closed is now reopened. A very strange interpretation of the Hatch Act. During an election it is OK to announce that a candidate for president is cleared but it is not OK to say that a candidate is under investigation.

In July 2016 Comey violated the Hatch Act when he, on orders from the corrupt Obama Attorney General, announced Hillary clean. In so doing, Comey used the prestige of federal clearance of Hillary’s violation of national security protocols to boost her standing in the election polls. Actually, Hillary’s standing in the polls is based on the pollsters over-weighting Hillary supporters in the polls. It is easy to produce a favorite if you overweight their supporters in the poll questions. If you look at the crowds attending the two candidate’s public appearances, it is clear that the American people prefer Donald Trump, who is opposed to war with Russia and China. War with nuclear powers is the big issue of the election.

Hillary’s problem has the ruling American Oligarcy, for which Hillary is the total servant, concerned. What are they going to do about Trump if he wins? Will his fate be the same as John F. Kennedy, Robert Kennedy, Martin Luther King, George Wallace? Time will tell. Or will a hotel maid appear at the last minute in the way that the Oligarchy got rid of Dominique Strauss-Kahn? All of the American and Western feminists, progressives, and left-wing remnant fell for the obvious frame-up of Strauss-Kahn. After Strauss-Kahn was blocked from the presidency of France and resigned as Director of the IMF, the New York authorities had to drop all charges against Strauss-Kahn. But Washington succeeded in removing Strauss-Kahn as a challenge to its French vassal, Sarkozy.

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Because it seems cheap and easy.

Why Is MI5 Making Such A Fuss About Russia? (G.)

If I had cornflakes for breakfast (which I don’t), I would have choked on them, reading Andrew Parker’s view of the threat posed by Russia, not just to the world at large – that is a commonplace of the “new cold war” discourse – but to the stability of the UK. With the majority vote for Brexit against the strong preference of Scotland and Northern Ireland for remain, we have shown ourselves quite capable of inflicting potentially fatal harm to our national stability all by ourselves. Why would we need Russia to do it for us? That was a knee-jerk reaction to the main thrust of the MI5 chief’s first national newspaper interview in the agency’s history. But a second, more substantial, response chased behind it in the form of a rather basic, and recurrent, question.

Why is the UK establishment in general, and UK intelligence in particular, so fixated on a supposed threat from Russia? The cold war is a quarter-century behind us. The Warsaw Pact was dissolved; the Soviet Union collapsed. Today’s Russia has three quarters of the territory but only half the population of the old Soviet Union. Its GDP, whether overall or per capita, is far below that of the US, or ours. Its 2015 military budget took 5% of that – $70bn in actual money – less than an eighth of the nearly $600bn spent by the US. “Tsar” Vladimir Putin may have played a weak hand magnificently, as judged by admirers and detractors alike, but a weak hand is still a weak hand.

If Russia really harbours ambitions to reconstitute an empire, its only success to date is the expensive (in every respect) reacquisition of Crimea, a contested no-man’s land of ragtag rebels in the rust belt of eastern Ukraine, and two miniature enclaves inside independent Georgia. That recent “show of force”, when the might of the Russian navy made its stately progress through the English Channel, demonstrated only the obsolescence of the erstwhile superpower’s fleet. In the same interview, Parker disclosed that there were around 3,000 “violent Islamic extremists in the UK, mostly British”, and that cyber, not just in Russia’s hands, was the threat of the future. So let me repeat the question: why does Russia remain bogeyman-in-chief?

Here are a few ideas. The first is that blaming Russia carries little cost. Russia is not China. Investment is not a big consideration. For all sorts of reasons, political relations have long been dire. Applying the same virulent rhetoric to terrorism conducted in the name of Islam, on the other hand, risks fomenting social and cultural strife here at home. A second reason, now as in the past, is that blaming Russia aligns us comfortably with the US, where stalwarts in Congress and at the Pentagon have never emerged from their old thinking about the threat. The Russia card has been played to exhaustion during this presidential campaign, to the point where it could swing the election – and I don’t mean in Donald Trump’s favour. A third factor is the consensus about a strong and malevolent Russia that still rules the “expert” community, and will probably do so for a few years yet – helped along by the hatchet-faced Putin.

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When their unwarranted powers are finally taken away from them it will be too late.

Central Banks and the Revenge of Politics (Issing)

The reputation of central banks has always had its ups and downs. For years, central banks’ prestige has been almost unprecedentedly high. But a correction now seems inevitable, with central-bank independence becoming a key casualty. Central banks’ reputation reached a peak before and at the turn of the century, thanks to the so-called Great Moderation. Low and stable inflation, sustained growth, and high employment led many to view central banks as a kind of master of the universe, able – and expected – to manage the economy for the benefit of all. The depiction of US Federal Reserve Chair Alan Greenspan as “Maestro” exemplified this perception. The 2008 global financial crisis initially bolstered central banks’ reputation further.

With resolute action, monetary authorities made a major contribution to preventing a repeat of the Great Depression. They were, yet again, lauded as saviors of the world economy. But central banks’ successes fueled excessively high expectations, which encouraged most policymakers to leave their monetary counterparts largely responsible for macroeconomic management. Such “expectational” and, in turn, “operational” overburdening has exposed monetary policy’s true limitations. In other words, central banks’ good reputation now seems to be backfiring. And “personality overburdening” – when trust in the success of monetary policy is concentrated on the person at the helm of the institution – means that individual leaders’ reputations are likely to suffer as well.

Yet central banks cannot simply abandon their new operational burdens, particularly with regard to financial stability, which, as the 2008 crisis starkly demonstrated, cannot be maintained by price stability alone. On the contrary, a period of low and stable interest rates may even foster financial fragility, leading to a “Minsky moment,” when asset values suddenly collapse, bringing down the whole system. The limits of inflation targeting are now clear, and the strategy should be discarded. Central banks now have to reconcile the need to maintain price stability with the responsibility – regardless of whether it is legally mandated – to reduce financial vulnerability. This will not be easy, not least because of another new operational burden that has been placed on many central banks: macro-prudential and micro-prudential supervision.

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They’re already completely lost by the looks of it.

Brexit Complexity Set to Overwhelm Politicians (G.)

Managing Britain’s exit from the EU is such a formidable and complex challenge that it could overwhelm politicians and civil servants for years, senior academics have warned. Theresa May has announced she will trigger article 50 – the two-year process of negotiating a separation from the EU – by the end of March next year. The government will also publish a great repeal bill, which will transfer all EU-originated laws into British law, so that MPs can decide how much they want to discard. A report from The UK in a Changing Europe, an independent group of academics led by Prof Anand Menon of King’s College London, warns that this will only be the start of the process of extricating Britain from the EU and establishing new relationships with other member states.

“Brexit has the potential to test the UK’s constitutional settlement, legal framework, political process and bureaucratic capacities to their limits – and possibly beyond,” Menon said. The group of experts, commissioned by the Political Studies Association, found that identifying and transposing the legislation to be included in the great repeal bill – and then deciding what to keep and what to ditch – will be a daunting task for civil servants. They also warn that while article 50, as set out in the Lisbon treaty, concerns the terms of a divorce with the rest of the EU – including what share of EU liabilities the UK should take on, for example – it is unclear whether the process can allow for parallel negotiations on Britain’s future status. And they suggest the repatriation of decision-making in key policy areas including agriculture, the environment and higher education to Britain from Brussels could affect the balance of power between Westminster and the devolved parliaments – another major constitutional headache for politicians.

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Wonder how far this kind of research will lead.

Oil Drilling Thought To Have Caused 1933 Killer Earthquake In California (R.)

Several damaging Los Angeles-area earthquakes of the 1920s and 1930s, including the deadliest ever in southern California, may have been brought on by oil production during the region’s drilling boom of that era, US government scientists have reported. The findings of a possible link between oil extraction and seismic events in the LA basin do not apply to modern industry practices but suggest the natural rate of quake occurrences in the region may be lower than previously calculated, the scientists said. The study’s authors, Susan Hough and Morgan Page of the US Geological Survey, stressed a distinction between their results and separate research attributing a growing frequency of quakes in Oklahoma and elsewhere to underground wastewater injection associated with fossil fuel production.

The new study, published in the Bulletin of the Seismological Society of America, also noted that early 20th-century industry techniques differed greatly from today, so the findings “do not necessarily imply a high likelihood of induced earthquakes at the present time”. The report suggested four major Los Angeles-area quakes in 1920, 1929, 1930 and 1933 were triggered by early drilling methods in which oil was extracted without water being pumped into the ground to replace it, causing the ground to subside. This could have artificially placed more pressure on seismic faults near oilfields. The most devastating event was the so-called Long Beach earthquake of 10 March 1933, a 6.4-magnitude quake that ruptured the Newport-Inglewood fault along the coast, toppling scores of buildings and killing 115 to 120 people – the highest death toll on record from a southern California earthquake.

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“..seeking to precipitate the coup through “subliminal messages” in their columns before it happened..”

Turkey Rejects Europe’s ‘Red Line’ On Press Freedom After Detentions (R.)

Turkey’s prime minister said he had no regard for Europe’s “red line” on press freedom on Tuesday and warned Ankara would not be brought to heel with threats, rejecting criticism of the detention of senior journalists at an opposition newspaper. Police detained the editor and top staff of Cumhuriyet, a pillar of the country’s secularist establishment, on Monday, on accusations that the newspaper’s coverage had helped precipitate a failed military coup in July. The United States and European Union both voiced concern about the move in Turkey, a NATO ally which aspires to EU membership. European Parliament President Martin Schulz wrote on Twitter that the detentions marked the crossing of ‘yet another red-line’ against freedom of expression in the country.

“Brother, we don’t care about your red line. It’s the people who draw the red line. What importance does your line have,” Prime Minister Binali Yildirim told members of his ruling AK Party in a speech in parliament. “Turkey is not a country to be brought in line with salvoes and threats. Turkey gets its power from the people and would be held accountable by the people.” Prosecutors accuse staff at Cumhuriyet, one of few media outlets still critical of President Tayyip Erdogan, of committing crimes on behalf of Kurdish militants and the network of Fethullah Gulen, a U.S.-based cleric blamed for orchestrating the July coup attempt. Journalists at the paper were suspected of seeking to precipitate the coup through “subliminal messages” in their columns before it happened, the state-run Anadolu agency said.

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Good to know, right? You don’t really own your car. Or anything else that has software in it.

It’s Now -Temporarily- Legal to Hack Your Own Car (IEEE)

You may own your car, but you don’t own the software that makes it work— that still belongs to your car’s manufacturer. You’re allowed to use the software, but in the past, trying to alter it in any way (including fixing it by yourself when it breaks or patching security holes) was a form of copyright infringement. iFixit, Repair.org, the Electronic Frontier Foundation (EFF), and many others think this is ridiculous, and they’ve been lobbying the government to try to change things. A year ago, the U.S. Copyright Office agreed that people should be able to modify the software that runs cars that they own, and as of last Friday, that ruling came into effect. It’s good for only two years, though, so get hacking. The legal and technical distinction between physical ownership and digital ownership is perhaps most familiar in the context of DVD movies.

You can go to the store and buy a DVD, and when you do, you own that DVD. You don’t, however, own the movie that comes on it: Instead, it’s more like you own limited rights to watch the movie, which is a very different thing. If the DVD is protected by Digital Rights Management (DRM) software, the Digital Millennium Copyright Act (DMCA) says that you are not allowed to circumvent that software, even if you’re just trying to watch the movie on a different device, change the region restriction so that you can watch it in a different country, or do any number of other things that it really seems like you should be able to do with a piece of media that you paid 20 bucks for.

Cars work in a similar way. You own the car as a physical object, but you only have limited rights to the software that controls it, because the car’s manufacturer holds the copyright on that software. This prevents you from making changes to the software, even if those changes are to fix problems or counter obsolescence, as well as preventing you from investigating the security of the software, which can have very serious and direct consequences for you as the owner and driver. It’s also worth pointing out that (especially in older vehicles like the 1995 Volvo 940 Turbo belonging to a certain anonymous journalist) relatively simple computerized parts can cost a ridiculous amount of money to replace because there is no legal alternative besides buying a new one from the manufacturer, who hasn’t made them in 20 years and would much rather you just bought an entirely new car anyway.

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Nov 012016
 
 November 1, 2016  Posted by at 9:36 am Finance Tagged with: , , , , , , , , , , ,  Comments Off on Debt Rattle November 1 2016
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Unknown Magazine and cannonballs at Battery Rodgers, Alexandria 1863

Donna Brazile’s Sins A Microcosm Of Biased Media (BH)
FBI Finds No Clear Link Between Trump and Russia (NY Times)
FBI Speeds Up Clinton Email Investigation After Criticism (LATimes)
Halloween Nation (Jim Kunstler)
Global Bond Markets See Worst Rout in 3 Years (BBG)
A Little-Noticed Fact About Trade: It’s No Longer Rising (NY Times)
US Trucking Companies Pare Down Fleets Amid Tepid Shipping Demand (WSJ)
October Mergers Smash All Records With $500.1 Billion In Deals (ZH)
Asset Bubbles From Stocks to Bonds to Iron Ore Threaten China (WSJ)
China Shows a Cheap Currency Doesn’t Pack the Same Punch Anymore (BBG)
Air Quality Worsens In Greece As People Burn Anything To Stay Warm (G.)
A Parting Gift To Athens From Obama (Kath.)
Creating Child Poverty For A Whole New Generation (G.)
Calais ‘Jungle’ like ‘Lord of the Flies’, With 1500 Abandoned Children (Ind.)
QPR To Bring Over 1,000 Children To UK In Kindertransport-Style Mission (G.)

 

 

Spot on from Adriana Cohen. CNN fires Brazile after she provided Clinton with debate questions. But she’s still head of the DNC, and Obama praises her: “..she is a person of high character..” What??

Donna Brazile’s Sins A Microcosm Of Biased Media (BH)

CNN was asking for it when it let Donna Brazile take a seat on the pundit desk. A plugged-in Brazile, now the interim chairwoman of the Democratic National Committee, seized on the opportunity and leaked questions to Hillary Clinton’s camp — one on Flint’s toxic water disaster before a CNN Michigan town hall in March and another a few days later on the death penalty before an Ohio showdown. CNN revealed yesterday – after WikiLeaks kept pointing out the embarrassing journalistic sins – that Brazile was no longer employed by the station. Unfortunately, it’s too late for Bernie Sanders. It’s also too late for voters hoping for an even playing field. There’s nothing wrong with having strong political opinions — I certainly have mine — but at least don’t cheat.

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.” Guess rigging a debate is just being a good advocate. Talk about a lack of ethics. But after the targeting of conservatives via the IRS — and recent undercover videos showing how Democratic operatives deployed paid agitators to disrupt Donald Trump rallies — who’s surprised?

But that’s not all Donald Trump and other candidates are up against when challenging the almighty Democratic machine. In a study conducted by Media Research Center of TV coverage during this election, a whopping 91% of Trump coverage was hostile toward the businessman compared to a small fraction of negative stories on Clinton. If that’s not a stacked deck, what is? Can you imagine in the World Series if the umpires made 91% of bad calls against one team and not the other? A biased media is risking its lifeblood — followers — by giving an unfair advantage to the candidate of their choice. A week from today voters will decide if they’ve had enough.

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It’s full tard insane and disgusting that this is still a story. This shallow-to-flat Clinton camp narrative would have been discarded many months ago if media like the NY Times had been just a little bit more impartial. And even this is not a real mea culpa; the article is still full of insinuations and innuendo that leaves plenty traces of the empty narrative alive.

FBI Finds No Clear Link Between Trump and Russia (NY Times)

For much of the summer, the F.B.I. 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. And even the hacking into Democratic emails, F.B.I. and intelligence officials now believe, was aimed at disrupting the presidential election rather than electing Mr. Trump.

Hillary Clinton’s supporters, angry over what they regard as a lack of scrutiny of Mr. Trump by law enforcement officials, pushed for these investigations. In recent days they have also demanded that James B. Comey, the director of the F.B.I., discuss them publicly, as he did last week when he announced that a new batch of emails possibly connected to Mrs. Clinton had been discovered.

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They can’t really not say anything by next weekend.

FBI Speeds Up Clinton Email Investigation After Criticism (LATimes)

The FBI accelerated its timeline for reviewing emails potentially linked to Hillary Clinton on Monday amid growing public pressure over the agency’s surprise announcement that it had found them in an unrelated case. Investigators had planned to conduct the review over several weeks but, after a torrent of criticism over the weekend, began scrambling to examine the trove of emails, according to law enforcement officials. The FBI hoped to complete a preliminary assessment in the coming days, but agency officials have not decided how, or whether, they will disclose the results of it publicly, and officials also could not say whether the entire review would be completed by election day.

The uncertainty did not stop Donald Trump from charging into the vacuum with ominous speculation that a Clinton victory would spark national upheaval. Clinton repeated that she was confident the FBI had no case against her and that voters had already made up their mind on her use of a private server while she was secretary of State. [..] FBI Director James B. Comey, a former Bush administration official appointed to run the bureau three years ago by President Obama, has come under heavy criticism from Democrats and Republicans alike for disclosing the investigation to Congress so close to the election.

Iowa Sen. Charles E. Grassley, a Republican who heads the Judiciary Committee, demanded that Comey release more information about the review by Friday. “While I disagree with those who suggest you should have kept the FBI’s discovery secret until after the election, I agree that your disclosure did not go far enough,” Grassley wrote to Comey. “Unfortunately, your letter failed to give Congress and the American people enough context to evaluate the significance or full meaning of this development.” “Without additional context, your disclosure is not fair to Congress, the American people, or Secretary Clinton,” Grassley added. He also renewed concerns that the FBI’s initial email investigation may have been hampered “by political appointees at the Justice Department.”

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Jim wrote to compliment me on my Throw Huma Under the Bus? article on Saturday. Compliments right back at you.

Halloween Nation (Jim Kunstler)

What was with James Comey’s Friday letter to congress? It looks to me like the FBI Director had to go nuclear against his parent agency, the Department of Justice, and Attorney General Loretta Lynch, his boss, in particular. Why? Because the Attorney General refused to pursue the Clinton email case when more evidence turned up in the underage sexting case against Anthony Weiner, husband of Hillary’s chief of staff, Huma Abedin. Over the weekend, the astounding news story broke that the FBI had not obtained a warrant to examine the emails on Weiner’s computer and other devices after three weeks of getting stonewalled by DOJ attorneys. What does it mean when the Director of the FBI can’t get a warrant in a New York minute? It must mean that the DOJ is at war with the FBI.

Watergate is looking like thin gruel compared to this fantastic Bouillabaisse of a presidential campaign fiasco. One way you can tell is that The New York Times is playing down the story Monday morning. Columnist Paul Krugman calls the Comey letter “cryptic.” Krugman’s personal cryptograph insinuates that Comey is trying to squash an investigation of “Russian meddling in American elections.” Senate Minority Leader Harry Reid chimed in with a statement that “it has become clear that you [Comey] possess explosive information about close ties and coordination between Donald Trump, his top advisers and the Russian government.” How’s that for stupid and ugly? It’s the Russian’s fault that Hillary finds herself in trouble again?

Earlier this week, lawyers at the DOJ attempted to quash a parallel investigation of the Clinton Foundation. They must be out of their minds to think that story will go away. Isn’t it about time that a House or Senate committee subpoenaed Bill Clinton to testify under oath about his June airport meeting with Loretta Lynch. He doesn’t enjoy any special immunity in this case. Speaking of immunity, when will we learn what kind of immunity Huma Abedin may have been granted in previous cycles of the email investigation? Plenty of other Clinton campaign associates got immunity from prosecution earlier this year, rendering bales of evidence on their own laptops inadmissible in the email server case.

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Central banks losing grip.

Global Bond Markets See Worst Rout in 3 Years (BBG)

When German bond markets sneeze, U.S. Treasuries catch a cold. That’s the conclusion drawn by analysts at TD Securities as global bonds march towards their worst streak of monthly losses since 2010. There’s a distinct rhythm to the selloff, according to the Canadian investment bank. Rising yields on benchmark bunds, and to a lesser-extent gilts, have driven the jump in long-dated Treasuries this month, strategists at TD Securities argue. They cite rising rate-market correlations, elevated selling of Treasuries during European trading hours, and market fears the ECB might moderate its monetary accommodation as factors that suggest international forces largely account for the rise in benchmark 10-year yields, which flirted with a five-month high of 1.88% on Friday.

“We believe that much of the recent rise in U.S. rates has been driven by bunds and gilts,” analysts at TD Securities, led by Priya Misra, wrote in a report on Friday. Rising U.S. Treasuries have been accompanied by an uptick in market-implied inflation expectations, combined with fears that investors are saddled with outsize duration risks. But tightening Treasury-bund spreads since September 30, in fact, throw into sharp relief the external drivers for the rout in the U.S. rate market, the strategists note. “Our analysis shows that since 2010, greater than a one-standard deviation increases in 10-year Treasury yields tend to result in a widening in Treasury-bund and Treasury-gilt spreads. However, this latest move has actually resulted in a tightening of US-Germany and U.K. spreads,” which suggests global rate-markets are dancing to a similar beat, the analysts write.

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Little-noticed? I have been writing about it for ages.

A Little-Noticed Fact About Trade: It’s No Longer Rising (NY Times)

During the 1990s, global trade grew more than twice as fast as the global economy. Europe united. China became a factory town. Tariffs came down. Transportation costs plummeted. It was the Walmart Era. But those changes have played out. Europe is fraying around the edges; low tariffs and transportation costs cannot get much lower. And China’s role in the global economy is changing. The country is making more of what it consumes, and consuming more of what it makes. In addition, China’s maturing industrial sector increasingly makes its own parts. The IMF reported last year that the share of imported components in products “Made in China” has fallen to 35% from 60% in the 1990s.

The result: The I.M.F. study calculated that a 1% increase in global growth increased trade volumes by 2.5% in the 1990s, while in recent years, the same growth has increased trade by just 0.7%. Hanjin, like other big shipping companies, bet that global trade would continue to expand rapidly. In 2009, the world’s cargo lines had enough room to carry 12.1 million of the standardized shipping containers that have played a crucial, if quiet, role in the rise of global trade. By last year, they had room for 19.9 million – much of it unneeded. India is not China redux. Most trade flows among developed nations. The McKinsey Global Institute calculates that 15 countries account for roughly 63% of the global traffic in goods and services, and for an even larger share of financial investment.

China joined this club the old-fashioned way: It used factories to build a middle class. But the automation of factory work is making it harder for other nations to follow. Dani Rodrik, a Harvard economist, calculates that manufacturing employment in India and other developing nations has already peaked, a phenomenon he calls premature deindustrialization. The weakness of the global economy is exacerbating the trend. Infrastructure investment by multinational corporations declined for the third straight year in 2015, according to the United Nations. It predicts a further decline this year. But even if growth rebounds, automation reduces the incentives to invest in the low-labor-cost developing world, and it reduces the benefits of such investments for the residents of developing countries.

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Overcapacity.

US Trucking Companies Pare Down Fleets Amid Tepid Shipping Demand (WSJ)

Big trucking companies have spent the second half of the year shrinking their fleets in hopes of changing an imbalance between the supply of rigs on the road and tepid shipping demand that has flattened industry earnings. They will learn in the coming weeks, as retailers stock up at stores and distribution centers for the holidays, whether efforts to slim down capacity have produced the rate increases that trucking companies say they need to increase profitability and to expand fleets next year. Trucking-industry reports in the coming week will take the pulse of a market at a critical point in the fourth quarter, when companies look to build off momentum in the consumer and manufacturing arenas to set business plans for 2017.

Industry data groups ACT Research and FTR are due to report this week on new heavy-duty truck orders for companies in October, a critical month for setting fleet plans for the coming year after several months in which orders have plummeted to historically low levels. DAT Solutions, which measures freight rates in the industrial-trucking market, will report the next week on whether carrier efforts to rein in capacity amid tepid demand are pushing up prices as hoped. DAT says prices for spot-market freight hauls and shipments moving under long-term contracts have been slipping for most of the year, and that rates in September were down 6.4% from the same month a year earlier. “We haven’t seen any difficulty in finding trucks,” said Ken Forster, CEO of logistics company Sunteck, that finds and books trucks for freight shippers. “It’s clear that overcapacity has driven down pricing.”

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Desperate insanity: “Low growth – which is bad for most things, but it’s good for M&A because that’s how you get growth..” No, it’s how you fake growth.

October Mergers Smash All Records With $500.1 Billion In Deals (ZH)

Last week David Rosenberg pointed out that mega Merger Manias like the one we are experiencing “invariably takes place at or near cycle peaks, as companies realize that they can no longer grow their earnings organically. We have just witnessed five multi-billion dollar deals this past week alone — $207 billion globally (AT&T/Time Warner; TD Ameritrade/Scottrade) in what has been the most active announcement list since 1999 … what do you know, near the tail end of that tech bull market too.” And now that October is officially over, we can close the books on what has been an unprecedented month for M&A.

According to Bloomberg, in the month when a chill was sent through the spines of corporate CFOs and their investment bankers over fears that rates are about to rise and thus make debt-funded deals more expensive, the scramble to acquire competitors went off the charts, leading to an all time high in global M&A with almost half a trillion dollars of mergers and acquisitions announced globally. CenturyLink’s $34 billion acquisition of Level 3 Communications, as well as General Electric’s deal to combine its oil and gas division with Baker Hughes, pushed October’s deal volumes to about $489 billion. That’s the highest amount for at least 12 years, topping the previous record of $471 billion in April 2007, the data show.

Deallogic had a slightly different higher October deal total, calculating that the value for mergers and acquisitions for October actually surpassed the half a trillion mark, hitting $500.1B, but the idea is the same and adds that global deal volume has only been higher during five other months in records going back to 1995. More than half of the deals have been based in the US, where M&A volume has already hit a monthly record of $321.2 billion. That’s about a third higher than the next biggest month on record, according to Dealogic. Cited by Bloomberg TV, Bob Profusek, partner and chair of the global M&A practice at law firm Jones Day said that “every weekend recently has been busy.”

According to the Jones Day lawyer “the fundamental drivers are still there,” Profusek said. “Low growth – which is bad for most things, but it’s good for M&A because that’s how you get growth – and very accommodating capital markets.” More important, however, are concerns that the period of low interest rates is coming to an end, prompting corporations to scramble and issue debt now while it is still cheap.

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“China’s money supply has quadrupled since 2007, and the new cash is largely trapped inside the country by government capital controls.”

Asset Bubbles From Stocks to Bonds to Iron Ore Threaten China (WSJ)

A succession of asset bubbles has formed in China, caused by a torrent of speculative money sloshing from stocks to bonds to commodities. The biggest apparent bubble is in housing, but prices have surged for niche assets, too, such as calligraphy, antiques and art. In May, futures prices for soybean meal, used as pig feed, jumped 40%. The trading volume of 600 million tons was nine times higher than China’s annual consumption. The pipe-making material PVC is up 40% so far this year on the Dalian Commodity Exchange. The world’s second-largest economy is slowing. Easy credit and successive fiscal stimuli, designed to keep China aloft, mean it is awash in money that is chasing an increasingly small number of investment opportunities.

China’s money supply has quadrupled since 2007, and the new cash is largely trapped inside the country by government capital controls. [..] The debt binge began with a crisis-related stimulus package. China’s public and corporate debt then grew threefold to about $22 trillion as Communist Party leaders used freer credit to support struggling state-owned firms and meet annual economic-growth targets. The downside of so much cash washing from one asset type to the next burst into view with a stock-market crash in the summer of 2015 that wiped out $5 trillion, or 43%, of value in Chinese stocks at one point. The Shanghai market had doubled from June 2014 to June 2015 as investors borrowed 2 trillion yuan ($300 billion) to buy stocks. To steady the stock market, authorities restricted short selling, and a “national team” of investors relied on by the Chinese government to support its stock market stepped in to purchase beaten-up shares.

Money then flowed into bonds. Many investors bought them by borrowing money against bonds they already owned, repeating the process over and over again. Such borrowing grew to 2.5 times the size of the $7 trillion bond market, according to bond-market analysts. The surge slowed only when yields tightened enough that bonds looked less attractive than other asset types. In this year’s first quarter, China’s total credit surged by another $690 billion, equivalent to about three times the economy of Ireland. Then came a bout of commodity speculation, which pushed prices for some products out of sync with economic fundamentals. Iron-ore futures surged 50% from January to April even though Chinese ports were piled with iron ore. Prices slumped in May.

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Again: world trade is shrinking.

China Shows a Cheap Currency Doesn’t Pack the Same Punch Anymore (BBG)

Chalk up China as another example where a cheapening exchange rate is failing to lift exports. As already seen in Japan in recent years, what textbooks say should happen when a country’s currency falls – its exports gain – isn’t. Bathroom accessories maker Dongguan City XinChen, in the southern Chinese province of Guangdong, is among those seeing one step forward, two steps back when it comes to the exchange rate. “The support from a weaker yuan is negligible compared to the pressure we face from rising labor and materials costs,” said owner Sandy Chang. “Foreign demand is already down. When growth is slow in our major markets, people just don’t buy.”

That tepid demand – on display in September data that showed China’s exports fell 10% from a year earlier – means factories are yet to get a sustained shot in the arm from a currency that’s weakened 9% against the dollar since August 2015. On a trade-weighted basis, the declines this year have been even more marked, with the yuan down 6.7% versus its 4.1% drop against the dollar in 2016. “China’s not going to get much out of anything from further currency depreciation in a weak global economy,” Stephen Roach, a senior fellow at Yale University and former Morgan Stanley non-executive chairman in Asia, said. “You can cut your relative prices through depreciation, but if you don’t have the external demand the impact is going to be limited.”

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Mad Max is here: “Along with chemicals from wood burning, scientists found lead, arsenic and cadmium particles, showing that people are burning painted and treated wood, and also their rubbish, to keep warm.”

Air Quality Worsens In Greece As People Burn Anything To Stay Warm (G.)

Greece’s financial recession is leaving its footprint on the environment. This follows twenty years of huge improvements in Greece’s air pollution. While most European countries struggle with the consequences of failure to control exhaust pollution from diesel vehicles, Greece benefitted from long-standing bans on diesel cars in the two biggest cities, Athens and Thessaloniki. This allowed the country to reap the full benefits of technologies to control petrol exhaust, without these being offset by the poor performance of diesel cars. As a consequence nitrogen dioxide from traffic approximately halved alongside Greek roads between 1996 and 2006, in contrast to the lack of improvement elsewhere in Europe. Lifting the diesel car ban in 2012 and lower taxes on diesel fuel acted as a huge incentive for those struggling with travel costs.

Amongst new car sales diesels leapt from less than 20% (around zero in Thessaloniki) to over 60%, but, so far, economic pressures have reduced traffic volumes averting a possible deterioration in air pollution. However, a tripling in the cost of heating oil brought about larger changes as hard-pressed Greeks have switched to burning wood. Wintertime particle pollution increased by around 30% in Thessaloniki in 2013 and air toxicity worsened on evenings when fires were lit. Analysis of wintertime air in Athens shows that it is not just logs that are being burnt. Along with chemicals from wood burning, scientists found lead, arsenic and cadmium particles, showing that people are burning painted and treated wood, and also their rubbish, to keep warm.

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Greece will get nothing from Obama.

A Parting Gift To Athens From Obama (Kath.)

[..] the key players in the euro area consistently kept the US at arm’s length when it came to dealing with the crisis, particularly in Greece. We should not forget that in February 2010, about three months before Greece’s first bailout was signed, the US Treasury secretary at the time, Timothy Geithner, had warned eurozone state leaders and ministers during a G7 meeting in Canada that they could not make moral hazard the driving force of their crisis strategy. “You can put your foot on the neck of those guys [the Greeks] if that’s what you want to do… but you have to make sure you counteract that with a bit more credible reassurance that you’re going to not allow the crisis to spread beyond Greece,” he said, according to the raw transcripts of his memoirs, which were published under the title “Stress Test.”

“They just wanted to take a bat to them,” added Geithner. “But in taking a bat to them, they were feeding a fare that was in its early stages.” The eurozone was not particularly interested in Washington’s message at the time, and has been similarly unimpressed by the US government’s interventions since. Washington’s position is weakened in European eyes because it does not have “skin in the game,” in other words it does not stand to lose financially or politically from any Greek debt relief, especially as the money owed to the International Monetary Fund, of which the US is the largest member with a 17.5% quota, has “super-senior status” and cannot be restructured.

To see a more recent example of US proposals for a change in approach on Greece not having an impact in the eurozone, we only need to wind back to the end of January 2015 and Obama’s comment in the wake of the SYRIZA-led government’s first election win. “You cannot keep on squeezing countries that are in the midst of a depression,” he told CNN. “At some point, there has to be a growth strategy in order to pay off their debts and eliminate some of their deficits,” he added, pointing out that it is difficult to carry out structural reforms when people are seeing their living standards plummet. “Over time, the political system and society cannot sustain it,” he concluded.

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Britain does to its own children, too, what it does to refugee kids. What’s the last you heard Corbyn say about this? Where the f*ck is he?

Creating Child Poverty For A Whole New Generation (G.)

In a little council house in Birkenhead, Steve is panicking over how he’ll find an extra £304 rent money a month. He has just days to magic up an answer. If he can’t, he can guess what will happen. “Eviction. Come the end of November, I won’t have a roof.” As a single parent, Steve won’t be the only one slung out. His four boys, aged from three to eight, would also lose their home and probably be taken from their dad. “I’d be fed to the dogs.” Everything I’ve tried so hard for …” – a snap of his fingers – “Nothing.” It’s not a landlord doing this to Steve; it’s our government. It’s not his rent that’s going up; it’s his housing benefit that’s getting cut. And he’s not the only one; on official figures, almost 500 households in the borough of Wirral face a shortfall of up to £500 a month.

From next Monday 88,000 families across Britain will have their housing benefit slashed. They will no longer have the cash to pay their rent. Among all those whose lives will be turned upside down will be a quarter of a million children. That’s enough kids to fill 350 primary schools, all facing homelessness. Those figures come directly from the Department for Work and Pensions. Plenty dispute them, which is unsurprising since DWP officials keep changing their minds. Some experts believe the number of children at risk could total 500,000. This is the biggest benefit cut that you’ve never heard of. The newspapers will waste gallons of ink on Candice Bake-Off’s lipstick and Cheryl’s apparent baby bump. But about a government policy that could disrupt hundreds of thousands of lives, there is near silence.

So allow me to explain. From next week Theresa May’s government will extend the cap on household benefits. Poor families in London will not be allowed more than £442 a week. Those outside the capital will be cut to £385 a week. In some areas the cuts will be brought in straightaway; in others with a slight delay. But in the end, families above the limit will be hit twice over. First, they will be pushed further into poverty. And, like Steve, their housing benefit will be docked, so they will be left scrabbling just to make the rent and keep a roof above their heads. How those families will manage is anyone’s guess. When Steve opened the letter at the end of July he had a “panic attack”. All that went round his mind was one question: “How the hell am I going to pay this?” Then came what he calls “a depressive state” that lasted nearly two months. Now he bottles it up, for the sake of his boys. “When they’re not around, that’s when I cry. When they’re out at school, when they’re asleep: that’s when I break down.”

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Given their approach to this simple and easy-to-solve non-issue, people like Holland and May should obviously be nowhere near any decision making positions. Perhaps more than anything else, letting children perish for your own petty political reasons says you’re a sociopath.

Calais ‘Jungle’ like ‘Lord of the Flies’, With 1500 Abandoned Children (Ind.)

The Calais ‘Jungle’ has become like ‘Lord of the Flies’, with 1,500 children left unsupervised, sleeping in bare containers and free to roam the adjacent camp site, close to heavy machinery being used to dismantle and remove the wreckage, volunteers have told The Independent. Taps supplying drinking water to the children’s compound have been turned off, and food for the young refugees, who are mostly boys aged between 10 and 17, is not being supplied by the authorities, aid organisations claim. Nobody is allegedly allowed inside the containers except for a handful of security guards, raising serious concerns about the safety of the ‘Jungle’s’ most vulnerable occupants.

A small group of volunteers from three tiny charities told The Independent they are working “round the clock” to distribute bottled water, food, and blankets to the children, in a bid to support them. The task is extremely difficult, they said, because the organisations have only been given about 20 passes between them permitting access to the razed ‘Jungle’ site. Members of the grassroots aid organisations Refugee Community Kitchen, Calais Kitchens, and Little Ashram Kitchen, said they have had to distribute supplies from the roadside by the fenced-off compound. Only French officials can access the restricted container site, volunteers said, but they have not been present on a day to day basis. Volunteer Steve Bedlam told The Independent: “They’ve left them with no support whatsoever. They’ve just left these 1,500 kids since Friday and gone.”

No official organisations are distributing water, Mr Bedlam said, leaving the three volunteer-run organisations sending in thousands of litres everyday. Food is also extremely limited. “There’s running water in the toilets, but the sinks have been turned off,” Mr Bedlam said. “This has been confirmed by several of the kids. When we bring water in a truck it goes crazy. People are grabbing at it, like they want to get six bottles.” A French organisation was supplying one hot meal a day, Mr Bedlam said, but it was not nearly enough food for a teenage boy, leaving the camp occupants reliant on volunteers. Many of the children also had no blankets or shoes, he said, and some unregistered refugees are still sleeping outside in the “freezing cold”. Another volunteer told The Independent she believes there are 12 children in each container, and she said one boy told her he had slept on a table.

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Bless you.

QPR To Bring Over 1,000 Children To UK In Kindertransport-Style Mission (G.)

Queens Park Rangers (QPR), the football club, has offered to help bring refugee children stranded in France to the UK. The Championship club is part of a new plan for more than a thousand refugee children that emerged on Monday night. QPR has put a fleet of coaches on standby to go to France to collect the children. And Hammersmith & Fulham council – QPR’s local council in west London – says it has volunteer social workers ready to travel to France in the next couple of days to assess and support the children. Lord Alf Dubs, who has led plans to bring child refugees to the UK in a Kindertransport-style mercy mission, announced the plan in a letter to the home secretary, Amber Rudd, and the French ambassador, Sylvie Bermann, on Monday.

In his letter, Dubs writes: “I formally request that the French government allows us to send in coaches and social workers to collect those refugee children that have a right to be here in the UK. We will need assistance with travel documents out of France. We have people arranging the coordination of this.” Dubs added: “I am also writing the British government and hope that this intervention can bring the assistance the refugee children so desperately need. Given the urgency of this matter I should be grateful for a quick response.” The home secretary made a statement to parliament saying that the UK government had only been granted access to the camp by the French authorities and permitted to bring over Dubs-amendment children very recently. They are children with no relatives in the UK but who are deemed eligible to travel to the UK as a result of their vulnerability.

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Oct 312016
 
 October 31, 2016  Posted by at 9:36 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle October 31 2016
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Harris&Ewing State, War & Navy Building, Washington DC 1917

Economic Stress As World Runs Out Of Dollars (AEP)
China as Factory to World Mulls the Unthinkable: Price Hikes (BBG)
European Banks Stuck With $1.3 Trillion of Bad Loans, KPMG Says (BBG)
FBI Obtains Warrant; Agents Waited Weeks To Tell Comey About Emails (WaPo) (WaPo)
Why Comey Jumped At The Chance To Reopen Hillary Investigation (DM)
FBI in Internal Feud Over Hillary Clinton Probe (WSJ)
Hillary’s Emails Matter: A Retired CIA Officer Explains Why (Hill)
Ex-FBI Official: ‘Intensive Investigation’ Ongoing Into Clinton Foundation (DC)
Clinton Supporter Doug Schoen Reconsiders, Cites Constitutional Crisis (RCP)
James Comey – As Seen Through The Persuasion Filter (Adams)
Theresa May Lied And Lied Again To Become PM (G.)
The Dirty Secret Beneath Hong Kong’s Wealth: Slavery (SCMP)
EU And Canada Sign CETA Free Trade Deal (G.)
Turkey Detains Editor Of Opposition Newspaper Cumhuriyet (AFP)
Erdogan Says Greek Islands ‘Used To Be Ours’ (Kath.)

 

 

“Our allocation model is now 100pc in cash. This is a warning signal for the market and it happens extremely rarely..”

Economic Stress As World Runs Out Of Dollars (AEP)

Surging rates on dollar Libor contracts are rapidly tightening conditions across large parts of the global economy, incubating stress in the credit markets and ultimately threatening overvalued bourses. Three-month Libor rates – the benchmark cost of short-term borrowing for the international system – have tripled this year to 0.88pc as inflation worries mount. Fear that the US Federal Reserve may have to raise rates uncomfortably fast is leading to an acute dollar shortage, draining global liquidity. “The Libor rate is one of few instruments left that still moves freely and is priced by market forces. It is effectively telling us that that the Fed is already two hikes behind the curve,” said Steen Jakobsen from Saxo Bank. “This is highly significant and is our number one concern. Our allocation model is now 100pc in cash. This is a warning signal for the market and it happens extremely rarely,” he said.

Goldman Sachs estimates that up to 30pc of all business loans in the US are priced off Libor contracts, as well as 20pc of mortgages and most student loans. It is the anchor for a host of exotic markets, used as a floor for 90pc of the $900bn pool of the leveraged loan market. It underpins the derivatives nexus. The chain reaction from the Libor spike is global. The BIS warns that the rising cost of borrowing in dollar markets is transmitted almost instantly through the global credit system. Changes in the short-term policy rate are promptly reflected in the cost of $5 trillion in US dollar bank loans,” it said. Roughly 60pc of the global economy is linked to the dollar through fixed currency pegs or “dirty floats”, but studies by the BIS suggest that borrowing costs in domestic currencies across Asia, Latin America, the Middle East, and Africa, move in sympathy with dollar costs, regardless of whether the exchange rate is fixed. Short-term “Shibor” rates in China have been ratcheting up.

The cost of one-year swaps jumped to 2.71pc last week, and the spread over one-year sovereign debt is back to levels seen during the Shanghai stock market crash last year. This is not a pure import from the US. The Chinese authorities themselves are taking action to rein in a credit bubble. It is happening in parallel with Fed tightening, each reinforcing the other, and that makes it more potent. Three-month interbank rates in Saudi Arabia have soared to 2.4pc. This is the highest since the global financial crisis in early 2009 and implies a credit crunch in the Saudi banking system. The M1 money supply has fallen 9pc over the last year. The Bank of Japan has doubled its window of dollar credit for Japanese banks to head off an incipient dollar squeeze, drawing on the country’s ample foreign reserves.

It may not be so easy for others. Credit analysts are becoming nervous about the spread between Libor and the overnight index swap, the so-called Libor-OIS spread that is used to gauge problems in the plumbing of the credit system. It has widened to 38 basis points, near levels seen in the eurozone debt crisis and past bouts of stress. The message from the ‘TED spread’ is similar, if less severe. This measures the spread between eurodollar rates in London and three-month futures contracts for US treasuries. The picture is complex. These signals have been distorted by new rules for US prime money market funds, which have shrunk by $560bn and led to a contraction of commercial paper. The deadline for this reform has come and gone, yet the spreads have not settled.

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Only thing left to do now is find buyers.

China as Factory to World Mulls the Unthinkable: Price Hikes (BBG)

China’s factories may be on the cusp of delivering a new shock to the global economy after years of undercutting rivals with cheaper costs. This time, increases in prices could reverberate around the world. To understand why, consider the dilemma facing Jiangmen Luck Tissue Mfy Ltd., now caught in a squeeze between surging wages and tepid demand. The company has already slashed staff by half, shaved prices and automated production to survive. Now, with margins razor thin, it’s weighing the first price increases since 2010. “There’s just no possibility for me to cut prices any more,” says deputy director Roger Zhao, 52, whose company is based in the city of Jiangmen in southern Guangdong province.

“Because costs are already pretty high and I don’t see any possibility they’ll go down, I’m seeking opportunities to raise prices a little bit.” That push to recover lost margins – even as demand remains muted – was shared by exporters of everything from clocks to jacuzzis interviewed in Guangzhou last week at the Canton Fair, a biannual gathering where 25,000 exhibitors and 180,000 mostly foreign buyers ink export deals in booths spanning exhibition space equivalent to about 3,400 tennis courts. For the world economy, decisions from companies like Jiangmen Tissue to stop cutting prices – and even raise them where demand allows – removes a source of disinflationary pressure.

To be decided is whether China, the factory to the world, swings from becoming a drag on consumer prices to a source of pressure nudging them higher. China’s manufacturing prices rose in September for the first time in almost five years and overall producer prices also clambered out of negative territory. Those likely to feel the biggest lift if Chinese export prices follow through with sustained increases would be the country’s top five markets: the U.S., Hong Kong, Japan, South Korea and Mexico. “China’s return to positive growth in producer prices marks a very significant turning point in deflationary pressures both in China and globally,” said Shane Oliver at AMP Capital Investors in Sydney. “This is only step one, though. We are still waiting for step two: stronger global demand and trade.”

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Draghi to the rescue. He better be fast.

European Banks Stuck With $1.3 Trillion of Bad Loans, KPMG Says (BBG)

Eight years after Lehman Brothers’ collapse sparked the financial crisis, Europe’s banks still have €1.2 trillion ($1.3 trillion) of non-performing loans and will probably be stuck with them for decades to come, according to KPMG. Anemic economic growth across the region is making it harder for lenders to off-load toxic assets, hurting profitability while banks also come under pressure from tougher capital rules and fines for misconduct, London-based KPMG said in a report published Monday. Firms could take “decades rather than years” to reduce their exposures, hampering profitability. European lenders are battling to cut soured loans as they face evaporating income from lending amid negative interest rates from the ECB.

Net interest margins, the difference between income from lending versus cost of funding, average about 1.2% in the region compared with about 3% in the U.S., according to KPMG. “Reversing the profitability of European banks is not a lost cause but it will certainly be a lot of hard work,” Marcus Evans, a partner at KPMG’s ECB office, said in a statement. “It’s clear that across Europe banks are still grappling with the new world of low, or negative, interest rates and mounting capital and regulatory costs.” The total value of toxic loans in Europe has surged since 2008 from about 1.5% of lending to more than 5% since 2013, according to the report. This has a negative impact on profitability from unpaid interest, raising provisions against impaired assets and realizing losses when disposing bad debts, according to KPMG.

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Lots of Weiner and Comey stuff today. Lots of guessing going on. Accurate picture is slow to seep through.

FBI Obtains Warrant; Agents Waited Weeks To Tell Comey About Emails (WaPo) (WaPo)

FBI agents investigating Hillary Clinton’s use of a private email server while secretary of state knew early this month that messages recovered in a separate probe might be germane to their case, but they waited weeks before briefing the FBI director, according to people familiar with the case. Director James B. Comey has written that he was informed of the development Thursday, and he sent a letter to legislators the next day letting them know that he thought the team should take “appropriate investigative steps designed to allow investigators to review these emails.” That missive ignited a political firestorm less than two weeks before the election. Almost instantly, Comey came under intense criticism for his timing and for bucking the Justice Department’s guidance not to tell Congress about the development.

And his announcement means that Clinton could have to contend with the news that the FBI has resumed its investigation of her use of a private email server — without any clarity on whether its investigators will find anything significant — up to and beyond Election Day. The FBI has obtained a warrant to search the emails found on a computer used by former congressman Anthony Weiner that may contain evidence relevant to the investigation into Clinton’s private email server, according to law enforcement officials. The warrant was obtained in New York, as FBI agents there have possession of the laptop. [..].. officials familiar with the case said the messages include a significant amount of correspondence associated with Clinton and her top aide Huma Abedin, Weiner’s estranged wife.

People familiar with the case said that agents on the Clinton email team had known about the messages since soon after New York FBI agents seized a computer related to their investigation into Weiner [..] Officials said the agents probing Clinton’s private email server didn’t tell the director immediately because they were trying to better assess what they had. “It’s a step-by-step process,” said one senior law enforcement official. “There are many steps along the way that get you to a place where the director can be appropriately briefed in order to make a decision” about whether to move forward.

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Even his wife was on to him. ‘They felt that he betrayed them and brought disgrace on the bureau by letting Hillary off with a slap on the wrist.’

Why Comey Jumped At The Chance To Reopen Hillary Investigation (DM)

James Comey’s decision to revive the investigation of Hillary Clinton’s email server and her handling of classified material came after he could no longer resist mounting pressure by mutinous agents in the FBI, including some of his top deputies, according to a source close to the embattled FBI director. ‘The atmosphere at the FBI has been toxic ever since Jim announced last July that he wouldn’t recommend an indictment against Hillary,’ said the source, a close friend who has known Comey for nearly two decades, shares family outings with him, and accompanies him to Catholic mass every week. ‘Some people, including department heads, stopped talking to Jim, and even ignored his greetings when they passed him in the hall,’ said the source.

‘They felt that he betrayed them and brought disgrace on the bureau by letting Hillary off with a slap on the wrist.’ According to the source, Comey fretted over the problem for months and discussed it at great length with his wife, Patrice. He told his wife that he was depressed by the stack of resignation letters piling up on his desk from disaffected agents. The letters reminded him every day that morale in the FBI had hit rock bottom. ‘He’s been ignoring the resignation letters in the hope that he could find a way of remedying the situation,’ said the source. ‘When new emails that appeared to be related to Hillary’s personal email server turned up in a computer used by Huma Abedin and Anthony Weiner, Comey jumped at the excuse to reopen the investigation.

‘The people he trusts the most have been the angriest at him,’ the source continued. ‘And that includes his wife, Pat. She kept urging him to admit that he had been wrong when he refused to press charges against the former secretary of state. ‘He talks about the damage that he’s done to himself and the institution [of the FBI], and how he’s been shunned by the men and women who he admires and work for him. It’s taken a tremendous toll on him. ‘It shattered his ego. He looks like he’s aged 10 years in the past four months.’ But Comey’s decision to reopen the case was more than an effort to heal the wound he inflicted on the FBI. He was also worried that after the presidential election, Republicans in Congress would mount a probe of how he had granted Hillary political favoritism.

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Maybe the agents should have spoken out earlier?

FBI in Internal Feud Over Hillary Clinton Probe (WSJ)

The surprise disclosure that agents from the Federal Bureau of Investigation are taking a new look at Hillary Clinton’s email use lays bare, just days before the election, tensions inside the bureau and the Justice Department over how to investigate the Democratic presidential nominee. Investigators found 650,000 emails on a laptop that they believe was used by former Rep. Anthony Weiner and his estranged wife Huma Abedin, a close Clinton aide, and underlying metadata suggests thousands of those messages could have been sent to or from the private server that Mrs. Clinton used while she was secretary of state, according to people familiar with the matter.

It will take weeks, at a minimum, to determine whether those messages are work-related from the time Ms. Abedin served with Mrs. Clinton at the State Department; how many are duplicates of emails already reviewed by the FBI; and whether they include either classified information or important new evidence in the Clinton email probe. Officials had to await a court order to begin reviewing the emails—which they received over the weekend, according to a person familiar with the matter—because they were uncovered in an unrelated probe of Mr. Weiner.

The new investigative effort, disclosed by FBI Director James Comey on Friday, shows a bureau at times in sharp internal disagreement over matters related to the Clintons, and how to handle those matters fairly and carefully in the middle of a national election campaign. Even as the probe of Mrs. Clinton’s email use wound down in July, internal disagreements within the bureau and the Justice Department surrounding the Clintons’ family philanthropy heated up, according to people familiar with the matter.

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“Accidentally removing a single classified message from controlled spaces, without any evidence of intent or exposure to hostile forces, can get you fired and cost you your clearance. Repeated instances will land you in prison.”

Hillary’s Emails Matter: A Retired CIA Officer Explains Why (Hill)

Nobody uses a private email server for official business. Period. Full stop. The entire notion is, to borrow a phrase from a Clinton campaign official, “insane.” That anyone would presume to be allowed to do so is mind-boggling. That government officials allowed Hillary Clinton to do so is nauseating. Classified and unclassified information do not mix. They don’t travel in the same streams through the same pipes. They move in clearly well defined channels so that never the twain shall meet. Mixing them together is unheard of and a major criminal offense. If you end up with classified information in an unclassified channel, you have done something very wrong and very serious.

Accidentally removing a single classified message from controlled spaces, without any evidence of intent or exposure to hostile forces, can get you fired and cost you your clearance. Repeated instances will land you in prison. Every hostile intelligence agency on the planet targets senior American officials for collection. The Secretary of State tops the list. Almost anything the Secretary of State had to say about her official duties, her schedule, her mood, her plans for the weekend, would be prized information to adversaries. It is very difficult, in fact, to think of much of anything that the Secretary of State could be saying in email that we would want hostile forces to know. As we wait for more information on the latest revelations, let’s quickly note what we already know Hillary Clinton did.

While Secretary of State, Hillary Clinton exclusively used a private email address for official business. Instead of using a State Department account, she used a personal email account, housed on a private server located in her home in Chappaqua, New York. The Department of State exercised zero control or oversight in this process. No government security personnel were involved in protecting them. When the House Select Committee on Benghazi asked to see these emails, the Department of State said they did not have them. Clinton’s lawyers then went through all the emails on her server. They turned over 30,000 emails they decided were work related and deleted all of the rest. How they made the decision as to which emails to share and which to destroy remains unknown. Active government officials not were involved in this process.

Hillary says she did not use the account to transmit classified information. This has been proven false. The FBI found over 100 messages that contained information that was classified when sent, including numerous email chains at the level of Top Secret/Special Access Programs. They don’t get any more highly classified, it’s the virtual summit of Mt. Everest. [..] While serving in one of the most senior positions in the United States Government, Hillary Clinton was at a minimum, grossly negligent in the handling of classified information and when confronted with this practice, acted immediately to destroy information and prevent a full, fair and complete investigation of any damage to national security. Anyone else who did such things in the government would long ago have been tried, convicted and sent to jail. ou decide if you want to send her to the White House instead.

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A bit of extra juice. And for many a big surprise.

Ex-FBI Official: ‘Intensive Investigation’ Ongoing Into Clinton Foundation (DC)

Tom Fuentes, a former assistant director at the FBI and a CNN analyst, said Saturday that the bureau has an open investigation into the Clinton Foundation. The statement undermines a report from a team of CNN reporters in August that the Justice Department quashed an investigation into the Clinton family’s non-profit earlier this year. “The FBI has an intensive investigation ongoing into the Clinton Foundation,” Fuentes said Saturday, citing current and former senior FBI officials as sources. “The reports that three divisions came in with a request to Washington to open cases and that they were turned down by the Department of Justice, that’s not true,” he said, referring to the CNN report. “What was turned down was that they be the originating office. Headquarters at the FBI made the determination that the investigation would go forward as a comprehensive unified case and be coordinated,” he added.

[..] Fuentes was discussing the investigation in the context of a letter that FBI director James Comey sent to Congress on Friday stating that the bureau was reopening the investigation into Clinton’s emails. [..] Fuentes asserted that the emails could pertain to the original Clinton email investigation, which was closed in July, as well as to the Clinton Foundation probe. “In a sense, it’s almost turned into a one-stop shopping for the FBI as they could have implications affecting three separate investigations on one computer,” said Fuentes, who served as assistant director at the FBI during the George W. Bush administration.

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Precious few voices have dared speaking of a constitutional crisis, though the threat seems obvious. Whoever wins.

Clinton Supporter Doug Schoen Reconsiders, Cites Constitutional Crisis (RCP)

Hillary Clinton supporter, Fox News contributor, and former pollster Doug Schoen told FNC’s Harris Faulkner Sunday night that the newly renewed FBI investigation into Hillary Clinton is forcing him to “reassess” his support for the Democratic candidate. DOUG SCHOEN: As you know, I have been a supporter of Secretary Clinton… But given that this investigation is going to go on for many months after the election… But if the Secretary of State wins, we will have a president under criminal investigation, with Huma Abedin under criminal investigation, with the Secretary of State, the president-elect, should she win under investigation. Harris, under these circumstances, I am actively reassessing my support. I’m not a Trump —

HARRIS FAULKNER, FOX NEWS: Whoa, whoa, wait a minute. You are not going to vote for Hillary Clinton? SCHOEN: Harris, I’m deeply concerned that we’ll have a constitutional crisis if she’s elected. FAULKNER: Wow! SCHOEN: I want to learn more this week. See what we see. But as of today, I am not a supporter of the Secretary of State for the nation’s highest office.

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We don’t need to know reality to survive. So we don’t know it. “..you might believe you are reincarnated from a monk and I might believe my prophet flew to heaven on a winged horse but we can both get through the day just fine.”

James Comey – As Seen Through The Persuasion Filter (Adams)

As my regular readers know, the Persuasion Filter is related to the idea that the human brain never evolved to accurately comprehend reality. In order for us to be here today, our predecessors only needed to survive and procreate. They had no need to understand reality at any basic level. And we have no such need either. That’s why you might believe you are reincarnated from a monk and I might believe my prophet flew to heaven on a winged horse but we can both get through the day just fine. Many different interpretations of reality are good enough for survival. I like to describe reality as each person living their own movie, which works well unless our script’s conflict. When that happens, one of us goes into cognitive dissonance and rewrites our past to make the movies consistent.

That’s how I see the world. Last year in this blog I suggested that the most productive and predictive way to view reality is through what I call the Persuasion Filter. That’s what I have been using to make spooky-good predictions about the election so far. And that’s what I’ll use today to give you an alternate movie about James Comey. Compare it to the movie you are running in your head and see which one better predicts the future. The base assumption of the Persuasion Filter is that people are irrational 90% of the time and only rarely – when no emotions are involved – truly rational. This is the reverse of the common filter for reality, in which people are assumed to be rational 90% of the time and a bit crazy 10% of the time. That’s some background for context.

[..] The way you know the new emails are disqualifying for Clinton is because otherwise our hero would have privately informed Congress and honored the tradition of not influencing elections. Comey is smart enough to know his options. And unless he suddenly turned rotten at his current age, he’s got the character to jump in front of a second bullet for the Republic. According to this movie, no matter who gets elected, we’ll eventually learn of something disqualifying in the Weiner emails. And we can’t say we weren’t warned. Comey took two bullets to do it. So compare this movie to your own movie and see which one does the best job of explaining the observed facts. And when we find out what is in the Weiner laptop emails, compare that news to my prediction that the information is disqualifying.

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Hard hitting Brits.

Theresa May Lied And Lied Again To Become PM (G.)

Theresa May appeals to a stereotype that has a deep grip on the English psyche. Sober and commonsensical, she behaves with the moral seriousness we expect from a vicar’s daughter. She may be a little clunky, but what a relief it is to have a straightforward leader from the heart of the country after the flash, poll-driven phonies of the past. I am not saying her public image is all a pretence. No focus group told her to campaign against the modern slave trade when she was home secretary. There were few Tory votes in stopping the police targeting young black men, either. But the dominant side of Theresa May is more superficial than David Cameron and more dishonest than Tony Blair. It is a tribute to the power of cliches to stop us seeing what is in front of our noses, that so few have noticed that the only reason she’s prime minister is that she put ambition before principle.

Last week, Downing Street spin doctors were trying and failing to downplay the importance of a secret speech she gave to Goldman Sachs on 26 May, which was leaked to Nick Hopkins and Rowena Mason of the Guardian. In private, May was unequivocal. “The economic arguments are clear,” she told the bankers. Companies would leave the UK if the UK left the EU. In public, however, she made just one speech during the referendum campaign. You forgot it the moment you heard it. May never mentioned the danger of companies fleeing. Her economic case, such as it was, came down to a flaccid, pseudo-impartial argument that “there are risks in staying as well as leaving”. As an orator, May was hopeless. As a politician on the make, she was close to perfect.

When Craig Oliver, Cameron’s former chief of communications, wondered if she was secretly an “enemy agent” for the Leave side, he was being too Machiavellian. May was just making the smart move. She kept her views about the economic consequences of Brexit quiet, so that the Conservative right would accept her as leader if Cameron lost. Failing to state your honest opinion on the most important decision Britain has taken in decades may seem cowardly enough. But the consequences of May’s pretence do not stop with one referendum. Her manoeuvres have forced her into a position where she must make arguments she cannot possibly believe, on behalf of causes she cannot possibly believe in.

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Just lovely.

The Dirty Secret Beneath Hong Kong’s Wealth: Slavery (SCMP)

Hong Kong, a city commonly associated with finance and wealth, has one of the highest proportions of people enslaved across Asia, a new report has found. At least 29,500 people out of a population of more than seven million are trapped in modern slavery in one of the 10 richest cities in the world based on its gross domestic product, according to the Global Slavery Index 2016, which assessed the problem in 167 countries and regions. The sobering figures which specifically concern Hong Kong may come as a surprise, but the hard-hitting report stated that the city has become one of the worst places in Asia for its poor response to the problem, performing worse than mainland China.

The city urgently needs tougher laws and a “transparent plan of action” to combat the problem, human rights group Justice Centre Hong Kong said. Jade Anderson, anti-human trafficking coordinator for the campaign group, said the Global Slavery Index, produced by charitable organisation Walk Free Foundation, came as a “shock” to some Hongkongers. But her organisation’s research had found there were major human rights abuses that went unpunished in the city, and the number of slaves could be much higher than researchers have estimated, she said. The Justice Centre’s investigation involving 1,000 migrant domestic workers found 17% were carrying out “forced labor”, which she said equated to about 55,000 of the city’s 320,000 helpers.

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Again: just lovely.

EU And Canada Sign CETA Free Trade Deal (G.)

The EU and Canada signed a free trade deal on Sunday that was almost derailed last week by objections from French-speaking Belgians , exposing the difficulties of securing agreement from 28 member states as Britain prepares for Brexit talks. The European commission president, Jean-Claude Juncker, said there was no parallel between the deal struck with Canada and looming Brexit talks. “I don’t see any relation between what we are signing today and the Brexit issue,” Juncker said, before greeting Canada’s prime minister, Justin Trudeau, in Brussels Trudeau and top EU officials signed the comprehensive economic and trade agreement, known as Ceta, paving the way for most import duties to be removed early next year. However, the treaty needs the approval of at least 38 national and regional parliaments, including the UK’s, to take full force.

Trudeau was meant to fly to Brussels last Wednesday but he stayed at home when the Wallonia region raised objections that held up agreement until Thursday. Belgium’s regional parliaments endorsed a compromise deal, which addressed concerns about competition for Wallonia’s farmers from Canada, on Friday. Donald Tusk, the president of the European council, who stood beside Trudeau at a news conference, said the delay was caused by Belgium’s internal politics and that the deal would be far less contentious when it went before national parliaments. Tusk said: “Fortunately we live in a democratic system and democracy is less predictable than other political systems but I still prefer democracy. My prediction is there is no huge problem with European parliaments. After my talks with all 28 member states’ leaders, I have no doubt Ceta is the least controversial trade agreement you could imagine.”

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Amazing he was still walking free.

Turkey Detains Editor Of Opposition Newspaper Cumhuriyet (AFP)

Turkish police detained the editor-in-chief of the opposition newspaper Cumhuriyet, state media reported Monday, while CNN Turk said 13 arrest warrants were issued for journalists and executives from the daily. Murat Sabuncu was detained while authorities searched for executive board chairman Akin Atalay and writer Guray Oz, the official news agency Anadolu said. The daily said Oz had already been detained. Police were searching the homes of Atalay and Oz, Anadolu said. The latest detentions came as authorities pressed a massive crackdown over a failed July bid by a rogue faction of the military to oust President Recep Tayyip Erdogan.Tens of thousands of civil servants have since been suspended, fired or detained, with the government pointing the finger of blame for the coup bid at exiled Muslim preacher Fethullah Gulen.

The government has also shut more than 100 media outlets and detained dozens of journalists as it presses a purge that has come under fire by Western leaders and human rights organisations. Sabuncu’s arrest also came as the government fought an insurgency from the outlawed Kurdistan Workers’ Party (PKK). The government’s operation against the Cumhuriyet daily was launched over its alleged “activities on behalf of” the Gulen movement and the PKK. The PKK — proscribed as a terrorist organisation by Ankara, the EU and US — has waged an insurgency inside Turkey since 1984. Cumhuriyet’s former editor-in-chief is Can Dundar, who was sentenced in May by a Turkish court to five years and 10 months in prison for allegedly revealing state secrets. Dundar is now believed to be in Germany after he was freed earlier this year pending an appeal.

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It’s too late for an October surprise from Erdogan, but this stuff is so insane it makes you wonder.

Erdogan Says Greek Islands ‘Used To Be Ours’ (Kath.)

In what was widely seen as a fresh dig at Greece, Turkish President Recep Tayyip Erdogan on Saturday reiterated that several Greek islands in the eastern Aegean “used to be ours.” The Turkish leader made waves recently in Greece when he said that the Treaty of Lausanne, which set the borders between Greece and Turkey in 1923, was unfair on his country. He returned to the subject on Saturday, saying he didn’t understand why his remarks had raised so many objections. “I said Lausanne and they got annoyed. Why are you annoyed?” he said, adding that “these islands were ours.” “We have our monuments and our mosques there [on the islands],” he said. “Whoever signed [for their passing to Greece] bears the responsibility.”

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