Jan 182021
 


Jean-Léon Gérôme Slave market 1866

 

Thousands Of Troops Dig In For Inauguration (Hill)
FBI Vetting Guard Troops In DC Amid Fears Of Insider Attack (AP)
The Senate’s Cadaver Synod: The Trial Of Citizen Trump (Turley)
Trump Social Media Ban Sparks Calls For Action vs Other Populist Leaders (G.)
Trump To Issue Around 100 Pardons And Commutations Tuesday (CNN)
Despair, Depression, And The Inevitable Rise of Trump 2.0 – Greenwald (RT)
Biden Team Already Holding Talks With Iran On US Return To Nuclear Deal (ToI)
Biden May Cancel Keystone XL Pipeline Permit On First Day In Office (R.)
3rd of Recovered Covid Patients Return To Hospital In 5 Months, 1 In 8 Die (Y!)
Parler Resurfaces On Web, Promises Platform To Be Revived Soon (JTN)
Prepare For A Surge In Global Inequality (RWER)
Anteroom of Our Own Extinction (Steppling)

 

 

Benefits of boosting your vitamin D levels.


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UK Parliament: David Davis Vitamin D

 

 

A lot of all this appears to be fear-mongering blown up to 11. I’ve so far seen reports from Connecticut, Utah, Florida, Mass. state capitols, and everything’s more than quiet.

Thousands Of Troops Dig In For Inauguration (Hill)

The National Guard is playing a leading role as the country confronts a domestic terrorism threat following the deadly insurrection at the U.S. Capitol. The Capitol is now crawling with more troops than in the United States’s main theaters of war in Afghanistan, Iraq and Syria combined as the National Guard fortifies key areas around Washington, D.C., for President-elect Joe Biden’s inauguration. The Secret Service is even referring to the new perimeter around the Capitol as the “Green Zone” — the same name used for secure zones in Iraq and Afghanistan’s capital cities. And it’s not just D.C. Amid FBI warnings of the potential for violence at all 50 state Capitols, governors in roughly a dozen states have called up their National Guards to bolster law enforcement.

But there are also worries the military is part of the problem, as several veterans have been arrested in connection with the Capitol riots. And at least one person arrested is a current member of the National Guard in Virginia. Following heavy criticism of the Guard’s response to last summer’s racial justice protests in the city, D.C. and Pentagon officials had originally sought to minimize its role in security surrounding the inauguration. In June, hundreds of guardsmen from around the country poured into the nation’s capital at President Trump’s request, despite objections from local authorities. A National Guard helicopter also hovered over protesters in the way the military does to insurgents overseas as a show of force, a move that drew widespread scrutiny and rebuke.

After that, as officials anticipated protests when Congress met to certify Biden’s electoral victory, D.C. officials requested and the Pentagon approved just 340 unarmed guardsmen to help the city with traffic control. Defense officials have said Capitol Police turned down offers of Guard help before the riots. That all changed after the Capitol siege. As of Friday, more than 7,000 guardsmen from across the country were in Washington, D.C., with up to 25,000 from all 50 states, three territories and D.C. expected to be in the city by Inauguration Day. Troops have erected 7-foot “non-scalable” fences around the Capitol and other nearby government buildings and set up checkpoints with military vehicles and concrete barriers on streets throughout the area.

Sacredest place

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Tweet: “The beauty of this claim is it’s perfect. If something happens, no matter how small, they can use it to target Trump supporters. And if nothing happens, they can credit their vigilance and… use it to target Trump supporters.”

FBI Vetting Guard Troops In DC Amid Fears Of Insider Attack (AP)

U.S. defense officials say they are worried about an insider attack or other threat from service members involved in securing President-elect Joe Biden’s inauguration, prompting the FBI to vet all of the 25,000 National Guard troops coming into Washington for the event. The massive undertaking reflects the extraordinary security concerns that have gripped Washington following the deadly Jan. 6 insurrection at the U.S. Capitol by pro-Trump rioters. And it underscores fears that some of the very people assigned to protect the city over the next several days could present a threat to the incoming president and other VIPs in attendance.

Army Secretary Ryan McCarthy told The Associated Press on Sunday that officials are conscious of the potential threat, and he warned commanders to be on the lookout for any problems within their ranks as the inauguration approaches. So far, however, he and other leaders say they have seen no evidence of any threats, and officials said the vetting hadn’t flagged any issues that they were aware of. ”We’re continually going through the process, and taking second, third looks at every one of the individuals assigned to this operation,” McCarthy said in an interview after he and other military leaders went through an exhaustive, three-hour security drill in preparation for Wednesday’s inauguration. He said Guard members are also getting training on how to identify potential insider threats.

About 25,000 members of the National Guard are streaming into Washington from across the country — at least two and a half times the number for previous inaugurals. And while the military routinely reviews service members for extremist connections, the FBI screening is in addition to any previous monitoring. Multiple officials said the process began as the first Guard troops began deploying to D.C. more than a week ago. And they said it is slated to be complete by Wednesday. Several officials discussed military planning on condition of anonymity. “The question is, is that all of them? Are there others?” said McCarthy. “We need to be conscious of it and we need to put all of the mechanisms in place to thoroughly vet these men and women who would support any operations like this.”

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“He pulled Formosus out of his tomb, propped him up in court, and convicted him of variety of violations of canon law. Formosus was then taken out, three fingers cut off, and eventually thrown in the Tiber River.”

The Senate’s Cadaver Synod: The Trial Of Citizen Trump (Turley)

With the second impeachment of President Donald Trump, the Congress is set for one of the most bizarre moments in constitutional history: the removal of someone who has already left office. The retroactive removal would be a testament to the timeliness of rage. While it is not without precedent, it is without logic. The planned impeachment trial of Donald Trump after he leaves office would be our own version of the Cadaver Synod. In 897, Pope Stephen VI and his supporters continued to seethe over the action of Pope Formosus, who not only died in 896 but was followed by another pope, Boniface VI. After the brief rule of Boniface VI, Pope Stephen set about to even some scores. He pulled Formosus out of his tomb, propped him up in court, and convicted him of variety of violations of canon law. Formosus was then taken out, three fingers cut off, and eventually thrown in the Tiber River.

While some may be looking longingly at the Potomac for their own Cadaver Synod, Speaker Nancy Pelosi and other Democrats have stated that their primary interest is in the possible disqualification of Trump from holding future federal office. Disqualification however is an optional penalty that follows a conviction and removal. It may be added to the primary purpose of removal referenced in the Constitution. The Trump trial would convert this supplemental punishment into the primary purpose of the trial. This did happen before but that precedent is only slightly better than the Cadaver Synod. That case involved William Belknap who served as Secretary of War to President Ulysses S. Grant. Belknap resigned after allegations of corruption — just shortly before a House vote of impeachment.

The Senate held a trial but acquitted him. Twenty nine of 66 voting senators disagreed in a threshold motion that Belknap was “amenable to trial by impeachment . . . notwithstanding his resignation.” In fairness to the Democrats, I have long rejected the argument that there comes a point when it is too late to impeach a president while he is in office. As I said in both the Clinton and Trump impeachment hearings, the House is under a duty to impeach if it believes that a president has committed a high crime and misdemeanor. If that occurred on the last day of a term, it would still be warranted.

My objection to this second impeachment was that it proceeded without any deliberation of the traditional impeachment process. It was a snap impeachment, which is to the Constitution what Snapchat is to conversations. It reduces the process to a raw, brief and partisan vote. This could have been avoided. A hearing could have been held in a day to allow the language of the article to be amended and the implications of the impeachment considered. It would also have allowed for a formal demand for a response from the president. Instead, the impeachment was pushed through on a partisan muscle vote with only ten Republicans supporting the single article.

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This is exactly what Merkel doesn’t want. It has to be done according to laws, not political preferences.

Trump Social Media Ban Sparks Calls For Action vs Other Populist Leaders (G.)

“I do not celebrate or feel pride,” the Twitter boss Jack Dorsey said this week after banishing Donald Trump. But for many around the world the decision brought hope: might similar action soon be taken against other populist provocateurs they accuse of using social media to stir chaos? “I have to follow YouTube’s rules when I post my videos, or I get banned. Journalists have to obey their outlet’s rules when they publish a story. So why shouldn’t presidents have to obey any rules when they publish something online?” wondered Felipe Neto, one of Brazil’s most famous and politicized online celebrities. “It’s as simple as that.” From Rio to Delhi, activists and academics have been asking similar questions following the US president’s suspension from platforms including Twitter, YouTube, Facebook, Snapchat and Instagram.

Calls for action have been particularly loud in Brazil, which has been led since 2019 by Jair Bolsonaro, a far-right tweeter-in-chief who basks in portrayals as the “tropical Trump”. “Twitter has put a muzzle on Trump. We’ll need another for Brazil,” tweeted Marcelo Freixo, one of several political rivals urging sanctions. Critics accuse Bolsonaro of repeatedly using social media to undermine democracy and incite violence. In an incendiary YouTube broadcast on the eve of his 2018 election he promised a historic “cleanup” of “red” rivals. In office, Bolsonaro has refused to moderate, using social media to encourage anti-democratic protests and urge “upstanding” supporters to buy guns to avoid being “enslaved”. In recent months Bolsonaro has questioned Brazil’s electronic voting system, convincing many that if he loses the next election he will reject its results as Trump has done – with unpredictable consequences for a young democracy.

“His obsession with arming the greatest possible number of his followers has an obvious goal,” warned Neto, who has 41m YouTube followers. “Bolsonaro and his family are preparing the ground not to accept election defeat – and things promise to be far worse than in the US [Capitol invasion].” Pedro Doria, a technology columnist, said he felt uneasy that unelected big tech bosses had the power to silence presidents. But he was also deeply troubled by Bolsonaro’s unchecked use of social media to preach political rupture. “If Trump was expurged from Twitter because he incited a mob against the Capitol, well, Bolsonaro is preparing himself to do the same … It makes no sense to wait for him to actually act on trying to overthrow the Brazilian democratic regime.”

In India, many have called for similar sanctions against the prime minister, Narendra Modi, and figures from his ruling Hindu nationalist Bharatiya Janata Party (BJP). While Modi’s regular use of Twitter is largely anodyne and uncontroversial, numerous senior and mid-level BJP politicians have been accused of politically motivated hate speech on their social media accounts.

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One last chance for Julian.

Trump To Issue Around 100 Pardons And Commutations Tuesday (CNN)

President Donald Trump is preparing to issue around 100 pardons and commutations on his final full day in office Tuesday, according to three people familiar with the matter, a major batch of clemency actions that includes white collar criminals, high-profile rappers and others but – as of now – is not expected to include Trump himself. The White House held a meeting on Sunday to finalize the list of pardons, two sources said. Trump, who had been rolling out pardons and commutations at a steady clip ahead of Christmas, had put a pause on them in the days leading up to and directly after the January 6 riots at the US Capitol, according to officials Aides said Trump was singularly focused on the Electoral College count in the days ahead of time, precluding him for making final decisions on pardons.

White House officials had expected them to resume after January 6, but Trump retreated after he was blamed for inciting the riots. Initially, two major batches had been ready to roll out, one at the end of last week and one on Tuesday. Now, officials expect the last batch to be the only one — unless Trump decides at the last minute to grant pardons to controversial allies, members of his family or himself. The final batch of clemency actions is expected to include a mix of criminal justice reform-minded pardons and more controversial ones secured or doled out to political allies. The pardons are one of several items Trump must complete before his presidency ends in days. White House officials also still have executive orders prepared, and the President is still hopeful to declassify information related to the Russia probe before he leaves office.

But with a waning number of administration officials still in jobs, the likelihood that any of it gets done seemed to be shrinking. The January 6 riots that led to Trump’s second impeachment have complicated his desire to pardon himself, his kids and personal lawyer Rudy Giuliani. At this point, aides do not think he will do so, but caution only Trump knows what he will do with his last bit of presidential power before he is officially out of office at noon on January 20. After the riots, advisers encouraged Trump to forgo a self-pardon because it would appear like he was guilty of something, according to one person familiar with the conversations. Several of Trump’s closest advisers have also urged him not to grant clemency to anyone involved in the siege on the US Capitol, despite Trump’s initial stance that those involved had done nothing wrong.

“There are a lot of people urging the President to pardon the folks” involved in the insurrection, Trump ally Sen. Lindsey Graham said Sunday on Fox News. “To seek a pardon of these people would be wrong.” One White House official said paperwork had not yet been drawn up for a self-pardon. Still, Trump is expected to leave the White House on January 20 and could issue pardons up until noon on Inauguration Day. Other attention-grabbing names, like Julian Assange, are also not currently believed to among the people receiving pardons, but the list is still fluid and that could change, too.

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“Greenwald warned that Biden could set the stage for a “smarter, more stable version” of Trump to take power.”

Despair, Depression, And The Inevitable Rise of Trump 2.0 – Greenwald (RT)

“I don’t think it’s particularly difficult… to know what to expect from the Biden administration,” the acclaimed American journalist told Chris Hedges, host of RT’s On Contact, on Sunday. Biden, Greenwald continued, has enjoyed a five-decade career in Washington and made his policy priorities well known over these years. Biden is “somebody who has repeatedly supported militarism and imperialism” and “one of the crucial leading advocates of the invasion of Iraq,” he said. On the domestic front, Biden is “a loyal servant of the credit card and banking industry” and the “architect of the 1994 crime bill,” the latter of which has been blamed for dramatically upping the incarceration rate of black men in the US.

That leftists involved in Black Lives Matter protests rallied around Biden, given his involvement in passing the crime bill (he was one of 61 senators who voted for it) is “ironic,” Greenwald told Hedges, but also serves as an example of how the Democratic Party operates. “Democrats are very good at creating a brand that is radically different than the reality, but essentially the Democratic party serves militarism, imperialism, and corporatism,” he said. “That’s who funds them, that’s what they believe in. It’s why you see neocons migrating so comfortably back to the Democratic Party, why you see Bush and Cheney operatives cheering for Joe Biden, why Wall Street celebrated when he picked Kamala Harris.”

Biden’s campaign didn’t only draw support from the left – who Biden then spurned by packing his cabinet with Obama administration alumni while giving progressives like Bernie Sanders the cold shoulder. The former vice president was also supported by Republican hawks like Bill Kristol and Max Boot, as well as the much-maligned ‘Lincoln Project’ Republicans, who fundraised $67 million to shoot attack ads against Trump in the runup to November’s election. The rallying of the establishment – Democrat and Republican alike – behind Biden could have far-reaching consequences, Greenwald warned. “It’s not a coincidence that after eight years of Obama and Biden, we got Donald Trump,” he said. “Obviously, if you go back and do exactly the same thing that the ‘Obiden’ administration did for 8 years, which is what Biden’s preparing to do, any rational person has to expect the same outcome.”

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Is this legal? How about the Logan Act? What about Michael Flynn?

Biden Team Already Holding Talks With Iran On US Return To Nuclear Deal (ToI)

Officials in the incoming Biden administration have already begun holding quiet talks with Iran on a return to the 2015 nuclear deal, and have updated Israel on those conversations, Channel 12 News reported Saturday. The network gave no sourcing for the report, and no details on what was allegedly discussed. US President-elect Joe Biden has indicated his desire to return to the accord, while Israel is pushing for any return to the deal to include fresh limitations on Iran’s ballistic missile program and support for terror and destabilization around the world. On Wednesday, Walla News reported that Israeli Prime Minister Benjamin Netanyahu is assembling a team to strategize for the first talks with the Biden administration on Iran’s nuclear program.

The team will include officials representing national security elements, the Foreign Ministry, the Defense Ministry, the military, the Mossad spy agency, and the Atomic Energy Commission, the report said, citing unnamed sources in the Prime Minister’s Office. Netanyahu is considering appointing a senior official to head the team and to serve as an envoy in talks with the US on the Iranian nuclear program, the report said. A possible candidate to head the team is Mossad chief Yossi Cohen, the report said. Channel 12 reported Saturday that Cohen was in Washington this week to meet with officials in the outgoing and incoming administrations.

US President-elect Joe Biden is expected to take a more conciliatory approach to Iran than the Trump administration and has said that if Iran returns to the terms of the 2015 nuclear agreement, he too would rejoin, removing the crushing economic sanctions that have wreaked havoc on the Iranian economy over the past two years. The US president-elect has indicated that he wants to negotiate more broadly with Tehran if Washington returns to the deal, notably over its missiles and influence across the Middle East. Iran has said it could welcome the return of the Americans to the agreement, but only after they lift sanctions. It has rejected negotiation on other issues. Former US president Barack Obama, with Biden as his vice president, signed the Iran nuclear deal with world powers in 2015.

The Trump administration withdrew from the accord in 2018 and pressured Iran with crippling economic sanctions and other measures. Obama signed the agreement despite fierce protest from Israel, and had a rocky relationship with Jerusalem and Netanyahu, while the premier and Trump have been in lockstep on most Middle East policy issues. The prospect of the US reengaging with Tehran has drawn warnings and alarm from Netanyahu and his allies. Last week, speaking alongside US Treasury Secretary Steve Mnuchin in Jerusalem, Netanyahu warned against the US rejoining the nuclear agreement, also known as the Joint Comprehensive Plan of Action (JCPOA). “If we just go back to the JCPOA, what will happen and may already be happening is that many other countries in the Middle East will rush to arm themselves with nuclear weapons. That is a nightmare and that is folly. It should not happen,” Netanyahu said.

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Hardly a time to open new pipelinnes.

Biden May Cancel Keystone XL Pipeline Permit On First Day In Office (R.)

U.S. President-elect Joe Biden is planning to cancel the permit for the $9 billion Keystone XL pipeline project as one of his first acts in office, and perhaps as soon as his first day, according to a source familiar with his thinking. President Donald Trump, a Republican, had made building the pipeline a central promise of his presidential campaign. Biden, who will be inaugurated on Wednesday, was vice president in the Obama administration when it rejected the project as contrary to its efforts to combat climate change. The words “Rescind Keystone XL pipeline permit” appear on a list of executive actions likely scheduled for the first day of Biden’s presidency, according to an earlier report by the Canadian Broadcasting Corp (CBC).


Biden, a Democrat, had earlier vowed to scrap the oil pipeline’s presidential permit if he became president. Canada’s ambassador to the United States said she would continue to promote a project that she said fit with both countries’ environmental plans. “There is no better partner for the U.S. on climate action than Canada as we work together for green transition,” Ambassador Kirsten Hillman said in a statement. The project, which would move oil from the province of Alberta to Nebraska, had been slowed by legal issues in the United States. It also faced opposition from environmentalists seeking to check the expansion of Canada’s oil sands by opposing new pipelines to move its crude to refineries. Alberta Premier Jason Kenney said on Twitter that cancellation would eliminate jobs, weaken U.S.-Canada relations and undermine American national security by making the United States more dependent on OPEC oil imports.

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Covid triggers diabetes?

3rd of Recovered Covid Patients Return To Hospital In 5 Months, 1 In 8 Die (Y!)

Almost a third of recovered Covid patients will end up back in hospital within five months and one in eight will die, alarming new figures have shown. Research by Leicester University and the Office for National Statistics (ONS) found there is a devastating long-term toll on survivors of severe coronavirus, with many people developing heart problems, diabetes and chronic liver and kidney conditions. Out of 47,780 people who were discharged from hospital in the first wave, 29.4 per cent were readmitted to hospital within 140 days, and 12.3 per cent of the total died. The current cut-off point for recording Covid deaths is 28 days after a positive test, so it may mean thousands more people should be included in the coronavirus death statistics.

Researchers have called for urgent monitoring of people who have been discharged from hospital. Study author Kamlesh Khunti, professor of primary care diabetes and vascular medicine at Leicester University, said: “This is the largest study of people discharged from hospital after being admitted with Covid. “People seem to be going home, getting long-term effects, coming back in and dying. We see nearly 30 per cent have been readmitted, and that’s a lot of people. The numbers are so large. “The message here is we really need to prepare for long Covid. It’s a mammoth task to follow up with these patients and the NHS is really pushed at the moment, but some sort of monitoring needs to be arranged.”

The study found that Covid survivors were nearly three and a half times more likely to be readmitted to hospital, and die, in the 140 days timeframe than other hospital outpatients. Prof Khunti said the team had been surprised to find that many people were going back in with a new diagnosis, and many had developed heart, kidney and liver problems, as well as diabetes. He said it was important to make sure people were placed on protective therapies, such as statins and aspirin. “We don’t know if it’s because Covid destroyed the beta cells which make insulin and you get Type 1 diabetes, or whether it causes insulin resistance, and you develop Type 2, but we are seeing these surprising new diagnoses of diabetes,” he added.

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PanQuake looks more interesting. The roll-out is a bit chaotic, but some good people involved.

Parler Resurfaces On Web, Promises Platform To Be Revived Soon (JTN)

The website of the social media platform Parler has resurfaced after going offline earlier this month. While the platform still has not become operational again, the message indicates that it will revive “soon.” “Now seems like the right time to remind you all — both lovers and haters — why we started this platform,” the website says. “We believe privacy is paramount and free speech essential, especially on social media. Our aim has always been to provide a nonpartisan public square where individuals can enjoy and exercise their rights to both. We will resolve any challenge before mli us and plan to welcome all of you back soon. We will not let civil discourse perish!”


The platform vanished earlier this month after a move by Amazon Web Services. Buzzfeed reported that in a letter to Parler, the AWS Trust and Safety Team had stated “we cannot provide services to a customer that is unable to effectively identify and remove content that encourages or incites violence against others.”

Introducing PanQuake: Revealing Project X (full censored event) #TalkLiberation from PanQuake – Talk Liberation on Vimeo.

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Global AND national.

Prepare For A Surge In Global Inequality (RWER)

The United States prepares for moving out of the Trump era with the incoming President promising more rounds of stimulus spending to revive an economy ravaged by Covid-19. Other members of the Organisation of Economic Cooperation and Development, a predominantly rich nation’s club, have also been generous with their spending and signalled that they are willing to keep their wallets open to spend more if necessary. The evidence clearly is that the Covid-crisis has upended the fiscal conservatism that has been the hallmark of the neoliberal era since the 1980s. However, not all nations seem to display this ability to depart from the prevailing orthodoxy. Where this weakness is most visible is the developing world, where governments, with very few exceptions, have not been loosening their purse strings to deal with the health emergency, throw out a safety net to protect devastated citizens, and stall and reverse the recession to restore livelihoods and normal economic activity.


Estimates from the World Bank in the January 2021 edition of its flagship Global Economic Prospects (GEP) report point to stark differences across countries at different levels of development in the level of fiscal support governments have provided in the wake of the Covid-shock (Chart 1). While planned and under-consideration measures in the advanced economies (AEs) are expected to have taken fiscal support spending to 22.6 per cent of their GDP, the comparable figures in emerging market and developing economies (EMDEs) as a group and low income economies (LICs) among them are placed at 6.2 and 2.4 per cent respectively (Chart 1). Government spending in 2020 was needed not just to address the immediate crisis, but to revive employment, investment and growth in the medium and long term.

If poorer countries have spent and are likely to spend less, while richer countries pump-prime their economies, the damage inflicted by the crisis is bound to worsen preexisting inequalities. Those inequalities are bound to increase, though the performance of a few exceptional cases like China, which influences the EMDE total, may conceal the magnitude of change in the aggregate figures. Underlying the difference in spending levels are the willingness and ability to resort to enhanced deficit spending, or expenditure financed with borrowing. Not that government debt has not risen in the poorer countries, albeit to a smaller extent than in their advanced counterparts. While the fiscal deficit in the AEs is estimated to have risen from 3.3 per cent of GDP in 2019 to 14.2 per cent in 2020, that in the EMDEs has moved from 4.8 per cent to 10.4 per cent and in the LICs from 3.3 to 5 per cent (Chart 2).

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“Almost one in three households suffers hunger, regularly. Almost half of black and hispanic households. Households with children are most vulnerable to the government policies. So half of the kids in the U.S. have inadequate nutrition.”

Anteroom of Our Own Extinction (Steppling)

This is now about a year into the pandemic and there have still been no debates, no public roundtables and no referendums. Nothing. Just decrees by the government. I honestly have given up trying to make sense of statistics, really. But a couple of things have not changed; the fatality rate if you catch Covid 19 is under 1% (and yes, case fatality is different than infectious mortality and that in turn is different from mortality rate). And depending on how it is being counted, it is often a good deal less than that. And yet the entire planet has been subjected to severe restrictions on travel, and coerced to follow pseudoscientific behaviour like mask wearing and social distancing. Today in many places there is what amounts to martial law. Police or national guard patrol the streets after dark. Many countries have banned public events, closed restaurants and nightclubs, and limited any public gatherings. Many schools remain closed or only partially open.

The economic consequences of these non-debated government policies have been catastrophic. In the U.S. something like 60 million jobs have been lost, many never to return. A hundred and fifty thousand restaurants have gone bankrupt. Only one in three museums will ever reopen. In San Francisco they decided NOT to count the numbers of new homeless. No reason was given but one can guess. The homeless situation in the U.S., in big cities in particular, was critical even before the pandemic. Now the numbers are unprecedented. Not even during the ‘Great Depression’ was there anything like the current level of those without basic shelter. Food insecurity is at a crisis level. Feeding America, the largest hunger relief organization in the US, estimates over 50 million people go hungry every night including something close to twenty million children.

“Since mid-March 2020, numerous surveys have documented unprecedented levels of food insecurity that eclipse anything seen in recent decades in the United States, including during the Great Recession. Over the past five years, US Department of Agriculture (USDA) estimates of food insecurity in the United States have hovered around 11% to 12%. As of March and April 2020, national estimates of food insecurity more than tripled to 38% In a national survey we fielded in March 2020 among adults with incomes less than 250% of the 2020 federal poverty level (based on thresholds from the US Census), 44% of all households were food insecure including 48% of Black households, 52% of Hispanic households, and 54% of households with children.” – American Public Heath Association (Dec 2020)

And yet, congress just passed another defense budget increase. According to Defense News… “..the final version of the 2020 defense appropriations bill, part of a broad $1.4 trillion spending deal to finalize federal spending for 2020 and avert a government shutdown. The defense bill would provide $738 billion.” Almost one in three households suffers hunger, regularly. Almost half of black and hispanic households. Households with children are most vulnerable to the government policies. So half of the kids in the U.S. have inadequate nutrition. Half will suffer long term developmental problems, almost guaranteed.

Read more …

 

 

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Just the roads built by the Roman Empire

 

 

 

 

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Mar 222019
 


New Zealand Prime Minister Jacinda Ardern leaves after the Friday prayers at Hagley Park outside Al-Noor mosque in Christchurch, New Zealand March 22, 2019. REUTERS/Jorge Silva

 

 

Dani Lebo is the wife of Nelson Lebo III, a regular contributor at the Automatic Earth. They are two Americans who have settled in Whanganui on the North Island of New Zealand. Whanganui is over 600 km (400 miles) from Christchurch on the South Island, but that is where Dani found herself last Friday, in the park next to the mosque where most of the victims fell. This is what she wrote about that.

Dani and Nelson named their son after a Neil Diamond song.

 


Dani Lebo with son Suleiman

 

Dani Lebo: A week after my son was born, I come across his name in an article in the New York Times. I catch my breath. He is a young man. He is describing the scene after a bomb tore through his village in Afghanistan. He is terrified, he says. He doesn’t know where to sleep. I don’t sleep that night either.

A year and a half later I see my son’s name in our local paper. He arrived six weeks ago from Syria. His brother and sister were killed by a bomb that woke him in the night. He is 5 years old and has already witnessed more tragedy than I will ever see in my lifetime.

Today I say my son’s full name as he giggles and throws himself into my arms. I sing the song that he was named for. He laughs. His shaggy golden hair covers his blue eyes.

“His name means ‘peace’,” I once justified to a Plunket nurse who didn’t even attempt to pronounce it. For some reason I felt the need to explain away her unwillingness to engage in something she saw as “different” or “too hard”. It is uncommon here, but common in the Muslim world. My son shares his name with millions of boys – millions of Muslim boys. Their mothers also named them “peace”.

 


People gathered to mourn at Hagley Park, Christchurch, last weekend. Photo Michael Craig

 

And then there I was sitting on the floor of a potting shed in Hagley Park on Friday, March 15, thinking about how relieved I was that my Suleiman, my laughing, smiling, joy of a boy was nowhere near me. Relieved that my Suleiman was safe at home – protected from this scene by 627km and the colour of his skin. And while I was sitting there feeling that relief I was so acutely aware that just a few hundred metres away sat a mother who was, in that very moment, watching her own son die.

In my head I know I was safe that day, but I’m having trouble telling my mind that.

Although I was very close to the shooting, I was never a target. I have run through a few hundred scenarios in my head where the day ends differently – the gunman’s car doesn’t start and he escapes on foot through the park – or he returns to the police cordon after the initial shooting – or his hatred is just slightly less predictable and he decides to spread his terror in a more random direction.

In each of these scenarios he comes to the shed where we were waiting. I try to dismiss these thoughts as quickly as they come, but they are wearing me down. They are wearing me down and I wasn’t even in any real danger. I heard no shots. I saw no blood. My Suleiman was far far away.

I almost didn’t write this column because people are feeling fatigued by this story, by this grief. I am feeling fatigued by my story, by my grief. But I want to let you know how I am feeling. Because you might be feeling this way too one day.

On Friday I spent four hours sitting in a shed in Hagley Park surrounded by uncertainty and fear. Like hundreds of others I waited tensely within blocks of the shooting not knowing exactly where and what was happening.

The fear and sadness and rage I am experiencing this week has given me a glimpse, the smallest tiniest of understanding, of what it would be like to exist in a world of uncertainty and fear.

The world where a man sits near the window when he prays because he is certain that one day he will need to use it as an escape route. And then he does. The world where children are trained in lockdown procedures. The world that our Muslim friends, our black friends, our Chinese friends walk in every day.

My experience that day wasn’t exceptional, and to me that’s an exceptional comment on the state of the world.

 

 

• Dani Lebo has a background in international relations and education. She runs The ECO School, an organisation dedicated to accessible sustainability education.

 

 

 

 

Dec 212018
 
 December 21, 2018  Posted by at 10:42 am Finance Tagged with: , , , , , , , , , , , , , , ,  12 Responses »


Pieter Bruegel the Elder Hunters in the snow 1565

 

Dow Drops 470 Points To 14-Month Low In Day 2 Of Big Losses After Fed Hike (CNBC)
As Fear Rises On Wall Street, Strategists Warn The Worst Is Yet To Come (CNBC)
US Defense Chief Mattis Quits As Trump Pulls From Syria, Afghanistan (AFP)
House Passes Spending Bill With Border Wall Money, Senate Showdown Next (CNBC)
China Denies ‘Slanderous’ Economic Espionage Charges From US Allies (R.)
Russian Media Regulator Starts Checking Legality Of BBC’s Operations (R.)
Gatwick Runway Reopens After Days Of Drone Disruption (G.)
There’s A National Emergency All Right – But It Isn’t Brexit (G.)
Germany’s Hidden Crisis – Social Decline In The Heart Of Europe (G.)
Malaysia Seeks $7.5 Billion In Reparations From Goldman Sachs Over 1MDB (R.)
Singapore Said To Expand 1MDB Criminal Probe To Include Goldman Sachs (BBG)
Carlos Ghosn Re-Arrested On New Charges In Japan (BBC)
New Tree Species Became Extinct Before It Was Named (Ind.)

 

 

Jay Powell pricks the bubbles. Painful and inevitable. But if he ever decides to lower rates again next year, look for the bubbles to return. That’s his dilemma.

Dow Drops 470 Points To 14-Month Low In Day 2 Of Big Losses After Fed Hike (CNBC)

U.S. stocks swooned for a second day Thursday after the Federal Reserve raised benchmark interest rates and said that it would continue to let its massive balance sheet shrink at the current pace. Fears of a government shutdown also sent stocks tumbling to new lows Thursday afternoon. The Dow Jones Industrial Average fell 464.06 points to 22,859.6, bringing its two-day declines to more than 800 points and its 5-day losses to more than 1,700 points. The S&P 500 fell 1.5 percent to finish at 2,467.41 as technology stocks underperformed. The Nasdaq Composite fell 1.6 percent and closed at 6,528.41, briefly dipping into bear market territory amid big losses in Amazon and Apple.

The Nasdaq is 19.7 percent below its recent high. Companies in the S&P 500 have lost a total of $2.39 trillion in market cap this month. The Cboe Volatility Index — one of the market’s best gauges of marketplace fear — rose above 30. The Dow and Nasdaq posted their lowest closes since October 2017, while the S&P 500 finished at its lowest level since September 2017. The Dow and S&P 500, which are both in corrections, are on track for their worst December performance since the Great Depression in 1931, down more than 10 percent each this month. The S&P 500 is now in the red for 2018 by 7.7 percent.

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Yeah, all these experts. Who cares? There’s not nearly enough fear yet.

As Fear Rises On Wall Street, Strategists Warn The Worst Is Yet To Come (CNBC)

“The market’s in no man’s land,” said Peter Boockvar, chief investment strategist at Bleakley Advisory Group. Stocks have broken through the lows of the year, and technicians are scurrying to find the next support levels. On the S&P 500, he said 2,400 is a potential psychological area of support. The market plunged Thursday against the backdrop of a congressional feud with the White House over a continuing budget resolution, but the markets were more focused on the worries that have been festering over global growth and the potential for recession. “You can guarantee if the government shuts down it’s going to very soon reopen,” said Boockvar.

“This could be a carry through from yesterday, that’s legitimate. The problem now is this is the first time in years in this bull market that people are doing tax-loss selling. That’s helping to exaggerate the move. You’re also having redemptions.” Since the Fed announced its rate hike Wednesday, the Dow was down 815 points. The sharp drop in stocks since early October was unexpected and even more crushing recently, since December is typically a positive time for stocks. The 10 percent decline so far in the S&P 500 is its worst December performance since 1931. If it remains this way, it would the first time ever that December is the worst month of the year for the index.

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Have all those people who now say Mattis is the wisest and most balanced in the White House, forgotten why he’s called Mad Dog?

US Defense Chief Mattis Quits As Trump Pulls From Syria, Afghanistan (AFP)

US Defense Secretary Jim Mattis resigned Thursday, leading a chorus of protests at home and abroad after President Donald Trump ordered a complete troop pullout from Syria and a significant withdrawal from Afghanistan. Trump steadfastly defended his sudden push for retrenchment, vowing that the United States would no longer be the “policeman of the Middle East” and saying the 2,000-strong US force in Syria was no longer needed as the Islamic State group had been defeated. Mattis, a battle-hardened retired four-star general seen as a moderating force on the often impulsive president, made little attempt to hide his disagreements with Trump.

“Because you have the right to have a secretary of defense whose views are better aligned with yours,” Mattis said in a letter to Trump, “I believe it is right for me to step down from my position.” Mattis hailed the coalition to defeat Islamic State as well as NATO, the nearly 70-year-old alliance between North America and Europe whose cost-effectiveness has been questioned by the businessman turned president. “My views on treating allies with respect and also being clear-eyed about both malign actors and strategic competitors are strongly held and informed by over four decades of immersion in these issues,” Mattis wrote. One day after the surprise announcement on Syria, a US official told AFP that Trump had also decided on a “significant withdrawal” in a much larger US operation – Afghanistan.

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No government into Christmas?

House Passes Spending Bill With Border Wall Money, Senate Showdown Next (CNBC)

The House passed a temporary spending bill Thursday with money for President Donald Trump’s proposed border wall, further muddying the scramble to dodge a partial government shutdown by Friday. The chamber approved the measure to keep the government running into February by a 217-185 vote. But the path forward now is murky. The bill likely will not clear the Senate because it includes more than $5 billion for the border barrier, increasing the chances that funding for seven agencies lapses after the midnight Friday deadline. Senators were told Thursday to prepare for potential votes Friday. The chamber convenes at noon. The Senate unanimously approved a bill Wednesday night to keep the government running through Feb. 8 — without border wall money.

Trump insisted Thursday that he would not sign it. It forced House Republicans to include the wall money in the new bill. Both House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer have flatly said congressional Democrats will not approve wall money. As Republicans need Democratic votes to pass spending legislation in the Senate, a partial shutdown is all but assured if the GOP insists on funding for the barrier. It is unclear if Republicans will abandon that goal in an effort to keep the government running past Friday. During a televised Oval Office fracas last week, Pelosi challenged Trump by saying he did not have the votes for wall money in the House. It turns out he did.

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We can do it, but they can’t.

China Denies ‘Slanderous’ Economic Espionage Charges From US Allies (R.)

China’s Foreign Ministry said on Friday it resolutely opposed “slanderous” accusations from the United States and other allies criticizing China for economic espionage, urging Washington to withdraw its accusations. The United States should also withdraw charges against two Chinese citizens, the ministry said, adding that China had never participated in or supported any stealing of commercial secrets and had lodged “stern representations” with Washington. “We urge the U.S. side to immediately correct its erroneous actions and cease its slanderous smears relating to internet security,” it said, adding that it would take necessary measures to safeguard its own cybersecurity and interests.

It has long been an “open secret” that U.S. government agencies have hacked into and listening in on foreign governments, companies and individuals, the ministry added. “The U.S. side making unwarranted criticisms of China in the name of so-called ‘cyber stealing’ is blaming others while oneself is to be blamed, and is self-deception. China absolutely cannot accept this.” U.S. prosecutors indicted two Chinese nationals linked to China’s Ministry of State Security intelligence agency on charges of stealing confidential data from American government agencies and businesses around the world. Prosecutors charged Zhu Hua and Zhang Shilong in hacking attacks against the U.S. Navy, the space agency NASA and the Energy Department and dozens of companies. The operation targeted intellectual property and corporate secrets to give Chinese companies an unfair competitive advantage, they said.

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More of the same: We can do it, but they can’t. The west wants to blame RT for all sorts of stuff beacuse that fits the Russophobe narrative.

Russian Media Regulator Starts Checking Legality Of BBC’s Operations (R.)

Russia’s media regulator said on Friday it would carry out checks to determine if the BBC World News channel and BBC internet sites complied with Russian law, a move it described as a response to British pressure on a Russian TV channel. Roskomnadzor, the regulator, said in a statement its checks were Russia’s response to a decision by British media regulator Ofcom, which on Thursday said that Russian broadcaster RT had broken impartiality rules in some of its news and current affairs programs. “The results of our check will be announced separately,” the Russian regulator said. Ofcom said on Thursday it was considering imposing some kind of sanction on RT, which is financed by the Russian state.

It took issue in particular with its coverage of the poisoning in Britain of former Russian spy Sergei Skripal and his daughter. Britain has accused agents working for Russia’s military intelligence agency, the GRU, of committing the crime, an allegation Moscow denies. British Media Secretary Jeremy Wright also weighed in on Thursday, saying what he called RT’s mask as an impartial news provider was slipping. RT rejected Ofcom’s findings, saying Ofcom had ignored its explanations and not paid “due regard” to its rights. Commenting on the launch of the Russian investigation on Friday, Margarita Simonyan, RT’s editor-in-chief, said on Twitter that Ofcom had hinted that it planned to strip her channel of its broadcasting license in Britain. “(Welcome to the) brave new world,” she wrote.

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Days of panic due to one or two drones, at an airport that has just one runway to begin with?!

Gatwick Runway Reopens After Days Of Drone Disruption (G.)

The first flights have resumed at Gatwick airport after a series of drone sightings caused days of disruption, affecting more than 100,000 passengers. Airlines warned customers to continue to check their flight’s status on Friday morning as the airport worked to “introduce a limited number of flights over the coming hours”. The runway had remained closed throughout Thursday night, forcing passengers to search for accommodation or shelter at the airport, and bringing demands for new aviation regulations to tackle the threat. The airport’s chief operating officer, Chris Woodroofe, said 120,000 passengers’ flights had been disrupted by the incident.

On Thursday night police said there had been more than 50 sightings of the drone in 24 hours from when the runway was first closed. Night-flight restrictions had been lifted at other airports, so “more planes could get into and out of the country”, the transport secretary, Chris Grayling said. “This is clearly a very serious ongoing incident in which substantial drones have been used to bring about the temporary closure of a major international airport,” he said. “The people who were involved should face the maximum possible custodial sentence for the damage they have done. The government is doing everything it can to support Sussex police.”

Shooting down the drone was being considered as a “tactical option” after other strategies to stop it had failed. Amid disbelief that the drone incident could be enough to bring one of the UK’s key airports to a standstill, the perpetrator or perpetrators eluded a search conducted by 20 units from two police forces in the surrounding area.

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Britain just stumbles from crisis to crisis, hidden from view by discussions about someone saying Stupid Woman.

There’s A National Emergency All Right – But It Isn’t Brexit (G.)

[..] there is a world beyond Brexit. True, it lacks the frenzied drama of cabinet walkouts, prime ministerial straw-clutching or humiliation served cold in Brussels. But things still happen – it’s just that they haven’t won much attention. It has been a good month to bury bad news. So allow me to disinter some of the headlines deep inside the newspapers. Since we’re counting small things, let’s start with children. Last week it was reported that a primary school in Great Yarmouth had opened its own food bank. It was launched by the headteacher, Debbie Whiting, after she saw pupils under 11 so hungry they were stealing from others’ lunchboxes.

This week, more than half of teachers surveyed by the National Education Union expressed fears that some of their kids won’t have enough to eat this Christmas. They reported a boy turning up wearing his trousers back to front, in order to hide the holes in the knees, and a class where one in three children sleep in their uniforms because they have no pyjamas. If anything qualifies as a national emergency, it should be this. A new generation growing up without adequate food and clothing ought to be leading TV bulletins and shaming government ministers into action. What dominates instead is blue-on-blue match commentary, because Jacob Rees-Mogg is box office while poor people can be slipped in just before the “And finally”.

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“..of all German women in work only one in three earns the minimum wage…”

Germany’s Hidden Crisis – Social Decline In The Heart Of Europe (G.)

The cover of Oliver Nachtwey’s book depicts a VW Beetle, emblem of Teutonic manufacturing prowess since Hitler’s day, driving off a cliff. Is the country that got used to imposing its values on feebler client nations – bailing out southern Europeans with their oversized public sectors, rampant tax avoidance and long lunches – in trouble? The Germany described by this Frankfurt School professor is a basket case – post-growth, post-democratic, with the first fascists in the Bundestag since the Third Reich. Despite being Europe’s richest country, it has higher numbers of working poor than any other EU state; almost one in four of its workers is paid less than the €9.30 (£8.40) minimum wage, many requiring state support.

Sociologist Ulrich Beck in the giddy 1980s called Germany an elevator society, in which millions of skilled workers upgraded from VWs to Audis and expected their children to rise still further in social status and wealth. The elevator may have seized up for a while after reunification, but only five years ago Germany seemed unstoppable. Every German, Beck thought, was in the same lift. No longer. Not only has downward mobility become more evident but the poor get poorer, the rich get richer, the older get tenure, the younger join the precariat. Sure, greater equality of opportunity means more women work than ever before, but of all German women in work only one in three earns the minimum wage.

“So while German women are more equal in terms of rights, inequality between women has never been greater than it is today,” Nachtwey argues. This is symptomatic of what he calls regressive modernisation and of the following paradox: “The more a society is based on equality of opportunity, the more unequal it becomes, and the more legitimate its inequalities”. Legitimate? The losers are perceived to be those who deserve to lose, the winners those who deserve to win. And the losers are the usual suspects – women, immigrants, those who have no qualifications. A Germany that once prided itself on social mobility, and whose sociologists once crazily imagined class distinctions were over, has become, in terms of class, as sclerotic as Britain.

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There’s a class action case looming as well.

Malaysia Seeks $7.5 Billion In Reparations From Goldman Sachs Over 1MDB (R.)

Malaysia is seeking US$7.5 billion in reparations from Goldman Sachs over its dealings with scandal-linked state fund 1MDB, the Financial Times reported on Friday (Dec 21), citing the country’s finance minister. Malaysian prosecutors this week filed charges against Goldman Sachs in connection with its role as underwriter and arranger of three bond sales that raised US$6.5 billion for 1Malaysia Development Berhad (1MDB), the first criminal action against the US bank over the scandal. Goldman Sachs has consistently denied wrongdoing and said certain members of the former Malaysian government and 1MDB lied to the bank about the proceeds of the bond sales.

In addition to the bonds’ total value, Goldman Sachs should also return US$1 billion to cover US$600 million in fees paid to the bank and bond coupons that were “higher than the market rate”, the FT quoted Malaysian finance minister Lim Guan Eng as saying. The three 10-year bonds carried coupons ranging from 4.4 per cent to 5.99 per cent. Lim also told the FT that reparations should at least be more than US$1.8 billion, the sum Goldman Sachs has told investors it had set aside to cover potential losses related to 1MDB legal proceedings. “Their figure is US$1.8 billion. Ours is US$7.5 billion,” Lim said. Goldman Sachs told the FT: “The 1MDB bond offerings were meant to raise money to benefit Malaysia; instead, a huge portion of those funds were stolen for the benefit of members of the Malaysian government and their associates.”

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The squid screwed up royally. But no-one at Goldman will be arrested.

Singapore Said To Expand 1MDB Criminal Probe To Include Goldman Sachs (BBG)

Singapore has expanded a criminal probe into fund flows linked to scandal-plagued 1MDB to include Goldman Sachs, which helped raise money for the entity, people with knowledge of the matter said. Police in the city-state had been examining Goldman’s relationship with the Malaysian state investment company since at least late 2017, but until recently, the firm’s local unit itself wasn’t a focus of any investigation, said the people, asking not to be named discussing sensitive information.

Authorities are trying to determine whether some of the roughly $600 million in fees from the three bond deals Goldman arranged for 1MDB from 2012 to 2013 flowed to the Singapore subsidiary, they said. Singapore’s widened probe opens a potential new battle front for Goldman, less than a week after Malaysia filed the first criminal charges against the firm over a relationship that spawned one of the biggest scandals in its history. Singapore is coordinating closely with the U.S. Justice Department, which is also investigating Goldman and has filed criminal charges against two former senior bankers at the firm, the people said.

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He’s been at it for a while: “..prosecutors now accuse Mr Ghosn of shifting a private investment loss of over $16m onto Nissan in the wake of the 2008 financial crisis.”

Carlos Ghosn Re-Arrested On New Charges In Japan (BBC)

Former Nissan chairman Carlos Ghosn has been re-arrested on fresh charges, Japanese media report, dashing any hopes he could be released on bail. Mr Ghosn has spent the last month in prison, accused of misusing funds and hiding $80m of income. But on Thursday a court rejected a request by the prosecution to extend his detention, which meant he could apply to be released on bail. Friday’s arrest is on a new charge of aggravated breach of trust. According to Japanese broadcaster NHK, prosecutors now accuse Mr Ghosn of shifting a private investment loss of over $16m onto Nissan in the wake of the 2008 financial crisis.

A towering and revered figure in the auto industry, Mr Ghosn has not yet responded to the latest allegation – but he has consistently denied all prior accusations made against him. He was first arrested in Tokyo in November as allegations of financial misconduct surfaced. The BBC’s Mariko Oi says that ever since Carlos Ghosn stepped off his private jet only to be taken into police custody, the case has gripped Japan with speculation rife over what could be behind such a stunning fall from grace. The case has been highly unusual – not least for a high profile chief executive to be spending time in jail – but also because of its legal twists such as yesterday’s when the court rejected an application to extend his detention..

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Animal species are much easier to worry over. Maybe that’s not all that smart.

“..at least six other studies failed to turn up any sign that the tree still exists. Tens of thousands of plant species globally face similar risks.”

New Tree Species Became Extinct Before It Was Named (Ind.)

Scientists have identified a new species of tree that is thought to have become extinct before it was even named. The tree, which has now been called Vepris bali, is believed to have been unique to a forest reserve in west Africa, but forest clearing and agricultural development have wiped it out. Scientists are studying the vepris species for the antimicrobial and antimalarial properties of their essential oils. Researchers hope several other vepris trees will be identified and named in Cameroon before they also disappear. A specimen was collected by a forester, Edwin Ujor, in the Bali Ngemba Forest Reserve in Cameroon in 1951.

The specimen was thought to belong to the genus vepris, which has 80 species, mostly found across Africa. But the tree has not been seen anywhere since. Researchers from the Royal Botanic Gardens, Kew, and the country’s University of Yaoundé I examined the original specimens and used molecular phylogenetic studies to identify the new species. They say the tree is now either critically endangered or already extinct.

Repeated efforts to find the species between 2000 and 2004 and at least six other studies failed to turn up any sign that the tree still exists. Tens of thousands of plant species globally face similar risks. According to the International Plant Names Index, only about 5 per cent of all known species have ever been formally assessed for their extinction risk. The authors wrote: “This makes it a priority to discover, document and protect such species before they become globally extinct.” The Bali Ngemba Forest Reserve, an officially protected forest, is part of the Bamenda highlands, an area so denuded of its natural forest vegetation that it is now known in Cameroon as “the grasslands”.

Read more …

Feb 172018
 
 February 17, 2018  Posted by at 10:42 am Finance Tagged with: , , , , , , , , , , , ,  11 Responses »


Gilles Mostaert Sodom and Gomorrah 1597

 

Kudlow: Trump Needs A Return To ‘King Dollar’ (CNBC)
The Stock Market’s $3 Trillion Trauma (BBG)
Why Today’s Low Financial Stress Should Stress You Out (Colombo)
US Government Is Nowhere Close To Regulating Bitcoin (CNBC)
Banks Told They’re Lagging On Response To Climate Change Risks (BBG)
Monsanto Loses Bid To Stop Arkansas Ban On Weed Killer Dicamba (R.)
Yet Another Year of Magical Thinking (Jim Kunstler)
The End Of Germany’s Big-Tent Parties (Spiegel)
‘Absurd’ Meddling Claims & Indictment Of Russians Show New US Policy (RT)
Oxfam Told Of Aid Workers Raping Children In Haiti A Decade Ago (Ind.)
Oxfam Boss: ‘Anything We Say Is Being Manipulated. We’ve Been Savaged’ (G.)

 

 

Weak dollars make weak economies. Or is it the other way around?

Kudlow: Trump Needs A Return To ‘King Dollar’ (CNBC)

The Trump Administration and the Republicans in Congress have passed one of the best pro-growth tax bills ever. The Tax Cuts and Jobs Act ranks in the all-time hall of fame of legislation, along with Ronald Reagan’s 1981 and 1986 Tax Acts and John F. Kennedy’s posthumous tax cuts of 1964. The announcements by Apple, FedEx, ATT, Fiat Chrysler and over 300 companies with multi-billion dollar investments in the U.S. are early indicators of good things to come from the tax rate cuts. When this is combined with President Donald Trump’s deregulation agenda, we see no reason why the economy cannot grow for a sustained period at 3 to 4% growth — up from 1.6% in Obama’s last year. But there is still a missing pillar of prosperity in the Trump economic agenda, and that is a sound dollar strategy.

The dollar weakened in 2017 and we want it stabilized. There’s little in this world that can bring our economy to its knees faster than a weak dollar in the foreign exchange markets. Just ask people who served in the administrations of Nixon, Ford, Carter, Bush 2 and Barack Obama’s first term. All of them were undone by a weak and depreciating dollar, surging inflation, spiking interest rates, plus financial or commodity bubbles. Meanwhile, under Reagan the U.S. dollar increased by 67% in value on foreign exchange markets through 1985. The price of gold, interest rates, and inflation all fell as well from double-digit inflationary highs, while the American economy reignited and the stock market launched its 18 year bull market.

Or, go back further in time. In May of 1962, President Kennedy’s Revenue Act was passed and he reaffirmed that the U.S. dollar was as good as gold — thus launching the incredible boom called the ‘Go-Go Sixties’. A strong dollar is an essential pillar of economic prosperity with minimal inflation, but we worry that the White House has not adopted this strategy. So we urge the Trump administration to return to the successful “King Dollar” policies that worked in the 60’s, 80’s and 90’s.

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When $3 trillion is almost nothing.

The Stock Market’s $3 Trillion Trauma (BBG)

Want a neat narrative? There isn’t one. Stocks buckled, $3 trillion was lost, then just as quickly, roughly half of it came back. Nothing quite explains every little twist and turn. Much of it remains a blur. But there are clues to be gleaned from the behavior of buyers and sellers. Several key facts stand out. One: a very large sum of money was plowed into equities amid January’s euphoria. Two: even more was yanked out as shares plunged. Three: corporate buyers showed up in force at the bottom. Combined, the flows are a framework for understanding — not a grand theory of everything, but an account of how money moved during the most tumultuous stretch in two years. They show how fast things change during a late-stage bull market, a rally that got back on track with this week’s 4.3% rebound.

“There was a technical correction but we saw some fear and some panic and some investors getting burned,” said Andrew Adams, a strategist at Raymond James Financial. “By no means did anyone expect that this selloff would be of this swiftness and magnitude.” Whatever the role of computers and automated traders as markets bucked and recovered, the events had a recognizable human ring. Investors – many of them of them newly christened, going by account data at discount brokerages – sent $16.4 billion to U.S. stock mutual funds and ETFs between Jan. 2 and the market peak of Jan. 26, EPFR data show. It was a decision they quickly reconsidered. Spooked by signs of inflation, shocked by the sight of traders unwinding bets against volatility, clients pulled almost $27 billion from the same set of funds in the next nine sessions.

One security, the SPDR S&P 500 ETF Trust, saw $23.6 billion withdrawn in one week. What made the selloff stop is anyone’s guess. It happened at a chart level, the S&P 500’s average price over the last 200 days, that half the world was watching a week ago Friday. But who the buyers were is less of a mystery. The Goldman Sachs unit that executes share repurchases for clients saw 4.5 times its average daily volume last week, its busiest ever. “Retail investors were fearful immediately after the selloff, but not the companies,” said Aidan Garrib, macro strategist at Pavilion Global Markets. “Companies have buyback policies that get reconsidered every quarter, so if you told shareholders that you’re going to buy back stock, and then a market blow-up that had no impact on your fundamentals made the price fall more than expected, maybe it’s not a bad thing to step in.”

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Any and all low financial stress should stress you out. Because there should be a balance between greed and fear. Because stability breeds instability.

Why Today’s Low Financial Stress Should Stress You Out (Colombo)

In this piece, I will discuss a little-followed, but valuable market indicator called the “St. Louis Fed Financial Stress Index.” According to the St. Louis Fed, this indicator was created in 2010 after economists sought a better way to track U.S. financial system stress in the wake of the 2008 financial crisis. This index uses 18 weekly data series: seven interest rate series, six yield spreads and five other indicators (mostly sentiment-related indicators). When the index is very high (such as in 2008), it means that the U.S. financial system is experiencing a great amount of stress. When the index is low (such as during an economic expansion and bull market), it means that the financial system is experiencing a low amount of stress. According to the chart below, U.S. financial system stress is currently at record lows:

According to the chart below (with my comments added in red), dangerous economic bubbles form during relative troughs in the St. Louis Fed Financial Stress Index. The late-1990s Dot-com bubble formed when the index was at a relative low, as did the mid-2000s U.S. housing and credit bubble, and I believe that the “Everything Bubble” is forming during the current trough. The “Everything Bubble” is a bubble that is inflating in numerous global assets and sectors (including tech startups, U.S. equities, global bonds, some segments of the U.S. property market, property in China, emerging markets, Australia, Canada, and more) as a result of unprecedented central bank stimulus since the global financial crisis.

The U.S. Federal Reserve has manipulated interest rates by keeping them extremely low, which has led to the inflation of bubbles throughout the economy. As the chart below shows, bubbles form during periods of low interest rates. In this case, “low” is all relative because interest rates have been trending lower since the early-1980s, which is why asset and credit bubbles are becoming more extreme than in the past. Most people are unaware of how extreme our current bubble is, but it will certainly be another case of “only when the tide goes out do you discover who’s been swimming naked” (to quote Warren Buffett).

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Not much need right now.

US Government Is Nowhere Close To Regulating Bitcoin (CNBC)

There’s a long way to go before the U.S. government starts regulating bitcoin, Rob Joyce, special assistant to the president and White House cybersecurity coordinator, told CNBC on Friday. Speaking at the Munich Security Conference in Germany, Joyce emphasized the need to better understand the cryptocurrency’s risks and benefits before embarking on any sort of regulatory regime. “I think we’re still absolutely studying and understanding what the good ideas and bad ideas in that space are,” he said when asked about the potential for government regulation. “So, I don’t think it’s close.” Bitcoin is a decentralized cryptocurrency, meaning that unlike fiat currencies such as the dollar, it’s not backed by a central authority. Critics have said that this gives the currency, which saw huge price gains in 2017, no inherent value.

As transactions are completely anonymous, bitcoin has been accused of making it easier for those engaged in illicit activities to hide their money. “We are worried. There are benefits to the bitcoin concept — digital cash, digital currencies,” Joyce said. “But at the same time, if you look at the way bitcoin works after there is a criminal act that takes place, you can’t rewind the clock and take back that currency.” Joyce described the inherent problem with this lack of a trail, noting that in the case of credit card theft, for instance, individuals or companies can contact their banks and purchases can be undone and the cash retrieved. “With the current instantiation of bitcoin and other cryptocurrencies, we haven’t figured that out yet. So it’s a problem,” he said.

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Someone comes up with some arbitrary set of numbers (Paris) and expects banks to comply. We got nothing.

Banks Told They’re Lagging On Response To Climate Change Risks (BBG)

Fewer than half the world’s biggest banks are doing enough to forestall climate change that poses risks to their markets and economies. Most lenders still aren’t producing firm targets for low-carbon financial products that will aid efforts to keep temperatures from rising, according to a survey of 59 banks conducted by Boston Common Asset Management. Even the strongest banks in the survey, including Goldman Sachs, still struggle to define a climate strategy at the heart of their business, according to the report published Thursday and backed by more than 100 institutional investors. Scientists predict higher frequencies of floods, famines and superstorms unless the world keeps temperature rises well below 2 degrees Celsius (3.6 degrees Fahrenheit) this century.

Goldman Sachs was cited as a leader in the report after the investment bank set a 2025 target of $150 billion in clean energy financing and investing. It also released a clean energy impact report in 2016 that examined the impact of the $41 billion in green investments. Almost half of the groups have put in place climate risk assessments and 61% haven’t restricted the financing of coal. The global banking sector provided $600 billion in financing for the top 120 coal plant developers between 2014 and September 2017, according to the report. Boston Common called for all banks to disclose climate risk in line with the Taskforce on Climate-related Financial Disclosures. They should also set clear targets to promote low carbon products and publish strategy reports aligned with the Paris Agreement, according to the recommendations.

“Since 2005, when Goldman Sachs established its Environmental Policy Framework, harnessing market-based solutions to address environmental challenges has become increasingly core to our business,” said Kyung-Ah Park, head of the Environmental Markets Group at Goldman Sachs. “Our $150 billion target of financing and investing in companies that promote clean technology and renewable energy is an example of our commitment to addressing climate change.”

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Because the state cannot be made a defendant in court.

Monsanto Loses Bid To Stop Arkansas Ban On Weed Killer Dicamba (R.)

An Arkansas judge on Friday dismissed a Monsanto lawsuit aiming to stop Arkansas from blocking the use of a controversial farm chemical the company makes, dealing a blow to its attempts to increase sales of genetically engineered seeds. Monsanto, which is being acquired by Bayer, filed the lawsuit last year in a bid to halt the state’s ban on sprayings of the weed killer known as dicamba from the period spanning April 16 to Oct. 31. Growers across the U.S. farm belt said last summer that dicamba drifted away from where it was sprayed, damaging millions of acres of crops that could not tolerate the herbicides. St. Louis-based Monsanto, the biggest U.S. seed company, said it was disappointed with the judge’s decision and would consider additional legal action.

In the ruling, Pulaski County Circuit Court Judge Chris Piazza cited a recent Arkansas Supreme Court decision that the state cannot be made a defendant in court, according to the Arkansas Agriculture Department. Dicamba, also sold by BASF and DowDuPont, is meant to be used during the summer growing season on soybeans and cotton that Monsanto engineered to resist the chemical. Monsanto is banking on the herbicide and its dicamba-resistant soybean seeds to dominate soybean production in the United States, the world’s second-largest exporter. The company says dicamba, which it sells under the name XtendiMax with VaporGrip, is safe when used properly.

The Arkansas ban hurts Monsanto’s ability to sell dicamba-tolerant seed in the state and has caused “irreparable harm” to the company, according to Monsanto’s lawsuit. The state also limited use of Monsanto’s dicamba herbicide in 2017 but allowed sales of products by other companies. David Wildy, an Arkansas farmer who served on a state task force that recommended the ban, said he supported Friday’s ruling. He said his soybeans suffered damage from the herbicide last year and that it threatens plants ranging from flowers to vegetables and peanuts when it drifts away from where it is sprayed. “If we can’t keep products on target, then there’s not a place for them in agriculture,” Wildy said in an telephone interview.

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If all the money and energy spent on Mars attacks were used to ameliorate life on earth, perhaps we’d have a shot.

Yet Another Year of Magical Thinking (Jim Kunstler)

There’s absolutely nothing that might make Mars a “sustainable” habitat for human beings, or probably any other form of Earthly life. The journey alone would destroy human bodies. If you think that living in Honolulu is expensive, with most daily needs of the population shipped or flown in, imagine what it would be like sending a cargo of provisions (Doritos? Pepperoni sticks? Mountain Dew? Fabreeze?) to a million “consumers” up on Mars. Or do you suppose the colonists will “print” their food, water, and other necessities? Elon Musk’s ventures have reportedly vacuumed in around $5 billion in federal subsidies. Mr. Musk is doing a fine job of keeping his benefactors entertained. Americans are still avid for adventures in space, where just about every other movie takes place.

I suppose it’s because they take us away from the awful conundrums of making a go of it here on Earth, a planet that humans were exquisitely evolved for (or designed for, if you will), and which we are in the process of rendering uninhabitable for ourselves and lots of other creatures. This is our home. Can we talk about the necessary adjustments and arrangements we have to make in order to continue the human project here? Just based on our performance on this blue planet, we are not qualified to infect other parts of the solar system.

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German politics is descending into chaos.

The End Of Germany’s Big-Tent Parties (Spiegel)

The country is slipping into a crisis and Germany, the bastion of stability in Europe, is becoming politically unstable. And every month the country continues to be run by a provisional government is another month that Germany doesn’t have a voice in Europe or the world.This is by no means purely a domestic development. The party system is currently being turn upside down across Western democracies. Owing to Germany’s prosperity and the sedative power of its chancellor, it long appeared that Merkel had been spared by the international development. But the torturous wrangling to create a new government has now dashed that hope.

In France, the two parties that once dominated the country now hold only just over a quarter of the seats in the national parliament. In Italy, the Five Star Movement, which doesn’t seem to stand for much other than the desire for change and its loathing of the status quo and is led by a former TV comedian, appears to have strong chances of winning the election there in March. In Germany, the old establishment parties are also struggling to maintain political stability. Combined support for the SPD and the conservatives has dropped from over 90% at the beginning of the 1970s to just 49% today. Their decline, which had previously been a slow and creeping process, has rapidly accelerated in recent months.

The party system in Germany is splintering, with seven parties now represented in national parliament. When it is no longer possible to form governments with two or three parties, it will necessarily become increasingly difficult to build stable governments. Italy already provides an example of what that can mean. The country is constantly swapping out its prime minister and holding snap elections. Italy has had almost 30 prime ministers and a total of 61 cabinets since 1946. In the same period, Germany has been governed by eight chancellors.

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Echo chambers just keep getting louder. Not much of substance. So why not RT’s comment? The Russians did it anyway.

‘Absurd’ Meddling Claims & Indictment Of Russians Show New US Policy (RT)

US indictment of 13 Russian nationals and three entities over alleged meddling in American elections in 2016 has been labelled absurd by the Russian Foreign Ministry spokesperson, Maria Zakharova. “Turns out, there’ve been 13 people, in the opinion of the US Justice Department. 13 people interfered in the US elections? 13 against billions budgets of special agencies? Against intelligence and counterespionage, against the newest technologies? Absurd? – Yes.” Zakharova said in a Facebook post. The indictment, however, is the “modern American political reality,” Zakharova added, jokingly suggesting that the number 13 was picked due to its negative associations.

One of the indicted, Russian businessman Evgeny Prigozhin, said he was not really upset by the accusations. “The Americans are very emotional people, they see what they want to see. I have great respect for them. I am not at all upset that I am on this list. If they want to see the devil, let them,” Prigozhin told RIA Novosti. The entities and individuals were indicted by a US federal grand jury on Friday of “supporting the presidential campaign of then-candidate Donald J. Trump…and disparaging Hillary Clinton.” However, there are “no allegations” that the suspected activities of the Russian nationals somehow affected the polls, according to the US Deputy Attorney General Rod Rosenstein.

On Friday, Russian Foreign Minister Sergey Lavrov said that supporting Donald Trump has never been an official Russian policy, even if some Russians did express their backing of the new US leader. The Minister has expressed his discontent with the apparently continuing nosedive in the US-Russia relations. “It’s a pity that under Donald Trump, for more than a year of his presidency, our relations have not improved compared to the period of the Democratic administration. Even worsened to a certain extent,” Lavrov told Euronews.

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Close it down. It can’t be saved. You can’t send Oxfam people anywhere in the world anymore.

Oxfam Told Of Aid Workers Raping Children In Haiti A Decade Ago (Ind.)

Aid agencies including Oxfam were warned that aid workers were sexually abusing children in Haiti a decade ago, The Independent can reveal. Children as young as six were being coerced into sex in exchange for food and necessities, according to a damning report by Save the Children, which called for urgent action including the creation of a global watchdog. Its research exposed abuse linked to 23 humanitarian, peacekeeping and security organisations operating in Haiti, Ivory Coast and what was then Southern Sudan. “Our own fieldwork suggests that the scale of abuse is significant,” the report concluded. “Every agency is at risk from this problem … existing efforts to keep children safe from sexual exploitation and abuse are inadequate.”

It identified “every kind of child sexual abuse and exploitation imaginable”, including rape, prostitution, pornography, sexual slavery, assaults and trafficking. One 15-year-old girl in Haiti told how “humanitarian men” exposed themselves and offered her the equivalent of £2 to perform a sex act. “The men call to me in the streets and they ask me to go with them,” said another Haitian girl. “They do this will all of us young girls.” A six-year-old girl described being sexually assaulted and a homeless girl was given a single US dollar by a “man who works for an NGO” before being raped and severely injured, while boys were also reportedly raped. When asked why the abuse was not reported, children said they feared losing aid, did not trust local authorities, did not know who to go to, felt powerless or feared stigma and retaliation. “The people who are raping us and the people in the office are the same people,” said one girl in Haiti.

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See? Oxfam is the victim, not te raped children. That this guy still has a job there says more than enough.

Oxfam Boss: ‘Anything We Say Is Being Manipulated. We’ve Been Savaged’ (G.)

Oxfam has been reeling since the Times reported last week that several of the charity’s aid workers – including the country director, Roland van Hauwermeiren, had used prostitutes in Haiti while providing humanitarian work, following the 2011 earthquake. The men involved lost their jobs, but Oxfam is accused of covering up the scandal. Further revelations of sexual abuse in Oxfam shops, some against volunteers as young as 14, have emerged, engulfing the charity in a crisis unprecedented in its 76-year history. Many things have been said about Goldring and Oxfam this week, but the charge that they have failed to grasp the gravity of the situation seems absurd. Yet he came close to cancelling this interview, justifiably fretting that his words would be wilfully twisted to do Oxfam yet more damage. “Anything we say is being manipulated: ‘Oxfam’s still making excuses, still trying to justify itself.’

I went on the Today programme on the first day and tried to explain and it totally failed. All it did was fuel the fire.” Every explanation he’s tried to offer has been branded an excuse “and just failed in the court of public opinion. We’ve been savaged.” Even apologies only make matters worse. “I said on TV: ‘Yes, we could have done some things faster,’ and all of a sudden we’ve got two former ministers calling for my resignation. What I felt really clearly is many people haven’t wanted to listen to explanations.” To try again is a risk Goldring worries he may regret, but no one can doubt the courage it took. He talks to me alone, unchaperoned by press officers, and is unguarded and candid. The impression I form is of someone telling the truth: if Goldring has been guilty of anything, I think it might be naivety about the vulnerability of almost any organisation in the febrile public mood of distrust.

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 December 3, 2016  Posted by at 9:51 am Finance Tagged with: , , , , , , , , , , ,  1 Response »


DPC “Car ferry Michigan Central turning in ice, Detroit River” 1900

Italian Stock Exchange CEO: There Are ‘Colossal’ Short Positions On Italy (R.)
Markets Eye Europe’s ‘Fear Gauge’ As Italian Referendum Approaches (CNBC)
Is the Yellen Fed TRYING to Crash Stocks To Hurt Trump? (Summers)
China Blames Taiwan For President’s ‘Petty’ Phone Call With Trump (R.)
China Bond Yields Jump As Investors Head For Exit (MNI)
China’s ‘Extraordinary Leverage’ Tops BOE List Of Concerns (CNBC)
Do We Want House Prices Up Or Down? (AFR)
Cash Is Still King In Eurozone – Deutsche (CNBC)
Iceland Pirate Party To Try To Form Government (BBC)
UK Politicians Exempt Themselves From New Wide-Ranging Spying Laws (Ind.)
The New American Dream – A Life In Hock (Peters)
California Pensions Underfunded By $1 Trillion Or $93k Per Household (ZH)
Why US ‘News’ Media Shouldn’t Be Trusted (Zuesse)
Everything You Read About The Wars In Syria And Iraq Could Be Wrong (Ind.)
US Veterans Build Barracks For Pipeline Protesters In Cold (R.)

 

 

By Monday morning, Europe could be shaking on its brittle foundations.

Italian Stock Exchange CEO: There Are ‘Colossal’ Short Positions On Italy (R.)

Big international investors are holding huge short positions on Italian assets, the CEO of the Italian exchange said on Tuesday, days before the country holds a referendum on constitutional reform that could unseat Prime Minister Matteo Renzi. “There are colossal short positions on Italy from the U.S. and other countries where big investors are based,” said Raffaele Jerusalmi during a conference in Milan. Opinion polls conducted until a blackout period began last week showed the “no” vote comfortably in the lead, raising concerns of a political crisis and fueling market volatility. Renzi has said he would resign if Italians reject the reform.

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Spread with Bunds.

Markets Eye Europe’s ‘Fear Gauge’ As Italian Referendum Approaches (CNBC)

The Italian referendum is the current hot concern for investors, who are worrying and waiting to see if voters will reject government attempts to reform the country’s political system. Prime Minister Matteo Renzi has staked his reputation and job on the outcome, arguing a change in the legislature will usher in a nimbler, more productive Italy. However some see the predicted rejection of Renzi’s wishes as a potential opportunity for anti-European populist to gain momentum. Jan Randolph, Director of Sovereign Risk at IHS Markit said in an email Friday that worries over a potential European break-up can be measured by Europe’s “fear gauge”: The difference in yield between Italian and German debt.

“The markets are certainly focusing on this ‘spread’ – what we used to call in the old British banking days the ‘country risk spread’ as viewed by the financial markets,” Randolph said. In recent weeks, the yield spread between Italian and German 10-year government bonds has risen by more than 60 points in 60 days. Last week the spread hit a two-and-a-half year high of 188 basis points, however Reuters reported Friday that investors may be short covering as the gap between Italian and German bond yields has narrowed to 167 basis points. Jan Randolph said any blow-out of Italian yields may well be prevented by the poker hand being played by ECB President Mario Draghi’s massive bond-buying program, which many analysts expect to be extended next year.

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Entertaining ideas.

Is the Yellen Fed TRYING to Crash Stocks To Hurt Trump? (Summers)

Is Janet Yellen trying to crash stocks to screw Trump? Ever since the $USD began its bull market run in mid-2014, the Fed, lead by Janet Yellen, has intervened whenever the $USD cleared 98. The reason for this was the following… Over 47% of US corporate sales come from abroad. With the $USD spiking, pushing all other major currencies generally lower, US corporate profits began to implode. As we write this today, profits have fallen to 2012 levels. Note when this whole profit massacre began. Because of this, the Fed has “talked down” the $USD anytime it began to push higher. Until today…

Since it was announced that Trump won the Presidency, the Fed has allowed the $USD to ramp straight up. It is currently over 101…and the Fed hasn’t said a word. So we ask again… is Janet Yellen trying to crash stocks to screw Trump? We all know the Yellen Fed is one of the most political in history with Fed officials openly donating money to the Clinton campaign. Now Trump has won… the $USD soars to 101… and suddenly the Fed is silent? Not one Fed official has appeared to talk about putting off a rate hike or some other statement that might push the $USD lower…

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Entire books have been written about this in the past 12 hours or so. That, too, is fake news.

China Blames Taiwan For President’s ‘Petty’ Phone Call With Trump (R.)

U.S. President-elect Donald Trump spoke by phone with President Tsai Ing-wen of Taiwan, the first such contact between the two sides in nearly four decades, but China dismissed the call as a “petty action” by the self-ruled island it claims as its own. The 10-minute telephone call with Taiwan’s leadership was the first by a U.S. president-elect or president since President Jimmy Carter switched diplomatic recognition from Taiwan to China in 1979, acknowledging Taiwan as part of “one China”. Hours after Friday’s call, Chinese Foreign Minister Wang Yi blamed Taiwan for the exchange, avoiding what could have been a major rift with Washington just before Trump assumes the presidency. “This is just the Taiwan side engaging in a petty action, and cannot change the ‘one China’ structure already formed by the international community,” Wang said at an academic forum in Beijing, state media reported.

“I believe that it won’t change the longstanding ‘one China’ policy of the United States government.” In comments at the same forum, Wang noted how quickly President Xi Jinping and Trump had spoken by telephone after Trump’s victory, and that Trump had praised China as a great country. Wang said the exchange “sends a very positive signal about the future development of Sino-U.S. relations”, according to the Chinese Foreign Ministry’s website. Taiwan was not mentioned in that call, according to an official Chinese transcript. Trump said on Twitter that Tsai had initiated the call he had with the Taiwan president. “The President of Taiwan CALLED ME today to wish me congratulations on winning the Presidency. Thank you!” he said. Alex Huang, a spokesman for Tsai, said: “Of course both sides agreed ahead of time before making contact.”

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“When everyone heads for the exit at the same time, there’s a risk of injury in the stampede.”

China Bond Yields Jump As Investors Head For Exit (MNI)

When everyone heads for the exit at the same time, there’s a risk of injury in the stampede. Chinese bond investors are getting a taste of just how that feels as they scramble to offload their holdings in what could turn out to be a nasty correction. Some investors have already been dumping their government bonds as yields started to rebound from record lows, while others, who only got in recently when yields were around 2.8-2.9%, been holding on in the hope that bond yields will fall back soon. In the secondary market, the yield on the benchmark 10-year Chinese Government Bond (CGB) broke above 3% on Thursday for the first time since early June and was at 2.995% in Friday morning trade, up nearly 15 basis points for the week, the biggest weekly rise since May 2015.

For November as a whole, the yield jumped 8.88%, the biggest monthly gain since October 2010. Treasury futures also plunged this week with March contracts for 10-year CGB and five-year CGB both having their biggest weekly loss since the contracts started trading in June. A Shanghai-based trader with a joint stock bank said he believes the yield on the 10-year CGB could rise as high as 3.2% before falling back. The brutal sell-off has been triggered by a triple whammy – expectations of tighter liquidity conditions and higher inflation on the domestic front, and externally, rising bond yields in the U.S.

A surge in redemptions from worried investors has hit the market hard. One major state-owned bank is said to have redeemed around CNY200 billion from money market funds while the Industrial and Commercial Bank of China, the country’s largest commercial bank, is also said to have told fund managers managing some of its money to cut bonds holdings and stockpile cash in line with ICBC’s own liquidity management. Domestic investors have swarmed over China’s bond market like bees around a honey pot over the last couple of years amid a dearth of more attractive investment opportunities as economic growth slowed. The stock market rout in the summer of 2015 only encouraged investors to move more funds to fixed income products.

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Sounds about right.

China’s ‘Extraordinary Leverage’ Tops BOE List Of Concerns (CNBC)

China, euro zone sovereign debt and the potential fallout from Brexit top the escalating list of concerns for the Bank of England (BOE), according to a report published on Wednesday which warns that risks to global stability have spiked in the past six months. The U.K.’s central bank’s semi-annual Financial Stability Report states, “Vulnerabilities stemming from the global environment and financial markets, which were already elevated, have increased further since July.” China’s burgeoning debt levels and rapid rate of credit expansion are singled out as significant red flags, with the report noting a 100 percentage point spike in the country’s non-financial sector debt relative to GDP since the 2008 financial crisis. The ratio currently stands at around 260% of GDP.

“This is extraordinary leverage for an advanced, let alone, an emerging economy,” the BOE Governor Mark Carney said at a press conference to launch the report. The “near-record” pace of net capital outflows from China during the third quarter and a 3% depreciation in the Chinese renminbi against the U.S. dollar since the publication of the BOE’s July report were also highlighted as reasons for concern. Turning to nearer neighbors, the governor broke down the key risks emanating from some euro area economies into, firstly, existing sovereign debt dynamics and, secondly, threats to the resilience of parts of the trading bloc’s banking system.

Carney noted the vulnerability of elevated sovereign debt levels to a leap in borrowing costs or diminished growth prospects on the back of either trade or political headwinds. Moving even closer to home, the governor raised the looming specter of the U.K.’s impending departure from the EU, noting banks located domestically currently supply over half of the debt and equity issuance from continental firms and account for over 75% of foreign exchange and derivatives activity in the U.K.

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“We” can’t make up our minds about this one. Because our minds are stuck in a bubble.

Do We Want House Prices Up Or Down? (AFR)

Just as market forces were about to push the price of housing down in Australia, the Treasurer stepped in with some new regulation. Phew. Some first home buyer’s nearly snatched a good deal, but luckily the Treasurer was there to protect the property developers from the oversupply their building bonanza created. No issue creates a bigger flood of nonsensical econobabble in Australia than “housing affordability”. It’s a meaningless term engineered for the sole purpose of allowing politicians to pretend they are simultaneously on the side of home buyers and home sellers. What’s remarkable is the willingness of the media and others to play along. Most politicians are adamant that they want petrol, fresh food and health insurance to be less expensive.

We talk about the price of petrol and the price of milk. We don’t talk about “petrol affordability” or “bread affordability” let alone create an index of the price of bread divided by median household income. Talking endlessly about “housing affordability” allows politicians to duck the simple question of whether house prices are “too high”, “too low” or “just right”. The absurdity of this situation was revealed during the federal election campaign when the Coalition attacked the ALP’s plans to reform negative gearing on the basis that such changes would, wait for it, put downward pressure on house prices. Oh, the humanity! The Coalition’s rhetorical solution to the imaginary issue of housing affordability is to reject changes to the tax treatment of investment houses and instead blame environmentalists and state governments for “restricting the supply of housing”.

Of course this week’s redefinition of “second-hand property” by Treasurer Morrison makes a mockery of such a position. Having spent years pretending that increasing the housing supply would make housing “more affordable” the Treasurer has now acted to prevent an increase in apartment supply from pushing apartment prices down. The Coalition playbook makes clear that when it’s not the environmentalists’ fault, it must be the unions’ fault. On cue Malcolm Turnbull recently empathised with the terrible plight of “young Australian couples that can’t afford to buy a house because their costs are being pushed up by union thuggery”. A quick look at the data suggests no such link, but if Donald Trump taught conservatives anything it’s that data is for losers.

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And it should be.

Cash Is Still King In Eurozone – Deutsche (CNBC)

While cash is facing several challenges in the euro area with an increasing number of people moving towards cashless payments and digital banking, the reports of the demise of cash are greatly exaggerated, Deutsche Bank has said in its latest research note. “Cash is facing many challenges in the euro area. The ECB has decided to cease production of the €500 ($532) note due to concerns over its facilitation of illicit activities,” the bank said while adding that the cash in circulation is three times more than what it was in 2003.

While many would attribute this to the never-ending stream of money that the central banks have been pumping into the economy through QE and ultra-low interest rates, Deutsche Bank’s Heike Mai believes that most of the increase in cash since 2008 comes from abroad and hoarders. Cash held outside the euro area was worth €80 billion and cash hoarded domestically by the real economy is estimated to be valued at €120 billion. “There are good reasons to believe that cash won’t disappear anytime soon from the euro area. First, it is debatable that a cashless society would mean less crime,” Mai said, adding, that the ratio of damage caused by card fraud to the value of counterfeit notes in circulation is more than 10 to 1.

“Second, the political value of cash should not be underestimated. Some economies like using cash, for example, Germany, Spain, Italy and Austria. The most robust data protection is provided by cash,” Mai, an economist at Deutsche Bank, said in the note. The research note that focuses on Europe argued that by the end of third-quarter of 2016, euro currency in circulation amounted to €1.1 trillion, three times as much as in the first quarter of 2003. While small-value notes such as €5, €10 and €20 are used to a great extent for day-to-day payments, bigger-value notes such as €50 and €100 are used for both payments and cash hoarding.

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Beware of frozen quicksand. Everyone wants the Pirates to fail.

Iceland Pirate Party To Try To Form Government (BBC)

Iceland’s anti-establishment Pirate Party has been asked by the president to try to form a new government, following October’s snap elections. President Gudni Johannesson made the announcement after talks with Pirates head Birgitta Jonsdottir. The Pirates, who vowed radical reforms, came third in the elections in which no party won an outright majority. Two earlier rounds of coalition talks involving first the Independence Party and then the Left-Greens failed. “Earlier today, I met the leaders of all parties and asked their opinion on who should lead those talks. After that I summoned Birgitta Jonsdottir and handed her the mandate,” President Johannesson said on Friday.

Ms Jonsdottir said afterwards she was “optimistic that we will find a way to work together”. In the elections, the Pirate Party – which was founded in 2012 – more than tripled its seats to 10 in the 63-member parliament. The election was called after Prime Minister Sigmundur Gunnlaugsson quit in April in the wake of the leaked Panama Papers, which revealed the offshore assets of high-profile figures. The Pirates want more political transparency and accountability, free health care, closing tax loopholes and more protection of citizens’ data.

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Color me stunned.

UK Politicians Exempt Themselves From New Wide-Ranging Spying Laws (Ind.)

Politicians have exempted themselves from Britain’s new wide-ranging spying laws. The Investigatory Powers Act, which has just passed into law, brings some of the most extreme and invasive surveillance powers ever given to spies in a democratic state. But protections against those spying powers have been given to MPs. Most of the strongest powers in the new law require that those using them must be given a warrant. That applies to people wanting to see someone’s full internet browsing history, for instance, which is one of the things that will be collected under the new law. For most people, that warrant can be issued by a secretary of state. Applications are sent to senior ministers who can then approve either a targeted interception warrant or a targeted examination warrant, depending on what information the agency applying for the warrant – which could be anyone from a huge range of organisations – wants to see.

But for members of parliament and other politicians, extra rules have been introduced. Those warrants must also be approved by the prime minister. That rule applies not only to members of the Westminster parliament but alos politicians in the devolved assembly and members of the European Parliament. The protections afforded to politicians are actually less than they had hoped to be given. Earlier in the process, the only amendment that MPs had submitted was one that would allow extra safeguards for politicians – forcing any request to monitor MP’s communications to go through the speaker of the House of Commons as well as the prime minister.

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Eric Peters sells cars. And he’s right that cheap credit drives car sales and gadgetry. But not about the need for cars in the first place.

The New American Dream – A Life In Hock (Peters)

We live in a society driven by debt. Cars, for example, have become hugely expensive (even on the low end) relative to what people can afford – because of the easy availability of credit. Which is the nice word used to speak about debt, intended to encourage us to get into it. It takes at least $15,000 or so to drive home in a “cheap” new car, once all is said and done. And the “cheap” car will have to be registered, plated and insured. It runs into money. And most new cars cost a lot more money. Which most people haven’t got. So they get debt. A loan. Which, when it becomes commonly resorted to as a way to live beyond one’s means as a lifestyle, drives up the cost of life for everyone. Including those who try to live within their means – or better yet, below them.

When most people (when enough people) are willing – are eager – to go into hock for the next six years in order to have a car with an LCD touchscreen, leather (and heated) seats, six air bags, a six-speaker stereo, electronic climate control AC and power everything – which pretty much every new car now comes standard with – the car companies build cars to satisfy that artificial demand. Artificial because based on economic unreality. That is a good way to think about debt. It is nonexistent wealth. You are promising to pay with money you haven’t earned yet. And maybe won’t. The car market has become like the housing market – which has also been distorted by debt to a cartoonish degree. The typical new construction home is a mansion by 1960s standards.

Not that there’s anything wrong with living in a mansion. Or driving a car with heated leather seats and climate control AC and a six-speaker surround-sound stereo and six air bags and all the rest of it. Provided you can afford it. Most people can’t. Normally, that fact would keep things in check. There would be mansions, of course – and high-end cars, too. But only for those with the high-end incomes necessary to afford them. Everyone else would live within their means. We wouldn’t be living in this economic Potemkin village that appears prosperous but is in fact an economic Jenga Castle that could collapse at any moment. There would be a lot less pressure to “keep up with the Joneses”… as they head toward bankruptcy and foreclosure.

As society heads that way. Like the housing industry, the car industry has ceased building basic and much less expensive cars because of easy and grotesque debt-financing. Which is tragic. There ought to be (and would be) a huge selection of brand-new cars priced under $10,000 were it not for the ready availability of nonexistent wealth (.e., debt and credit). Cars many people could pay cash for.

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Still waiting for a politican or government to come clean about the Pension Ponzi.

California Pensions Underfunded By $1 Trillion Or $93k Per Household (ZH)

Earlier today the Kersten Institute for Governance and Public Policy highlighted an updated pension study, released by the Stanford Institute for Economic Policy Research, which revealed some fairly startling realities about California’s public pension underfunding levels. After averaging $77,700 per household in 2014, the amount of public pension underfunding for the state of California jumped to a staggering $92,748 per household in 2015. But don’t worry, we’re sure pension managers can grow their way out of the problem…hedge fund returns have been stellar recently, right?

Stanford University’s pension tracker database pegs the market value of California’s total pension debt at $1 trillion or $93,000 per California household in 2015. In 2014, California’s total pension debt was calculated at $77,700 per household, but has increased dramatically in response to abysmal investment returns at California’s public pension funds that hover at or below 0% annual returns.

Looking back to 2008, the underfunding levels of California’s public pension have skyrocketed 157% on abysmal asset returns and growing liabilities resulting from lower discount rates. Perhaps this helps shed some light on why CalPERS is having such a difficult time with what should have been an easy decision to lower their long-term return expectations to 6% from 7.5% (see “CalPERS Weighs Pros/Cons Of Setting Reasonable Return Targets Vs. Maintaining Ponzi Scheme”)…$93k per household just seems so much more “manageable” than $150k.

Oddly enough, California isn’t even the worst off when it comes to pension debt as Alaska leads the pack with just over $110,000 per household. Of course, at this point the question isn’t “if” these ponzi schemes will blow up but rather which one will go first? We have our money on Dallas Police and Fire…

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Oh, there are thousands of reasons.

Why US ‘News’ Media Shouldn’t Be Trusted (Zuesse)

Nassim Nicholas Taleb headlined on November 22nd a devastating takedown of U.S. ‘news’ media and academia, «Syria and the Statistics of War», and he began there by exposing the highly honored Harvard fraud, Dr. Steven Pinker, but then went pretty much through the entire U.S. ‘intellectual’ Establishment, including all of its major ‘news’ media, as being untrustworthy on the part of any intelligent person. (Regarding Professor Pinker specifically, Taleb linked to a scientific paper that Taleb had co-authored, which shredded one of Pinker’s highly honored and biggest-selling books. Taleb and his colleague mentioned there an article that had appeared in Britain’s Guardian raising serious questions about Pinker’s work, and they were here offering statistical proof of the fraudulence of that work.)

The scenario of exposing intellectual fraud is so common: the only reason why it’s not better known among the public is that usually the disproofs of highly honored work have no impact, and fail to dislodge the prejudices that the given established fraud has ‘confirmed’. Another good example of that occurred when the University of Massachusetts graduate student Thomas Herndon issued his proof of the fraudulence of the extremely influential economics paper by Kenneth Rogoff and Carmine Rinehart, «Growth in a Time of Debt», which had been widely cited by congressional Republicans and other conservatives as a main ‘justification’ for imposing draconian economic austerity on the U.S. and other nations during the recovery from the 2008 economic crash.

Years later, that graduate student is still a graduate student (i.e., unemployed), while Kenneth Rogoff remains, as he was prior to his having been exposed: one of Harvard’s most prominent professors of economics, and a member of the Group of 30 — the world’s 30 most influential and powerful economists. Carmen Rinehart likewise retains her position also as a Harvard Professor. Previously, the Harvard Economics Department had guided communist Russia into a crony-capitalist (or fascist) ‘democracy’, but then Vladimir Putin took over Russia and got rid of the worst excesses of Harvard’s «capitalism» and so became hated by the U.S. aristocracy and its ‘news’ media — hated for having tried to establish Russia’s national independence, Russia’s independence from the U.S. aristocracy (which expected, and still craves, to control Russia).

And now after Donald Trump’s victory against the super-neoconservative hater of Russia, Hillary Clinton, the U.S. Establishment, through its voices such as the Washington Post, is trying to smear — like Joseph R. McCarthy smeared America’s non-fascists back in the 1950s — the tiny independent newsmedia that had been reporting truthfully about U.S.-Russian relations and America’s coups and invasions trying to weaken and ultimately to conquer Russia even if that means nuclear war.

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Fake news as far as the eye can see. Next up: Putin eats babies.

Everything You Read About The Wars In Syria And Iraq Could Be Wrong (Ind.)

The Iraqi army, backed by US-led airstrikes, is trying to capture east Mosul at the same time as the Syrian army and its Shia paramilitary allies are fighting their way into east Aleppo. An estimated 300 civilians have been killed in Aleppo by government artillery and bombing in the last fortnight, and in Mosul there are reportedly some 600 civilian dead over a month. Despite these similarities, the reporting by the international media of these two sieges is radically different. In Mosul, civilian loss of life is blamed on Isis, with its indiscriminate use of mortars and suicide bombers, while the Iraqi army and their air support are largely given a free pass. Isis is accused of preventing civilians from leaving the city so they can be used as human shields.

Contrast this with Western media descriptions of the inhuman savagery of President Assad’s forces indiscriminately slaughtering civilians regardless of whether they stay or try to flee. The UN chief of humanitarian affairs, Stephen O’Brien, suggested this week that the rebels in east Aleppo were stopping civilians departing – but unlike Mosul, the issue gets little coverage. One factor making the sieges of east Aleppo and east Mosul so similar, and different, from past sieges in the Middle East, such as the Israeli siege of Beirut in 1982 or of Gaza in 2014, is that there are no independent foreign journalists present. They are not there for the very good reason that Isis imprisons and beheads foreigners while Jabhat al-Nusra, until recently the al-Qaeda affiliate in Syria, is only a shade less bloodthirsty and generally holds them for ransom.

These are the two groups that dominate the armed opposition in Syria as a whole. In Aleppo, though only about 20 per cent of the 10,000 fighters are Nusra, it is they – along with their allies in Ahrar al-Sham – who are leading the resistance. Unsurprisingly, foreign journalists covering developments in east Aleppo and rebel-held areas of Syria overwhelmingly do so from Lebanon or Turkey. A number of intrepid correspondents who tried to do eyewitness reporting from rebel-held areas swiftly found themselves tipped into the boots of cars or otherwise incarcerated.

Experience shows that foreign reporters are quite right not to trust their lives even to the most moderate of the armed opposition inside Syria. But, strangely enough, the same media organisations continue to put their trust in the veracity of information coming out of areas under the control of these same potential kidnappers and hostage takers. They would probably defend themselves by saying they rely on non-partisan activists, but all the evidence is that these can only operate in east Aleppo under license from the al-Qaeda-type groups.

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Could get tricky for Trump. Luckily for him, there’s still 7 weeks to go until January 20.

US Veterans Build Barracks For Pipeline Protesters In Cold (R.)

U.S. military veterans were building barracks on Friday at a protest camp in North Dakota to support thousands of activists who have squared off against authorities in frigid conditions to oppose a multibillion-dollar pipeline project near a Native American reservation. Veterans volunteering to be human shields have been arriving at the Oceti Sakowin camp near the small town of Cannon Ball, where they will work with protesters who have spent months demonstrating against plans to route the Dakota Access Pipeline beneath a lake near the Standing Rock Sioux Reservation, organizers said. The Native Americans and protesters say the $3.8 billion pipeline threatens water resources and sacred sites.

Some of the more than 2,100 veterans who signed up on the Veterans Stand for Standing Rock group’s Facebook page are at the camp, with hundreds more expected during the weekend. Tribal leaders asked the veterans, who aim to form a wall in front of police to protect the protesters, to avoid confrontation with authorities and not get arrested. Wesley Clark Jr, a writer whose father is retired U.S. Army General Wesley Clark, met with law enforcement on Friday to tell them that potentially 3,500 veterans would join the protest and the demonstrations would be carried out peacefully, protest leaders said. The plan is for veterans to gather in Eagle Butte, a few hours away, and then travel by bus to the main protest camp, organizers said, adding that a big procession is planned for Monday.

[..] The protesters’ voices have also been heard by companies linked to the pipeline, including banks that protesters have targeted for their financing of the pipeline. Wells Fargo said in a Thursday letter it would meet with Standing Rock elders before Jan. 1 “to discuss their concerns related to Wells Fargo’s investment” in the project. There have been violent confrontations near the route of the pipeline with state and local law enforcement, who used tear gas, rubber bullets and water hoses on the protesters, even in freezing weather. The number of protesters in recent weeks has topped 1,000. State officials on Monday ordered them to leave the snowy camp, which is on U.S. Army Corps of Engineers land, citing harsh weather, but on Wednesday they said they would not enforce the order. “There is an element there of people protesting who are frightening,” North Dakota Attorney General Wayne Stenehjem said on Thursday. “It’s time for them to go home.”

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Feb 092016
 
 February 9, 2016  Posted by at 9:53 am Finance Tagged with: , , , , , , , , , ,  10 Responses »


Arthur Rothstein Going to church to pray for rain., Grassy Butte, North Dakota Jul 1936

‘Panic Situation’ As Asia Stocks Tumble Amid Fears Of New Global Recession (G.)
Global Bond Rally Near ‘Panic’ Level With Japan Yield Below Zero (BBG)
Japan’s 10-Year Yield Falls Below Zero for the First Time (BBG)
US Bank Stocks And Bonds Clobbered By Recession Worry (Reuters)
Investors Dump Stocks, Seek Safe Havens As Bank Fears Flare (Reuters)
Banks Bonds Are “The Epicenter Of Growth Concerns Globally” (BBG)
Goldman Sachs Sees Near-Zero Risk Of UK Recession Despite Market Tantrum (AEP)
Chesapeake Energy Plunges On Bankruptcy Fears (Forbes)
150 Oil And Gas Companies “At Risk Of Bankruptcy” As Prices Fall (BBG)
US Oil Industry Woes Grow As Storage Levels Hit ‘Critical Level’ (MW)
Jim Rogers: “The Market Knows It’s Over” (SHTF)
Can Hobbit Tourism Save New Zealand’s Troubled Dairy Farmers? (BBG)
Turkey’s Erdogan Threatened To Flood Europe With Migrants (Reuters)
35 Refugees Die Off Turkish Coast (Guardian)

Panic.

‘Panic Situation’ As Asia Stocks Tumble Amid Fears Of New Global Recession (G.)

Japan’s Nikkei index plummeted more than 950 points on Tuesday, its biggest intraday loss since May 2013, and the yen briefly soared to a 14-month high against the US dollar, as continued fears over the health of the global economy saw a continuation of the previous day’s selloff in Europe and the US. The Nikkei dived 5.1% to 16,132.25 in morning trading and extended losses into the afternoon, while Australia’s S&P/ASX 200 fell 2.6% to 4,946.70. Markets were also down in the Philippines, Indonesia, Thailand and New Zealand. The MSCI’s index of Asia-Pacific shares outside Japan fell 1% and might have fallen further had several Asian markets not been closed.

Markets in China, Hong Kong, Taiwan and South Korea were closed for Lunar New Year holidays. Most markets in the region will re-open from Wednesday, with Chinese markets returning next week. The volatility affecting global markets last month appears set to continue amid concern about Chinese economic growth, falling oil prices and speculation that the US federal reserve could change course with interest rates. “The combination of concerns that the United States could be heading toward a recession and the global stock sell-off is curbing risk appetite and is sending investors to the safe-haven yen,” Takuya Takahashi at Daiwa Securities told Kyodo News.

After hovering around the 117-yen line on Monday, the Japanese currency briefly rose to the upper 114 zone to its strongest level against the dollar since November 2014. Investors regard the yen as a “save haven” currency when global markets are hit by the kind of turmoil witnessed in recent weeks. The yen is expected to make further gains – a trend that eats into the repatriated profits of Japanese auto and other exporters. Three-month dollar/yen implied volatility – which indicates how much currency movement is expected in the months ahead – reached 12.137% its highest since September 2013. Responding to the yen’s rise, Japan’s finance minister, Taro Aso, told reporters: “It is clear that recent moves in the market have been rough. We will continue to carefully monitor developments in the currency market.”

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And more panic.

Global Bond Rally Near ‘Panic’ Level With Japan Yield Below Zero (BBG)

Sovereign bonds surged, sending the Japanese benchmark 10-year yield below zero for the first time, as investors seeking the safest assets gorged on government debt. Treasury yields dropped to a one-year low in the rush to refuge from a worldwide stock rout. Traders pared the odds the Federal Reserve will raise interest rates this year to 30%, before Chair Janet Yellen begins her two-day testimony to Congress on Wednesday. The yield on the Bank of America Merrill Lynch World Sovereign Bond Index tumbled to 1.29%, the least in data that go back to 2005. “It’s almost like a panic,” said Hideo Shimomura, the chief fund investor in Tokyo at Mitsubishi UFJ Kokusai Asset Management. “The flight to quality is exaggerated.”

The benchmark 10-year Treasury yield tumbled six basis points to 1.69% as of 2:31 p.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 2.25% security due in November 2025 rose 17/32, or $5.31 per $1,000 face amount, to 105. Japan’s 10-year yield fell to minus 0.01%, an unprecedented low for such a maturity in a Group-of-Seven economy. Australia’s dropped to 2.38%, a level not seen since April. Investors rushed to bonds as the MSCI Asia Pacific Index of stocks slid 2.8% and Japan’s Topix Index plunged 5.7%. “It’s hard to find a reason to short Treasuries,” said Tomohisa Fujiki at BNP Paribas in Tokyo, referring to bets that a security will fall. Turmoil “is now affecting equity markets in developed countries as well — and commodities and emerging markets have not stabilized yet.” BNP is one of the 22 primary dealers that underwrite the U.S. debt.

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BoJ buys them all anyway.

Japan’s 10-Year Yield Falls Below Zero for the First Time (BBG)

The yield on Japan’s benchmark 10-year government bonds fell below zero for the first time, an unprecedented level for a Group-of-Seven economy, as global financial turmoil and the Bank of Japan’s adoption of negative interest rates drive demand for the notes. The 10-year yield has tumbled from 0.22% before the BOJ surprised markets with the decision on Jan. 29 to introduce a minus 0.1% rate on some of the reserves financial institutions park at the central bank. It fell 7 1/2 basis points to a record minus 0.035% as of 3:05 p.m. in Tokyo. Japanese bonds are also climbing as sovereign securities rally worldwide. Global stocks have dropped 10% this year on concern growth is slowing in China, and as slumping oil prices undermine policy makers efforts to revive inflation.

About 29% of the outstanding debt in the Bloomberg Global Sovereign Bond index was yielding less than zero as of 5 p.m. in New York on Monday. Swiss 3% notes due in 2018 were offering the lowest yield in the index, according to data compiled by Bloomberg. “It was just a matter of time before 10-year yields went negative, so it wasn’t a surprise,” said Yusuke Ikawa at UBS. Five-year yields dropped seven basis points to minus 0.25%, while two-year yields slid five basis points to minus 0.245%. Both were record lows. A basis point is 0.01 percentage point. The expected price volatility for Japanese debt over a 60-day period soared to 3.13% on Monday, the highest level since June, according to data compiled by Bloomberg.

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Banks across the globe are under fire.

US Bank Stocks And Bonds Clobbered By Recession Worry (Reuters)

U.S. bank stocks and bonds took a pounding on Monday as recession fears compounded concern about their exposure to the energy sector and expectations that global interest rates are unlikely to rise quickly. The S&P 500 financial index, already the worst performing sector this year, fell 2.6% and now stands more than 20% from its July 2015 high, confirming the sector is in the grip of a bear market. Shares of Morgan Stanley slid 6.9% in their largest one-day drop since November 2012, while rival Goldman Sachs fell 4.6%. Both stocks closed at their lowest since the spring of 2013. Meanwhile, bonds issued by U.S. banks extended their decline, with the yield premium demanded by investors to hold these securities, rather than safer U.S. Treasury debt, climbing to the highest in three-and-a-half years, according to BofA Fixed Income Index data.

“Investors’ attitudes seem to be worsening relative to the likelihood of a global recession. I think that’s what financials are reflecting – that their net interest margins are going to be further compressed under collapsing (sovereign) bond yields,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. Yields on sovereign bonds from so-called safe-haven issuers such as the United States, Germany and Japan have tumbled recently as investors increasingly doubt central banks in these countries will be able to raise interest rates any time soon. The U.S. Federal Reserve late last year pulled off its first rate increase in nearly a decade, but interest rate futures markets now assign just a 1-in-4 chance of another one this year. And the Bank of Japan last month cut rates into negative territory for some bank reserves.

Monday’s drop in U.S. bank stocks follows concern over stress in the financial sector in Europe, where the cost of insuring the European financial sector’s senior debt against default climbed to its highest level since late 2013. Credit default swaps on several U.S. banks have followed suit. The cost for a five-year CDS contract on Morgan Stanley debt, for instance, has rocketed by more than 27% since last Thursday and now stands at its highest since October 2013, data from Markit shows. Citigroup’s CDS, likewise, is at the highest since June 2013.

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“Japanese Finance Minister Taro Aso felt moved enough to warn the yen’s rise was “rough”..”

Investors Dump Stocks, Seek Safe Havens As Bank Fears Flare (Reuters)

Asian share markets were scorched on Tuesday as stability concerns put a torch to European bank stocks and sent investors stampeding to only the safest of safe-haven assets. As fear overwhelmed greed, yields on longer-term Japanese bonds fell below zero for the first time, the yen surged to a 15-month peak and gold reached its most precious since June. Japanese Finance Minister Taro Aso felt moved enough to warn the yen’s rise was “rough”, something of an understatement as the Nikkei nosedived 5.4%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.2%, with Australian shares hitting 2-1/2-year closing low, and would have been lower if not for holidays in many centres.

Spread-betters see another weak session in European shares, where German DAX is seen falling 0.7% and Britain’s FTSE 0.5%. S&P 500 e-mini futures fell more than 1% at one point. “Sentiment towards risk assets remained extremely bearish and price action reflected a market that may be capitulating,” said Jo Masters, a senior economist at ANZ. All of which magnified the stakes for U.S. Federal Reserve Chair Janet Yellen’s testimony this week. “She needs to come across as optimistic without being too hawkish and cautious without being negative,” said Masters. “Hawkishness or dovishness could easily exacerbate the current sell-off, tightening financial conditions further.”

Wall Street pared losses but still ended deep in the red. The Dow lost 1.1%, while the S&P 500 fell 1.42% and the Nasdaq 1.82%. The rout began in Europe on Monday, when the FTSEurofirst 300 index shed 3.4% to its lowest since late 2013, led by a near 6% dive in the banking sector. Deutsche Bank alone sank 9.5% as concerns mounted about its ability to maintain bond payments. Late Monday, the German bank said it has “sufficient” reserves to make due payments this year on AT1 securities. The cost of insuring bank debt against default also climbed to its highest since late 2013. Borrowing costs in Spain, Portugal and Italy jumped as investors demanded a fatter risk premium over safer German paper, where two-year yields hit record lows at minus 52 basis points.

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“..additional Tier 1 bonds..” Sounds solid?!

Banks Bonds Are “The Epicenter Of Growth Concerns Globally” (BBG)

Last year’s sure thing in credit markets is quickly becoming this year’s nightmare for bond investors. The riskiest European bank debt generated returns of about 8% last year, according to BofAML index data, beating every type of credit investment globally. In less than six weeks this year, those gains have been all but wiped out, even after interest payments. Investors are increasingly concerned that weak earnings and a global market rout will make it harder for banks to pay the interest on at least some of these securities, or to buy them back as soon as investors had hoped. The bonds allow banks to skip interest payments without defaulting, and they turn into equity in times of stress. Deutsche Bank may struggle to pay the interest on these securities next year, a report from independent research firm CreditSights earlier on Monday said. The bank took the unusual step of saying that it has enough capacity to pay coupons for the next two years.

“The worries about these bonds represent real fears that the European banking system may be weaker and more vulnerable to slowing growth than a lot of people originally thought,” said Gary Herbert at Brandywine Global Investment Management. “It’s the epicenter of growth concerns globally. And it doesn’t look pretty,” he added. Money managers’ concerns are spreading even to safer bank bonds, underscoring how investors are running away from risk across a broad range of assets now, from stocks to commodities to corporate bonds. The cost of protecting against defaults on safer U.S. and European financial debt known as senior unsecured notes has jumped to the highest level since 2013. European banks are looking less solid since their last earnings reports.

Deutsche Bank for example last month posted its first full-year loss since 2008, and its shares have plunged. Credit Suisse’s shares plunged to their lowest level since 1991 after the Swiss bank posted its biggest quarterly loss since the crisis. Banks have issued about €91 billion of the riskiest notes, called additional Tier 1 bonds, since April 2013. The problem is the securities are untested and if a troubled bank fails to redeem them at the first opportunity or halts coupon payments investors may jump ship, sparking a wider selloff in corporate credit markets. “It’s the first thing that gets cut from portfolios,” said David Butler, a portfolio manager at Rogge Global Partners, which oversees about $35 billion of assets. “When the wider credit market turns, it leaves investors exposed.”

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Feel better now? “For those “brave enough to defy Mr Market’s gloomy prognosis”, this may be an ideal time to jump back into the stock market, said Mr Hatzius.”

Goldman Sachs Sees Near-Zero Risk Of UK Recession Despite Market Tantrum (AEP)

Britain is extremely unlikely to face an economic recession over the next two years and is on safer ground than any other major country in the developed world, according to a new crisis-study by Goldman Sachs. The US investment bank said the global stock market rout and the credit tremors this year are sending off false signals, insisting that underlying indicators of economic health show little sign of a sudden rupture in Europe, the US or across the OECD bloc of rich states. An array of “alarm” indicators – based on the experience of 20 countries since 1970 – suggest that the current business cycle is still in full swing and far from exhaustion, even if risks have been ratcheting up over recent months. Credit ratios are high but they have not been spiking higher in most OECD states, and there is still plenty of slack left in the economy.

This allows central banks to take their time before having to slam on the brakes – the time-honoured cause of recessions. Jan Hatzius, Goldman’s chief US economist, cited a string of episodes where markets were gripped by fear and emotion yet the storm passed without doing much damage. These included the 1987 stock market crash, the 1994 bond rout, Mexico’s Tequila crisis, the failure of the giant hedge fund Long-Term Capital Management and the Asian crisis in 1998, the corporate credit squeeze from 2002-2003 at the onset of the Iraq War and the eurozone sovereign debt crisis. “In each case, at least some financial markets were priced for significant recession risk, if not an outright slump,” he said. Yet Goldman cautioned that it would be a “grave error” to ignore the latest market tantrum altogether.

The US Federal Reserve was able to slash interest rates and flush the international financial system with liquidity to weather the 1987 and 1998 storms, something that would be much harder to pull off today. Mounting worry over China – and its linkages through the commodity nexus – has put everybody’s nerves on edge this time. “Financial markets now signal a high probability of another recession. High-yield spreads are at levels almost never seen outside of recessions,” said Mr Hatzius. “The message from the equity market is less clear-cut, but there are only a few non-recessionary instances over the past three decades in which the S&P 500 (index of US equities) performed as poorly as it did over the past year,” he said. That said, Britain appears rock-solid under the Goldman Sachs model with a mere 3pc risk of losing its footing over the next eight quarters, followed by Sweden, Denmark and South Korea.

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“Basically they’re maxxing out their credit cards before the banks can cut them off.”

Chesapeake Energy Plunges On Bankruptcy Fears (Forbes)

Shares in Chesapeake Energy were halted in mid-morning trading after selling off more than 50% to new lows on a report from Debtwire that the company had hired restructuring specialists Kirkland & Ellis . Seeking to stem the panic, Chesapeake issued a statement saying it “has no plans to pursue bankruptcy” and that Kirkland & Ellis had been one the company’s law firms since 2010. Chesapeake also reportedly hired restructuring specialists Evercore Partners back in December. After trading resumed, shares recovered some of their ground, jumping from $1.50 to $2.25, though still off 27% on the day so far. At these levels, all of Chesapeake’s equity could be had for $1.4 billion. Shares traded above $30 in 2014, and north of $60 in 2008, when natural gas prices hit record highs.

Naturally, holders of Chesapeake debt are shooting first and asking questions later. Its nearest-term bond matures March 15; it traded as high as 95 cents on the dollar late last week, but plunged this morning to 73.75 cents. After the announcement the bonds recovered above 80 cents, according to FINRA data. Investors are concerned that Chesapeake will be unwilling or unable to roll the debt. According to a report this morning from Troubled Company Reporter, some of Chesapeake’s longer dated issues are trading below 30 cents. Chesapeake has been looking for options to improve liquidity. Late last year amended its $4 billion bank revolver, changing it from an unsecured line to secured. It also did a distressed-debt-exchange offer, taking in $3.8 billion in notes in exchange for $2.4 billion in second-lien debt. It recently canceled dividend payments on its preferred stock.

A big problem for Chesapeake and many other exploration and production companies: their oil and gas hedges are rolling off, meaning that the little protection they used to have against low commodity prices is evaporating. As billionaire natural gas trader John Arnold tweeted this morning: “The wave of E&P bankruptcies starts now. CHK alone has nearly $1 billion less in hedging gains in ’16 than ’15 at today’s prices.” I talked to a well-placed banker over the weekend who says restructuring advisors at shops like Lazard and Kirkland & Ellis had been advising his clients to begin drawing down any cash remaining on their bank revolvers in order to maximize liquidity to get them through the next few months. Basically they’re maxxing out their credit cards before the banks can cut them off. That’s exactly what Linn Energy said last week that it had done; with more than $4 billion in credit facilities maxxed. Shares in LINE fell 50% on Friday and are off another 24% today. Linn’s debt is trading below 20 cents.

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“We need to close that gap. And the way that that will happen is the rest of those bankruptcies will go forward.”

150 Oil And Gas Companies “At Risk Of Bankruptcy” As Prices Fall (BBG)

About 150 oil and gas companies tracked by energy consultant IHS Inc. may go bust as a supply glut pressures prices and punishes revenues. The number of companies at risk is more than twice the 60 producers that have already filed for bankruptcy, Bob Fryklund, chief upstream analyst at IHS, said in an interview. A further shake out would help stimulate deals that have been on hold because buyers and sellers have disagreed on asset values, he said. Oil has collapsed about 70% over the past two years as U.S. shale producers boosted output and OPEC flooded the market with crude to drive out higher-cost suppliers. More bankruptcies would be one signal that energy prices have reached a bottom and would help kick off deals for the $230 billion worth of oil and gas assets currently up for sale, according to Fryklund.

“Nobody is buying because there is a mismatch between expectations,” Fryklund said in an interview in Tokyo. “We need to close that gap. And the way that that will happen is the rest of those bankruptcies will go forward.” Companies that plan to make investments are likely to wait for prices to gain for six months because they want to be confident in a recovery, according to Fryklund. “It usually happens as we begin to come back up on price,” he said. “There is always a little lag on timing.” The global oil surplus that fueled crude’s decline to a 12-year low will shift to a deficit as output falls and a new bull market begins before the year is out, Goldman Sachs said in January.

U.S. production will drop by 620,000 barrels a day, or about 7%, from the first quarter to the fourth, according to the Energy Information Administration. Low prices are also spurring greater efficiency, according to IHS. Operating costs on a per barrel basis declined about 35% last year in North America and have dropped about 20% globally, according to the consultant. Crude output from North Dakota rose through most of last year and some producers in the Permian Basin in western Texas can break-even drilling oil at $35 a barrel, he said.

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88% full is about as full as it can get. Tanks at Cushing are used for blending too. Can’t do that if they get even fuller.

US Oil Industry Woes Grow As Storage Levels Hit ‘Critical Level’ (MW)

The storage tanks at Cushing, Okla., the delivery point for the New York Mercantile Exchange crude contract, are edging closer to their limits, raising a new set of problems for an industry that has already suffered from a 70% drop in prices in the past year and a half. Cushing, which represents about 13% of the nation’s oil storage, has a working capacity of about 73.014 million barrels of crude oil, according to data from Sept. 2015, the latest available from the EIA. As of the week ended Jan. 29, there was 64.174 million barrels of oil in storage at Cushing, so it is at about 88% full. “Where inventories count the most—at the Nymex terminal complex in Cushing, Oklahoma—storage is already at a critical level,” said Stephen Schork, in The Schork Report published Monday.

“Approximately 6 out of 7 barrels available storage capacity at the Nymex hub are now full.” The report highlighted an article from Reuters that discussed delays in crude deliveries from storage tanks at Cushing because there wasn’t enough room to drain existing tanks to blend oil to meet West Texas Intermediate crude specifications. Cushing serves as a blending station, where crude oil from the midcontinent is mixed to the specific grades required by different refineries, according to StateImpact Oklahoma. “We soon might be in a situation that we have so much oil, that we don’t have enough of the right kind of oil,” Schork said.

But that’s not the only problem. Richard Hastings, macro strategist at Seaport Global Securities, said building more tanks would take time and there would be questions over how the cost of tanks would be shared across the supply chain. Meanwhile, the market is dealing with a “constant high volume” of crude oil coming from the floating storage at the Gulf Coast, the Canadian crudes coming by rail to the U.S. and domestic production, said Hastings. “If the volumes get too high, then the intermediate delivery steps—moving large volumes from tanks to pipelines—could be difficult if the local hub’s pipeline capacity is constrained,” he said.

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“..no matter how much P.R. or whitewashing they use, the market knows this is over and we’re not going to play this game anymore.”

Jim Rogers: “The Market Knows It’s Over” (SHTF)

Back in the 1970’s as recession gripped the world for a decade, stocks stagnated and commodities crashed, investor Jim Rogers made a fortune. His understanding of markets, capital flows and timing is legendary. As crisis struck in late 2008, he did it again, often recommending gold and silver to those looking for wealth preservation strategies – move that would have paid of multi-fold when precious metals hit all time highs in 2011. He warned that the crash would lead to massive job losses, dependence on government bailouts, and unprecedented central bank printing on a global scale. Now, Rogers says that investors around the world are realizing that the jig is up. Stocks are over bloated and central banks will have little choice but to take action again. But this time, says Rogers in his latest interview with CrushTheStreet.com, there will be no stopping it and people all over the world are going to feel the pain, including in China and the United States.

We’re all going to suffer… I can think of very few places that won’t suffer. But most people are going to suffer the next time around. Central banks will panic. They will do whatever they can to save the markets. It’s artificial… it won’t work… there comes a time when no matter how much money you have, the market has more money. [..] I don’t know if they’ll even call it QE (Quantitative Easing) in the future… who knows what they’ll call it to disguise it… they’re going to try whatever they can… printing more money or lowering interest rates or buying more assets… but unfortunately, no matter how much P.R. or whitewashing they use, the market knows this is over and we’re not going to play this game anymore.

The entire world is about to get hammered and the average person on the street is the one who will pay the price, as is usually the case. We can expect more losses in markets, more losses in jobs and more losses to freedom as governments and central banks point the finger at everyone but themselves.

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If that’s your sole alternative…

Can Hobbit Tourism Save New Zealand’s Troubled Dairy Farmers? (BBG)

New Zealand farmer Ian Diprose used to count on the dairy industry for most of his income. Today, he relies on tourism. As plunging milk prices push dairy farms into the red and hurt rural businesses, Diprose and wife Joy are making more money accommodating tourists than other farmers’ cows. That’s because their grazing property in Waikato, New Zealand’s dairying heartland, is about 16 kilometers (10 miles) from Hobbiton, a life-sized imitation of Bilbo Baggins’ Shire created for Peter Jackson’s Lord of the Rings and Hobbit movies. “A lot of the people who come through here are Hobbiton-crazy,” said Diprose, 73, whose De Preaux Lodge in Matamata offers bed, breakfast, a home-cooked meal and an authentic New Zealand farm experience for NZ$175 ($120) a night. “In our little town, we have something like 30 cafes or places to eat because of the tourists coming through.”

The Diproses started offering accommodation five years ago as a hobby to augment income from agisting cattle. Today, it’s their main business. Four out of five dairy farmers in New Zealand, the world’s biggest dairy exporter, will operate at a loss this season as the global slump in milk prices enters its third year, according to the central bank. That’s curbing farmers’ spending and damping economic growth, even as a tourism boom helps to soften the blow. “I’ve reduced my grazing prices to one of my customers quite drastically because she’s a young farmer and I know she’s struggling,” said Diprose, who has two sons dairying. “The impact it’s having on them is crippling. The financial situation of the dairy farmers, I weigh that up every day in my heart.” As farmers tighten their belts, demand for fertilizer to veterinary services has fallen, and retailers in rural towns are feeling the pinch.

At Giltrap AgriZone, which sells hay balers and tractors at three outlets around Waikato, sales are down 30% from a year ago, said Managing Director Andrew Giltrap. “We’re on a roller coaster and we just have to ride it out,” he said. New Zealand, once known as the country with 10 times more sheep than people, has stepped up investment in dairy farming in the past decade. The nation now boasts 5 million cows, more than its 4.5 million human population, while sheep numbers have declined 26% since 2006 to 29.5 million. The strategy made sense when milk prices surged to a record in 2007 and neared that peak again in 2013. Since then, a global oversupply and waning demand for milk powder from a slumping China have seen prices crash. With plunging oil prices now sapping milk purchases by Russia and other energy-producing nations, dairy prices are approaching the 12-year low they hit in August.

Read more …

But they’ll let him, want to bet? Europe’s rudderless. He has a demand or two in Syria as well.

Turkey’s Erdogan Threatened To Flood Europe With Migrants (Reuters)

Turkish President Tayyip Erdogan threatened in November to flood Europe with migrants if EU leaders did not offer him a better deal to help manage the Middle East refugee crisis, a Greek news website said on Monday. Publishing what it said were minutes of a tense meeting last November, the euro2day.gr financial news website revealed deep mutual irritation and distrust in talks between Erdogan and the EU’s two top officials, Jean-Claude Juncker and Donald Tusk. The EU officials were trying to enlist Ankara’s help in stemming an influx of Syrian refugees and migrants into Europe. Over a million arrived last year, most crossing the narrow sea gap between Turkey and islands belonging to EU member Greece.

Tusk’s European Council and Juncker’s European Commission declined to confirm or deny the authenticity of the document, and Erdogan’s office in Ankara had no immediate comment. The account of the meeting, in English, was produced in facsimile on the website. It does not state when or where the meeting took place, but it appears to have been on Nov. 16 in Antalya, Turkey, where the three met after a G20 summit there. “We can open the doors to Greece and Bulgaria anytime and we can put the refugees on buses … So how will you deal with refugees if you don’t get a deal? Kill the refugees?” Erdogan was quoted in the text as telling the EU officials. It also quoted him as demanding €6 billion over two years. When Juncker made clear only half that amount was on offer, he said Turkey didn’t need the EU’s money anyway.

The EU eventually agreed a €3 billion fund to improve conditions for refugees in Turkey, revive Ankara’s long-stalled accession talks and accelerate visa-free travel for Turks in exchange for Ankara curbing the numbers of migrants pouring into neighboring Greece. In heated exchanges, Erdogan often interrupted Juncker and Tusk, the purported minutes show, accusing the EU of deceiving Turkey and Juncker personally of being disrespectful to him.The Turkish leader was also quoted as telling Juncker, a former prime minister of tiny Luxembourg, to show more respect to the 80-million-strong Turkey. “Luxembourg is just like a little town in Turkey,” he was quoted as saying.The tense dialogue highlighted the depth of mutual suspicion at a time when the EU is banking on Turkish help to alleviate its worst migration crisis since World War Two.

The EU says the flow of people from Turkey, which hosts more than 2.5 million Syrian refugees, has not decreased in any significant way since the bloc’s joint summit with Ankara in November, when they had agreed the fund for refugees there.The report prompted a member of the European Parliament from the Greek centrist party To Potami to ask the European Commission to confirm the purported talks.”If the relevant dialogues between the EU officials and the Turkish President are true, it seems that there are aspects of the deal between Ankara and the EU which were concealed on purpose,” Miltos Kyrkos said in the question he submitted to the Commission. “We want immediately an answer on whether these revelations are true and where the Commission’s legitimacy to negotiate, using Turkey’s accession course as a trump card, is coming from,” Kyrkos said.

Read more …

Sweet Jesus.

35 Refugees Die Off Turkish Coast (Guardian)

At least 35 people have died after two boats carrying refugees sank off Turkey’s Aegean coast, according to reports. The Turkish coastguard said 24 drowned when a boat capsized in the Bay of Edremit, near the Greek island of Lesbos, while the Dogan news agency reported that the bodies of 11 people were found after a separate accident further south, near the Aegean resort of Dikili. The deaths came as Angela Merkel, the German chancellor, met the Turkish prime minister, Ahmet Davutoglu, for more talks on reducing the influx of refugees to Europe.

Turkey is central to Merkel s diplomatic efforts to reduce the flow. Germany saw an unprecedented 1.1 million asylum seekers arrive last year, many of them fleeing conflicts in Syria, Iraq and Afghanistan. In her weekly video message on Saturday, Merkel said European Union countries agree that the bloc needs to protect its external borders better, and that that is why she is seeking a solution with Turkey. She added that, if Europe wants to prevent smuggling, “we must be prepared to take in quotas of refugees legally and bear our part of the task”. “I don t think Europe can keep itself completely out of this”, Merkel said.

Read more …

Nov 022015
 
 November 2, 2015  Posted by at 10:08 am Finance Tagged with: , , , , , , , , , , ,  13 Responses »


RLOppenheimer New flag for EU 2015

To reiterate: People are genetically biased against change, because change means potential danger. People are also genetically biased against acknowledging this bias, because they wish to see themselves as being able to cope with both change and danger. Put together, this means that when changes come, people are largely unprepared or underprepared.

Take this beyond the bias of the individual, and apply it to that of the group (s)he belongs to, the vantage point of a society, and you find the bias multiplies and becomes self-confirming. That is, the members of the group reinforce each other’s bias. When change comes in small and gradual steps, as it mostly does, this can be said to work relatively well. When it comes in large and sudden steps, trouble ensues.

This little bit of psychology 101 may seem redundant, but it is indispensable if we wish it to recognize the implications of Europe -and the entire world with it, in its slipstream- having already entered a period of change so profound it is impossible to predict what the impact will be. We can do a lot better at this than we do today, where so far the drivers of change, and indeed the changes themselves, are ignored and/or denied.

This ignorance and denial threatens to lead to a needless increase in nationalism, fascism, violence, misery, death and warfare. If we were to acknowledge that the change is inevitable, and prepare ourselves accordingly, much of this could be avoided.

There are two main engines of change that have started to transform the Europe we think we know. First, a mass migration spearheaded by the flight of refugees from regions in the world which Europeans have actively helped descend into lethal chaos. Second, an economic downturn the likes of which hasn’t been seen in 80 years or so (think Kondratieff cycle).

Negative ideas about refugees are already shaping everyday opinion and politics in many places, and this will be greatly exacerbated by the enormous economic depression that for now remains largely hidden behind desperate sleight-of-hands enacted by central bankers, politicians and media.

People, first in Europe, then globally, will need to learn to share what they have, and do with much less. This is not optional. The refugees won’t stop coming, and neither will the depression. It would be much better if people were prepared for this by those same central bankers, politicians and media, but the opposite is happening.

It’s not only individual people who are biased against change, societies are too, and that means so are those who ‘lead’ these societies. They are all motivated, consciously or not, to resist change, because their positions and their powers depend on things remaining -largely- the same.

‘Leaders’ in Brussels and various European capitals still operate on the assumption that the refugee stream is a fleeting phenomenon they can and must stop. In a sort of positive feedback loop with their populations, this idea is continuously reinforced.

This leads to today’s reality in which at least one baby drowns every single day (and more in the past few days) off the shores of Greece, on Europe’s borders, and easily ten times as many members of their families. Moreover, the count is accelerating fast. Weather forecasts for the coming week call for Beaufort 7 winds.

There’s no society, no civilization that allows such atrocities to happen, and is not subsequently down for the count, and bound to dissolve, crumble and disappear. Societies all need common values, based on minimum levels of humanity and compassion, just to survive. And they need a whole lot more if they wish to flourish. No such values, as we see on a daily basis, exist in Europe today.

And that means it has no future – at least not in its present EU structure. It doesn’t get simpler than that. Denied and ignored as the simple fact may have been from the start, it was always clear that the European Union, if it failed to solidly unify the continent, risked becoming a force for division. And it looks as if the first real crisis the union faces will be enough to generate that division. There’s no union in sight other than in name.

Scores of people still hail Angela Merkel for her role in the refugee crisis, but they should think again. Merkel demanded the protagonist role for herself and Germany in setting if not dictating the conditions in the Greek debt negotiations over the first half of 2015, but she’s nowhere to be seen in a leading role now.

Merkel, true, has opened German doors to refugees, but she has utterly failed in expanding any such policy to the EU as a whole. And since she’s the only recognized leader in the entire union, leaving people like Hollande and Juncker far behind, she must acknowledge responsibility if things go wrong. Being a leader doesn’t mean you get to cherry-pick your challenges, it’s a package deal. Merkel cannot today act as German leader only.

But as fast increasing numbers of refugees and their children are drowning in the Aegean, in an act of supreme cynicism Merkel last week went to China to sell Volkswagens and weapons, as well to talk about… human rights. That is to say, the human rights of Chinese people. Not those of the refugees making their way to Europe, who apparently don’t even have the right to safe passage.

It’s that safe passage that must be Europe’s first and main concern right now, not how to stop people from coming. There are many voices clamoring for the ‘Evros fence’, built by Greece three years ago on a stretch of land on its border with Turkey, to be opened, so the drownings stop.

This would seem to be a good first step to halt would should by now be labeled a refugee disaster, rather than crisis. But it’s a step that could have been taken months ago, and the fact that it hasn’t even after Merkel visited Turkey recently, doesn’t bode well. Tsipras is set to visit Turkey this week in the wake of Erdogan’s election victory yesterday, but Tsipras may not get the green light from Berlin to tear down the fence.

The best thing would perhaps be for ordinary people to organize themselves into a large group, 10,000+, travel to Evros, and tear down the fence themselves, rather than wait for politicians to do it. Perhaps the time to rely on others, politicians or otherwise, to do things, has passed.

The world has seen mass migrations before, numerous times, and Europe sure has had its share. The manner is which these migrations take place typically depends to a large extent on people’s human values and their willingness to share their wealth. What’s happening with Syrian refugees today bears some eery resemblances to the boats carrying Jewish refugees prior to WWII that were refused in many ports. Let’s not go there again.

Refugees almost always make a positive contribution to the country they resettle in, both economically and in other ways. We know that, just like we know many other things. But that doesn’t lead our reactions, fear does. And the more wealth people have, the more they seem to fear losing it.

I’ve quoted before how the German federal police warned Merkel at least 8 months ago that a million refugees would be at the country’s doorstep. And that nothing was done with this knowledge for about half a year, leaving Germany woefully unprepared when the warning turned out to be correct.

UN Geneva Director General Michael Moller puts the warning even further into the past; he says EU leaders were told about it at least two years ago.

Refugee Crisis Was Not Unexpected, Top UN Official Says

Director-General of the United Nations office in Geneva, Denmark’s Michael Moller, expresses optimism that the agency’s sustainable development goals (SDGs) will help toward ending extreme poverty but he has no illusions about the refugee crisis[..]

“The crisis we have today, we knew it was going to happen. The leaders of Europe were told it was going to happen at least two years ago. So a little prevention and a little preparation in terms of the narrative to their voters would have gone a long way.”

“This very negative, xenophobic and frankly racist narrative that we’re seeing in many countries, including my own country – I don’t recognize my own country – is unacceptable [..] one of the things that I find very puzzling is that there’s some sort of global amnesia going on. In the early 80s we had pretty much the same problem in Southeast Asia, with much bigger numbers of boat people.

It took a while and then someone decided we must deal with it in a more rational way and they came up with a plan of action which was the product of an international conference where international solidarity kicked in in a much broader way than now. Then we put in place a whole series of measures in a way that minimized the pain and over seven years we resettled 2.5 million people. I don’t see why we can’t take a page or two or three out of that book. To me what’s happening isn’t a European problem, it’s an international problem.

[Washington] are evolving as well. First of all, the number [of refugees the US would accept] was 10,000 but now they’ve upped it to 100,000. I’ve talked to some of the politicians.

[..] looking at this crisis as an isolated incident doesn’t make any sense whatsoever. We are going to have more of these things and a lot worse. The moment climate refugee problems kick in we are going to be in real trouble, unless we sit down globally and figure out structures and ways to deal with this in the future. Not to reinvent the wheel every damn time that happens, but to rethink completely the humanitarian system, because I guarantee you that it will happen again.

The refugee disaster is only the first step in a long and multi-pronged process of profound change in the lives of all citizens of -formerly- rich countries. And if we collectively screw up step 1 as badly as we have and still do, what’s going to happen when our economies fall to pieces? When our alleged ‘financial security’ crumbles, our pensions, our benefits?

Are we going to blame it all on the refugees, and vote in right wing simpletons? Too many of us undoubtedly will. Whether there’s enough decency to counter that is a toss-up. What is not is that the numbers of refugees will keep rising at the same time that our economies keep sinking.

It’s up to us, wherever we live in the world, to find the best way to deal with it. We have a choice in how we react to these developments, not in whether they happen or not.

Oct 082015
 
 October 8, 2015  Posted by at 11:45 am Finance Tagged with: , , , , , ,  14 Responses »


BIS/OWI Battle of Britain. Children in an English bomb shelter 1940/41

The deeply embedded, genetically determined aversion -or resistance- to change that we are all born with is an important survival tactic. Since change equals potential danger, our aversion to it keeps us out of danger.

We are ‘programmed’ to prefer familiar surroundings, to first look at what we recognize, and to ignore what we do not until we feel comfortable enough about what we do know.

Ironically, though, the aversion to change can also lead us into danger. Because it prevents us from preparing for change, and therefore preparing for danger.

Yes, people can adapt, they have that ability too, but we don’t fully adapt to change until and unless we’re forced to. And while it may not be too late then, it certainly tends to make adaptation much more difficult.

We prefer to focus on those things that stay the same, or seem to stay the same, ignoring those that don’t, even if they change in -comparatively- radical ways, until we no longer can. But by then we have most often missed a significant part of the time and the opportunity to adapt to them. Our resistance to change causes us to miss those changes that happen despite our efforts at keeping things the same.

The deeper problem, as every thinking human can recognize, is that things always change, life changes, the world does. Nothing ever stays the same. Change itself is the only constant. Life equals change. Without change, there would be no life.

And arguably -since time is perhaps not a constant-, changes come even faster today than they have historically, in the perception of our ancestors, both in human designed systems and in natural systems. And the faster the changes come, the more vulnerable our inborn aversion to change makes us. Which in turn reinforces that aversion all the more.

In today’s world, plant and animal species go extinct at a far faster pace than ever in human history. The planet warms, sea levels rise. Pollution of multiple kinds increases at an exponential speed.

Our initial genetic reaction to all of this is to withdraw deeper into the cocoons we’ve built, and ignore, if not deny, that these things are happening. Or we may care up to a point, donate some money or even wave a banner, but always with an eye to returning to the safety of our cocoons.

The way it appears to work is that our aversion to change turns against us because, and when, it is amplified by our propensity to lie to ourselves and to each other.

That’s also the point where we let the sociopaths of the world into the picture, and that’s where we allow them to be our leaders. They thrive on our denial of change, of problems, of dangers. They know to tell us just what we want to hear. Recovery, hope, wealth, clean energy, whatever sells on any given day.

Politicians eagerly use our resistance to change, because they don’t want change either, lest it costs them their positions. The world’s wealthiest, too, seize on to our inbuilt drive to hold on to what’s familiar, and they use it to get even wealthier.

It is nothing new that people’s fears can be used to control them. Fear of the unknown, fear of what’s different, fear of change. But also fear of communists, fear of muslims, fear of people who have different skin colors, customs, rituals and cultures. We possess a myriad of -often dormant- fears, and it is very easy to play into them, and get people to support those who promise to protect them. “Trust me, I’ll keep you comfy, I’ll make sure things stay just the same. And better.”

What is true for changes in climate, pollution, extinction rates, is also true for the economy and our perceived wealth status. We try to ignore the biggest changes, and elect people to represent us who feed into that denial.

Together, politics and big money, through the media they firmly control, today paint a picture of a world in recovery – a beneficial change, a return to what we are comfortable with-, albeit a recovery that requires job cuts and pay cuts and austerity and other miserable measures for ‘normal people’. It’s the price you’ve got to pay for being allowed to stay in your comfort zone.

The reality, however, is that there is no recovery, and there can’t and won’t be until huge amounts of debt have either been repaid or restructured. Meanwhile, the rich and their bankers continue to increase their profits and upscale their lifestyles, as everyone else gets squeezed while dreaming of what they once had, or were once dreaming of.

This way we have entirely missed out on perhaps the biggest change to our economies in human history. That is, our economies, and therefore our societies, no longer run on what we produce, they run on what we borrow. This is not that recent a development, but what is new is that we have reached a stage where the inevitable shadow side of the arrangement is becoming ever more obvious.

The optimum, the sweet spot, for our western economies can be debated, but the range is not that wide: it will be sometime between the late 1960s and the mid-to-late 1970s. That’s when our societies -and their private citizens- would have been at their richest, and it’s all been downhill from there, something that becomes obvious especially when looking at what debt levels have done since.

At first debt went up slowly, but then it started to accelerate faster, in a classical hockey stick model. Around the year 2000, again not a solid date but close, we began to need to issue more debt just to service existing debt. And since then, we’ve dug a much deeper debt hole for ourselves.

Which we will only be able to climb out of after a painful sequence of deleveraging and deflation. It will be so painful that it’s pretty much useless to think about what we’re going to do at the other end of it; the world will have changed so profoundly by then we wouldn’t recognize it anyway. Talk about change.

The process of trying to ignore the changes taking place around us has had many perverse effects, but perhaps none more than our inability to see how a wide range of organizational structures in our world have changed their roles, their goals and their purposes.

NATO has always been presented as beneficial to our safety, as well as that of the entire world. It lost that role a long time ago, but we’re ignorant of that change. The IMF was supposed to instill balance into the global economy, and provide support to weaker nations, but it’s become a tool for the rich to squeeze the poor. The same holds for the World Bank.

The US was born as a union of free states, but it’s rapidly becoming a force of suppression for both its own citizens and just about all other nations on the planet. The EU was meant to unite European countries in a manner that should prevent yet more wars, but it‘s become an authoritarian bureaucracy that divides and will, if it is not stopped, provoke fighting among nations once our economic facades start to crumble for real.

We used think of our media as independent organizations whose goal it was to provide us with objective information on local as well as world affairs. Today, there is very little left in the media that could be labeled objective even with the best of intentions.

There are many more examples of things that have changed profoundly, and where we entirely missed out on the changes. And as we may start to realize the reason why we didn’t see the changes as they happened, i.e. we are genetically pre-disposed not to notice them, we may also come to perceive the role these changes are set to play in our future lives, and the dangers they pose to those lives.

It’s a remarkable PR and spin achievement that we have been led to -still- believe our societies need megabanks to survive, and it’s just as remarkable that trade deals like NAFTA, TPP and TTiP are sold to us as beneficial to our lives, even as they are concocted in the most flagrant anti-democratic way imaginable. “Trust us”.

Alas, the moment we finally wake up to what these deals represent, we won’t own a single square inch of our own world anymore. The very people who claim to bring freedom to the rest of the world are very busy taking our freedom away at home.

The relentless invasions by US/UK/NATO military of a dozen or so Muslim nations, all of which resulted in utter political chaos in formerly largely peaceful societies, in bloodshed among their citizens and even sometimes in the murder of doctors and nurses, all these things find widespread support among western populations thinking “we” are still on the right side of the equation, or even that God is still on our side.

Even if the murder of civilian populations has long been constituted as a war crime, and even if we all intuitively understand that those who volunteer to work in the world’s most volatile regions in order to help ordinary people in mortal danger, like the doctors and nurses in Medecins sans Frontiers’ numerous locations around the world, are arguably the best among us, they get bombed and shot at, and their lifeless remains discarded as collateral damage, and we pretend that somehow that’s alright.

Russia has been carefully positioned by our governments and media as the new/old baddest enemy we have, but Stalin is long gone and our representatives are unable to provide us with any evidence of the evil deeds Moscow is alleged to be guilty of this time around.

Today, with the Russian army stepping in where the west, at least if we may believe its stated goals, has failed -Syria-, NATO cries wolf as loud as it can. And we believe it, because we believe it’s protecting us from evil. That it may well be the agent of evil itself is a matter that cannot be discussed, and isn’t.

The persistent claim emanating from Washington that America spreads freedom and democracy around the world has been exposed as ludicrous numerous times and in many parts of the world, but not in the US itself, and that’s what counts; most.

It’s easier for us to ignore the changes that the behemoth political, economical and military structures in our own societies have undergone, and that’s who they like it. At a certain scale, an organizational structure gets too large too wrap a human mind around, nobody oversees what happens and why, and the organizations therefore attract the wrong people as leaders, the sociopathic types who thrive in exactly such situations.

But sociopaths know exactly which buttons to push, or they wouldn’t rise to their positions. And one of those buttons is your aversion to change, and all the fears change can give way to. Through the same methods you are being sold detergent, you are relentlessly pushed to trust a political system and its representatives that once may -may- have acted in your best interest but no longer do.

In the same vein, economic growth may once have been a valid goal to strive for, but today has not only become impossible because of the aforementioned debt levels, it must also be seriously questioned in view of massive pollution, mass extinctions and changing climates.

The notion that we we can grow our way out of the mess that our previous growth spurt has gotten us into, rests at best on very flimsy foundations. To shake off this all-encompassing growth ideal, however, we would need to radically change our ‘model’ of the world.

Unfortunately, we are pre-disposed not to like change, let alone the radical kind.

The combination of our pre-disposition against change and the accelerating rate of change we ourselves have induced, means we are entering what may be seen as the ‘dark side’ of that disposition.

And while we can try and ignore that dark side for a little bit longer, the days of our ignorance are numbered. Our blinders are about to be ripped off our faces, in a violent fashion. We’re not going to like it.

May 152015
 
 May 15, 2015  Posted by at 10:04 am Finance Tagged with: , , , , , , , , , , , ,  1 Response »


G. G. Bain Police machine gun, New York 1918

Every Speculative Bubble Rests On Some Kind Of A Fairy Tale (G&M)
Banks Seek Waivers Ahead Of Forex Guilty Pleas (Reuters)
How China’s Banks Hide Trillions In Credit Risk – Full Frontal (Zero Hedge)
Max Keiser: ‘Britain Is The Epicentre Of Financial Fraud’ (Newsweek)
EU Prevents Greece From Implementing Reforms: Varoufakis (EFE)
Varoufakis Refuses Any Bailout That Would Send Greece In ‘Death Spiral’ (Guar.)
Greece To Privatize Port, Airports In Concession To Creditors (Bloomberg)
Varoufakis Says Debt Swap Fills Draghi’s ‘Soul With Fear’ (Reuters)
Greek Government Defends Itself Over Central Bank Tensions (Reuters)
Syriza Highlights ‘Red Lines’ In Negotiations, Calls On People (Kathimerini)
Syriza and Greece: Dancing with Austerity (Village.ie)
Greece Signs EBRD Deal Worth €500 Million A Year (Reuters)
You Can’t Read The TPP, But These Huge Corporations Can (Intercept)
Secrets, Betrayals and Merkel’s Risky Silence in the NSA Scandal (Spiegel)
Flash Crash Patsy Complained Over 100 Times About Real Market Manipulators (ZH)
Monsanto’s Syngenta Gambit Hinges On Sale Of Seed Businesses (Reuters)
A Third Of Europe’s Birds Is Under Threat (Guardian)
Your Attention Span Is Now Less Than That Of A Goldfish (OC)

“Every speculative bubble rests on some kind of a fairy tale.. And now it is the faith in the central-planning capabilities of global central bankers. When the loss of confidence in the Fed, the ECB etc. begins, the stampede out of stocks and bonds will start.”

Every Speculative Bubble Rests On Some Kind Of A Fairy Tale (G&M)

Government bonds regarded as among the safest in the developed world have become subject to violent price swings typically associated with more speculative assets. Yields on German 10-year bunds, the benchmark for the euro zone, shot up more than 20% at one point Tuesday, in a selloff described by Goldman Sachs analysts as “vicious.” As recently as last month, the same debt reached a record-low yield of 0.05%. At the other end of the confidence scale, Greek bonds strengthened slightly, reflecting renewed optimism that the embattled leftist government could cobble together a deal with euro-zone finance ministers that would get the bailout cash flowing again into its nearly empty coffers. But deal or no deal, the chances of a Greek default remain high. And despite the efforts of European authorities to contain any fallout and safeguard the euro, a spillover to other battered members of the euro club can’t be ruled out.

“There are a lot of rotten assets out there, and ultimately you have to have a reckoning,” warned Alex Jurshevski at Recovery Partners, who advises governments and corporations on debt restructuring. Although most analysts doubt this would trigger a seismic global financial shock, the risk of contagion is more than trivial, as underscored by the current sovereign-bond rout – with a loss in value of about $450-billion across global markets in just three weeks. “There’s a lot of risk in any of the markets that have been subjected to artificial downward pressure on interest rates,” Mr. Jurshevski said. Worries about sovereign debt have been around since European nations first latched on to this instrument as a relatively low-cost way of meeting the high costs of waging wars and undertaking other expensive projects.

Within four years after the newly minted Bank of England issued such bonds in 1694, government debt ballooned to £16-million from £1.25-million. By the middle of last year, government-related debt around the world totalled $58-trillion (U.S.), a 76% increase since the end of 2007, according to a report by McKinsey Global Institute aptly titled “Debt and (not much) deleveraging.” The ratio of all debt to GDP jumped 17 %age points to a whopping 286%. Since the Great Recession, debt has been expanding faster than the economy in every developed nation on the planet, led by a huge expansion of public-sector borrowing.

“Every speculative bubble rests on some kind of a fairy tale, a story the bubble participants believe in and use as rationalization to buy extremely overvalued stocks or bonds or real estate,” Mr. Vogt argued. “And now it is the faith in the central-planning capabilities of global central bankers. When the loss of confidence in the Fed, the ECB etc. begins, the stampede out of stocks and bonds will start. I think we are very close to this pivotal moment in financial history.”

Read more …

Commit to crimes and demand BAU in the same breath.

Banks Seek Waivers Ahead Of Forex Guilty Pleas (Reuters)

Banks want assurances from U.S. regulators that they will not be barred from certain businesses before agreeing to plead guilty to criminal charges over the manipulation of foreign exchange rates, causing a delay in multibillion-dollar settlements, people familiar with the matter said. In an unprecedented move, the parent companies or main banking units of JPMorgan Chase, Citigroup, RBS, Barclays and UBS are likely to plead guilty to rigging foreign exchange rates to benefit their transactions. The banks are also scrambling to line up exemptions or waivers from the Securities and Exchanges Commission and other federal regulators because criminal pleas trigger consequences such as removing the ability to manage retirement plans or raise capital easily.

In the past, waivers have generally been granted without a hitch. However, the practice has become controversial in the past year, particularly at the SEC, where Democratic Commissioner Kara Stein has criticized the agency for rubber stamping requests and being too soft on repeat offenders. Negotiating some of the waivers among the SEC’s five commissioners could prove challenging because many of these banks have broken criminal or civil laws in the past that triggered the need for waivers. Many of the banks want an SEC waiver to continue operating as “well-known seasoned issuers” so they can sell stocks and debt efficiently, people familiar with the matter said.

Such a designation allows public companies to bypass SEC approval and raise capital “off the shelf” – a process that is speedier and more convenient. Several of the people said another waiver being sought by some banks is the ability to retain a safe harbor that shields them from class action lawsuits when they make forward-looking statements. The banks involved are also seeking waivers that will allow them to continue operating in the mutual fund business, sources said. At least some of the waivers at issue in the forex probe will need to be put to a vote by the SEC’s five commissioners. No date has been set yet..

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“..loan loss reserves aren’t even sufficient to cover NPLs + special mention loans, let alone defaults on a portion of the 38% of credit risk carried off the books..”

How China’s Banks Hide Trillions In Credit Risk – Full Frontal (Zero Hedge)

There are several takeaways here. First – and most obvious – is the fact that accurately assessing credit risk in Chna is extraordinarily difficult. What we do know, is that between forced roll-overs, the practice of carrying channel loans as “investments” and “receivables”, inconsistent application of loan classification norms, and the dramatic increase in off balance sheet financing, the ‘real’ ratio of non-performing loans to total loans is likey far higher than the headline number, meaning that as economic growth grinds consistently lower, the country’s lenders could find themselves in deep trouble especially considering the fact that loan loss reserves aren’t even sufficient to cover NPLs + special mention loans, let alone defaults on a portion of the 38% of credit risk carried off the books.

The irony though is that while China clearly has a debt problem (282% of GDP), it’s also embarking on a concerted effort to slash policy rates in an effort to drive down real rates and stimulate the flagging economy, meaning the country is caught between the fallout from a shadow banking boom and the need to keep conditions loose because said boom has now gone bust, dragging credit growth down with it. In other words, the country is trying to deleverage and re-leverage at the same time. A picture perfect example of this is the PBoC’s effort to facilitate a multi-trillion yuan refi program for China’s heavily-indebted local governments. The idea is to swap existing high yield loans (accumulated via shadow banking conduits as localities sought to skirt borrowing limits) for traditional muni bonds that will carry far lower interest rates.

So while the program is designed to help local governments deleverage by cutting hundreds of billions from debt servicing costs, the CNY1 trillion in new LGB issuance (the pilot program is capped at 1 trillion yuan) represents a 150% increase in supply over 2014. Those bonds will be pledged as collateral to the PBoC for cheap cash which, if the central bank has its way, will be lent out to the real economy. So again, deleveraging and re-leveraging at the same time. This is just one of many ‘rock-hard place’ dynamics confronting the country as it marks a difficult transition from a centrally planned economy based on credit and investment to a consumption-driven model characterized by the liberalization of interest and exchange rates.

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‘If you see me walking the streets of your town, then you’re probably screwed’.

Max Keiser: ‘Britain Is The Epicentre Of Financial Fraud’ (Newsweek)

A general election, Benjamin Disraeli once observed, “inflames the passions of every class of the community. Even the poor,” he added, “begin to hope.” In 2015, Max Keiser argues, the power of global markets has rendered election fever something of an anachronism: “Tony Blair personified the shift away from democracy, towards control by bankers.” In modern politics, the prime minister “is really taking orders from finance”. “What if Miliband had won?” “There’s an impending scheme called TTIP (Transatlantic Trade and Investment Partnership, a proposed EU-US agreement) whereby all complaints – against US companies fracking in Britain, say – would go to a global tribunal, moderated by corporations. They don’t care who the prime minister is. “Why should we?” David Cameron’s role, “is being eroded to the point of insignificance”.

Keiser, 55, is a New York University graduate and former high-achieving Wall Street trader whose mischievous wit and renegade instincts have made him one of the most widely viewed broadcasters on the planet. His flagship show, Keiser Report, is carried by Russian state-funded channel RT; for that alone, some fellow-Americans consider him a traitor. But Keiser connects with a predominantly youthful audience otherwise indifferent to economics. “Rage against kleptocrats is building incrementally,” says Keiser, a tireless scourge of JP Morgan, Lehman Brothers and HSBC. “All over the world, people have had enough.” Untroubled by controversy, Keiser conducted the 2011 interview with Roseanne Barr during which she explained that a fitting reward for “banksters” would be to bring back the guillotine.

He once advised Cameron to “go back to Eton and get some of that back-stall shower pleasure”. When we first met, three years ago, just after Keiser moved to London with co-presenter and wife Stacy Herbert, he told me that the modern voter was worse off than a medieval serf. “Back then,” he said, “at least the process of theft was transparent. The barons whacked you over the head, then took all your money. The mode of larceny has changed, that’s all.” What he calls “the Thatcher-Reagan market model” has, he says, “been consigned to the dustbin. There’s no growth. There’s quantitative easing, which causes deflation. The global economy is collapsing.”

The EU, as Keiser likes to describe it, “poses as an elite club; actually it’s a leper colony where everyone’s comparing who has the most fingers left”. “Could France, say, go bankrupt?” “Absolutely. The forces killing Greece are active in France, Italy and Spain.” The EU, he says, “could be viewed as The Fourth Reich. Germany is a superpower. The Greek crisis is great for them – it keeps the euro low and German exports cheap. When countries like France go broke, EU federalisation will proceed through Berlin.”

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“So far, none of the many planned reforms have been implemented because the partners first wanted a broad and comprehensive agreement..”

EU Prevents Greece From Implementing Reforms: Varoufakis (EFE)

Greek Finance Minister Yanis Varoufakis said on Thursday that its European partners have prevented the Greek government from legislating many necessary reforms, and stressed that he would only sign an agreement that aims at economic sustainability, Efe news agency reported. So far, none of the many planned reforms have been implemented because the partners first wanted a broad and comprehensive agreement, and believed that any legislation would constitute a unilateral act, Varoufakis argued at a conference organised in the Greek capital by The Economist weekly.

The minister said that from the beginning, creditors rejected proposals to negotiate and regulate in parallel, an action that, in his view, would have helped to create confidence between Greece and its partners. Varufakis stressed that Greece was determined to reform everything in the country, noting that if Greece did not reform, it would sink. However, he stressed that he would not sign any agreement inconsistent with macroeconomics or unsustainable, and accepting conditions that cannot be met, such as had been down in the past. The error of the past, he explained, was that every negotiation looked only for what to do to make the next bailout payment instead of seeking solutions to pursue economic recovery.

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Oh boy: “[Draghi] received a rapturous welcome from Christine Lagarde, who introduced him as “maestro” – the nickname once given to Alan Greenspan. “Those who know you understand that you are a man of outstanding insight, fierce determination, and above all, courage.”

Varoufakis Refuses Any Bailout That Would Send Greece In ‘Death Spiral’ (Guar.)

Greece’s embattled finance minister, Yanis Varoufakis, stepped up his war of words with eurozone policymakers on Thursday, saying he wished his country still had the drachma, and would not sign up to any bailout plan that would send his country into a “death spiral”. With Greece facing a severe cash crisis as it struggles to secure a rescue deal from its creditors, Varoufakis – who has been officially sidelined from the debt negotiations – told a conference in Athens that he would reject any agreement in which “the numbers do not add up”. Greek GDP figures, published on Wednesday, revealed that the economy has already returned to recession. “I wish we had the drachma, I wish we had never entered this monetary union,” Varoufakis said.

“And I think that deep down all member states with the eurozone would agree with that now. Because it was very badly constructed. But once you are in, you don’t get out without a catastrophe”. He also warned that a mooted proposal for a bond swap, to ease Athens’ cash-crunch, was likely to be rejected, because it struck “fear into the soul” of European Central Bank president Mario Draghi. Despite his comments Greece on Thursday offered a concession to its international lenders by pushing ahead with the sale of its biggest port, Piraeus. Greece has asked three firms to submit bids for a majority stake in the port, a senior privatisation official told Reuters, unblocking a major sale of a public asset as creditors demand economic reforms from Athens.

Draghi, who was in Washington on Thursday to deliver a lecture on monetary policy, pointedly failed to mention the ongoing Greek crisis. He received a rapturous welcome from Christine Lagarde, the managing director of the International Monetary Fund, who introduced him as “maestro” – the nickname once given to Federal Reserve chairman Alan Greenspan. “Those who know you understand that you are a man of outstanding insight, fierce determination, and above all, courage. You can call a spade a spade without putting any of your cards on the table,” she said.

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“It’s “definite” that Greece won’t proceed with selling other state assets on a list that had been agreed on by the previous government..”

Greece To Privatize Port, Airports In Concession To Creditors (Bloomberg)

Greece will continue with efforts to privatize the country’s largest port and regional airports as it seeks ways to attract investment for other state assets, Economy Minister George Stathakis said, in a government concession in talks with its creditors. The privatization process that is already underway for the Piraeus Port Authority, operator of Greece’s largest harbor, and for 14 regional airports will continue, Stathakis said today in an interview in Tbilisi, Georgia. “We’re trying to revise some elements of these privatizations in order to improve them and I think we’ll get a sensible agreement for both.” A sale of the Piraeus Port would be a reversal on the part of Greece’s Syriza party-led government, which had earlier pledged to block such moves.

As part of ongoing negotiations to unlock aid to Europe’s most-indebted nation, Greek’s European creditors have asked for more specific policy proposals in areas including labor market deregulation, a pension-system overhaul, sales tax reform and privatization of state-held assets. Still, Stathakis said the government doesn’t plan to sell other assets at the moment.The Piraeus Port sale “is part of the bailout negotiations,” and the fact that the government “agrees to privatize the port is a compromise to creditors,” government spokesman Gabriel Sakellaridis told reporters in Athens Thursday. A venture led by Fraport won the right in November 2014 to use, operate and manage the 14 regional airports after it offered €1.2 billion for 40 years and promised to pay an annual, guaranteed leasing fee of €22.9 million.

Fraport also pledged to make €330 million in investments over the next four years. Greece is talking to Fraport and a decision should be reached “very soon.” It’s “definite” that Greece won’t proceed with selling other state assets on a list that had been agreed on by the previous government such as water companies, the post office or Public Power Corp, Stathakis said. “We’re trying to work on a different model than privatizing to attract capital and investment such as for the country’s railways and other ports” and Greece is looking at “alternative options to 100% privatization.” The sale of land at Hellenikon, site of Athens’s old airport that is Europe’s largest unused tract of urban real estate, “is an issue under discussion,” Stathakis said. A venture led-by Lamda Development last year agreed to buy the property for €915 million while also committing to spend €1.2 billion on infrastructure at the site.

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“..such a swap of our own new bonds with these bonds … would feed Mr. Weidmann with excuses to create problems with the ECB’s QE.”

Varoufakis Says Debt Swap Fills Draghi’s ‘Soul With Fear’ (Reuters)

Repayment of what Greece owes to the ECB should be pushed into the future, but it is not an option because it fills ECB chief Mario Draghi’s “soul with fear”, Greece’s finance minister said on Thursday. Yanis Varoufakis said Draghi, president of the ECB, cannot risk irritating Germany with such a debt swap because of Berlin’s objection to his bond-buying program. Varoufakis first raised the idea of swapping Greek debt for growth-linked or perpetual bonds when his leftist government came to power earlier this year, But Athens has since dropped the proposal after it got a cool reception from eurozone partners.

The outspoken minister, who has been sidelined in talks with EU and IMF lenders, brought it up again on Thursday, saying €27 billion of bonds owed to the ECB after €6.7 billion worth are repaid in July and August should be pushed back. “What must be done (is that) these €27 billion of bonds that are still held by the ECB should be taken from there and sent overnight to the distant future,” he told parliament. “How could this be done? Through a swap. The idea of a swap between the Greek government and the ECB fills Mr. Draghi’s soul with fear. Because you know that Mr. Draghi is in a big struggle against the Bundesbank, which is fighting against QE. Mr. Weidmann in particular is opposing it.”

Varoufakis was referring to the ECB’s quantitative easing (QE) or bond-buying plan and Bundesbank President Jens Weidmann’s unabashed criticism of it. Varoufakis said the bond-buying plan is “everything for Mr. Draghi” but that “allowing such a swap of our own new bonds with these bonds … would feed Mr. Weidmann with excuses to create problems with the ECB’s QE.” Prime Minister Alexis Tsipras’s government stormed to power in January promising it would end austerity and demand a debt writeoff from lenders to make the country’s debt manageable. It has spoken little about debt relief in recent months as it tries to focus on reaching a deal with lenders on a cash-for-reforms deal, which has proved difficult amid a deadlock on pension and labor issues.

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I have the impression Syriza is being very polite on this issue.

Greek Government Defends Itself Over Central Bank Tensions (Reuters)

Greece’s leftist government on Thursday sought to deflect criticism over tensions with the Bank of Greece, saying it respected the bank’s independence but was free to castigate the governor for actions he took as finance minister. Governor Yannis Stournaras’s relations with the government have come under scrutiny in recent days after a newspaper accused him of undermining Greece’s talks with creditors and government officials openly criticized him on other issues. “The Greek government hasn’t opened any issue with Mr. Stournaras. If issues have surfaced, it wasn’t due to the government’s initiative,” government spokesman Gavriil Sakellaridis told reporters. “The issue of the central bank’s independence, which is fully respected by the Greek government, is above all an issue for the central bank to defend.” [..]

Stournaras was appointed central bank governor last June. Before that he was finance minister in the conservative-led government, where he spearheaded Greece’s return to the bond markets in April 2014 after a four-year exile. But he also drew criticism from anti-bailout groups for implementing harsh spending cuts demanded by the EU and IMF. Energy Minister Panagiotis Lafazanis this week was quoted as saying Stournaras’s role in winding down ATEbank – a small lender that gave loans to farmers – in 2012 was a “scandal.” “The criticism by Mr. Lafazanis towards Mr. Stournaras refers to the period that he was finance minister,” Sakellaridis said. “Obviously, today he is a central banker but there can be and should be political criticism over the period that he was a finance minister.”

Interior Minister Nikos Voutsis this week also questioned why Stournaras – who suggested Greece tap an IMF holding account to repay €750 million to the fund this week and avoid default – had not mentioned the funds earlier. The latest tensions flared when the Efimerida ton Syntakton newspaper reported over the weekend the Bank of Greece in an e-mail to journalists leaked economic data including deposit outflows during Tsipras’s first 100 days in power. Hours later, officials at Tsipras’s office called on the central bank to deny the report, saying the report, if true, “constitutes a blow to the central bank’s independence.” The Bank of Greece has denied that either Stournaras’s office or the bank’s press office sent such an e-mail.

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“Now is the time for the people to join the battle..”

Syriza Highlights ‘Red Lines’ In Negotiations, Calls On People (Kathimerini)

Even as negotiations with Greece’s creditors enter a critical phase, the political secretariat of SYRIZA has indicated that the party will not back down from its so-called red lines, reaffirming pre-election promises to protect pensioners and workers. In a statement issued late on Thursday after a stormy session of senior party cadres, the secretariat said, “the red lines of the government are also red lines of the Greek people, expressing the interests of workers, the self-employed, pensioners, farmers and young people.” Underlining the need for the debt-racked country to return to a path of growth and social justice, the statement referred to “the persistence of creditors on enforcing the memorandum program of the Samaras government” whom it accused of exercising pressure through politics and by restricting liquidity.

The fixation on austerity was “paving the way for the far-right,” it added. The secretariat stressed that the demands of creditors “cannot be accepted, adding that SYRIZA MPs and officials would continue efforts to inform the Greek people and to invite them to join “a mobilization toward the victory of democracy and dignity.” “Now is the time for the people to join the battle,” it said. The statement followed a feverish session during which Deputy Prime Minister Yiannis Dragasakis is said to have come under fire by many SYRIZA officials for making concessions to creditors. Senior SYRIZA MP and Parliament Speaker Zoe Constantopoulou was said to be among those who claimed the government has ceded too much ground from its pre-election pledges.

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Excellent longish essay. “We come with arguments, they reject them, then they say, ‘you’re wasting time’. What does that mean? It’s just saying, agree with us. You’re wasting time between getting elected and doing what we say”.

Syriza and Greece: Dancing with Austerity (Village.ie)

Dimitrios Tzanakopoulos is Alexis Tsipras’ Chief of Staff. A serious Marxist theorist with an utterly coherent anti-capitalist worldview, he is at the very heart of the new government, directing the affairs of the Prime Minister’s office. He remains “optimistic that there will be a deal” with the partners. “Europe needs to ask if austerity is the future. If not, there must be a solution to these social catastrophes. SYRIZA has promised to find one and this is what we will do”. In many ways the government’s line in negotiations mirrors his Althusserian politics. It views instability as the most important threat for the ruling class and capital accumulation. The election of SYRIZA brought such instability, inserting an unpredictable and politically divergent player into decision-making in Europe.

So, the logic goes, the number one goal of European elites will be to overthrow the government. Not by violent means but by a soft coup, which they are currently attempting to execute by combination of economic strangulation and political humiliation. This instability thesis is a profound challenge to the dominant narrative of capitalism today, which sees it as a system based on risk and reward. But actually it has a long history as a critique, with even moderate figures like Keynes noting instability’s effects on the “animal spirits” of the economy. The prevalence of the word “confidence” in contemporary discourse evidences the degree to which economic and financial players value security. Therefore if they cannot overthrow SYRIZA, and if no capitulation is forthcoming, the team around Alexis Tsipras believe that European elites and the IMF will compromise.

This is because the third option, the last on the table, brings about an explosion of instability: the threat of Grexit from the eurozone. This opinion is shared by Loudovikos Kotsonopoulos, party intellectual and senior advisor in the Economy Ministry. “My prediction is that there will be a compromise. European elites fear a geopolitical realignment. It is very difficult for the European Union to suffer a defeat of such magnitude as a departure of one of its members. Until now the only direction was countries coming into the EU. If this ceased to be the only option it would have significant ramifications. I’m not sure that they can manage such a defeat, and neither are they. But they know as well that we are in trouble if we exit the euro. So it is tense. What are the sides going to give? And how can this be presented as a victory for both?”.

Dimitris Ioannou, writer for party publication Enthemata, is more sceptical about a compromise. “We come with arguments, they reject them, then they say, ‘you’re wasting time’. What does that mean? It’s just saying, agree with us. You’re wasting time between getting elected and doing what we say”.

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Peanuts, but nice peanuts.

Greece Signs EBRD Deal Worth €500 Million A Year (Reuters)

Greece signed an investment deal worth up to €500 million a year with the European Bank for Reconstruction and Development (EBRD) on Thursday, gaining a rare financial endorsement from the region for its attempts to remain solvent.The EBRD and Greece formally signed the five-year agreement at the development bank’s annual meeting in Georgia. It was approved by the bank’s shareholders in March.“It could help the country’s economic recovery significantly,” Greece’s Economy Ministry said in a statement.The ministry added it should boost the funding options of Greek businesses, especially the small and medium-sized ones that have been hit the hardest by the country’s economic crisis.

The EBRD’s decision to start lending in Greece comes after years of debate at the bank about whether a member of the world’s most advanced monetary union fits with the bank’s role of helping countries make the transition to market economies.The head of the bank, Suma Chakrabarti, has said he hopes to have the first Greek projects in place in coming months but admits Athens leaving the euro would complicate things.New EBRD forecasts on Thursday predicted Greece’s economy would stagnate this year and the bank’s staff warned if it left the euro, the situation would be far worse both for itself and the countries around it.

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Congress can’t even read it unhindered. But GE, Apple, Nike and Walmart can.

You Can’t Read The TPP, But These Huge Corporations Can (Intercept)

[..] who can read the text of the TPP? Not you, it’s classified. Even members of Congress can only look at it one section at a time in the Capitol’s basement, without most of their staff or the ability to keep notes. But there’s an exception: if you’re part of one of 28 U.S. government-appointed trade advisory committees providing advice to the U.S. negotiators. The committees with the most access to what’s going on in the negotiations are 16 “Industry Trade Advisory Committees,” whose members include AT&T, General Electric, Apple, Dow Chemical, Nike, Walmart and the American Petroleum Institute. The TPP is an international trade agreement currently being negotiated between the US and 11 other countries, including Japan, Australia, Chile, Singapore and Malaysia.

Among other things, it could could strengthen copyright laws, limit efforts at food safety reform and allow domestic policies to be contested by corporations in an international court. Its impact is expected to be sweeping, yet venues for public input hardly exist. Industry Trade Advisory Committees, or ITACs, are cousins to Federal Advisory Committees like the National Petroleum Council that I wrote about recently. However, ITACs are functionally exempt from many of the transparency rules that generally govern Federal Advisory Committees, and their communications are largely shielded from FOIA in order to protect “third party commercial and/or financial information from disclosure.” And even if for some reason they wanted to tell someone what they’re doing, members must sign non-disclosure agreements so they can’t “compromise” government negotiating goals. Finally, they also escape requirements to balance their industry members with representatives from public interest groups.

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Angela needs to be careful.

Secrets, Betrayals and Merkel’s Risky Silence in the NSA Scandal (Spiegel)

The world of politics abounds with tales of secrets and betrayals, of collective silence and the indiscretion of individuals. Tales of trust and mistrust. The shadowy world of espionage is no different — its secrets and betrayals legendary. But Sigmar Gabriel’s treachery stands out nonetheless. The German vice chancellor recently announced that Angela Merkel had twice assured him that the NSA and Germany’s foreign intelligence agency, the Bundesnachrichtendienst (BND), had never spied on German companies. In fact, in 2008 the Americans began reneging on agreements and going too far – much too far. They spied on aviation giant Airbus, among others. In August 2013, Angela Merkel had her then Chief of Staff Ronald Pofalla announce that the NSA was doing “nothing that damaged German interests.”

In fact, the Chancellery knew better. But Merkel refrained from taking action, opting instead to navigate her way through the situation by saying nothing. Nearly two years ago, after the information leaked by Edward Snowden first surfaced, she said she didn’t really know what it was all about. The message she’s been conveying ever since is that it’s all terribly technical and not all that important, really. The chancellor’s strategy had the desired effect. The public saw her as a victim. The general election in 2013 should have been dominated by the NSA spying scandal, but Merkel emerged unscathed, triumphant. Newspapers like the conservative Frankfurter Allgemeine Zeitung naively wrote that secret services just happen to spy — and, after all, we need intelligence, so what is one to do?

But the intelligence services and the US had overreached. Merkel could have told them exactly how far was too far. She could have backed their activities and at the same time made sure they didn’t get out of hand. In other words, she could have taken charge. When Merkel assumed office in 2005, she took an oath vowing to protect the German people from harm. It’s her job to protect German companies and the public when US secret services act as though Germany is not a sovereign nation. But people in power often fail to notice when the very quality that brought about their rise to the top turns into a weakness, a danger and even their ultimate undoing.

Merkel tends to lead by stealth. She doesn’t care for rhetoric and confrontation and she avoids quick decisions. These might not be bad qualities, but they don’t suit a head of government. Many of her predecessors loved nothing more than decisiveness and debate. It was why they sought power in the first place. But Merkel seems to worry that she will make enemies with plain speaking, so she chooses to remain close-lipped in crises such as this one.

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“As for Sarao’s complaints going anywhere else: fear not, they will – just as soon as the market crashes.”

Flash Crash Patsy Complained Over 100 Times About Real Market Manipulators (ZH)

Several weeks ago, when the CFTC and DOJ’s laughable attempt to scapegoat the May 2010 flash crash on the actions of a live-in-his-parents-basement UK trader, we explained “Why Sarao Is The Flash Crash Patsy: He Threatened To Expose The “Mass Manipulation Of High Frequency Nerds.” It now turns out that he not only threatened to expose the real market manipulators, but he acctually did it. More than 100 times.

Navinder Singh Sarao, the trader arrested last month on U.S. charges he manipulated futures prices and contributed to the May 2010 “flash crash,” leveled claims of similar misconduct against other traders before his arrest. Mr. Sarao complained to the Chicago Mercantile Exchange, where he traded futures contracts, more than 100 times over the past several years about traders he believed were engaging in manipulative conduct, people familiar with the matter said. His last complaint came just weeks before he was arrested on Justice Department charges, one of the people said.

Previously released documents have shown Mr. Sarao urging exchanges to target high-frequency trading practices he viewed as manipulative, but the frequency and extent of his complaints weren’t known. His complaints underscore the extent to which Mr. Sarao viewed his own trading as a legitimate counter to other high-speed traders. Mr. Sarao appears to have filed an unusually large volume of complaints. “That would be considered a high number,” said Ray Cahnman, a longtime futures trader and chairman of the proprietary trading firm Transmarket. “Most people would break down before they get to 100 because they realize the complaints aren’t going anywhere,” he said.

Sarao’s complaints got him somewhere: straight to prison. And now we know why. As for Sarao’s complaints going anywhere else: fear not, they will – just as soon as the market crashes. Because not only will the next market crash be epic, it will be blamed entirely on the same HFTs that for the past 7 years worked in tandem with the central banks – the source of all capital misallocation decisions – in the creation of the biggest asset bubble of all time.

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You may know Syngenta under any one of these names: Imperial Chemical Industries, Novartis, AstraZeneca, Geigy, Sandoz, Ciba.

Monsanto’s Syngenta Gambit Hinges On Sale Of Seed Businesses (Reuters)

U.S. seeds giant Monsanto is trying to line up buyers for assets worth up to $8 billion to appease competition authorities before making a fresh takeover approach for Swiss Syngenta, possibly within three weeks, industry sources said. Monsanto is expected to tap German chemicals group BASF, an existing joint venture partner, as it seeks a buyer for the U.S. seeds business of Syngenta, which can’t be part of its proposed takeover, sources said. The St. Louis-based group is after Syngenta for its industry-leading crop chemicals, driven by the idea that seeds and pesticides will be better sold and developed together.

Monsanto produces glyphosate, or Roundup, the world’s most widely used broad-spectrum herbicide, and has engineered a range of proprietary crops that resist it. Syngenta closely integrated its seeds and crop chemicals operations in 2011 and Monsanto is expected to unravel some of the main strategic decisions that shaped the group over the last four years – selling off seeds and merging Syngenta’s crop chemicals with Monsanto’s seeds. Global antitrust authorities are expected to demand remedies to reshape the balance of power in the crop protection industry before any combination is allowed.

Syngenta’s management will not want to be seen backing a deal that is then shot down by antitrust watchdogs, two industry sources said. Monsanto commands about a quarter of the $40 billion global seeds market while Syngenta’s own seeds business has a global market share of 8%. The Swiss group’s seeds business could be worth between $6 billion and more than $8 billion, according to analysts. It will have to be sold because authorities are expected to block Monsanto from entrenching its dominance of the U.S. soy and corn seeds market.

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“Of 804 natural habitats assessed by the European Environment Agency for the report, 77% were deemed to be in a poor condition..”

A Third Of Europe’s Birds Under Threat (Guardian)

One in three European birds is endangered, according to a leaked version of the most comprehensive study of Europe’s wildlife and natural habitats ever produced. The EU State of Nature report, seen by the Guardian, paints a picture of dramatic decline among once common avian species, and also warns that ecosystems are struggling to cope with the impact of human activity. Turtle dove populations have plunged by 90% or more since 1980 and could soon be placed on the International Union for the Conservation of Nature’s (IUCN) ‘red list’ of threatened species. Numbers of skylark and ortolan bunting, a songbird illegally hunted and eaten whole in France, have fallen by around half.

Of 804 natural habitats assessed by the European Environment Agency for the report, 77% were deemed to be in a poor condition, with almost a third having deteriorated since a study in 2006. Just 4% were found to be improving. The wide-ranging technical survey made use of data compiled by 27 EU countries between 2007-2012, and will be released by the European Commission later this year. “The report clearly shows that Europe’s wildlife and natural habitats are in crisis,” said Andreas Baumueller, the head of WWF Europe’s natural resources unit. “Our habitats are slowly dying and our natural capital – reflected by species such as birds and butterflies – is being put under enormous pressure from unsustainable agriculture and land use policies.”

The study finds that intensive farming and changes to natural terrain pose the greatest threat to Europe’s flora and fauna, even though biodiversity loss costs the EU an estimated €450bn per year, or 3% of GDP. Agriculture accounts for two-thirds of EU land use. The destruction or conversion of grasslands, heathlands and scrub to grow more crops – often using pesticides – has decimated many bird populations. Monoculture farming, changes in grazing regimes, and the removal of natural vegetation and landscape have added to the pressure. The report also lists changes to waterways, fragmentation of habitats and human activities such as hunting, trapping, poisoning and poaching as specific threats to birdlife.

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Ha!

Your Attention Span Is Now Less Than That Of A Goldfish (OC)

People now have shorter attention spans than goldfish — and our always-on portable devices may be to blame, a new study suggests. The study from Microsoft draws on surveys of more than 2,000 Canadians who played games online in order to determine the impact that pocket-sized devices and the increased availability of digital media and information are having on everyday life. Researchers also did in-lab monitoring, using electroencephalograms (EEGs) to monitor brain activity of 112 people. Among the findings of the 54-page study was that, thanks to our desire to always be connected, people can multi-task like never before. However, our attention spans have fallen from an average of 12 seconds in the year 2000 to just eight seconds today.

A goldfish is believed to have a nine-second attention span on average, the study says. “Canadians with more digital lifestyles (those who consume more media, are multi-screeners, social media enthusiasts, or earlier adopters of technology) struggle to focus in environments where prolonged attention is needed,” reads the study. “While digital lifestyles decrease sustained attention overall, it’s only true in the long-term. Early adopters and heavy social media users front load their attention and have more intermittent bursts of high attention. They’re better at identifying what they want/don’t want to engage with and need less to process and commit things to memory.”

Microsoft’s data is supported by similar findings released by the National Centre for Biotechnology Information and the National Library of Medicine in the U.S. Among the most concerning findings of the study is our declining ability to sustain our focus during repetitive activities: 44% of respondents said they had to concentrate really hard to stay focused on tasks, while 37% said they were unable to make the best use of their time, forcing them to work late evenings and or weekends.

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 November 21, 2014  Posted by at 9:22 pm Finance Tagged with: , , , , , , ,  5 Responses »


NPC US Navy photographers March 24, 1925

The original idea behind a central bank is that medium and longer term monetary policy should not be allowed to be held hostage by a short-term prevailing political wind, that an incumbent politician and his/her party should not be permitted and/or enabled to manipulate a nation’s currency for political gain. A central bank was (and still is officially) supposed to be independent of politics, to be a buffer between a society’s long term interests and a politician’s short-term ones.

In particular, no-one should issue huge amounts of money to make it look like they were just awesome leaders that make everyone rich, while sinking the future of a society in the process. I know, I know, there are tons of other ways to explain the drive to found central banks, just google Jekyll Island, but the issue of economic stability vs fleeting political flavors is certainly a big one.

So. Have we come a long way or what’s the story? Today’s central banks do nothing BUT engage in short term policies that keep incumbents as happy as they can be in bad economic circumstances. Central banks have become political instruments that pamper to the tastes of whoever may be in charge on any given day, which is the exact 180º opposite of why they exist in the first place.

And because they’ve gotten so far removed from what they’re supposed to be doing, central bankers start to realize they’ve ended up in completely unfamiliar and uncharted territory. And now they are, like anyone would be in that kind of position, scared. Sh*tless. And as we’ve all learned from kindergarten on is that fear is a bad counselor. They may have risen to positions of oracles and household names (also entirely contrary to their original job descriptions), and they may have fallen for the flattery that comes with all that, but deep down they know full well they’re way out of their leagues.

The best they can come up with is trying to bluff their way out of their conundrums. Because it’s not as if they don’t understand that doing exactly what they were intended not to do, i.e. flood markets with cheap money not based on any underlying real values, or work performed, will of necessity at some point blow up in their faces. They just hope and pray it will take long enough for them to be somewhere else, enjoying a Banana Daiquiri when that mushroom appears on the horizon.

Central bankers have been reduced to political toys, and they – at least at times – realize that’s not a good position to be in. If only because it makes them redundant. If they only simply do what politicians want anyway, we might as well just let those politicians set monetary policy by themselves.

That puts central bankers in a situation in which they are being set up as patsies, to catch all the bad rap if and when things get even worse then they already are. And they will. Moreover, obviously it’s not the politicians that decide, but the people who finance their campaigns (they do need long term policies), and once you realize that, you really need to wonder what kind of court jesters Bernanke, Yellen, Draghi and Kuroda have become.

Now that we’ve come to naming names, look at them: Draghi today did another press-op in which he blubbered about what he’ll do about inflation, and fast. But there’s nothing blooper Mario can do to make people in Europe spend their money any faster, if only because they don’t have any money. And his banking overlords won’t let him hand out money to the people even if he would want to (dubious for a Goldmanman), so boosting that consumer spending is never ever going to work.

All Mario gets to do is spread the alarm, and then catch the fall. But you know, you’re thinking, doesn’t he know hat’s going on, and he may well know very well. In the end that’s just a sad story, and because of the role he plays he deserves to never again have a single night of solid sleep. His role is just too ambiguous. And most of all, it hurts too many innocent people.

The Fed has Janet Yellen, who’s trying to contortion her way into explaining that the US economy is doing so well she just must raise interest rates, which is so far off reality it’s not funny, but it’s the going story, because her paymasters on Wall Street need or want more profits, and they’ve gotten all they could out of the zero % policies now that every mom and pop is on the same side of the trade as they are.

All I can think when I see her pop up again is why would anyone, let alone Janet herself, want to be in her position? Where’s the satisfaction? Why not go live somewhere out on Martha’s Vineyard and let others do the damage? What drives these clowns?

The Bank of Japan’s Haruhiko Kuroda is perhaps the most overt and obvious political tool of them all, who does only what PM Shinzo Abe tells him to, and drives his country into a deep dark stinking swamp while he’s at it. Kuroda doesn’t even know how to spell ‘independent central banker’.

And talking about bad counselors, Bloomberg reports on a meeting Abe had with Paul Krugman, who won that Fake Nobel a few years back for the same single two words he undoubtedly told Abe: Spend and More. If any country today could benefit from having a truly independent central bank it’s Japan, But of course, the Bank of Japan is, if anything, even less independent than the rest of them.

What drives central bankers in November 2014 is fear, pure and simple, if not absolute screaming panic. Together, they’ve literally spent untold trillions of dollars, and what is the result? People everywhere across the planet slow down their spending more and more. And that means deflation. Which is what they’re all supposed to be so afraid of. But which they also all know cannot be averted.

And then this morning we see that the Chinese central bank People’s Bank of China, PBOC, has lowered its interest rate targets. The PBOC chairman’s name is Zhou Xiaochuan, and there’s of course plenty reason why nobody knows that name. That is, nobody even expects the PBOC to be independent from the rulers.

Which is somewhat curious, because the role Zhou plays is no different at all from that of Yellen, Draghi and Kuroda. The only difference is the pretense that the latter are not political toys and instruments and kow-towing fools.

Why does Zhou lower interest rates? Because he’s scared. Well, he and his forbidden city masters. China’s economy is falling so much so fast that they see the historically by far biggest ever debt-driven economic model implode on their watch. Xi and Li and Zhou fear the wave that’s coming for them, and given the size of the Chinese economy, no matter how fake and debt-based it is, we should all share their angst.

Japan is dead, a zombie with lipstick, and still the world’s no. 3 economy. One more reason for all of us to be afraid. Add in Draghi whose only resort is to find different ways of saying the same thing he will never ever be able to do, to buy everything in Europe that’s not bolted down and then buy the bolts too, and you have am entire world that should be scared straight out of their undies.

Which makes Janet Yellen’s task of defending the upcoming rate hikes all the more amusing. Yeah, sure, the US economy is doing great. Sure, grandma. Look, we all know your place in history will be that of someone who was either too complicit or too stupid while the walls were crumbling. And we all know today that you’re scared to even open your mail in the morning. Because we all know as well as you do that the picture of the US economy that you paint is a virtual reality. The only question is, do you yourself actually live in it?