Jan 062020
 
 January 6, 2020  Posted by at 10:57 am Finance Tagged with: , , , , , , , , , , ,  13 Responses »


Esther Bubley Soldiers with their girls at the Indianapolis bus station 1943

 

Gold, Oil Soar, Shares Slip As US And Iran Rattle Sabers (R.)
Iraqi PM Claims Soleimani Was On Peace Mission When Assassinated (GZ)
Iraqi Parliament Calls For Expulsion Of Foreign Troops (AlJ)
Boeing Reports “Previously Unreported Concerns” With Wiring In 737 MAX (CNN)
Why We’ll Never Get Rich By Putting Cash Away For A Rainy Day (Bell)
Fed Focuses On Repo Market Exit Strategy After Avoiding Year-End Crunch (R.)
PBOC Says Its Prudent Policies Will Continue (CD)
Trump Admin Pressed Dutch Hard To Cancel China Chip-Equipment Sale (R.)
Handwritten Note Found In Jeffrey Epstein’s Jail Cell (CBS)
Ghislaine Maxwell Under 24-Hour Guard By Former US Navy Seals (DM)
Victoria’s Secret Models Got Much Thinner Over Last 23 Years (WBUR)
Ricky Gervais Skewers Hollywood’s A-List (R.)

 

 

With war cries rulling the waves, “investors” wonder where their money is safest: with a sweat-shop using company that buys back its shares all the time, or with gold. Given volumes, governments, central banks also appear involved.

Gold, Oil Soar, Shares Slip As US And Iran Rattle Sabers (R.)

Tensions in the Middle East after the killing of a top Iranian general by the United States pushed an index of Asian shares off an 18-month high on Monday as investors pushed safe-haven gold near a seven-year high, and oil jumped to four-month peaks. The United States detected a heightened state of alert by Iran’s missile forces, as President Donald Trump warned the United States would strike back, “perhaps in a disproportionate manner,” if Iran attacked any American person or target. Iraq’s parliament on Sunday recommended all foreign troops be ordered out of the country after the U.S. killing of a top Iranian military commander and an Iraqi militia leader in a drone strike on a convoy at Baghdad airport.


Spot gold gained 1.6% to $1,579.55 per ounce in jittery trade to reach its highest since April 2013. Oil prices extended gains on fears any Middle East conflict could disrupt global supplies. Brent crude futures rose $1.9 to $70.50 a barrel, while U.S. crude climbed $1.5 to $64.57. “The risk of further escalation has clearly gone up – given the direct attack on Iran, Iran’s threat of retaliation and Trump’s desire to look tough – posing the threat of higher oil prices,” said Shane Oliver, chief economist at AMP Capital. “Historically though oil prices need to double to pose a severe threat to global growth and we are long way from that.”

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Max Blumenthal takes a bit much as gospel: “Iraqi PM Reveals…”

Iraqi PM Claims Soleimani Was On Peace Mission When Assassinated (GZ)

At a January 3 State Department briefing, where reporters finally got the chance to demand evidence for the claim of an “imminent” threat, one US official erupted in anger. “Jesus, do we have to explain why we do these things?” he barked at the press. Two days later, when Iraqi Prime Minister Adil Abdul-Mahdi addressed his country’s parliament, Trump’s justification for killing Soleimani was exposed as a cynical lie. According to Abdul-Mahdi, he had planned to meet Soleimani on the morning the general was killed to discuss a diplomatic rapproachment that Iraq was brokering between Iran and Saudi Arabia. Abdul-Mahdi said that Trump personally thanked him for the efforts, even as he was planning the hit on Soleimani – thus creating the impression that the Iranian general was safe to travel to Baghdad.


Soleimani had arrived in Baghdad not to plan attacks on American targets, but to coordinate de-escalation with Saudi Arabia. Indeed, he was killed while on an actual peace mission that could have created political distance between the Gulf monarchy and members of the US-led anti-Iran axis like Israel. The catastrophic results of Soleimani’s killing recall the Obama administration’s 2016 assassination of Mullah Akhtar Muhammad Mansur, a Taliban leader who was eager to negotiate a peaceful end to the US occupation of Afghanistan. Mansur’s death wound up empowering hardline figures in the Taliban who favored a total military victory over the US and triggered an uptick in violence across the country, dooming hopes for a negotiated exit.

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Again: who gets what they wanted?

Iraqi Parliament Calls For Expulsion Of Foreign Troops (AlJ)

Iraq’s parliament has passed a resolution calling on the government to expel foreign troops from the country as Iran-US tensions escalate following the killing of a top Iranian military commander and Iraqi armed group leader in a US strike in Baghdad. In an extraordinary parliamentary session on Sunday, parliament called on the government to end all foreign troop presence in Iraq and to cancel its request for assistance from the US-led coalition which had been working with Baghdad to fight ISIL. “The government commits to revoke its request for assistance from the international coalition fighting Islamic State due to the end of military operations in Iraq and the achievement of victory,” the resolution read.


“The Iraqi government must work to end the presence of any foreign troops on Iraqi soil and prohibit them from using its land, airspace or water for any reason.” Parliament resolutions, unlike laws, are non-binding and the move would require new legislation to cancel the existing agreement. Ahead of the vote, chants of “No, no, America…long live Iraq”, rang out inside the hall, before Iraqi Prime Minister Adel Abdul Mahdi also called on parliament to end foreign troop presence. “Despite the internal and external difficulties that we might face, it remains best for Iraq on principle and practically,” said Abdul Mahdi in an address to parliament ahead of the vote.

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Latest proposal: mandatory simulator trainning for all pilots. That’s what started the whole charade, so a nice round circle.

Boeing Reports “Previously Unreported Concerns” With Wiring In 737 MAX (CNN)

[..] as part of a December audit of the plane’s safety ordered by the US Federal Aviation Administration, Boeing found “previously unreported concerns” with wiring in the 737 Max, according to a report earlier Sunday from the New York Times. The company informed the FAA last month that it is looking into whether two sections of wiring that control the tail of the plane are too close together and could cause a short circuit — and potentially a crash, if pilots did not react appropriately — the Times reported, citing a senior Boeing engineer and three people familiar with the matter. A Boeing spokesperson confirmed the report to CNN Business on Sunday, saying the issue was identified as part of a “rigorous process” to ensure the plane’s safety.


“Our highest priority is ensuring the 737 Max meets all safety and regulatory requirements before it returns to service,” the spokesperson said. “We are working closely with the FAA and other regulators on a robust and thorough certification process to ensure a safe and compliant design.” The spokesperson said it “would be premature to speculate” whether the discovery will lead to new design changes for the plane, or further extend the timeline for its recertification. It will be a challenge for Boeing’s new chief executive, David Calhoun, who officially takes over the job on January 13 after former CEO Dennis Muilenburg was ousted on December 23. “A change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders,” the company in December.

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We would still do much better if central banks wouldn’t strangle interest rates.

Why We’ll Never Get Rich By Putting Cash Away For A Rainy Day (Bell)

Norway has a wealth tax. Now, I’m in favour of a greater role for wealth taxes but, whatever your view, there’s at least one benefit we should all appreciate: lots of data on who owns what. Recent research delves into this Norwegian data mine and helps us investigate the popular view that those with more wealth build it up by saving more. You might call this the “wealth as the reward for doing the right thing” view of the world. But the research finds it’s nonsense – Norwegians save around 7% of their income, however much they may own. Despite saving the same proportion as those with much less, those with lots accumulate more. Why? Because we can accumulate wealth by the rising value of assets, such as property and shares.


The wealthier have more assets and more capital gains. These are banked, not consumed, so the gap grows. This is a huge deal, explaining 80% of wealth growing faster than income in Norway. The UK has also seen a wealth boom from rising house prices. These unexpected windfalls – rather than active savings like paying off a mortgage – explain 82% of increased property wealth since the early 1990s. Yet we pretend that wealth comes from savings and we ignore these capital gains when considering who is doing well, and so we make a dog’s dinner out of taxing them. It’s time we woke up to where wealth has actually come from in modern Britain … and Norway.

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They can only exit repo if they support banks somewhere else.

Fed Focuses On Repo Market Exit Strategy After Avoiding Year-End Crunch (R.)

Wall Street’s worst fears of a year-end funding squeeze never materialized thanks in large part to the quarter-trillion dollars the Federal Reserve stuffed into the market to ensure nothing became gummed up. The question now, though, is what it will take for the U.S. central bank to withdraw from its daily liquidity operations in the $2.2 trillion market for repurchase agreements, or repos – after it became a dominant player in a short three months. “The repo operations are a band-aid, but the wound isn’t healed fully,” said Gennadiy Goldberg, an interest rate strategist at TD Securities. The New York Fed began injecting billions of dollars of liquidity into the repo market in mid-September, when a confluence of events sent the cost of overnight loans as high as 10%, more than four times the Fed’s rate at the time.

A month later, the Fed moved to expand its balance sheet – and boost the level of reserves – by snapping up $60 billion a month in U.S. Treasury bills. The Fed will continue pumping tens of billions a day into the repo market through at least the end of January. Its ability to exit from the repo market after that time will depend on how long it takes the central bank to make the balance sheet large enough so there are adequate reserves in the banking system – and the repo operations are no longer needed. “It seems implausible to me that the Fed will be able to stop their repo operations by the end of January,” said Mark Cabana, head of U.S. rates strategy at Bank of America Merrill Lynch.

Minutes from the Fed’s December policy meeting released on Friday showed its staffers expected repo operations to be “gradually” reduced after mid-January. However, staff members also said the central bank may need to continue offering some repo operations until at least April, when tax payments could reduce the level of reserves. Another challenge for Fed officials: Deciding just how big the central bank’s balance sheet, which is currently about $4 trillion, should be.

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Michael Pettis on Twitter: “So far “prudent policies” has meant that for several years China has generated nearly five times as much debt per unit of GDP as the rest of the world — even more if you think GDP growth has been overstated on a comparable basis.”

PBOC Says Its Prudent Policies Will Continue (CD)

China will maintain a prudent monetary policy while keeping it flexible this year to ensure reasonably adequate liquidity, and it will strengthen adjustments to support economic growth, the People’s Bank of China, the central bank, said in a statement on Sunday. [..] The PBOC will promote credit financing for small and private companies, it said in its statement. Last year, it increased large commercial banks’ loans for small and micro companies by more than 30 percent, leading to a drop in lending costs of 1 percentage point. “These targets have been over-fulfilled,” it said.

The central bank is aiming this year to “win the battle of preventing and reducing large financial risks” and reiterated its role as “the lender of last resort”, which means the it will provide money to financial institutions that are experiencing financial difficulty to prevent their collapse. Last year, financial regulators took over Baoshang Bank in the Inner Mongolia autonomous region and provided liquidity to prevent the spread of financial risks. To support liquidity and improve commercial bank’s asset quality, the PBOC will supplement commercial banks’ capital in 2020 through issuance of perpetual bonds — a credit instrument having no date to pay back.

Other risk-control measures will be taken for internet and real estate financing, and a macro-prudential regulatory system will be built to supervise cross-border capital flows, according to the central bank. Regulatory control over monetary policy operations is expected to continue to strengthen in China. “Monetary easing, if any, is expected to be limited and should not translate into relaxed regulatory control over the riskier types of leverage, which is positive to system stability,” said Rowena Chang, associate director of Non-Banks Asia Pacific at Fitch Ratings, an international rating agency.

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Military use is a deal killer.

Trump Admin Pressed Dutch Hard To Cancel China Chip-Equipment Sale (R.)

The Trump administration mounted an extensive campaign to block the sale of Dutch chip manufacturing technology to China, with Secretary of State Mike Pompeo lobbying the Netherlands government and White House officials sharing a classified intelligence report with the country’s Prime Minister, people familiar with the effort told Reuters. The high-level push, which has not previously been reported, demonstrates the importance the White House places on preventing China from getting hold of a machine required to make the world’s fastest microprocessors. It also shows the challenges facing the U.S. government’s largely unilateral efforts to stem the flow of advanced technology to China.

The U.S. campaign began in 2018, after the Dutch government gave semiconductor equipment company ASML, the global leader in a critical chip-making process known as lithography, a license to sell its most advanced machine to a Chinese customer, two sources familiar with the matter told Reuters. Over the following months, U.S officials examined whether they could block the sale outright and held at least four rounds of talks with Dutch officials, three sources told Reuters. The effort culminated in the White House on July 18 when Deputy National Security Advisor Charles Kupperman raised the issue with Dutch officials during the visit of Netherlands Prime Minister Mark Rutte, who was given an intelligence report on the potential repercussions of China acquiring ASML’s technology, according to a former U.S. government official familiar with the matter.

The pressure appears to have worked. Shortly after the White House visit, the Dutch government decided not to renew ASML’s export license, and the $150 million machine has not been shipped. [..] The ASML machine uses extreme ultraviolet (EUV) light beams, generated by lasers and focused by giant mirrors, to lay out extraordinarily narrow circuits on slabs of silicon known as wafers. That in turn makes it possible to create faster and more powerful microprocessors, memory chips and other advanced components, which are critical for consumer electronics and military applications alike. Only a few companies, including America’s Intel, South Korea’s Samsung and Taiwan’s TSMC, are currently capable of manufacturing the most sophisticated chips.

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Curious: CBS puts a whole team on this for 5 months, and then writes about a note that says nothing, instead of photos that say a lot. Bloody neck, bloodless noose.

Handwritten Note Found In Jeffrey Epstein’s Jail Cell (CBS)

While Epstein surrounded himself with a collection of powerful and high profile figures, the wealthy financier lived a majority of his life in privacy, avoiding television appearances and media interviews almost entirely. And though the federal charges brought against Epstein in July served as a gateway into learning more about the secretive life the 66 year-old led, filled with a controversial plea deal, luxurious travels around the world and alleged sex abuse rings, public intrigue about Epstein, who neglected to give any public statements following his arrest, has heightened.


In the course of a five-month investigation, 60 Minutes obtained photos of Epstein’s cell after his apparent suicide. Also found was a note, giving the world a look into what Jeffrey Epstein may have been thinking in his final days. The note was written on yellow lined paper with a blue ballpoint pen and there were complaints about jail conditions. The note says that one guard “kept me in a locked shower stall for 1 hour.” “[Another prison guard] sent me burnt food.” “Giant bugs crawling over my hands. No fun!!” Epstein’s apparent discomfort about jail conditions comes as no surprise. According to Bruce Barket, Epstein’s former cellmate’s lawyer, Jeffrey Epstein and his legal team took up one of the two attorney visiting rooms “all day, every day.”

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No, I don’t know how credible the Daily Mail is here. But it’s good to keep the conversation going.

Ghislaine Maxwell Under 24-Hour Guard By Former US Navy Seals (DM)

Ghislaine Maxwell, the former girlfriend of convicted paedophile Jeffrey Epstein, is being guarded round the clock by former US Navy SEALs amid concern that her life is in danger, The Mail on Sunday can reveal. A source says ex-special forces are shuttling the 58-year-old friend of Prince Andrew from one safe house to another across the American Midwest following ‘credible death threats’. She is now the principal focus of an FBI investigation and is said to hold the key to the truth about the Duke of York’s relationship with the disgraced financier and whether he had sex with a 17-year-old girl. The Duke has repeatedly denied these allegations and any suggestion of wrongdoing.


While Miss Maxwell has never been accused by the authorities of criminal wrongdoing, Epstein’s alleged victims have portrayed her as his ‘madam’ and ‘fixer’. A source said: ‘There has been so much rubbish written about Ghislaine. The reality is she receives multiple, credible death threats on a daily basis. The hate mail is sometimes 2ft high. ‘She is constantly moving. Her life is in danger. She is being guarded by the best of the very best and that includes former US Navy SEALs. She’s not under the protection of any government. She’s on her own.’ Asked about reports last week that Miss Maxwell was being sheltered in Israel and supported by wealthy friends, the source said: ‘I only wish. This is costing her a fortune. She moves constantly. The reports are just b*******.’

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The reason Victoria’s Secret had no 2019 show is Epstein. But interesting that as America gets fatter fast, models go the opposite way. Neither looks very healthy.

Victoria’s Secret Models Got Much Thinner Over Last 23 Years (WBUR)

Cosmetic dermatologist Dr. Neelam Vashi says she is fascinated by women’s waist-to-hip ratio, the hourglass curve from the narrowest point of the waist to the widest point of the hips. She was curious, she says, to see whether previous cross-cultural findings that men tend to prefer women with a 0.7 waist-to-hip ratio would hold true across time in a group known for beauty — models in the famed Victoria’s Secret fashion show. So Vashi, an assistant professor of dermatology at Boston University and director of the Cosmetic and Laser Center at Boston Medical Center, and colleagues analyzed the measurements of models who walked the runway at the now-defunct fashion show over 23 years, from 1995 to 2018.

She found that the 0.7 ratio — roughly a 24-inch waist divided by 35-inch hips — did hold true for the models, a nice confirmation of her hypothesis. But the results from other measures the team examined were surprising — and, she says, concerning. “Overall, these models became slimmer and their dress size decreased,” says Vashi. “The ratio stayed the same, but each one of those measurements did decrease.” And as Victoria’s Secret models got thinner, the average American woman’s measurements grew — with the average woman now at least a size 16. Concern over that rising disparity comes across in the research paper’s title, which begins: “Unattainable Standards of Beauty.”

“These findings represent an ideal of beauty that continuously moves further away from the characteristics of the average American woman,” says a news release accompanying the study. In 2019, with ratings low, Victoria’s Secret canceled the fashion show, saying it needed to evolve and be rethought for a new media era. As a cosmetic dermatologist, Vashi focuses on enhancing people’s looks, she says, but she also hopes people recognize that Victoria’s Secret models, “have bodies that are just not attainable by an average person.” Though that hasn’t stopped some from trying. The study notes a dramatic recent rise in cosmetic surgery, “with buttock and lower body lift [procedures] increasing by 4295% and 256%, respectively, since 2000.”

[..] The study found that bust measurements dropped from 32.9 inches in the 1990s, to 32 inches 20 years later. Waist size dropped from 24.7 inches to 23.6 inches, and hips shrank from 34.9 inches to 34.4 inches. Average dress size dropped from 5.2 to 3.7. The research also found the models became more racially and ethnically diverse. “To decrease a dress size from 5.2 to 3.7, that’s a significant difference,” Vashi says. “To slim an inch off one’s waist — that’s very hard to do.”

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And then you realize you really couln’t get one single American to say it. Painful.

Ricky Gervais Skewers Hollywood’s A-List (R.)

British comedian and actor Ricky Gervais returned to host the Golden Globe awards on Sunday, cracking scathing jokes about Hollywood’s elite that got both laughs and disapproving looks from the A-list audience. Gervais last hosted the Globes four years ago, before the #MeToo and #OscarsSoWhite movements shined a spotlight on the underrepresentation of women and minorities in Hollywood. He said the Hollywood Foreign Press Association, which hands out the Golden Globes, had planned to have a segment honoring celebrities who died in 2019, “but when I saw the list of people who died, it wasn’t diverse enough.”


Gervais also called out Hollywood actors as hypocrites for giving impassioned political speeches at awards shows while working in movies or television series produced by major tech and media corporations. “You say you’re woke, but the companies you work for – I mean, unbelievable – Apple, Amazon, Disney. If ISIS started a streaming service, you’d call your agent, wouldn’t ya?,” he asked. “So if you do win an award tonight, don’t use it as a platform to make a political speech. You are in no position to lecture the public about anything. You know nothing about the real world. Most of you spent less time in school than Greta Thunberg. “So if you win, right? Come up, accept your little award, thank your agent and your God” and leave the stage, he concluded, using an expletive.

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Include the Automatic Earth in your 2020 charity list. Support us on Paypal and Patreon.

 

Jan 042020
 


Jack Delano Near Shawboro, North Carolina, Florida migrants on way to Cranberry, NJ 1940

 

The Dubious Official Story Behind the Soleimani Assassination (Whitney Webb)
Israel Had Advance Notice Of US Plan To Kill Iranian General Suleimani (LAT)
How Trump Decided To Kill Iran’s Soleimani (Pol.)
Inside The Plot By Iran’s Soleimani To Attack US Forces In Iraq (R.)
Iraqi PMF Militias Retract Claims Of Medics Targeted By US Airstrike (RT)
The Dogs of War (Kunstler)
Fed Policymakers Broadly See Eye To Eye On 2020 Outlook (R.)
Fed’s Mester Warned Of Inflation Risks, Says Current Policy ‘Well Calibrated’ (R.)
Australian Troops Called To Tackle Fires (BBC)
Slow Burn (John Quiggin)
Australia’s Bushfires Push Countless Species To Extinction (G.)
Mexico President Calls For Julian Assange To Be Released From UK Prison (R.)

 

 

See far too many people pretending they’re far too sure about what’s going on. Mostly in line with their pre-conceived views, but others, too, appear to think there’s shame in not having a strong opinion on things they don’t know much about (there will be a war!). While Israel and Saudi are almost completely missing from those opinions and reports.

First victim of war is truth, guys, and that war for now only exists in opinions. And don’t believe everyone in Iran is in deep mourning now. There, too, in the upper echelons there’s a constant power battle, with lots of bloodshed and torture and renditioned people. Just like in America. Plenty Iranians will be happy to see Soleimani gone.

The Dubious Official Story Behind the Soleimani Assassination (Whitney Webb)

Much has been written by MintPress and other outlets about the long-standing efforts by prominent neoconservatives in the U.S. as well as the Israel lobby and Israeli government to prod the U.S. into a major war with Iran. Neoconservative efforts at regime change in Iran have been decades in the making and the current presidential administration has several notable Iran hawks in prominent positions. Furthermore, both President Trump and his foremost ally in the Middle East, Israeli Prime Minister Benjamin Netanyahu, are facing domestic efforts aimed at removing them from office and are facing fresh elections, giving both leaders incentive to ratchet up tensions abroad to distract from their own domestic conflicts.

Yet, the current pressure facing both Trump and Netanyahu in their respective policies is only the latest factor that has pushed both administrations into a renewed and increasingly desperate push to satisfy the decades-old effort of Iran hawks in both countries to stoke war and “reshape” the Middle East in favor of the U.S.-Israel axis. Given the recent assassination of Soleimani, however, it is essential to point out that the U.S. airstrike targeting the Quds Force leader came just a few months after Israel tried but failed to assassinate the general. Indeed, the most recent of these failed attempts was slated to occur early last October and, per The Times of Israel:

“The assassins planned to dig under a religious site associated with Soleimani’s father and set off an explosion under the building when he was inside, and then try to deflect blame so that it ignited an interfaction[al] religious war. The assassins prepared some 500 kilograms to use for the bomb.” Israel’s government did not comment on the alleged plot, though it is notable that the plan to dig below a Muslim holy site and plant a bomb has been attempted by Israeli extremist groups in the past, groups which have a major foothold in Israel’s current government.


This alleged attempt by Israel to kill Soleimani came after claims that, in 2018, the Trump administration had given Israel a “green light” to assassinate the general. The report claimed that “there is an American-Israeli agreement” that Soleimani is a “threat to the two countries’ interests in the region” and was published by the Kuwaiti newspaper Al-Jarida, which is widely considered to be “an Israeli platform for conveying messages to other countries in the Middle East,” according to Israeli media.

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Geez, what a surprise.

Israel Had Advance Notice Of US Plan To Kill Iranian General Suleimani (LAT)

Israel had advance notice of the U.S. plan to kill Iranian military leader Gen. Qassem Suleimani, Israeli military and diplomatic analysts reported Friday night while refraining from providing further details due to heavy military censorship. “Our assessment is that the United States informed Israel about this operation in Iraq, apparently a few days ago,” Barak Ravid, a journalist and commentator with deep sources in the Israeli security establishment, said on Channel 13. An Israeli army officer with knowledge of Israeli military assessments, who spoke on the condition of anonymity because he did not have permission to speak to reporters, told the Los Angeles Times that the attack on Suleimani “did not come as a surprise.”

The reactions of Israel’s political leadership to Suleimani’s assassination were mostly positive, though deep concern was registered throughout the leadership. Iran and Israel maintained warm relations for almost four decades before the 1979 Islamic Revolution that overthrew the shah and imposed a theocratic Shiiite Muslim regime that for four decades now has called for “death to Israel” and is accused of backing and masterminding numerous terrorist attacks against Israeli or Jewish targets, including the 1992 and 1994 attacks on the Israeli Embassy and the Jewish community center in Buenos Aires that left over 100 people dead. Hezbollah, the Lebanese-based Iranian proxy militia, has in recent years been accused of perpetrating further attacks against Israeli targets in India, Thailand and Bulgaria.


[..] Due to the heightened alarm, Prime Minister Benjamin Netanyahu cut short a visit to Greece, where he had signed an agreement for a regional gas pipeline. He made a statement on the tarmac ahead of boarding his flight back to Israel, saying that the United States had the right to defend itself. “Qassem Suleimani is responsible for the death of American citizens and many other innocent people. He was planning more such attacks. President Trump deserves all the credit for acting swiftly, forcefully and decisively. Israel stands with the United States in its just struggle for peace, security and self-defense.” The Israeli army officer described the situation as “definitely higher readiness than usual, but not DEFCON One. We want to err on the side of caution, but we know we are not the first target. We are the second.”

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Lots of stories of Trump spilling the beans before the attack to run of the mill Mar-a-Lago guests. While Howie Carr didn’t know anything until afterwards. Don’t let news outlets shape your opinions for you.

How Trump Decided To Kill Iran’s Soleimani (Pol.)

Hours before the U.S. military sent a Reaper drone to kill one of the most wanted men on the planet, President Donald Trump was relaxing at his palatial Florida properties. In the morning, he played 18 holes at Trump International, his West Palm Beach golf club. At around 3 p.m., he returned to Mar-a-Lago, the historic oceanfront estate he’s branded “the Winter White House,” and waited, donning a navy blue suit with a powder-blue tie and an American flag pinned to his lapel. He’d already made a risky—and potentially world-altering—decision to allow the U.S. military to kill Qassem Soleimani, the leader of Iran’s elite paramilitary forces.

Earlier this week, he’d been surrounded at Mar-a-Lago by top officials like Secretary of State Mike Pompeo, Chairman of the Joint Chiefs of Staff Mark Milley, acting White House chief of staff Mick Mulvaney, national security adviser Robert O’Brien and Legislative Affairs Director Eric Ueland. Throughout the entire week, Trump sought input from other advisers by phone. “He was calm, cool and collected,” said conservative radio host Howie Carr, who spoke with Trump on Thursday at Mar-a-Lago soon after the news first broke, as the president dined with GOP House leader Kevin McCarthy. “I had no idea there was anything out of the ordinary going on until I got home.”

As rocket attacks against U.S. bases in Iraq intensified over the last two months, the president had granted the Pentagon extraordinary latitude: The U.S. military had his permission to kill Soleimani the next time it had an opportunity to do so, according to a senior defense official who was not authorized to speak on the record. “We had authority before the strike to take that action,” said the official, who wouldn’t say how recently Trump gave the Pentagon that authorization—whether it was hours, weeks or even months earlier. As recently as New Year’s Eve, the president was telling reporters that he didn’t want war with Iran.


For a man U.S. officials have portrayed as a terrorist mastermind, an evil genius responsible for the deaths of hundreds of Americans, Soleimani often flaunted his influence as he jetted between Tehran, Baghdad and Beirut for meetings with local potentates. “I don’t think it was so hard [to find him] because he was not below the radar in the last two or three years,” said a former senior Israeli government official, who noted that Soleimani had previously moved around under strict operational secrecy. “But the last two or three years, he worked in the open.”

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We simply don’t know what is fact and what fiction. And that’s okay.

Inside The Plot By Iran’s Soleimani To Attack US Forces In Iraq (R.)

In mid-October, Iranian Major-General Qassem Soleimani met with his Iraqi Shi’ite militia allies at a villa on the banks of the Tigris River, looking across at the U.S. embassy complex in Baghdad. The Revolutionary Guards commander instructed his top ally in Iraq, Abu Mahdi al-Muhandis, and other powerful militia leaders to step up attacks on U.S. targets in the country using sophisticated new weapons provided by Iran, two militia commanders and two security sources briefed on the gathering told Reuters. The strategy session, which has not been previously reported, came as mass protests against Iran’s growing influence in Iraq were gaining momentum, putting the Islamic Republic in an unwelcome spotlight.

Soleimani’s plans to attack U.S. forces aimed to provoke a military response that would redirect that rising anger toward the United States, according to the sources briefed on the gathering, Iraqi Shi’ite politicians and government officials close to Iraqi Prime Minister Adel Abdul Mahdi. Soleimani’s efforts ended up provoking the U.S. attack on Friday that killed him and Muhandis, marking a major escalation of tensions between the United States and Iran. The two men died in air strikes on their convoy at a Baghdad airport as they headed to the capital, dealing a major blow to the Islamic Republic and the Iraqi paramilitary groups it supports. Interviews with the Iraqi security sources and Shi’ite militia commanders offer a rare glimpse of how Soleimani operated in Iraq, which he once told a Reuters reporter he knew like the back of his hand.


Two weeks before the October meeting, Soleimani ordered Iranian Revolutionary Guards to move more sophisticated weapons – such as Katyusha rockets and shoulder-fired missiles that could bring down helicopters – to Iraq through two border crossings, the militia commanders and Iraqi security sources told Reuters. At the Baghdad villa, Soleimani told the assembled commanders to form a new militia group of low-profile paramilitaries – unknown to the United States – who could carry out rocket attacks on Americans housed at Iraqi military bases. He ordered Kataib Hezbollah – a force founded by Muhandis and trained in Iran – to direct the new plan, said the militia sources briefed on the meetings. Soleimani told them such a group “would be difficult to detect by the Americans,” one of the militia sources told Reuters.

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That second strike everyone’s talking about? Did it even happen?

Iraqi PMF Militias Retract Claims Of Medics Targeted By US Airstrike (RT)

The Iranian-backed Iraqi Popular Mobilization Forces (PMF) have dropped their claims that a medical convoy was destroyed in a US air raid along Taji road, north of Baghdad. In a new press release cited by several news agencies, the PMF leadership retracted their statement in which the group said their medics were hit by a US airstrike. This happened after Reuters cited Iraqi Army sources who said that six people were killed in a raid near Taji. The Iraqi Army, however, later denied that an airstrike took place there. In a statement quoted by local media, the military urged everyone to be “careful” about spreading unverified information and “rumors” in the future. The US-led coalition in Iraq also said that no air raids have been conducted in that area in recent days.

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“..the little towns that dotted that landscape where all the carnage and horror played out. Not a strip-mall in the whole gorgeous panorama. The rolling fields neatly fenced in the stillness of a summer’s day. A peaceful tranquility we today cannot even imagine.”

The Dogs of War (Kunstler)

In that mercifully quiet week between Christmas and New Years, I re-watched Ken Burns’ documentary of the first Civil War, in contemplation of a possible second. What an almighty bloodbath that was. Thousands butchered in minutes in one battle after another, heads and limbs flying, men turned inside-out, and horses, too. The blue and the gray were hostage to their battlefield tactics and didn’t seem to learn from the insane extravagance of souls wasted in massed assaults against massed artillery again and again and again. The population of the whole nation (Confederacy included) was 31 million in 1860 and the war killed two percent of that, almost entirely young men.

Another impression left by that documentary was the startling beauty of the countryside in that day, and of the little towns that dotted that landscape where all the carnage and horror played out. Not a strip-mall in the whole gorgeous panorama. The rolling fields neatly fenced in the stillness of a summer’s day. A peaceful tranquility we today cannot even imagine. Everything human-scaled and so many buildings graced with beauty deliberately made: pediments, steeples, cupolas, columns, and swags. Walt Disney could not have imagined a more tender and appealing place. The lyrical names of those towns are linked to rivers of blood: Shiloh, Spotsylvania, Missionary Ridge, Cold Harbor….


And the last impression accumulated over each installment was that this we did it to ourselves, and couldn’t seem to stop, just as today various parties to current events can’t seem to stop their provocations to a new episode of national domestic violence. This time it is the very government at war with itself, and so far the war is merely legalistic, the battles of lawyers — of which, one senses, we have far too many for our own good. The Department of Justice in particular is at war with itself, one faction in it refusing to cooperate with the other, hiding documents, trafficking in political muck, kluging up the works with deceptions, and still at it in the yet-unresolved case of General Flynn, which should have been thrown out of court months ago based on obvious prosecutorial malice.

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These people think you are really really stupid…

Fed Policymakers Broadly See Eye To Eye On 2020 Outlook (R.)

Federal Reserve policymakers who last year were frequently at odds over where to set U.S. borrowing costs opened 2020 telegraphing confidence in the state of the economy and signaling broad agreement that monetary policy is right where it should be. In their first remarks in the new year, heads of several regional Fed banks noted a strong job market, robust consumer spending and a rising optimism for a resolution to the trade tensions that had nicked growth in the second half of 2019.


And after cutting interest rates three times last year to bring the Fed’s target to a range of 1.5% to 1.75% and ensure global headwinds didn’t short-circuit the longest U.S. economic expansion in history, “I think most of us think that we are well-calibrated now,” Cleveland Federal Reserve Bank President Loretta Mester said in an interview on the sidelines of an economics conference in San Diego. Based on forecasts of her fellow policymakers on the Fed’s rate-setting committee, she said, “the committee thinks a flat path (for interest rates)… is appropriate.” Mester had been among a handful of Fed policymakers who argued last year that the U.S. economy did not need lower rates to continue to grow.

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… so stupid, in fact, that they say whatever sounds good, truth be damned.

Fed’s Mester Warned Of Inflation Risks, Says Current Policy ‘Well Calibrated’ (R.)

Cleveland Federal Reserve Bank President Loretta Mester, among the Fed policymakers most concerned that easy monetary policy would risk excessive inflation, said on Friday she has put those fears to rest for now and is willing to leave rates at their current level absent some substantial change in the economy. Her comments in an interview with Reuters on the sidelines of the American Economic Association conference suggest how firmly the Fed is anchored to its current setting for overnight interest rates, fixed in a range of between 1.5% and 1.75% after three rate cuts last year. Advocates for even deeper rate reductions now agree the current setting is helping the economy enough that the Fed can stand pat while Mester and others who worried that lower rates might court faster inflation or risky lending have concluded that at this point there is little cause for concern.


I have been kind of forecasting inflation to go up to 2% for quite a while and we have been undershooting,” said Mester, who assumes a voting role this year on the Fed’s policy-setting committee. Mester, who was skeptical last year that rate cuts were needed, said, “I think we are really well calibrated now.” A rate increase would not be needed, “until I see either financial stability issues looming or some indication that inflation is going to pick up strongly. I don’t see that now and it is not in my forecast.” “You want to see that inflation really is at 2%. You want persistence. You want to be able to say that I am confident now that inflation is meeting our goal,” which was set at 2% in 2012 but never consistently achieved, she said.

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Finally, and even then it’s just reserve troops.

Australian Troops Called To Tackle Fires (BBC)

Australian Prime Minister Scott Morrison has announced 3,000 reserve troops will be deployed to help tackle raging bushfires across the country. Defence Minister Linda Reynolds said this is the first time this has happened in Australia’s history. Temperatures have surpassed 40C (104F) in parts of south-east Australia. Officials had warned that Saturday was set to be a “dangerous day”. Since September, fires in Australia have killed at least 23 people. Speaking at a press conference on Saturday, Mr Morrison told reporters: “We have seen this disaster escalate to an entirely new level.”


An emergency warning was issued for areas of eastern Victoria that told remaining residents it was now too late to leave. “The safest option is to plan how you will safely take shelter indoors as conditions worsen,” the warning said, adding: “Leaving now would be deadly.” Residents were instructed to attempt to take shelter indoors or in a large clearing or body of water. Dozens of people are missing and some 1,500 homes have already been lost this fire season. Mr Morrison also announced A$20m (£10m) has been allocated to lease four water bomber planes. Defence force bases would provide temporary accommodation, he said.

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Just think about all the plastics and paints etc. that are burning.

Slow Burn (John Quiggin)

At least eighteen people have already been killed by this season’s bushfires — and, with most of January and all of February still to come, that number is sure to rise. But these dramatic deaths are far outweighed by the hundreds, perhaps thousands, that will ultimately result from the toxic smoke blanketing Australian cities.

The most dangerous component of bushfire smoke are tiny particulates, no more than 2.5 micrometres in diameter, known as PM2.5. Over the past twenty years, studies have shown that high levels of PM2.5 have contributed to millions of premature deaths in highly polluted cities like Beijing and Delhi. Sydney, Canberra and other Australian cities have recently joined this list. In 2016 alone, exposure to PM2.5 contributed to an estimated 4.1 million deaths worldwide from heart disease, stroke, lung cancer, chronic lung disease and respiratory infections.

Even before the current cataclysm, air pollution was a major health hazard. While Sydney’s prevailing average of 6 micrograms per cubic metre (6 μg/m3) is within international health standards, it is above the levels observed in most European and American cities. A study led by the Sydney Public Health Observatory’s Richard Broome estimated that particulates and associated forms of pollution already account for between 310 and 540 premature deaths annually.

As far as can be determined, the mortality and health risks of PM2.5 are a linear function of the level of exposure. Being exposed to 6 μg/m3 every day for a year, for example, amounts to 2190 “microgram days.” Broome and his colleagues’ work implies that each microgram day is associated with between 0.14 and 0.25 premature deaths. This figure is consistent with a range of international studies they cite.

The overall mortality effects are also a linear function of the number of people exposed. That’s why a city like Delhi, with thirty million people and an average PM2.5 of 150 μg/m3, suffers tens of thousands of premature deaths every year.

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Think anyone cares? Always had the impression white Australia only wants to sell off all resources as fast as they can, because they know they stole all of them to begin with. Before you get caught, make sure the money’s in your pocket.

Australia’s Bushfires Push Countless Species To Extinction (G.)

Close to the Western River on Kangaroo Island, Pat Hodgens had set up cameras to snap the island’s rare dunnart – a tiny mouse-like marsupial that exists nowhere else on the planet. Now, after two fires ripped through the site a few days ago, those cameras – and likely many of the Kangaroo Island dunnarts – are just charred hulks. “It’s gone right through the under storey and that’s where these species live,” said Hodgens, an ecologist at Kangaroo Island Land for Wildlife, a not-for-profit conservation group. “The habitat is decimated.” On Friday afternoon word came through that three other Land for Wildlife sites protecting dunnarts and other endangered species, including the southern brown bandicoot, had also been consumed by fire on the island off the South Australian coast.


Prof Sarah Legge, of the Australian National University, said the prognosis for the Kangaroo Island dunnart was “not good” and its plight was symbolic of what was happening all across the east coast of Australia. “Many dozens” of threatened species had been hit hard by the fires, she said. In some cases “almost their entire distribution has been burnt”. So far, the Australian bushfire season has burned through about 5.8m hectares of bush, known across the world for its unique flora and fauna. Ecologists say the months of intense and unprecedented fires will almost certainly push several species to extinction. The fires have pushed back conservation efforts by decades, they say, and, as climate heating grips, some species may never recover. Climate scientists have long warned that rising greenhouse gases will spark a wave of extinctions.

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AMLO doesn’t appear to be very effective so far, certainly not internationally. A socialist right on America’s doorstep. Can’t be easy.

Mexico President Calls For Julian Assange To Be Released From UK Prison (R.)

Mexico’s President Andres Manuel Lopez Obrador on Friday called for Wikileaks founder Julian Assange to be released from prison in London, urging an end to what he described as his “torture” in detention. Assange, 48, is in a British jail for skipping bail when he sought asylum in Ecuador’s embassy in London, where he spent nearly seven years to avoid extradition to Sweden over allegations of rape that were dropped in November. Assange is also battling U.S. attempts to extradite him over Wikileaks’ publication of vast caches of leaked military documents and diplomatic cables. He faces a lengthy prison term if extradited to the United States.


A U.N. human rights investigator last year said Assange has suffered psychological torture from a defamation campaign and should not be extradited to the United States where he would face a “politicized show trial.” Lopez Obrador, a leftist who has close ties with Britain’s opposition Labour Party leader Jeremy Corbyn, expressed his solidarity with Assange and said he hoped the former hacker and activist is “forgiven and released” from prison. “I don’t know if he has recognized that he acted against rules and norms of a political system, but at the time these cables demonstrated how the world system functions in its authoritarian nature,” Lopez Obrador said in response to a question about Assange at a regular government news briefing. “Hopefully consideration will be given to this, and he’s released and won’t continue to be tortured.”

Read more …

 

 

 

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Jan 032020
 
 January 3, 2020  Posted by at 11:15 am Finance Tagged with: , , , , , , , , , , , ,  14 Responses »


Alfred Palmer New B-25 bomber at Kansas City plant of North American Aviation 1942

 

America Just Took Out The World’s No. 1 Bad Guy (CNBC)
US Strike That Killed Iranian Commander Starkly Divides US Lawmakers (CNN)
Erdogan Questions Europe As 250,000 Flee Idlib (ZH)
US Dollar as Global Reserve Currency vs Euro, Yen, Renminbi, & Others (WS)
China Cuts US Dollar Weighting In Key Index To Boost Fortunes Of Yuan (SCMP)
China’s Central Bank Frees Up $115 Billion To Support Growth (SCMP)
What the Fed Did to Calm Year-End Hissy-Fit of its Crybaby Cronies (WS)
Greece, Israel, Cyprus: Turkey’s Libya Troops Bill Dangerous Escalation (R.)
Leaders Of Greece, Israel, Cyprus Ink Deal For Pipeline (K.)
The Terrifying Rise of the Zombie State Narrative (Craig Murray)

 

 

Inevitably, the killing of Qassim Soleimani in Baghdad leads to the confirmation of US party lines’ divide. While the GOP stands behind the decision, the Dems have a hard time reconciling their own contradictions. They are a war party, if you look past Tulsi Gabbard and Bernie Sanders, but they can’t be seen to agree with Trump. So the likes of Schumer and Pelosi say that while Soleimani won’t be mourned by any American since he was a really terrible person, Trump should have asked for their permission.

The logic being that this could lead to WWIII, a theme that’s all over the internet, so much it makes one think independent thought is under threat. Be that as it may, the president needs permission to declare war, not to hit an individual. Moreover, since they agree killing the man might have been a good idea, they surely realize that he was in a spot where they could get at him, for a limited amount of time, so asking for permission would heve risked losing the opportunity. Weak.

The following two tweets are worth citing:

Nicole Alexander Fisher: “Pelosi voted for Trump’s NDAA which stripped a provison that would have prevented unauthorized war with Iran. She sided with Trump and warhawks on this, as did 188 other Democrats. 41 Dems like AOC, Ilhan Omar, Tulsi Gabbard, Ro Khanna, and Joe Kennedy voted no.”

Soleimani fought ISIS, Al-Nusra, Al-Qaeda etc., along with the US.

Sara Abdallah: “The “no. 1 bad guy” who led the counter-terrorism campaigns that defeated ISIS and Al-Qaeda in Iraq, Syria and Lebanon; the “no. 1 bad guy” who prevented a jihadist takeover of the Middle East.”

I’m still wondering how CNBC became the no. 1 warmonger for the MSM. This is some headline. As for the Dems and GOP, one would be inclined to say: pick your side. But if you look just a little bit closer, you see there is only one side.

 

America Just Took Out The World’s No. 1 Bad Guy (CNBC)

So, just who is this top Iranian general the U.S. just eliminated? For many of us who watch and analyze news out of the Middle East daily, he was the world’s number one bad guy. Qassim Soleimani has been in control of Iran’s Quds Force for more than 20 years. His current greatest hits include helping Bashar al Assad slaughter hundreds of thousands of his own people in the Syrian civil war, stoking the Houthis in Yemen’s civil war, and overseeing the killing of hundreds of Iraqi protesters recently demonstrating against Iranian influence in their country. But most importantly for Americans, Soleimani was behind the deaths of hundreds of American soldiers during the Iraq War. Last year, the U.S. State Department put the number of Americans killed by Iranian proxies in Iraq at 608 since 2003.


The killing of Soleimani doesn’t have the emotional power of the takedown of Osama bin Laden, and he wasn’t even as well-known to Americans as ISIS founder Abu Bakr al Baghdadi. But in many ways, taking him out means much more in terms of saving current lives. Remember that bin Laden and al Baghdadi were mostly out of business and in hiding at the time of their deaths. Solemani was busier than ever, directing mayhem all over the Middle East and beyond. For example, these last few days have made it clear to the whole world just how much Iran controlled just about all of Iraq and Iraq’s Shia population. It appears Solemeini not only felt justified in being the likely mastermind behind Tuesday’s attack on the U.S. embassy in Baghdad, he also was comfortable enough to travel to Iraq personally to oversee it. But this time, he got too comfortable.

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No, it doesn’t.

US Strike That Killed Iranian Commander Starkly Divides US Lawmakers (CNN)

The US airstrike that killed Iran Quds Force commander Qasem Soleimani generated starkly different reactions along party lines Thursday night, with Republicans heaping praise on President Donald Trump and Democrats expressing concerns about the legality and consequences of the attack. The Pentagon confirmed in a statement that Trump had ordered the strike, saying Soleimani “was actively developing plans to attack American diplomats and service members in Iraq and throughout the region. General Soleimani and his Quds Force were responsible for the deaths of hundreds of American and coalition service members and the wounding of thousands more.”

[..] Some key members of Congress — such as Senate Minority Leader Chuck Schumer, a New York Democrat who is a member of the congressional Gang of Eight leaders, who are briefed on classified matters — had not been made aware of the attack ahead of time. It’s not clear how many other lawmakers had advance notice of the strike. The Pentagon added that “this strike was aimed at deterring future Iranian attack plans” and the US “will continue to take all necessary action to protect our people and our interests wherever they are around the world.”

[..] Democrats pushed back on Republican sentiments about the attack, stressing the potential consequences and lambasting the decision to carry out the strike without congressional authorization. Sen. Chris Murphy of Connecticut emphasized that Soleimani “was an enemy of the United States” in a tweet before stating, “The question is this – as reports suggest, did America just assassinate, without any congressional authorization, the second most powerful person in Iran, knowingly setting off a potential massive regional war?” In a more explicit statement, Sen. Tom Udall of New Mexico said, “President Trump is bringing our nation to the brink of an illegal war with Iran without any congressional approval as required under the Constitution of the United States.”

[..] On the campaign trail, Democratic former Vice President Joe Biden said “no American will mourn” Soleimani but that the strike that killed him is a “hugely escalatory move.” “President Trump just tossed a stick of dynamite into a tinderbox, and he owes the American people an explanation of the strategy and plan to keep safe our troops and embassy personnel, our people and our interests, both here at home and abroad, and our partners throughout the region and beyond,” Biden said in a statement. “I’m not privy to the intelligence and much remains unknown, but Iran will surely respond. We could be on the brink of a major conflict across the Middle East. I hope the Administration has thought through the second- and third-order consequences of the path they have chosen.”

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This situation is not likely to improve after the assassination:

Erdogan Questions Europe As 250,000 Flee Idlib (ZH)

As Russian and Syrian jets have dramatically stepped up their bombardment of jihadist-held Idlib over the past three weeks, Turkish President Recep Tayyip Erdogan has again warned a massive wave of refugees is headed into Turkey, but that his country is without help and thus is seeking to prevent the new influx. “Right now, 200,000 to 250,000 migrants are moving toward our borders,” Erdogan said while addressing a conference in Ankara. “We are trying to prevent them with some measures, but it’s not easy. It’s difficult, they are humans too.” This after the UN on Monday said that of Idlib province’s some 3 million civilian population, up to 284,000 are currently on the move.


International reports commonly put the current numbers of Syrian refugees hosted by Turkey at about 3.7 million, which Erdogan has of late constantly reminded Europe of as he seeks support for foreign military intervention in places like northeast Syria and now even Libya. During his latest comments, Erdogan actually put the number of refugees across all provinces of Turkey at a whopping 5 million — which would be larger than many small countries. Crucially, during his speech on Thursday, he alluded to his prior threats to “open the gates” and allow refugees to flood into Europe, starting with Greece and other Mediterranean nations:

“Although they [the West] have more resources than we do, why don’t they accept them, why don’t they open the gates?” Erdogan asked. While also slamming Arab League member states for not acting, he answered his own question with, “We are Turkey. Alone this gives us a power and superiority that nobody has.” In late December, Erdogan reiterated prior provocative threats underscoring that “Turkey cannot handle a fresh wave of migrants from Syria, President Tayyip Erdogan said on Sunday, warning that European countries will feel the impact of such an influx if violence in Syria’s northwest is not stopped,” as Reuters summarized of the statement.

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Remarkably stable, really.

US Dollar as Global Reserve Currency vs Euro, Yen, Renminbi, & Others (WS)

The US economy and financial system – including being able to maintain and fund the gargantuan trade deficits and fiscal deficits – has become reliant on the dollar being the dominant global reserve currency. And the IMF just released its next installment on how this status has been changing. Total foreign exchange reserves in all currencies combined declined 0.6% in the third quarter from the second quarter to $11.66 trillion, according to the IMF’s quarterly COFER data. US-dollar-denominated exchange reserves – such as Treasury securities, US corporate bonds, etc. held by foreign central banks – ticked down 0.4% to $6.51 trillion. But holdings denominated in other currencies fell faster, and the share of dollar-denominated reserves edged up to 61.8% of total exchange reserves.


The US dollar’s share of total global reserve currencies declines when central banks other than the Fed proportionately reduce their dollar-denominated assets and add assets denominated in other foreign currencies. Over the long term, the recent moves in the dollar’s share are relatively small. There have been huge moves from 1977 through 1991, when the dollar’s share plunged from 85% to 46%, and then huge moves as the share rose again to 70% by 2000:

In October 2016, the IMF included the Chinese renminbi in the currency basket of the Special Drawing Rights (SDR), and the renminbi became officially a global reserve currency. But since then, progress of the currency has been exceedingly slow, and there are no signs the RMB would dethrone the US dollar anytime soon.The creation of the euro came with a lot of hopeful rhetoric that it would reach parity with the US dollar in every way, including as global trade currency, global financing currency, and global reserve currency. [..] During the initial phase of the conversion of European currencies to the euro, the euro’s share of global reserve currencies rose and the dollar’s share fell from 71.5% in 2001 to 66.5% in 2002.

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Wait, so China is desperate for dollars, and then decides dollars are becoming less important? Yeah, we’ll all believe it.

China Cuts US Dollar Weighting In Key Index To Boost Fortunes Of Yuan (SCMP)

China’s decision to cut the weighting of the US dollar in a basket of foreign currencies used to determine the strength of the yuan will help Beijing’s long-term efforts to weaken the international dominance of the American currency, economists said. The China Foreign Exchange Trade System (CFETS), a unit of the Chinese central bank, trimmed the weighting of the US dollar on Wednesday to 21.59 per cent from 22.40 per cent in a key yuan exchange index to make it “more representative” of current trade conditions. The new version of the index will be based on 2018 trade data, rather than data from 2015, when the CFETS was first established. The move, which comes amid heightened trade tensions between China and the United States, will help Beijing’s long-term efforts to create an alternative international payments system, economists said.


“The yuan hopes to become a reserve currency, to prevent the situation where the US dollar dominates the global financial system – or the so-called hegemony of the US dollar. This is a longer-term goal … and an inevitable trend,” said Shen Jianguan, vice-president and chief economist at JD Digits, although he added that the adjustment also reflected changes to China’s trading environment. His remarks were echoed by Lu Zhengwei, chief economist at China Industrial Bank, who said the cut would give the yuan marginally more independence against the US dollar. “The yuan should live its own way – now there is too much shadow from other [currencies] hanging over it,” he said.

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The amount is symbolic.

China’s Central Bank Frees Up $115 Billion To Support Growth (SCMP)

China’s central bank has announced a move to unleash 800 billion yuan (US$115 billion) from the banking system to support the economy, sending a pro-growth message on the first day of 2020. The People’s Bank of China (PBOC) will reduce the deposit reserve ratio in financial institutions by 0.5 percentage points from January 6, mainly to offer sufficient funding to the real economy, according to a notice published on the bank’s website. The announcement on Wednesday came after growth continued to weaken while China and the United States prepared to sign an interim trade deal in mid-January. The central bank said this round of funding was partially to offset cash withdrawals before the Lunar New Year, and would not change its stance on monetary policy.


From Monday, the reserve requirement ratio (RRR) for big banks will be lowered to 12.5 per cent, while the ratio for medium and small banks will be reduced to 10.5 per cent and 7 per cent respectively. In 2019, the central bank cut the RRR rate three times. “The RRR cut will help boost investor confidence and support the economy, which is gradually steadying,” said Wen Bin, an economist at Minsheng Bank in Beijing, who also expects another cut in China’s new loan prime rate this month. After 18 months of the trade war between China and the United States, the Chinese economy, the world’s second largest, is facing external and domestic headwinds, with growth slowing to 6 per cent in the third quarter, the lowest since 1992. By value of goods, China’s export growth fell 0.3 per cent between January and November 2019, while import growth was down 4.5 per cent for the same period.

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End the Fed. They lost control a decade ago.

What the Fed Did to Calm Year-End Hissy-Fit of its Crybaby Cronies (WS)

The big fear was that the repo market would blow out again at the end of 2019, as banks would be window-dressing their balance sheets by building up reserves to certain levels. In the process, they would refuse to lend to the repo market. And borrowing pressure on the other side – such as hedge funds or mortgage REITs that borrow cheaply in the repo market to fund long-term bets – would drive up repo rates. At the end of 2018, repo rates blew out, but quickly settled down without the Fed’s involvement. In September 2019, repo rates blew out again. At this point, the rattled Fed started dousing the market with hundreds of billions of dollars to calm the repo market and prevent another year-end blowout.


To do this, the Fed engaged in repo operations and also began purchasing short-term Treasury bills. This calmed the repo market, and at the end of December, repo rates didn’t blow out. But on January 1, the Fed did a huge $64 billion reverse repo, the opposite of a repo, thus draining overnight $64 billion in liquidity from the market. This astounding spike in reverse repo balances showed up on its balance sheet for the week ended January 1, released today:

In a reverse repo, the Fed sells securities and takes in cash, under an agreement to buy back those securities at a fixed price on a set date. A reverse repo drains liquidity from the market. When the reverse repo unwinds on the maturity date, as the Fed buys back those securities, it adds liquidity to the market. Reverse repos are liabilities on the Fed balance sheet. In a normal repo, the Fed buys Treasury securities and mortgage-backed securities (MBS) guaranteed by Fannie Mae and Freddie Mac, or Ginnie Mae, under agreements to repurchase them at a fixed price on a specific date, such as the next day or in a longer period. This adds liquidity to the market for the duration of the repo.


When the repo matures and unwinds, the liquidity gets drained. But a new repo can roll this over. Repos are assets on the Fed’s balance sheet. Total repos on the Fed’s balance sheet on January 1 rose to $256 billion, up $48 billion from a month earlier (as of Dec 4 balance sheet):

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Erdogan is not sitting pretty.

Greece, Israel, Cyprus: Turkey’s Libya Troops Bill Dangerous Escalation (R.)

Turkey’s bill allowing troop deployment in Libya marks a dangerous escalation in the North African country’s civil war and severely threatens stability in the region, a joint statement by Greece, Israel and Cyprus said late on Thursday. “This decision constitutes a gross violation of the UNSC resolution…imposing an arms embargo in Libya and seriously undermines the international community’s efforts to find a peaceful, political solution to the Libyan conflict,” Greek Prime Minister Kyriakos Mitsotakis, Israel’s Prime Minister Benjamin Netanyahu and Cyprus President Nicos Anastasiades said in the statement.


Turkish parliament overwhelmingly approved a bill that allows troops to be deployed in Libya, in a move that paves the way for further military cooperation between Ankara and Tripoli but is unlikely to put boots on the ground immediately. Turkey’s move comes after Ankara and the internationally recognized government of Libyan Prime Minister Fayez al-Serraj signed two separate agreements in November: one on security and military cooperation and another on maritime boundaries in the eastern Mediterranean, infuriating Greece, Israel, Egypt and Cyprus.

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The exact same countries want to cut a pipeline straight through an area claimed by Turkey. Think there’s a connection?

Leaders Of Greece, Israel, Cyprus Ink Deal For Pipeline (K.)

The intergovernmental agreement signed on Thursday by Greece, Israel and Cyprus for the construction of the EastMed pipeline sent out multiple diplomatic messages. The first of these relates to the endurance of the trilateral cooperation itself. In the 10 years since its inception, Cyprus President Nicos Anastasiades and the prime ministers of Israel, Benjamin Netanyahu, and Greece, Kyriakos Mitsotakis, confirmed that the relationship between the three countries is not circumstantial. Skepticism concerning the situation in Jerusalem after three consecutive national elections which will have been held by March is reasonable. However, it will be very difficult for any Israeli government to roll back years of planning.

The second message concerns Turkey, as the pipeline will link Israel’s reserves with Cyprus, then Crete and mainland Greece through an area that Ankara says belongs to Turkey, according to the pact it signed with Libya’s Tripoli-based government. The EastMed agreement is essentially a legal act stemming from international law as it expresses the will of three sovereign and elected governments (in contrast to that in Tripoli) to deepen their cooperation. At the same time it is a message of cooperation which leaves the door open for Ankara to take part if it decides so. However, signs Thursday were not encouraging as a pair of Turkish F-16s fighter jets made six overflights over Oinousses and the nearby island of Panagia, while the presence of the Turkish fleet around Cyprus remains emphatic.

Moreover, the Turkish Parliament decided on Thursday to approve the deployment of troops to Libya, if deemed necessary. A Turkish Foreign Ministry spokesman said any project that ignores the rights of Turkey and Turkish Cypriots in the region will fail, while Turkish-Cypriot leader Mustafa Akinci said the pipeline is an obstacle to efforts for a solution to the Cyprus problem. The third message is to countries such as Italy and Egypt. With the signing of the deal, Athens, Nicosia and Jerusalem showed they were not willing to wait for the perfect conditions to prevail before moving ahead.

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“..the western powers are now busily attacking the Iraqi Shia majority government they themselves installed, for the crime of being a Shia majority government.”

The Terrifying Rise of the Zombie State Narrative (Craig Murray)

The ruling Establishment has learnt a profound lesson from the debacle over Iraqi Weapons of Mass Destruction. The lesson they have learnt is not that it is wrong to attack and destroy an entire country on the basis of lies. They have not learnt that lesson despite the fact the western powers are now busily attacking the Iraqi Shia majority government they themselves installed, for the crime of being a Shia majority government. No, the lesson they have learnt is never to admit they lied, never to admit they were wrong. They see the ghost-like waxen visage of Tony Blair wandering around, stinking rich but less popular than an Epstein birthday party, and realise that being widely recognised as a lying mass murderer is not a good career choice.

[..] The security services outlet Bellingcat would publish some photos of big missiles planted in the sand. The Washington Post, Guardian, New York Times, BBC and CNN would republish and amplify these pictures and copy and paste the official statements from government spokesmen. Robert Fisk would get to the scene and interview a few eye witnesses who saw the missiles being planted, and he would be derided as a senile old has-been. Seymour Hersh and Peter Hitchens would interview whistleblowers and be shunned by their colleagues and left off the airwaves. Bloggers like myself would be derided as mad conspiracy theorists or paid Russian agents if we cast any doubt on the Bellingcat “evidence”.

Wikipedia would ruthlessly expunge any alternative narrative as being from unreliable sources. The Integrity Initiative, 77th Brigade, GCHQ and their US equivalents would be pumping out the “Iraqi WMD found” narrative all over social media. Mad Ben Nimmo of the Atlantic Council would be banning dissenting accounts all over the place in his role as Facebook Witchfinder-General.

Read more …

 

 

 

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Dec 142019
 
 December 14, 2019  Posted by at 10:40 am Finance Tagged with: , , , , , , , , ,  10 Responses »


Lewis Wickes Hine Child Labor in Magnolia Cotton Mills spinning room, Mississippi Mar 1911

 

Fed Policymakers See US Economy On Good Footing (R.)
‘Back Up The Truck And Buy, Buy Buy,’ Because There Is No Risk (MW)
Trump Halts New Tariffs In US-China Trade War (BBC)
China To Target Around 6% Growth In 2020, Step Up State Spending (R.)
Rudy Giuliani Can Barely Contain Himself Over His Ukraine Findings (ZH)
Two for One Holiday Special (Kunstler)
NY Post Editorial Board Names Eric Ciaramella As Whistleblower (ZH)
Labour Voters ‘Defected Over Corbyn, Not Brexit’ (Ind.)
The State of the Canadian Debt Slaves (WS)
Talks At COP25 Stalled ‘Because Of Australia, Saudi Arabia & Brazil’ (SMH)
Esper Tells Syrian Kurds US Never Promised Them A State (RT)
Lawyers Complain About Lack Of Access To Julian Assange In Jail (PA)

 

 

Just yesterday they announced another $500 billion for the repo crisis. Which will take the balance sheet over $4.5 trillion. Everything’s just dandy.

Fed Policymakers See US Economy On Good Footing (R.)

The U.S. economy is doing well and looks set to stay that way next year, two top Federal Reserve policymakers said on Friday, remarks that suggest they are content to leave interest rates where they are. “I think the economy is in a good place. U.S Federal Reserve Vice Chair Richard Clarida said in an interview with Fox Business Network, adding that the consumer has never been in better shape. “We have the strongest labor market in 50 years, we have low and stable inflation, we have solid growth and our baseline outlook for the economy is more of the same in 2020.” Speaking to students and faculty earlier in the day at the Borough of Manhattan Community College, New York Fed President John Williams summed it up this way: “The economy is performing about as well as we have seen in decades.”

Williams and Clarida work closely with Fed Chair Jerome Powell, who on Wednesday announced the U.S. central bank’s well-telegraphed decision to hold interest rates steady in a range of 1.5% to 1.75%, and signaled borrowing costs would remain there for the foreseeable future. The Fed cut rates three times from July to October in a mini-easing cycle, designed to sustain the U.S. economic expansion amid slowing global growth and a drop in business investment caused by uncertainty amid the 17-month long U.S.-China trade war. On Friday the world’s two largest economies announcing a Phase 1 agreement that reduces some U.S. tariffs in exchange for increased Chinese purchases of American farm goods.


“Any resolution of that uncertainty, assuming it’s a good deal, is obviously a positive for the economic outlook,” Clarida said. He added, though, that trade was just a number of risks the Fed will monitor. “This is obviously a negotiation; it looks like it’s going in a positive direction,” Clarida said. “But … global developments more broadly have been something we’ve been monitoring. You’ve had a global slowdown this year, emerging markets have been slowing down, there are muted inflation pressures. So it’s not just any one thing that we are focusing on.”

Read more …

There is no risk because the Fed jumps in always and everywhere. Except to protect savings and pensions. Those they kill.

‘Back Up The Truck And Buy, Buy Buy,’ Because There Is No Risk (MW)

“Back up the truck and buy, buy, buy.” That was the advice from Chris Rupkey, chief financial economist at MUFG Union Bank, who sent a rousing note to clients late Thursday, on the heels of trade optimism that is lifting global equities at the week’s end and a decisive election outcome in the U.K. “All over the world, markets are falling love. Buy it. Buy it all,” reads the headline of that note. Rupkey said a pair of geopolitical risks — an elusive U.S.-China trade deal and yearslong wrangling over Brexit — “thought to be strangling world economic growth” incredibly look to be getting resolved in a “big, big way.”


“There is some smoke and mirrors here, but it looks like this is the time for investors around the world to throw months of caution to the winds and take risk off the table, and they are, buying stocks and selling bonds with abandon, as the economic outlook brightens and central banks shelve their plans to cut interest rates further,” he writes. Investors were waiting for more news on a trade deal after reports surfaced Thursday that the U.S. could trim existing import tariffs on Chinese goods, as well as delaying those set to kick in on Sunday. Notably though, China has remained silent on any deal progress in the wake of those developments.

Read more …

You start out big, so you have room to retreat a little.

Trump Halts New Tariffs In US-China Trade War (BBC)

The US and China have announced a preliminary trade agreement. The so-called phase one deal will see billions of dollars in tariffs removed or delayed. US stocks hit a fresh record on hopes there will be a continued softening of trade tensions between the world’s two largest economies. A fresh wave of US tariffs on Chinese imports was due to take effect on Sunday. However, this has been cancelled for now. “We will begin negotiations on the phase two deal immediately, rather than waiting until after the 2020 Election,” US President Donald Trump said in a tweet. “This is an amazing deal for all.”


If the new, higher tariffs had gone ahead, Chinese-made goods such as smartphones, clothing and toys would have become more expensive for Americans just ahead of Christmas. US negotiators are reportedly offering to significantly reduce existing tariffs on about $360bn worth of Chinese imports. In return, China has promised to buy large quantities of US soybeans, poultry and other agricultural products. The agreement is a deal in principle, which means if China breaks any part of the agreement, the Trump administration has the ability to re-implement tariffs.

Read more …

Almost half a trillion in new local bonds. What a great idea.

China To Target Around 6% Growth In 2020, Step Up State Spending (R.)

China plans to set a lower economic growth target of around 6% in 2020 from this year’s 6-6.5%, relying on increased state infrastructure spending to ward off a sharper slowdown, policy sources said. Chinese leaders are trying to support growth to limit job losses that could affect social stability, but are facing pressure to tackle debt risks caused by pump-priming policies. The proposed target, to be unveiled at China’s annual parliamentary session in early March 2020, was endorsed by top leaders at the annual closed-door Central Economic Work Conference this month, according to three sources with knowledge of the meeting’s outcome.

“We aim to keep next year’s growth within a reasonable range, or around 6%,” said a source who requested anonymity. Top leaders pledged to keep economic policies stable while making them more effective to achieve growth targets in 2020, state media said on Thursday. Next year will be crucial for the ruling Communist Party to fulfill its goal of doubling GDP and incomes in the decade to 2020. Economic growth of nearly 6% next year could be enough to meet that goal given the economy is expected to expand about 6.2% this year, policy insiders said.


[..] The government aims to boost infrastructure investment by allowing local governments to issue more special bonds next year, but there is less room for tax cuts, the sources said. The annual budget deficit could rise from this year’s 2.8% of GDP, but is likely to be kept within 3%, they said. Local governments could be allowed to issue special bonds worth some 3 trillion yuan ($426.20 billion) in 2020 to fund infrastructure projects, including 1 trillion yuan front-loaded to this year, they said. “Fiscal policy will provide a key support for the economy,” said one source.

Read more …

Let’s see it. Bill Barr has said the Durham report won’t be out until spring-summer 2020. Lots of wiggle room.

Rudy Giuliani Can Barely Contain Himself Over His Ukraine Findings (ZH)

For the past several weeks, the personal attorney to President Trump has been in Ukraine, interviewing witnesses and gathering evidence to shed light on what the Bidens were up to during the Obama years, and get to the bottom of claims that Kiev interfered in the 2016 US election in favor of Hillary Clinton. He has enlisted the help of former Ukrainian diplomat, Andriy Telizhenko, to gather information from politicians and ask them to participate in a documentary series in partnership with One America News Network (OANN) – which will make the case for investigating the Bidens as well as Burisma Holdings – the natural gas firm which employed the son of a sitting US Vice President in a case which reeks of textbook corruption.

According to the Journal, Giuliani will present findings from his self-described “secret assignment” in a 20-page report. “Trump and Giuliani say then-Vice President Biden engaged in corruption when he called for the ouster of a Ukrainian prosecutor who had investigated a Ukrainian gas company where Hunter Biden served on the board. The Bidens deny wrongdoing, and ousting the prosecutor was a goal at the time of the U.S. and several European countries. -Wall Street Journal. Telizhenko, the former diplomat, tells the Journal that the plan for the series was conceived during the impeachment hearings as a way for Giuliani to tell his side of the story.


The former Ukrainian diplomat flew to Washington on November 20 to film with Giuliani, while in early December he accompanied America’s Mayor on the Kiev trip – stopping in Budapest, Vienna and Rome. Upon his return to New York on Saturday, Giuliani says he took a call from President Trump while his plane was still taxiing down the runway, according to the Wall Street Journal. “What did you get?” Trump asked. “More than you can imagine,” answered the former New York mayor who gained notoriety in the 1980s for taking down the mob as a then-federal prosecutor.

Read more …

The Dems focus on impeachment, the GOP on the elections.

Two for One Holiday Special (Kunstler)

Hillary Clinton sure got her money’s worth with the Fusion GPS deal: it induced a three-year psychotic break in the body politic, destroyed the legitimacy of federal law enforcement, turned a once-proud, free, and rational press into an infernal engine of bad faith, and is finally leading her Democratic Party to an ignominious suicide. And the damage is far from complete. It’s even possible that Mrs. Clinton will return to personally escort the party over the cliff when, as is rumored lately, she jumps into the primary contest and snatches the gonfalon of leadership from the ailing old man of the sclerotic status quo, Uncle Joe Biden. The citizens of this foundering polity have been subjected to a stunning doubleheader of political spectacle clear through the week.

On Monday, the Horowitz Report was briefly celebrated by the Left for claiming “no bias” and a “reasonable predicate” for the RussiaGate mess — until auditors actually got to read the 400-plus-page document and discovered that it was absolutely stuffed with incriminating details that Mr. Horowitz was too polite, too coy, or too faint-hearted to identify as acts worthy of referral for prosecution. Mr. Barr, the attorney general, and US attorney John Durham immediately stepped up to set the record straight, namely, that this was hardly the end of the matter and that they were privy to fact-trains of evidence that would lead, by-and-by, to a quite different conclusion. This reality-test was greeted, of course, with shrieking for their dismissal from the Jacobin Left.


But then at mid-week, Mr. Horowitz put in a personal appearance before the Senate Judiciary Committee and left no doubt that entire RussiaGate extravaganza was spawned by Fusion GPS’s utterly false Steele dossier and the so-called “Intel Community’s” zeal for weaponizing it to overthrow the president. The shock-waves from all that still pulsate through the disordered collective consciousness of this sore-beset republic, and will disturb the sleep of many former and current officials for months to come as the specter of Barr & Durham transmutes into a nightmare of Hammer & Tongs, perp-walks, and actual prosecutions.

Read more …

What a weird joke. Yeah, let him do Maddow with a mask on.

NY Post Editorial Board Names Eric Ciaramella As Whistleblower (ZH)

The New York Post Editorial Board has named CIA analyst Eric Ciaramella as the whistleblower at the heart of the Trump impeachment saga, confirming an October 30 report by RealClearInvestigation’s Paul Sperry which has been widely cited in subsequent reports. Whistleblower lawyers refuse to confirm or deny Ciaramella is their man. His identity is apparently the worst-kept secret of the Washington press corps. In a sign of how farcical this has become, Rep. Louie Gohmert (R-Texas) said his name as part of a series of names during a live hearing Wednesday night aired on television. He never called him the whistleblower, just said he was someone Republicans thought should testify, yet Democrats angrily denounced the “outing.” If you don’t know the man’s name, how do you know the man’s name?” -New York Post

Ciaramella, a registered Democrat, is a CIA analyst who specializes in Russia and Ukraine, and ran the Ukraine desk at the National Security Council (NSC) in 2016. He previously worked for then-NSC adviser Susan Rice, as well as Joe Biden when the former VP was the Obama administration’s point-man for Ukraine. He also worked for former CIA Director John Brennan, and was reportedly a highly valued employee according to RedState’s Elizabeth Vaughn. He also became former National Security Adviser H.R. McMaster’s personal aide in June 2017, was called out as a leaker by journalist Mike Cernovich that same month.


He also worked Alexandra Chalupa, a Ukrainian-American lawyer and Democratic operative involved in allegations that Ukraine meddled in the 2016 US election by releasing the so-called ‘Black Ledger’ that contained Paul Manafort’s name. In 2017, former White House chief strategist Steve Bannon wanted Ciaramella kicked off the National Security Council over concerns about leaks.

Read more …

It’s Corbyn’s job to realize this. Or it was.

Labour Voters ‘Defected Over Corbyn, Not Brexit’ (Ind.)

More voters turned against Labour because of Jeremy Corbyn rather than Brexit, according a poll probing the reasons for the party’s greatest electoral defeat in decades. Pollsters Opinium found that among 2017 Labour voters who defected at last night’s general election, 37 per cent of them cited the leadership of the party as their main reason. Despite Mr Corbyn’s claim the election “was taken over ultimately by Brexit”, 21 per cent said they defected due to the party’s stance on EU membership while just six per cent said their main reason was Labour’s economic policies. It comes as the Labour leader indicated he would step down from his role at the start of the new year, but remain in place for the duration of a leadership contest, which could take several months.


Among Labour voters who switched allegiances to the Tories, 45 per cent cited Mr Corbyn’s leadership as the main issue while 29 per cent of those who defected to the Liberal Democrats did so. Of all respondents who said they did not vote for the Labour Party at the first December election in almost a century, 43 per cent said their main reason was the leadership. A further 17 per cent placed blame with the triangulation on Brexit and 12 per cent of the economic policies put forward in Labour’s manifesto.

Read more …

“..despite still ultra-low interest rates..”

The State of the Canadian Debt Slaves (WS)

Canadian households, rated near the top of the most indebted in the world, accomplished something awe-inspiring: They got even more indebted and their leverage rose to a new record, according to data released today by Statistics Canada. The portion of their disposable income (total incomes from all sources minus taxes) that Canadian households spent on making principal and interest payments, including on mortgage debts and non-mortgage debts such as credit card balances, reached a new record of 14.96% in the third quarter, This record beat the prior record of 2007, and this happened despite still ultra-low interest rates:

Mortgage debt was the driver behind this new record, as the portion of disposable income that Canadians spent to make interest and principal payments on their mortgages rose to 6.74%, the highest ever. But these are aggregate numbers, and for some individual households, the burden is a lot higher. Based on data from the 2016 census, 67.8% of Canadian households own their home, and the ratio has been dropping. The remaining households rent, and they do not have a mortgage. And a portion of those who own a home do not have a mortgage either because they’d already paid it off. And another portion of homeowners only carries a relatively small amount of mortgage debt.


But among the remaining homeowners, particularly those who bought in recent years, the burden of their mortgage is heavy. And it’s this portion that everyone is worrying about, not the large number of other Canadian households. In the US, it was this portion that triggered the mortgage crisis — not the renters, and not the one-third of homeowners who’d already paid off their mortgages, and not those homeowners who’d paid down their mortgages significantly. Non-mortgage debt, such as credit-card balances and personal loans, also increased, but did not take out the previous high. In the third quarter, debt service on non-mortgage debts reached 8.23% of disposable income, the highest since Q3 2008. This chart shows the two ratios separately:

Americans were forced to deleverage during the mortgage bust and housing bust, and have never re-leveraged to the full extent, particularly with mortgage debt and credit card debts, which are barely higher than they were at the peak in 2007, but over those 12 years the economy had grown, and the population has grown, and the ratio of mortgage debt and credit card debt to GDP has declined sharply. The exception are student loans, which have totally blown out, and auto loans which have also increased faster than GDP. Canadian households in aggregate never really experienced the full effects of the Financial Crisis in the housing market, and they weren’t forced to deleverage, and there was no lesson to be learned, and they have gone hog-wild on debt to fund their housing bubbles:

Read more …

Others say because of the US. It’ll end with big promises that remain unfunded.

Talks At COP25 Stalled ‘Because Of Australia, Saudi Arabia & Brazil’ (SMH)

Global climate talks have been extended into the weekend as nations wrangle over carbon accounting issues, including whether Australia should be able to slash its Paris emissions reduction goals using a surplus from an earlier era. As is typical with Conference of the Parties (COP) events, the gathering in the Spanish capital of Madrid blew past its Friday deadline. Observers expect negotiations on carbon trading rules and other issues to last until at least Sunday, Australian time. International media singled out Australia’s insistence it be allowed to count “over-achievement” during the 2012-20 Kyoto Protocol period to reduce its abatement task during the 2021-30 Paris accord as one brake on progress.


John Connor, chief executive of the Carbon Markets Institute, said a ban on Australia’s use of so-called Kyoto carry-over credits remained an option in final drafts. The use of a “surplus” – effectively halving Australia’s Paris pledge of reducing 2005-levels of emissions by 26 per cent by 2030 – opened the door to India and former Soviet nations to cut their ambition too, he said. “Other countries definitely care … because the Kyoto carryover is a card only developed countries, who had carbon budget commitments under the Kyoto protocol, can play,” Mr Connor said. “To date it remains that only Australia is willing to play that card and it’s not winning them friends.”

Read more …

This goes back to Condoleeza Rice at least.

Esper Tells Syrian Kurds US Never Promised Them A State (RT)

The US never promised Syria’s Kurds that it would help them build an autonomous state, Defense Secretary Mark Esper has insisted, despite years of hints to the contrary. So much for the birth pangs of that New Middle East… “Nowhere, at no point in time did we tell the Kurds, we will assist you in establishing an autonomous Kurdish state in Syria, nor would we fight against the longstanding ally Turkey on your behalf,” Esper told reporters on Friday. “We live up to our obligations, and our obligation, our agreement, our understanding with the Kurds was this: that we would work together to fight in Syria to defeat ISIS,” he explained, referring to the Islamic State (IS, formerly ISIS) terrorist group.

But now that ISIS has been declared dead almost as many times as its late leader Baghdadi, is it game over for the US-Kurdish partnership? Esper’s words no doubt came as a shock to anyone expecting a continuation of the Assad-Must-Go policies of the Obama administration, in which it was understood that the Kurdish Syrian Democratic Forces would be rewarded for doing their part to overthrow Syrian President Bashar Assad with their own semi-sovereign state à la Iraqi Kurdistan. US media have long sung the praises of ‘Rojava’ as some sort of feminist utopia, but this “brave social experiment” is now imperiled by the Trump administration’s stubborn refusal to continue waging a war it has all but lost in Syria.


The SDF provided an ideal anti-Assad proxy through which the US could occupy resource-rich areas of Syria, an occupation which would otherwise be considered illegal under international law. But when the US began pulling out of northeast Syria back in September, leaving the surprised Kurds at the mercy of Turkish forces that view them as terrorists, the Kurds were forced to beg the same Assad government they had decried as the devil incarnate while the US was still propping them up for protection. They ultimately swallowed their pride and worked out an arrangement with Syrian and Russian forces along the Turkish border, but this was not the deal they thought they’d made with the US.

Read more …

From our Comments yesterday:

“Finally, DJ Baraitser asked Gareth Peirce if it would help if Julian #Assange were presented in person on the 19th in order to facilitate a meeting afterwards. Peirce declined saying that “It’s a difficult claustrophobic journey from Belmarsh”

So, the main complaint apparently – and the headline to the story – is that they need more direct access to Assange. But when the Judge offers one thing that IS in her power to order that would give them at least some direct access in person, the lawyers decline with a flimsy excuse.

Now that he is on remand he is supposed to be allowed 2 social visits per week and unlimited legal visits. Those two things are separate, one doesn’t preclude the other. If he isn’t getting that and he was my client I’d be raising merry hell about it and dragging whoever necessary into the appropriate Court TODAY to get an Order fixing it.”

Lawyers Complain About Lack Of Access To Julian Assange In Jail (PA)

Julian Assange has been blocked from seeing evidence in his extradition case because his lawyers cannot get sufficient access to him, a court has heard. The WikiLeaks founder, 48, appeared at Westminster magistrates court by video link on Friday for a hearing to extend his detention in Belmarsh prison, in south-east London. He is being held in the high-security jail before a full hearing in February when he will fight extradition to the US, where he faces 18 charges including conspiring to hack into a Pentagon computer. Assange is accused of working with the former US army intelligence analyst Chelsea Manning to leak hundreds of thousands of classified documents.

Assange appeared uncomfortable as he sat waiting for the hearing to start, clenching his hands together before putting them inside the sleeves of his grey sweater. He spoke to confirm his name and date of birth and to clarify he was Australian, after the court’s legal adviser mistakenly suggested he was a Swedish national. The court heard that his lawyers had made a request to the judge, complaining about a lack of access to their client behind bars. Gareth Peirce, defending Assange, said the legal team were struggling to prepare documents for the case as Assange had no access to the evidence. “Without Mr Assange’s knowledge, some of it is recently acquired evidence, some of it is subject to months of investigation not always in this country, of which he is unaware because of the blockage in visits,” she said.


“Despite our best efforts, Mr Assange has not been given what he must be given, and we are doing our utmost to cut through this.” Peirce said the governor of Belmarsh had prioritised family visits over legal visits, and she asked the judge to step in. But the district judge, Vanessa Baraitser, said she had no jurisdiction over the Prison Service.= “Can I make it clear that I have no desire to stand in the way of any lawyer having proper access to their client and it’s in the interest of justice that they do,” the judge said. “What I can do and say is to state in open court that it would be helpful to this extradition process that Mr Assange’s lawyers have the access to their client.”

Read more …

 

Banksy’s latest in Birmingham

 

 

 

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Dec 072019
 
 December 7, 2019  Posted by at 10:26 am Finance Tagged with: , , , , , , , , , , ,  12 Responses »


Dorothea Lange Homeless mother and child walking from Phoenix to Imperial County CA Feb 1939

 

Donald Trump and Jerome Powell Can ‘Take Another Victory Lap’ (Y!)
Abenomics has Failed Japan. Financial Times Wants to Make it Global. (Lacalle)
What the ‘Expert’ Panel Should Have Told You About Impeachment (ET)
A Fraught Moment (Kunstler)
Strzok and Page Did Real Damage (Cortese)
Pelosi Puts A Brave Face On A Doomed Mission (Tucker Carlson)
Bloomberg On His Democratic Rivals: ‘Trump Would Eat ‘Em Up’ (R.)
Kamala Harris, Michael Bloomberg, and a Supreme Court Decision (IC)
Musk’s Defamation Win May Reset Legal Landscape For Social Media (R.)
Saudi Arabia Retreats From The Troubles Its Clown Prince Caused (MoA)

 

 

If you look only at jobs, and not even the quality of those jobs, things may appear shiny. We get it.

Donald Trump and Jerome Powell Can ‘Take Another Victory Lap’ (Y!)

The November jobs report crushed expectations on Friday, sending the stock market surging. “Jerome Powell and Donald Trump can take another victory lap,” said Danielle DiMartino Booth, a former Federal Reserve advisor and CEO of Quill Intelligence. The economy added 266,000 jobs in November, according to a report released Friday by the Bureau of Labor Statistics. The prior two months of job gains were revised higher pushing the three month average of job adds to 205,000. “In stark contrast to just about every other source of economic data, the jobs data insists the U.S. economy is strong, and that is all markets care about as it is the most visible and most quoted,” Booth said. “The reaction in the dollar and bond yields speaks volumes to how surprised markets were to this data.”


[..] As for Fed Chair Jerome Powell, he has steered a Federal Reserve that cut interest rates three times so far this year in an effort to reverse the hawkishness of Fed policy last year, which included four rate hikes, and to get ahead of any economic weakness sparked by the ongoing trade tensions between the U.S. and China. The Federal Reserve meets again next week, and most market participants aren’t expecting any changes to rates. “Despite the strengthening trend, this [jobs report] will not change anything at the Fed aside from what officials say publicly,” Booth said.

Read more …

Abe and the BOJ looked only at deflation. And the harder they tried to make them spend, the more fearful of spending the Japanse people became.

Abenomics has Failed Japan. Financial Times Wants to Make it Global. (Lacalle)

A recent article in the Financial Times, “Abenomics provides a lesson for the rich world,” mentioned that the experiment started by Prime Minister Shinzo Abe in the early 2010s should serve as an important warning for rich countries. Unfortunately, the article’s “lessons” were rather disappointing. These were mainly that the central bank can do a lot more than the ECB and the Fed are doing, and that Japan is not doing so badly. I disagree. The failure of Abenomics has been phenomenal. The balance sheet of the Central Bank of Japan has ballooned to more than 100% of the country’s GDP, the central bank owns almost 70% of the country’s ETFs and is one of the top 10 shareholders in the majority of the largest companies of the Nikkei index.

Government debt to GDP has swelled to 236%, and despite the record-low cost of debt, the government spends almost 22% of the budget on interest expenses. All of this to achieve what? None of the results that were expected from the massive monetary experiment, inventively called QQE (quantitative and qualitative easing) have been achieved, even remotely. Growth is expected to be one of the weakest in the world in 2020, according to the IMF, and the country has consistently missed both its inflation and economic growth targets, while the balance sheet of the central banks and the country’s debt soared. Real wages have been stagnant for years, and economic activity continues to be as poor as it was in the previous two decades of constant stimulus.

[..] The wrong diagnosis will lead to worsening outcomes. When the government is surrounded by economists that tell them that the problem of the economy is that there are too many savings, the government will decide to raise taxes and create a larger problem attacking consumption. With private debt at 221% of GDP. Japan has many issues, none of them being a “savings glut.” If you abandon structural reforms, the results will be worse. The QQE program was based on three “arrows”: monetary policy, government spending, and structural reforms. Guess which arrow they forgot to implement? Exactly. Structural reforms never happened, and when they did, they came in the form of higher taxes and more interventionism, the opposite of what the economy needed.

Read more …

Back to the 18th century we go.

What the ‘Expert’ Panel Should Have Told You About Impeachment (ET)

Many phrases in the Constitution—such as “necessary and proper,” “Privileges and Immunities,” and “Convention for proposing Amendments”—carry specialized 18th century meanings not obvious to the modern reader. Recall that most of the leading Founders were lawyers and the Constitution is a legal document. Some of these phrases derive from 18th century law. Therefore, to understand them you have to consult 18th century legal materials in addition to better-known sources such as the 1787 convention debates or the Federalist Papers. Unfortunately, most of the scholars called by the House Judiciary Committee to address the meaning of “high Crimes and Misdemeanors” were not able to do so accurately.

According to the authoritative Westlaw database, two of the three Democratically appointed witnesses have published no scholarly work on impeachment: Their specialties are in other areas. None showed any familiarity with 18th century fiduciary standards—which (as explained below) are part of the law of impeachment. All of the witnesses voted against President Trump, and several have been involved in anti-Trump activity. It’s not surprising, therefore, that, except for professor Jonathan Turley’s heavily footnoted 53-page written statement, the testimony was biased and superficial. [..] The core of the case against President Trump is that he used his political position to seek re-election assistance from a foreign government. Although there’s dark talk of crimes committed, the principal charge is fiduciary rather than criminal. In other words, a “high … Misdemeanor.”

House Democrats have struggled to define Trump’s alleged offense. Initially, they described it as “quid pro quo.” Then they employed the term “bribery.” The legally correct designation is “self-dealing.” Self-dealing is betraying your employer’s interests to enrich yourself. It’s a violation of the fiduciary duty of loyalty. We can assume the president might benefit from a Ukrainian investigation, but that doesn’t mean asking for an investigation was self-dealing as defined by fiduciary, and therefore by impeachment, law. There’s nothing unusual or improper about a president asking a recipient of U.S. foreign aid to address corruption. As for seeking political advantage: If we punished every politician who did that, they would all be swinging from the yardarm.

This is as true in foreign as in domestic affairs. When President Barack Obama told the Russian president he would have more flexibility after his re-election, he was saying (1) an agreement now would benefit both Russia and the United States, but (2) I’m going to sacrifice our mutual interests for the present because such an agreement might hurt my re-election campaign. Was this impeachable self-dealing? Almost certainly not. So where is the divide between “normal” conduct and impeachable conduct? To answer this, we need to weigh at least three factors: impeachment precedent, the national interest, and the practice of other presidents.

Read more …

The Horowitz report is due on Monday. He’s scheduled to testify on Wednesday.

A Fraught Moment (Kunstler)

The IG has no real law enforcement powers. He can only refer or recommend further action. Nevertheless, a great miasma of anxiety oppresses the Democratic Party now as it awaits whatever Mr. Horowitz has to say about these matters. The party’s propaganda arms at The New York Times, the WashPo, and cable news networks worked up a frenzy of distractions and ruses this past week — for instance the “bombshell” that International-Man-of-Mystery Joseph Mifsud was not a hireling of the FBI. Of course, nobody ever claimed he was. Rather, he is suspected of being an agent of the Italian intel service with links to British intel, both used by the CIA as beards for its nefarious activities around its own election meddling of 2016.


House Speaker Nancy Pelosi’s Democratic caucus has been busy with ersatz impeachment proceedings, which are invidiously scheduled to continue next week as a smokescreen to conceal the Horowitz findings. It’s been a frantic campaign for them at a fraught moment in this long saga — but the odor of desperation is thick and rank. Of course, behind the Horowitz report loom the specters of Barr & Durham. Whatever they’ve been up to has been hermetically sealed in a globe of silence even more oppressive and nightmarish for the Dems than the IG’s inquiry. Barr & Durham are able to make things stick, most crucially genuine criminal culpability for the entire RussiaGate fiasco and all of its offshoots, including the most recent “Whistleblower” caper — a patently treasonous scheme. Who knows if and when indictments start raining down, but there’s a chance that it will be a very hard rain indeed.

Read more …

Jeff Cortese, a financial crimes manager in the private sector, is the former acting chief of the FBI’s Public Corruption Unit.

Strzok and Page Did Real Damage (Cortese)

Strzok and Page were employed by what was the world’s leading law enforcement agency. The integrity of their work and the work of their FBI peers was paramount to maintaining stability and confidence in the country and its law enforcement. It’s not news that the FBI’s reputation has taken a hit in recent years, but the extent of the impact from the imprudence of Strzok and Page is likely not fully understood by most people. Their obvious improprieties created a level of widespread distrust in the FBI not previously seen. Recruiting assets and sources, finding willing participants for interviews, and even trial success can all be adversely impacted by the decline in the FBI’s reputation.

Former colleagues have told me they recently lost otherwise strong cases because lone jurors claimed after trial they refused to convict anyone investigated by the FBI. Criminals are literally walking the streets because the FBI has lost the confidence of the American people. And that decline is directly linked to the famously poor judgment made by two senior FBI employees who knew better. This is precisely why the FBI teaches its agents never to engage in activity on FBI phones or in a public forum that reveals personal bias. The risk to the Agency is too significant. The work of all the great men and women in the FBI should not be jeopardized by the actions of one, or two, of its people.

As Americans we have a soft spot for stories of redemption. We are a country of second chances, and that is a good thing. The idea that anyone could find pleasure in someone’s downfall is abhorrent, even if they hold opposing political views. That is not to say Peter Strzok and Lisa Page did not do this to themselves. They did. They made themselves political talking points that will be used by politicians and pundits until the next election, and perhaps beyond.

Read more …

“The framers, Pelosi tells us, worried that corrupt Americans might take money from foreign powers to do their bidding. And that, class, is why we need to impeach Donald Trump. Get it? Wait a second. Trump didn’t take money from Ukraine; Hunter Biden did.”

Pelosi Puts A Brave Face On A Doomed Mission (Tucker Carlson)

Nancy Pelosi, Speaker of the House: “Let us begin where our Founders began in 1776: “When in the course of human events it becomes necessary for one people to dissolve the political bonds which have connected them with another.” With those words, our founders courageously began our Declaration of Independence, from an oppressive monarch, for among other grievances, the king’s refusal to follow rightfully passed laws. In the course of today’s events, it becomes necessary for us to address, among other grievances, the president’s failure to faithfully execute the law.” It’s just mesmerizing on many levels. But what did it mean exactly? Well, it was a metaphor. Trump is a slightly more orange version of King George III.

Democrats are the patriots plotting to overthrow him with violence. If that strikes you as alarming, Pelosi has a few words of comfort. A group of 18th-century slaveholders, she assures us, would have been completely in favor of what she’s doing. Pelosi: “James Madison, the architect of the Constitution, warned that the president might betray his trust to foreign powers, which might prove fatal to the republic. Another Founder, Gouverneur Morris, feared that a president may be bribed by a greater interest to betray his trust. He emphasized that this magistrate is not the king. The people are the king.” So, James Madison has given Nancy Pelosi his personal seal of approval. Remember that the next time Pelosi’s acolytes try to pull Madison’s statue off its pedestal for crimes against progressive orthodoxy.

For a brief moment, the Founders of our country are useful to the left, so they’re being presented as heroes. Enjoy it while it lasts. The framers, Pelosi tells us, worried that corrupt Americans might take money from foreign powers to do their bidding. And that, class, is why we need to impeach Donald Trump.Get it? Wait a second. Trump didn’t take money from Ukraine; Hunter Biden did. Trump just pointed that out. He was on James Madison side on that score, vigilantly policing bribery by a hostile foreign power. And for that, he must be removed from office.

Read more …

But not him?

Bloomberg On His Democratic Rivals: ‘Trump Would Eat ‘Em Up’ (R.)

Democratic presidential contender Michael Bloomberg said on Friday that Donald Trump would easily defeat any of his Democratic White House rivals in next year’s election, bluntly declaring: “Donald Trump would eat ‘em up.” Bloomberg, 77, a billionaire media mogul and former New York mayor, was a late entry into the race last month. He has been privately disparaging of his Democratic presidential rivals but this was the first time he had been so critical of them in public. In an interview on CBS’s “This Morning,” Bloomberg said: “I looked at our national government getting worse, the way we’re behaving overseas and domestically, led by our president.”


“I said back in 2016, ‘He is the wrong person for the job. He doesn’t have the temperament or the ethics or the intellect to do the job.’” Bloomberg added: “And I said, ‘We just can’t have another four years of this.’ And then I watched all the candidates. And I just thought to myself: ‘Donald Trump would eat ‘em up’.” Bloomberg, a former Republican and independent, fears that liberal candidates such as U.S. Senators Elizabeth Warren and Bernie Sanders, and their proposed costly expansion of government programs, will alienate voters in battleground states.

Read more …

I wouldn’t want to create the impression that Kamala due to a lack of money.

Kamala Harris, Michael Bloomberg, and a Supreme Court Decision (IC)

Democratic Sen. Kamala Harris of California suspended her presidential campaign on Tuesday. Why? Because, she said, she did not “have the financial resources we need to continue. I’m not a billionaire. I can’t fund my own campaign.” Meanwhile, former New York Mayor Michael Bloomberg, who definitely is a billionaire, has spent at least $57 million of his own money since he jumped into the race on November 24. Harris, by contrast, raised $36 million as of her last campaign filing in October. Of that, she’d spent almost $26 million since she announced her campaign last January 21. The divergence in the fates of the two candidates can be traced back to a Supreme Court decision on the constitutionality of campaign finance law.

But the case involved is not Citizens United v. Federal Election Commission, from 2010. It’s a far less famous one: Buckley v. Valeo, from 1976. The decision opened the door for billionaires — and, more generally, the ultra-rich — to spend as much as they want on their own political campaigns. The divergence in the fates of Harris and Bloomberg can be traced back to a Supreme Court decision — not from Citizens United in 2010, but Buckley v. Valeo in 1976. One of the main forces behind the case was a young Republican lawyer named John Bolton, later to become President Donald Trump’s national security adviser for a time. In Bolton’s memoir, he proudly states that “Everyone knew the decision in Buckley v. Valeo could determine … the future shape of American politics.” Bolton was right — and his long-ago efforts continue to bear fruit today.

Watergate was, among other things, a scandal about money in politics. President Richard Nixon’s 1972 reelection campaign had accepted bribes, including $200,000 from the chairman of the board of McDonald’s in return for permission from the federal government to raise the price of their Quarter Pounder cheeseburger. Soon after Nixon resigned in 1974, Congress responded with significant amendments to the Federal Election Campaign Act. This included a new limit of $50,000 per calendar year on what presidential candidates could spend of their own money on their campaign. Adjusting for inflation, that’s about $275,000 today.

Just two years later, however, the Supreme Court struck that limit down in the Buckley case. Those running for political office could now spend any amount of their own fortune they wanted. In fact, the court stated, it could be good for the wealthy to self-fund runs for office, because “the use of personal funds reduces the candidate’s dependence on outside contributions and thereby counteracts the coercive pressures and attendant risks of abuse.”

Read more …

Are we now all free to call each other whatever we want?

Musk’s Defamation Win May Reset Legal Landscape For Social Media (R.)

Elon Musk’s daring has left its mark on electric cars and rockets, and now experts say the entrepreneur may have reshaped U.S. defamation law with his willingness to defend at a high-stakes trial a lawsuit over an off-the-cuff tweet. The victory by Tesla Inc’s outspoken chief executive over a Twitter message describing a British cave explorer as “pedo guy” has raised the bar for what amounts to libel online, according to some legal experts. Musk defended his comments as trivial taunts made on a social media platform that he argued everyone views as a world of unfiltered opinion, which is protected as free speech, rather than statements of fact.

“I think this verdict reflects that there is a feeling that internet tweets and chats are more like casual conversation whether you call it opinion or rhetoric or hyperbole and should not be punished in a lawsuit,” said Chip Babcock, a lawyer who defends against defamation lawsuits. Several other attorneys who specialize in defamation cases privately expressed surprise at the outcome of what they viewed as a strong case for the cave explorer, Vernon Unsworth. They attributed it to Musk’s fame and the perceived youthfulness of the jury. But they also agreed it would shift the legal landscape, undercutting the cases that would have seemed viable before the trial while defendants would use it to try to reduce possible settlement values.

Musk’s court papers cast his comments as part of the rough-and-tumble world of Twitter, which rewards and encourages emotional outbursts and sucks in readers worldwide but that no one takes seriously. Mark Sableman, a lawyer who defends defamation cases, said the freewheeling nature of social media has inevitably changed the understanding of language and what amounts to defamatory factual statements, versus opinion. “I think defendants in modern defamation cases are likely to point to the vitriolic no-holes-barred nature of modern social media, cable TV, and political discourse, in contending that many words and accusations formerly considered defamatory are now understood only as mere opinions, not factual assertions,” he said.

Read more …

“..some $25.6 billion will be taken out of the left Saudi trouser pocket to be put into the right one.”

Saudi Arabia Retreats From The Troubles Its Clown Prince Caused (MoA)

Iran has enabled the Houthi to resist throughout the 5 years of war the Saudis waged on them. Drones and missiles parts provided by Iran to the Houthi allowed them to compel the Saudis to file for peace. It is thereby highly unlikely that the Houthi will dissociate themselves from Iran. They will agree to end their attacks on Saudi Arabia if the Saudis end their attacks on Yemen and pay for the damage their war has caused. If the Saudis do not agree to that more of their helicopters will come down in flames and more of their oil installations will be set on fire. The war on Yemen was started by clown prince Muhammad bin Salman who was then Defense Minister of Saudi Arabia.

He had hoped for a fast victory but the well equipped Saudi military proved to be incapable of defeating barefoot Houthi in the mountains of north Yemen. The war costs the Saudis several billions per month and threatened to ruin the state. Muhammad Bin Salman’s other projects did not go any better. He had planned to sell shares of Saudi Aramco at international stock exchanges and at a total valuation of 2 trillion dollar. The move was supposed to bring in $100 billion to finance a further industrialization of the Saudi economy. After many delays Saudi Aramco is now finally making its initial public offering. The shares will start trading on December 11. But the stock will only be listed at the Saudi Tadawul exchange.

The initial share price offer puts the value of the company at $1.7 trillion which is higher than the $1.5 trillion estimate international banks had published. Today the Saudis announced a large cut in their oil output to increase the global oil prices and the company’s valuation. That might attract more urgently needed buyers to the IPO. But the stocks will still be sold to mainly domestic entities, if needed with some pressure. Instead of attracting $100 billion of fresh money from abroad some $25.6 billion will be taken out of the left Saudi trouser pocket to be put into the right one. The economic benefit for the country is dubious.

Two and a half years ago the clown prince tried to attack and occupy Qatar. The given ideological reason was the Qatari support for the Muslim Brotherhood. But the real reason was the Saudi need for more money which MbS tried to gain through a real estate and resource grab. The project failed when Turkish troops came to Qatar’s aid.

Read more …

 

 

 

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Dec 062019
 


Paul Gauguin When are you getting married? 1892

 

 

It wasn’t really the plan to make this a series, but it seems to have turned into one. Part 1 is here: The Fed Detests Free Markets. Part 3 will follow soon. And yeah, I did think perhaps I should have called this one “End The Fed” Is No Longer Enough. Because that’s the idea here. But what’s in a name?

 

 

Okay, let’s talk a bit more about finance again. Though I still think this requires caution, because the meaning of the terminology used in such conversations appears to have acquired ever more diverse meanings for different groups of people. Up to the point where you must ask: are we really still talking about the same thing here?

I’ve said multiple times before that there are no more markets really, or investors, because central banks have killed off the markets. There are still “contraptions” that look like them, like the real thing, but they’re fake. You can see this every time a Fed chief opens their mouth and every single person involved in the fake markets hangs on their lips.

They do that because that Fed head actually determines what anything will be worth tomorrow, not the markets, since the Fed buys everything up, and puts interest rates down so more people can buy grossly overpriced property and assets, and allows companies to buy their own shares so nobody knows what they’re worth anymore.

The Fed today is in the business of propping up zombies. And when I say the Fed, that also means the ECB and BOJ, western central banks. I won’t get into the PBOC here, but they’re not far behind.

Recently, Christine Lagarde, the new ECB head, said the most incredible thing (at least to my ears, I guess not to hers):

We should be happier to have a job than to have our savings protected … I think that it is in this spirit that monetary policy has been decided by my predecessors and I think they made quite a beneficial choice.

Who on earth ever claimed jobs vs savings is some necessary or inevitable “choice”? Why should it be? If this were true, isn’t that a sign that something is terribly wrong? That you can have a job, but you can’t save anything? And aren’t the central banks to blame for that then?

The entire system has been built for decades around the notion that people save, either to purchase big items, or for their old age, and that people put money into their pension systems. And now central banks come along and in no time destroy what has been valid for all these years. And they never even warned about it.

Anyway, after Lagarde’s remarks, I guess the Fed’s Jay Powell felt he couldn’t be left behind and said:

US central bankers see a “sustained expansion” ahead for the country’s economy, with the full impact of recent interest rate cuts still to be felt and low unemployment boosting household spending, Federal Reserve chairman Jay Powell said on Wednesday in remarks that brushed aside any worries of a looming slowdown.

“The baseline outlook remains favorable,” and the current level of interest rates “appropriate,” Mr Powell said in remarks prepared for delivery to the joint economic committee of congress, a panel that includes some members from the House of Representatives and Senate.

His comments tracked closely to those in his news conference last month after the US central bank cut rates for the third time this year and signaled it was likely done reducing borrowing costs absent a significant change in the economic outlook. Despite “noteworthy risks” including slowing global growth and fallout from the US-China trade war, “my colleagues and I see a sustained expansion of economic activity … as most likely,” Mr Powell said in his prepared remarks for the hearing.

Former Goldman and Bear Stearns banker, and friend of the Automatic Earth, Nomi Prins, tweeted yesterday: “Tuesday, the Fed added $95 billion in liquidity to financial markets. Today, Fed’s vice chair told Congress, “The Board’s latest [review] confirms the current health of the banking system. It depicts a stable, healthy, and resilient banking sector…” The Fed’s official for supervision and regulation told Congress, “The Board’s latest Supervision and Regulation Report… describes steady improvements in safety and soundness, with a gradual decline in outstanding supervisory actions at both the largest & smallest organizations..”

“The baseline outlook remains favorable,” Powell said. That must be why they have been pulling out all the stops and invented new ones, for a decade+. Bernanke, Yellen, the lot of them, all because the baseline has remained so favorable. Why would anyone want to listen to this guy, who so obviously dabbles in complete nonsense? Well, because he’s the one giving the money away.

I think I can tell Mr. Powell what the “full impact of recent interest rate cuts” will be, what it will feel like, and it won’t be anywhere near what he pretends it will be. I must think he knows that too, or he’s an utter fool, and I don’t think he is. He’s just doing a job, while he’s worth $100 million, and that job is very different from how it’s presented to the public.

I’ll tell you about that full impact in part 3 of this Fed essay, which I left on the shelf for a long time because I thought people would declare me nuts, but which now, with increasing chatter of a next recession, maybe can be exposed to daylight. It’s about how grave the damage is that central banks have inflicted on their economies, something I never see discussed. Powell and Draghi/Lagarde and Kuroda are not just the ones giving the money away, they’re also taking it away, just not from the same people. And that latter part is much more important to societies and economies.

A third quote, just to complete the “circle”, deals with BOJ chief Kuroda; it’s from a June 2019 Reuters article entitled How Japan Turned Against Its ‘Bazooka’-Wielding Central Bank Chief:

The direction taken by the BOJ could determine whether Japan’s banking sector avoids a hard landing and whether Abe or his successor will lean on the central bank to take the most extreme step remaining: printing money for the explicit purpose of financing a national debt that is now more than twice the size of Japan’s economy. That could risk a costly downgrade by credit rating agencies for Japan, and, by extension, Japanese corporate borrowers.

The spurning of Kuroda-nomics also has political implications. It is part of a broader public dissatisfaction with what has been labeled “Abenomics” – the prime minister’s plan to reflate the economy out of prolonged stagnation through a combination of aggressive monetary easing, bold fiscal spending and fundamental structural reforms in the economy.

“Kuroda’s radical stimulus kept interest rates low, allowing politicians to delay reforms to get Japan’s fiscal house in order,” said Koichi Haji, executive research fellow at NLI Research Institute. “The foot-dragging could cost Japan dearly. The options left for the BOJ all seem extreme.”

Options left for the BOJ will be even more extreme because Japan’s Birth Rate Has Hit Its Lowest Level Since Records Began In 1899. As a Dutch comment on that report said: “by 2050 there will be one working Japanese for every child or pensioner [..] Japan adopted a law in April designed to make it easier for foreigners to work in Japan. The goal was to attract 350,000 foreign workers. 8 months later, just 400 had arrived”.

And just this week we read that Japan is preparing another $120-$230 stimulus package. Extreme has become normal in no time. Only, the ratings agencies could lower their rating for Japan, because of this. Then again, why should they do it only for Japan? Everyone’s in “extreme” territory, or as Ben Bernanke called it in 2008, “uncharted territory”. Same difference.

 

But Lagarde is right on one thing: it is “the monetary policy decided by her predecessors” that has destroyed savings -and pensions-. How on earth she can call that “beneficial” is very hard to grasp. What is the goal, what is all these central bankers’ goal? That in the end nobody has any savings or pensions anymore, and they all must go into debt or perish? That would create entire societies made up of zombies. And that’s “policy”?

It’s policy to spin a fantasy tale so people like Jay Powell can claim that “the baseline outlook remains favorable” and “sustained expansion” lies ahead for the economy, and it’s policy to pay for that fantasy with money that belongs to savers and pensioners, and that you can then hand out to a bunch of zombie “investors”. That’s policy.

The role of today’s central bankers is possible only because the public are made to think these are very smart people that have the interest of Joe Blow at heart, and because they have “unlimited resources” to make stocks and bonds and the housing market look good. But what would happen if Joe Blow knew what is going on?

The Fed is now considering “policy” that “makes up for lost inflation”. No, stop laughing, I’m serious. Their extreme policies in uncharted territory have failed so dismally, they’ve obviously not been extreme enough.

Once they’ve gone down the path of extreme stimulus (not that they call it that), there’s no way back. Because they’ve just destroyed the markets, and then they go: let’s see how the markets react to that. Well, they don’t. They’re dead. You killed them. There are parties left who love feeding off of your free money teats, but they’re not the markets or even market participants. They’re rich socialists. But they’re also the only ones the Fed cares about.

Still, a central bank that doesn’t have the population at large, at the center of its policies, is a scourge on a society and/or country. And it should be abolished. But in the case of the Fed, ECB and BOJ, it is probably already too late for that. They have done their damage. “End The Fed” is no longer enough. Societies need to develop emergency measures to counter the damage done, or face untold misery, unrest and eventually, revolution.

People don’t see this, because these central banks -temporarily- taper over the disaster they’ve wrought with their “policies”. Time for the media to step in? No, it’s too late for that too, and besides, what media? They’ve been silent all along, why would they speak up now?

More in part 3.

 

 

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Dec 062019
 
 December 6, 2019  Posted by at 10:16 am Finance Tagged with: , , , , , , , , , , , , ,  5 Responses »


Arthur Rothstein President Roosevelt tours drought area, near Bismarck, North Dakota Aug 1936

 

Mueller Report’s Resurgence Gives Democrats New Dilemma On Impeachment (CNN)
Democrats Offering Passion Over Proof In Trump Impeachment (Turley)
Pelosi Pursues Articles Of Impeachment Against Trump (R.)
Ukraine Fires Prosecutor Investigating Burisma And Hunter Biden (CDMedia)
Fed Goes Hog-Wild with T-Bills, But Repos Drop and MBS Shrink by $22 Bn (WS)
Filmmakers Sue To Shield Visitors To US From Social Media Vetting (IC)
French Strike Against Macron Reforms Enters Day Two (R.)
UK’s Labour Accuses BBC Of Bias In Election Coverage (R.)
Andrew Neil Tells Johnson “It’s Not Too Late” For Election Interview (BBC)
Leak Confirms Turkey’s “Gold-For-Gas” Scheme To Evade US Sanctions On Iran (ZH)
BPA Chemical Levels In Humans Drastically Underestimated (G.)

 

 

There’s a concerted effort to bring back Mueller into the impeachment narrative. I’m not entirely sure why the Dems would want that. A little video with the article suggests Trump would have lied to Mueller -in writing- about contacts with WikiLeaks. You know, Julian Assange, the man who can’t defend himself. The same reason why Mueller could leave him in the report. Along with the 13 Russians. Pelosi can swing from Ukraine back to RussiaRussia. She already did, actually.

So will they bring back Mueller’s bumbling testimony as well? Be careful what you wish for.

Mueller Report’s Resurgence Gives Democrats New Dilemma On Impeachment (CNN)

Democrats are debating a risky step that may immeasurably bolster their impeachment case but could multiply the political price for ramming it home. Including elements of former special counsel Robert Mueller’s Russia report suggesting President Donald Trump was guilty of obstruction would help arguments he did exactly the same in the Ukraine investigation. But reviving the controversy over the special counsel’s probe could blur the much clearer current abuse of power case and play into Trump’s claims that both Washington intrigues are all part of the same “hoax.” Such an accusation would not be based in fact, but it would surely increase the exposure of swing state Democratic House members already facing an existential vote over impeachment. [..]

Democrats provoked fresh speculation that they were moving towards admitting some Mueller evidence by scheduling a Judiciary Committee hearing for Monday with staffers from two committees: Intelligence, which investigated the Ukraine scandal, and Judiciary, which dealt with allegations of obstruction in the Mueller report. This followed comments by House Judiciary Committee Chairman Jerry Nadler, a New York Democrat, that could be taken as a hint that Democrats were examining the Mueller option. “President Trump welcomed foreign interference in the 2016 election. He demanded it for the 2020 election,” Nadler said in his committee’s opening impeachment hearing on Wednesday. “In both cases, he got caught. And in both cases, he did everything in his power to prevent the American people from learning the truth about his conduct.”

But in a situation as emotionally and politically fraught as an impeachment, confronting each action can provoke a politically damaging counter-reaction. Democrats who wanted to initiate impeachment proceedings against Trump after the release of the Mueller report failed to convince a critical mass of their own leadership that the case was sufficiently clear to the American people. That was one reason why Pelosi held out so long against rising pressure in her own caucus for an effort to oust the President, amid fears of a political backlash. In the CNN town hall, the speaker suggested that the Ukraine case was far more black and white. “It wasn’t so clear to the public,” Pelosi said, referring to Mueller’s findings.

“The Ukraine (situation) has removed all doubt, it was self-evident that the President undermined our national security, jeopardized the integrity of our election as he violated the oath of office.” The President and his supporters, perpetrating a massive disinformation campaign to create uncertainty and ambiguity about the Ukraine case, has been trying to brand it as an extension of the Mueller saga. Folding in the special counsel’s evidence could help do his work for him. For instance, in the first televised House Intelligence Committee hearing last month, the panel’s top Republican, Rep. Devin Nunes, told witnesses: “the main performance — the Russia hoax — has ended, and you’ve been cast in the low-rent Ukrainian sequel.”

Read more …

Turley of course is the one expert who disagreed with the three others.

Democrats Offering Passion Over Proof In Trump Impeachment (Turley)

The most dangerous place for an academic is often between the House and the impeachment of an American president. I knew that going into the first hearing of the House Judiciary Committee on the impeachment of Donald Trump. After all, Alexander Hamilton that impeachment would often occur in an environment of “agitated passions.” Yet I remained a tad naive in hoping that an academic discussion on the history and standards of it might offer a brief hiatus from hateful rhetoric on both sides. In my testimony Wednesday, I lamented that, as in the impeachment of President Clinton from 1998 to 1999, there is an intense “rancor and rage” and “stifling intolerance” that blinds people to opposing views.

My call for greater civility and dialogue may have been the least successful argument I made to the committee. Before I finished my testimony, my home and office were inundated with threatening messages and demands that I be fired from George Washington University for arguing that, while a case for impeachment can be made, it has not been made on this record. Some of the most heated attacks came from Democratic members of the House Judiciary Committee. [..] As I stated Wednesday, I believe the Clinton case is relevant today and my position remains the same. I do not believe a crime has been proven over the Ukraine controversy, though I said such crimes might be proven with a more thorough investigation. Instead, Democrats have argued that they do not actually have to prove the elements of crimes such as bribery and extortion to use those in drafting articles of impeachment.

In the Clinton impeachment, the crime was clearly established and widely recognized. As I said 21 years ago, a president can still be impeached for abuse of power without a crime, and that includes Trump. But that makes it more important to complete and strengthen the record of such an offense, as well as other possible offenses. I remain concerned that we are lowering impeachment standards to fit a paucity of evidence and an abundance of anger. Trump will not be our last president. What we leave in the wake of this scandal will shape our democracy for generations to come. These “agitated passions” will not be a substitute for proof in an impeachment. We currently have too much of the former and too little of the latter.

Read more …

More Mueller.

Pelosi Pursues Articles Of Impeachment Against Trump (R.)

Warning that U.S. democracy is at stake, House of Representatives Speaker Nancy Pelosi directed a congressional committee on Thursday to draft articles of impeachment against President Donald Trump, a historic step setting up a fight over whether to oust him from office. In a dramatic televised statement, Pelosi accused the Republican president of abusing his power and alluded to Britain’s King George III, the monarch against whom the American colonies rebelled in forming the United States in 1776, saying that in the United States, “the people are the king.” “Our democracy is what is at stake. The president leaves us no choice but to act because he is trying to corrupt, once again, the election for his own benefit. The president has engaged in abuse of power, undermining our national security and jeopardizing the integrity of our elections,” said Pelosi, the top Democrat in Congress.

At the heart of the Democratic-led House’s impeachment inquiry is Trump’s request that Ukraine launch an investigation targeting Joe Biden. The former vice president is a top contender for the Democratic nomination to face Trump in the 2020 presidential election. “Sadly, but with confidence and humility, with allegiance to our founders and our heart full of love for America, today I am asking our chairman to proceed with articles of impeachment,” Pelosi said. She had opened the investigation in September. She was referring to Jerrold Nadler, whose House Judiciary Committee has the responsibility of drawing up the formal charges that would later be voted on by the full House. Two people knowledgeable about the process said the panel could draft and recommend the articles of impeachment to the House as early as Dec. 12.

[..] Judiciary Democrats said the report by former Special Counsel Robert Mueller documenting Russian interference in the 2016 election could be part of testimony they hear on Monday from a committee lawyer, who is presenting evidence along with a Democratic lawyer from the House Intelligence Committee. Republican committee lawyers are also expected to testify. Including material from Mueller’s report in an article of impeachment would demonstrate a pattern of behavior involving foreign interference in U.S. elections, House Judiciary Democrat Pramila Jayapal said.

Read more …

Talk about a swamp. Giuliani is talking to Ukraine people. Not sure where that fits in.

Ukraine Fires Prosecutor Investigating Burisma And Hunter Biden (CDMedia)

Ukraine has fired the prosecutor investigating cases involving Hunter Biden and Burisma and has transferred responsibility to the Soros-controlled ‘National Anti-Corruption Bureau’ (NABU) for disposal. This is the same NABU led by Artem Sytnyk who was caught on tape bragging about helping the Clinton campaign in its effort to discredit Donald Trump during the 2016 election. Konstantin Kulik was fired from the General Prosecutor’s Office on November 22 due to corruption charges against him. Sources for CD Media describe the firing as being political in nature, as a way to ‘tidy up’ any loose ends regarding Biden and Burisma, to keep the information from the public eye during the ‘impeachment’ campaign in the United States.

They describe Victor Trepak (New Deputy General Prosecutor), Deputy Prosecutor General Vitaly Kasko, and Sytnyk as being under the control of the George Soros/Deep State infrastructure in-country. Trepak was involved in the infamous ‘black ledger’ in the Manafort affair, which is now considered to be fake. The State Bureau of Investigation may be headed by Deputy Prosecutor General Viktor Trepak it was reported by “Ukrainian Truth” with reference to sources, reported Ukrainian news outlet GordonUA.com. “Soros and the Democrats appointed their agents of influence to the General Prosecutor’s Office (Kasko and Trepak). They put Sytnyk in NABU and Kholodnitsky in SAP (Special Prosecutor) in order to destroy the evidence of corruption of the Democrats in Ukraine and to continue the process of the country’s rape with impunity. They are corruption. If they put Trepak, the author of the ‘black ledger’, as the head of the State Bureau of Investigation, then the process of covering up their crimes will be completed,” declared a confidential intelligence source in Ukraine.

In an interview with the Ukrainian news outlet Babel, Kasko discusses the development of Kulik’s firing. According to him, the National Bureau of Investigation will deal with almost all of the cases that Kulik conducted: “All the cases that Kulik was involved in are currently being inventory. In 99 percent of cases, NABU will deal with them. This is a good body to put an end to and clarify what actually happened in these matters. “

Read more …

End the Fed.

Fed Goes Hog-Wild with T-Bills, But Repos Drop and MBS Shrink by $22 Bn (WS)

The total amount of repurchase agreements (“repos”) on the Fed’s balance sheet as of December 4, released today, declined to $209 billion, from $215 billion a month ago. These repos included: • $70 billion in overnight repos, issued on Wednesday morning that unwound today; all prior overnight repos had already unwound. • $88 billion in multi-day repos with maturities of up to two weeks; • $50 billion in 42-day repos; of which $25 billion were issued on November 25 and $25 billion on December 2. They will unwind early next year. Before the repo market blew out in mid-September, the repos on the Fed’s balance sheet were zero. This chart shows the weekly balances of repos on the Fed’s balance sheet as of each Wednesday:

In these “repo operations,” the Fed buys Treasury securities, mortgage-backed securities issued by Fannie Mae and Freddie Mac, and government “Agency” securities, under an agreement whereby the counter parties have to repurchase those securities on a set date at a set (higher) price. The interest rate is determined by the difference between the price the Fed buys the securities at, and the pre-set higher price it sells the securities back to the original counter party. [..] The Fed has stated many times that it wants to get rid of its holdings of MBS. And it’s progressing with the plan. In November, the Fed shed $22 billion in MBS, exceeding the self-imposed cap of $20 billion per month for the seventh month in a row. Over the past seven months, it has shed $160 billion in MBS, or about $22.8 billion a month on average. Its holdings are now down to $1.42 trillion, below where they had first been in November 2013:

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Big Brother appears inevitable.

Filmmakers Sue To Shield Visitors To US From Social Media Vetting (IC)

A filmmaker working on a documentary that’s critical of U.S. policies. A writer who operates a pseudonymous Twitter account to evade an authoritarian regime in their home country. An activist who uses Facebook to organize protests at the U.S.-Mexico border. These are the kinds of people who might not want U.S. immigration agents poring over their social media profiles before deciding whether they should be allowed into the country. Yet that’s exactly what the State Department now requires as part of the Trump administration’s “extreme vetting” of millions of visa applicants. As of May, people who need a visa to enter the U.S. have to disclose any social media handles they’ve used over the past five years on 20 platforms, from Instagram and Twitter to YouTube and Weibo (the Chinese microblogging service).


If they don’t, their visas could be denied. Two U.S.-based documentary film organizations filed suit on Thursday in federal court in Washington, D.C. to challenge the policy, arguing that it will have a chilling effect on the filmmakers they work with. Along with the Knight First Amendment Institute at Columbia University and the Brennan Center for Justice at New York University Law School, the International Documentary Association and Doc Society are suing the State Department and the Department of Homeland Security because their international members are “concerned that their political views will be used against them during the visa process.” “They self-censor to avoid being associated with controversial ideas or sensitive topics,” the complaint states. The nonprofit groups surveyed over 100 international filmmakers and found that “a significant majority said it would chill their speech online.”

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“We’re going to protest for a week at least, and at the end of that week it’s the government that’s going to back down…”

French Strike Against Macron Reforms Enters Day Two (R.)

France faced a second day of travel chaos, shuttered schools and understaffed hospitals on Friday as unions said they would be no let-up in a strike against Emmanuel Macron’s pension reforms until the president backed down. Much of France ground to a halt on Thursday as transport workers went on strike – joined by teachers, doctors, police, firemen and civil servants – while smoke and tear gas swirled through the streets of Paris as some protests turned violent, leading to dozens of arrests. On Friday there were heavy cancellations of rush-hour trains into Paris and 10 out of 16 metro lines were closed while others ran limited services.


Traffic jams totaling more than 350 kilometers clogged the main roads in and around the capital, according to traffic app Styadin, as many commuters took to their cars. Rail workers extended their strike through Friday, while unions at the Paris bus and metro operator RATP said their walkout would continue until Monday. “We’re going to protest for a week at least, and at the end of that week it’s the government that’s going to back down,” said 50-year-old Paris transport employee Patrick Dos Santos. The strike pits Macron, a 41-year-old former investment banker who took office in 2017 on a promise to open up France’s highly regulated economy, against powerful unions who say he is set on dismantling worker protections.

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With 6 days left, what’s the use?

UK’s Labour Accuses BBC Of Bias In Election Coverage (R.)

Labour’s co-campaign coordinator Andrew Gwynne said they had recorded numerous examples where his party’s leadership had received “more negative treatment, harsher scrutiny and slanted editorial comment” than Prime Minister Boris Johnson’s Conservatives. “That bias has been reflected in the framing, content and balance of BBC reporting during the campaign,” Gwynne wrote in a letter to the BBC’s Director General Tony Hall. “If the Conservatives are allowed to ‘play’ or manipulate the BBC, and this behavior goes unchecked, then the corporation will have effectively been complicit in giving the Conservative Party an unfair electoral advantage.”

The broadcaster, which is funded by a tax on all television-watching households and regularly faces accusations of bias from across the political spectrum, is bound by strict rules to ensure impartiality. “The BBC will continue to make its own independent editorial decisions, and is committed to reporting the election campaign fairly, impartially and without fear or favor,” a BBC spokesman said. Labour, trailing the Conservatives by about 10 points in opinion polls before the Dec. 12 vote, are particularly unhappy that Johnson has not agreed to be interviewed by veteran journalist Andrew Neil, who has already subjected the other major party leaders to tough questioning.

Labour said they had agreed to the Neil interview on the understanding that Johnson had also signed up. “Instead, the BBC allowed the Conservative leader to pick and choose a platform through which he believed he could present himself more favorably and without the same degree of accountability,” Gwynne said. On Thursday, having just interviewed the head of the Brexit Party Nigel Farage on BBC TV at prime-time, Neil issued an on-air challenge to Johnson to appear before him. He also detailed a series of questions he would ask, focusing on whether Johnson could be trusted over campaign promises.

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Ready for prime time TV. If Boris is MIA, just broadcast this.

Andrew Neil Tells Johnson “It’s Not Too Late” For Election Interview (BBC)

The BBC’s Andrew Neil says he wants to quiz Boris Johnson about whether he can be trusted. The Conservative leader is – so far – the only main party leader not to submit to an election grilling on BBC One.

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Great story. Who has the movie rights?

Leak Confirms Turkey’s “Gold-For-Gas” Scheme To Evade US Sanctions On Iran (ZH)

We first started noticing major ‘odd’ exports of gold from Turkey to Iran in May 2012. Turkey’s trade balance fluctuated wildly as gold stocks flowed out of the country in bursts. “Turkey’s going to continue it,” the Turkish economy minister said. “If those casting aspersions on the gold trade are searching for immorality, they should take a look in the mirror.” Then, in 2014, we discussed Turkey’s “200 tons of secret gold” trade with Iran detailing how a complex network that spanned Turkey, China, Dubai and Iran was used to skirt US sanctions on energy exports from Iran. The operation featured an Iranian-born businessman who liked fast horses, faster cars and the fastest planes.

His unique skill: Getting gold into sanctions-encircled Iran. Enough gold that for a time he became the government’s key instrument in improving Turkey’s irksome economic imbalance. At the time, the plot revealed what one observer called, “one of the most complex illicit finance schemes [prosecutors] have seen.” In 2017, the man at the center of the scheme, Reza Zarrab, was arrested (and briefly disappeared) and was tied to Turkey’s president. “Zarrab is thought to have been close to the Erdogan family and, indeed, he was given Turkish citizenship, alongside Iranian. This is a real stress point.”

Zarrab pleaded guilty in October 2017 and turned against Mehmet Hakan Atila – a director at Turkey’s Halkbank – who was convicted on Jan. 3, 2018, and after serving a total 32 months behind bars was returned to Turkey and has since become the head of the Istanbul stock exchange. And since then “one of the biggest money-laundering schemes ever” has disappeared from the headlines… until now. Thanks to a massive leak of more than a million documents from a British offshore shell company provider, think Panama Papers 2.0, we now learn exactly how Iran’s national oil company and its subsidiaries hopscotch the globe, with the help of intermediaries, in search of tax havens that help it try to wriggle free from the grip of crippling U.S.-led sanctions.

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We’ll end humanity yet.

BPA Chemical Levels In Humans Drastically Underestimated (G.)

Humans are probably being exposed to far more of a widely used dangerous chemical – found in plastics, canned goods and receipt paper – than previously understood, according to a new study. The analysis, in the peer-reviewed scientific journal the Lancet, uses a new method for evaluating exposure to BPA, or bisphenol-A. BPA disrupts hormones critical to many body functions and is linked with obesity and other diseases. Pregnant women who are exposed to it are more likely to have children who have problems with growth, behavior and fertility, as well as a higher cancer risk. Many companies have phased out using BPAs, marketing new products with similar replacement bisphenols as safer without sufficient evidence for their claims, experts say.


The new research examined levels of BPA in urine but also counted the metabolites of BPA. Metabolites are formed when the body breaks down and eliminates a chemical. Using the new method, the scientists analyzed the urine of 29 pregnant women in their second trimester and found their BPA exposure levels to be an average of 44 times higher than what was measured with the traditional method. Patricia Hunt, a co-author of the study who is a molecular biosciences professor at Washington State University, said she was “horrified” by the high levels her group found in the pregnant women.

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Dec 052019
 
 December 5, 2019  Posted by at 9:38 am Finance Tagged with: , , , , , , , , , , ,  9 Responses »


Arthur Rothstein Interior of migratory fruit worker’s tent, Yakima, Washington Jul 1936

 

The Market Will Need The Fed Again In 2020 (Axios)
The Repo Market Is Broken And Fed Injections Are Not A Lasting Solution (MW)
Is Something Broken? Quants Running “Scared” As Nothing Makes Sense (ZH)
Legal Experts Called By Democrats Say Trump’s Actions Are Impeachable (R.)
Gaetz Grills Impeachment Witnesses Over Democratic Donations (Fox)
Judiciary Committee Member: Unfair, Politically Biased Ordeal (USAT)
The 10 Most Important Revelations From The Russia Probe FISA Report (Solomon)
Illinois’ Unfunded Pension Liability Rises To $137.3 Billion (R.)
China Set To Make History With Record Number Of Bond Defaults In 2019 (ZH)
France Braces For Biggest Strikes Of Macron’s Presidency (G.)
Uber Faces £1,500,000,000 Bill For Unpaid VAT (Metro)
Julian Assange in Videoconference: The Spanish Case Takes a Turn (IPD)

 

 

The Fed will never be able to get out. That was clear the moment they stepped in.

The Market Will Need The Fed Again In 2020 (Axios)

The No.1 risk to the stock market continuing its outperformance next year is not President Trump or consistently weak U.S. economic data or even China, senior analysts at John Hancock Investment Management say, but whether or not the Fed continues to stimulate the economy through what they call “not QE.” What it means: Fed chair Jerome Powell has insisted the central bank’s bond buying program — initiated after rates in the systemically important repo market spiked to five times their normal level in September — is not quantitative easing. But “it walks and talks” like QE, analysts say, and has injected close to $1 trillion of liquidity into the repo market and added more than $260 billion to the Fed’s balance sheet.

The intrigue: The new “not QE” program was “like a fourth rate cut this year,” John Hancock co-chief investment strategist Matthew Miskin said during a media briefing Tuesday in New York. And it has given a boost to the stock market. The big picture: “The equity market has benefited from a super aggressive Fed,” Ethan Harris, head of global economics at Bank of America Merrill Lynch, told Axios during a separate event Tuesday at BAML headquarters. “I mean the Fed basically anesthetized the markets to the trade war escalation this summer.”

Because the Fed was able to mask the economy’s pain from the market, a strong sell-off may be needed to motivate the Trump administration to secure what Harris calls a “skinny” trade deal with China and avert the Dec. 15 tariffs that will hit billions of dollars worth of consumer goods. The converse is also true, Miskin argued. “If things turn more sour because we’re not getting a trade deal or the tariffs go on Dec. 15, the stress underpinning … the market will re-emerge and the Fed’s definitely going to have to be there,” he told Axios.

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End the Fed.

The Repo Market Is Broken And Fed Injections Are Not A Lasting Solution (MW)

The Federal Reserve’s ongoing efforts to shore up the short-term “repo” lending markets have begun to rattle some market experts. The New York Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short term money markets since mid-September when a shortage of liquidity caused a spike in overnight borrowing rates. But as the Fed’s interventions have entered a third month, concerns about the market’s dependence on its daily doses of liquidity have grown. “The big picture answer is that the repo market is broken,” said James Bianco, founder of Bianco Research in Chicago, in an interview with MarketWatch. “They are essentially medicating the market into submission,” he said. “But this is not a long-term solution.”

This chart shows the more than $320 billion of total repo market support from the Fed since Sept. 17, when for the central bank began pumping in daily liquidity after overnight lending rates jumped to almost 10% from nearly 2%. Initially, the central bank rolled out roughly $75 billion in daily lending facilities to arm Wall Street’s core set of primary dealers with low-cost overnight loans to keep the roughly $1 trillion daily U.S. Treasury repo market running. The facilities allow banks to snap up loans by pledging safe-haven U.S. Treasurys or agency mortgage-backed securities with the New York Fed, but crucially without the typical risk-based pricing that lenders regularly charge when funding each other.

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“..the answer is yes: the market is broken, and you can thank central banks for that.”

Is Something Broken? Quants Running “Scared” As Nothing Makes Sense (ZH)

It was a year where the S&P put the mini bear market of December 2018 in the dust, and after a dramatic reversal which saw most central banks flip from hawkish to dovish throughout the year…

… the MSCI World index is just shy of its January 2018 highs, and the S&P has returned an impressive 24% (despite the jittery start to December), and stands at all time record highs, despite, paradoxically, a year of record equity fund outflow. On paper, this should have been a great year for investors after a dismal 2018. In reality, however, 2019 has been just as painful for not just for hedge funds, which have substantially underperformed the S&P again and in October saw a record 8 consecutive months of outflows, the most since the financial crisis…

… but especially for quants, which after a relatively solid year, suffered the September quant crash that destroyed most of their YTD gains, and have generally been unable to find their bearings in a year in which nothing seemed to work. It’s also Georg Elsaesser, a Frankfurt-based fund manager at Invesco, is trying to calm down his newbie quant clients as choppy stock moves make life difficult for anyone trading factors, which wire up all those systematic portfolios on Wall Street. “Some of them are kind of scared,” Elsaesser told Bloomberg. “They’re asking the questions: Is something going wrong? Is something broken?” Well actually, the answer is yes: the market is broken, and you can thank central banks for that.

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All three are Democrat donors who have a deep dislike of Trump. They couldn’t hide that, didn’t even try, instead went on RussiaRussia rants.

But this was supposed to be about the Constitution, not about their opinions. Turley was the only one who stuck to what was on the table.

Legal Experts Called By Democrats Say Trump’s Actions Are Impeachable (R.)

The hearing on Wednesday was the committee’s first to examine whether Trump’s actions qualify as “high crimes and misdemeanors” punishable by impeachment under the U.S. Constitution. Three law professors chosen by the Democrats made clear during the lengthy session that they believed Trump’s actions constituted impeachable offenses. “If what we’re talking about is not impeachable, then nothing is impeachable,” said University of North Carolina law professor Michael Gerhardt. But George Washington University law professor Jonathan Turley, who was invited by the Republicans, said he did not see clear evidence of illegal conduct. He said the inquiry was moving too quickly and lacked testimony from people with direct knowledge of the relevant events.

“One can oppose President Trump’s policies or actions but still conclude that the current legal case for impeachment is not just woefully inadequate, but in some respects, dangerous, as the basis for the impeachment of an American president,” said Turley, who added that he did not vote for Trump. [..] Republicans focused their questions on Turley, who largely backed up their view that Democrats had not made the case for impeachment – although he did say that leveraging U.S. military aid to investigate a political opponent “if proven, can be an impeachable offense.” Democrats sought to buttress their case by focusing their questions on the other three experts – Gerhardt, Harvard University law professor Noah Feldman and Stanford University law professor Pam Karlan – who said impeachment was justified.

Karlan drew a sharp response from Republicans for a remark about how Trump did not enjoy the unlimited power of a king. “While the president can name his son Barron, he can’t make him a baron,” she said. White House spokeswoman Stephanie Grisham on Twitter called Karlan “classless,” and first lady Melania Trump said Karlan should be “ashamed of your very angry and obviously biased public pandering” for mentioning her 13-year-old son.

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Matt Taibbi: “We laughed at this logic when George W. Bush used it to justify his Mideast wars: “We will fight them over there so we do not have to face them in the United States of America.”

Michael Tracey: “This woman was ostensibly called to testify about the legal and Constitutional questions around impeachment and instead ends up going on a bizarre Cold Warrior rant implying that Russia plans to invade the United States”

Gaetz Grills Impeachment Witnesses Over Democratic Donations (Fox)

Turning to the professors, he asked UNC-Chapel Hill Professor Michael Gerhardt to confirm that he donated to President Barack Obama. “My family did, yes,” Gerhardt responded. Shifting his attention to Harvard Law Professor Noah Feldman, Gaetz noted the educator has written several articles that portray Trump in a negative light. “Mar-a-Lago ad belongs in impeachment file,” Gaetz said, repeating the title of an April 2017 piece Feldman wrote for Bloomberg Opinion. Gaetz further pressed Feldman, asking him: “Do you believe you’re outside of the political mainstream on the question of impeachment?” Responding to Gaetz, Feldman said impeachment is warranted whenever a president abuses their power for personal gain or when they “corrupt the democratic process.”

The professor added he was an “impeachment skeptic” until the July 25 call between Trump and Ukrainian leader Volodymyr Zelensky. After the exchange, Gaetz turned to Stanford Law Professor Pamela Karlan and challenged her on reported four-figure donations to Clinton, Obama and Sen. Elizabeth Warren, D-Mass. “Why so much more for Hillary than the other two?” he added, smiling. The Florida lawmaker went on to criticize Karlan for a remark she made while answering an earlier question by Rep. Sheila Jackson Lee, D-Texas. Karlan had told Jackson Lee that there is a difference between what Trump can do as president and the powers of a medieval king. “The Constitution says there can be no titles of nobility, so while the president can name his son ‘Barron’, he can’t make him a baron.”

Gaetz fumed at the remark, saying it does not lend “credibility” to her argument. “When you invoke the president’s son’s name here, when you try to make a little joke out of referencing Barron Trump… it makes you look mean, it makes you look like you are attacking someone’s family: the minor child of the president of the United States.”

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Rep. Debbie Lesko, R-Ariz., serves on the House Judiciary Committee.

Judiciary Committee Member: Unfair, Politically Biased Ordeal (USAT)

By now we have all heard the news that President Donald Trump’s counsel will not be participating in the House Judiciary Committee’s first impeachment hearing Wednesday. As a member of the committee, I believe President Trump has made the right decision. In their obsession and rush to impeach the president by the end of the year, Democrats have rigged the process from the start. I wouldn’t blame anyone, let alone the president, for being skeptical about this unfair process. Closed door secret meetings, selectively leaked details, refusing to allow Republican witnesses, and releasing the Schiff report and witness list right before the hearing all indicate an unfair, politically biased ordeal.


With little to no information provided by Judiciary Chairman Jerry Nadler, right now it appears anything goes. The president was provided little notice and no indication of who would be the witnesses or if there would be additional hearings. This leaves more questions than answers as we head into the next phase of an already tainted process. House Democrats do not seem to grasp that they cannot legitimize such an illegitimate process halfway through. This process has been unfair for the president and the Republicans from the start, with Democrats ignoring the historical precedents outlined in the Clinton and Nixon impeachments. When it comes to Trump, Democrats have created a whole new set of rules. For them, the end justifies the means, no matter how devoid of due process and fairness those means are.

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I don’t have space for all 10, but Solomon is a must read.

The 10 Most Important Revelations From The Russia Probe FISA Report (Solomon)

Derogatory information about informant Christopher Steele The FBI stated to the court in a footnote that it was unaware of any derogatory information about the former MI6 agent it was using as “confidential human source 1” in the Russia case. This claim could face a withering analysis in the report. Congressional sources have reported to me that during a recent unclassified meeting they were told the British government flagged concerns about Steele and his reliance on “sub-sources” of intelligence as early as 2015. Bruce Ohr testified he told FBI and DOJ officials early on that he suspected Steele’s intelligence was mostly raw and needed vetting, that Steele was working with Hillary Clinton’s campaign in some capacity and appeared desperate to defeat Trump in the 2016 election.

And documents show State Department official Kathleen Kavalec alerted the FBI eight days before the first FISA warrant was obtained that Steele may have been peddling a now-debunked rumor that Trump and Vladimir Putin were secretly communicating through a Russian bank’s computer server. Most experts I talked with say each of these revelations might constitute derogatory information that should be disclosed to the court. On a related note, Horowitz just released a separate report that concluded the FBI is doing a poor job of vetting informants like Steele, suggesting there was a culture of withholding derogatory information from informants’ reliability and credibility validation reports.

News leaks as evidence One of Horowitz’s earlier investigative reports that recommended fired FBI Deputy Director Andrew McCabe for possible prosecution put an uncomfortable spotlight on the bureau’s culture of news leaks. Since then, a handful of other cases unrelated to Russia have raised additional questions about whether the FBI uses news leaks to create or cite evidence in courts. One key to watch in the Horowitz report is the analysis of whether it was appropriate for the FBI to use a Yahoo News article as validating evidence to support Steele’s dossier. We now know from testimony and court filings that Steele, his dossier and Fusion GPS founder Glenn Simpson played a role in that Yahoo News story.

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It’s not just the Fed, but they haven’t exactly helped.

Illinois’ Unfunded Pension Liability Rises To $137.3 Billion (R.)

Illinois’ growing unfunded pension liability, which increased by $3.8 billion to $137.3 billion at the end of fiscal 2019, underscores the need for state action to boost funding or cut costs, analysts said on Wednesday. The increase was fueled by actuarially insufficient state contributions and lower-than-expected investment returns, according to a new state legislative report. Illinois has the lowest credit ratings among U.S. states at a notch or two above the junk level due to its huge unfunded pension liability and chronic structural budget deficit.


Eric Kim, a Fitch Ratings analyst, said growth in the unfunded liability is expected to continue as long as contributions lag actuarial requirements and pension benefits are protected under the Illinois Constitution. “For us, what this all speaks to is the state addressing fundamental structural budget challenges,” he said. Earlier this year, Governor J.B. Pritzker created pension task forces, including one to explore asset sales to boost pension funding. Laurence Msall, president of Chicago-based government finance watchdog the Civic Federation, said the state has not effectively attacked core pension problems, including unsustainable costs. “At best Illinois is running in place, while trying to avoid sliding downhill,” he said.

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A normal market phenomenon?

China Set To Make History With Record Number Of Bond Defaults In 2019 (ZH)

While China is bracing for what may be a historic D-Day event on December 9, when the “unprecedented” default of state-owned, commodity-trading conglomerate Tewoo with $38 billion in assets may take place, it has already been a banner year for Chinese bankruptcies. According to Bloomberg data, China is set to hit another dismal milestone in 2019 when a record amount of onshore bonds are set to default, confirming that something is indeed cracking in China’s financial system and “testing the government’s ability to keep financial markets stable as the economy slows and companies struggle to cope with unprecedented levels of debt.”

After a brief lull in the third quarter, a burst of at least 15 new defaults since the start of November have sent the year’s total to 120.4 billion yuan ($17.1 billion), and set to eclipse the 121.9 billion yuan annual record in 2018. The good news is that this number still represents a tiny fraction of China’s $4.4 trillion onshore corporate bond market; the bad news is that the rapidly rising number is approaching a tipping point that could unleash a default cascade, and in the process fueling concerns of potential contagion as investors struggle to gauge which companies have Beijing’s support. As Bloomberg notes, policy makers have been walking a tightrope as they try to roll back the implicit guarantees that have long distorted Chinese debt markets, without dragging down an economy already weakened by the trade war and tepid global growth.

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The French know how to strike.

France Braces For Biggest Strikes Of Macron’s Presidency (G.)

Emmanuel Macron is braced for the biggest strikes of his presidency as French rail workers, air-traffic controllers, teachers and public sector staff take to the streets on Thursday against proposed changes to the pension system. French rail transport is expected to almost completely grind to a halt with 82% of drivers on strike and at least 90% of regional trains cancelled, amid fears that the transport disruption could continue for days. In Paris, 11 out of 16 metro lines will shut completely, with commuters scrambling to hire bikes and scooters. Many schools will close and even some police unions have even warned of “symbolic” closures of certain police stations. Shops along the route of a march in Paris have been advised to close in case of violence on the edges of the demonstration. About half of the scheduled Eurostar trains between Paris and London have been cancelled.


The standoff is a crucial test for the centrist French president, whose planned overhaul of the pensions system was a key election promise. The government argues that unifying the pensions system – and getting rid of the 42 “special” regimes for sectors ranging from rail and energy workers to lawyers and Paris Opera staff – is crucial to keep the system financially viable as the French population ages. But unions say introducing a “universal” system for all will mean millions of workers in both the public and private sectors must work beyond the legal retirement age of 62 or face a severe drop in the value of their pensions. The row cuts to the heart of Macron’s presidential project and his promise to deliver the biggest transformation of the French social model and welfare system since the postwar era.

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Does Uber have more lawyers than drivers?

Uber Faces £1,500,000,000 Bill For Unpaid VAT (Metro)

Car-sharing giant Uber is a step closer to being liable for an estimated £1.5 billion in unpaid UK tax. Campaigners have won an important legal step that could pave the way for the taxman to come knocking on the beleaguered firm’s door. The move is on top of another legal challenge to stop Uber operating in London. Uber has long-argued that it is a platform that brings drivers and riders together, rather than a transport business. This means that it falls to individual drivers to pay VAT on any rides instead of the company itself. But as the threshold for VAT is only for individuals earning more than £85,000 a year, none of the drivers need to charge it. Campaigners from the Good Law Project calculates this has cost the public £1.5 billion in lost revenue so far.


The law team initially attempted to take Uber to court to force them to disclose their tax affairs but the case looked like being too expensive. Instead, they challenged HM Revenues and Customs and demanded the taxman assess Uber for VAT liabilities. HMRC objected, saying its dealings with Uber were commercially sensitive and it should not have to disclose whether or not it is investigating. Today the Court of Appeal rejected HMRC’s arguments and Mrs Justice Lieven said HMRC now had to disclose whether or not they had made an assessment over Uber’s payment of VAT. The case for the Good Law Project is being led by anti-Brexit campaigner Jolyon Maugham QC who said: ‘The more time passes without an assessment being raised the more VAT is lost – forever.’

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Again, Assange -with his aides- is the only person who has abided by the law. All other parties involved have not. That should have a huge bearing on the case.

Julian Assange in Videoconference: The Spanish Case Takes a Turn (IPD)

The UK Central Authority has had a change of heart. On December 20, Assange is set to be transferred from his current maximum-security abode, Belmarsh, to Westminster Magistrates Court to answer questions that will be posed by De la Mata. To date, the evidence on Morales and the conduct of his organisation is bulking and burgeoning. It is said that the company refurbished the security equipment of the London Ecuadorean embassy in 2017, during which Morales installed surveillance cameras equipped with microphone facilities. While Ecuadorean embassy officials sought to reassure Assange that no recordings of his private conversations with journalists or legal officials were taking place, the opposite proved true.

An unconvinced Assange sought to counter such measures with his own methods. He spoke to guests in the women’s bathroom. He deployed a “squelch box” designed to emit sounds of disruption. These were treated as the measures of a crank rather than those of justifiable concern. The stance taken by Ecuador has not shifted, despite claims by Morales that any recordings of Assange were done at the behest of the Ecuadorean secret service. Instead, Ecuador’s President Lenín Moreno has used the unconvincing argument that Assange, not Ecuador, posed the espionage threat. “It is unfortunate that, from our territory and with the permission of authorities of the previous government, facilities have been provided within the Ecuadorean embassy in London to interfere in the processes of other states.” The embassy, he argued, had been converted into a makeshift “centre for spying.”

German broadcasters NDR and WDR have also viewed documents discussing a boastful Morales keen to praise his employees for playing “in the first league…We are now working for the dark side.” The dark side, it transpires, were those “American friends,” members of the “US Secret Service” that Morales was more than happy to feed samples to. NDR has added its name to those filing charges against UC Global for allegations that its own journalists were spied upon in visiting the Ecuadorean embassy in London.

The allegations have the potential to furnish a case Assange’s lawyers are hoping to make: that attaining a fair trial in the United States should he be extradited to face 18 charges mostly relating to espionage would be nigh impossible. The link between UC Global, the US intelligence services, and the breach of attorney-client privilege, is the sort of heady mix bound to sabotage any quaint notions of due process. The publisher is well and truly damned.

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Simon Kuestenmacher: Map shows that #lightning follows shipping lanes: As it turns out particles in ship exhaust increase the likelihood and intensity of thunderstorms. Really cool fact that I had never considered! Source: https://buff.ly/2B0tcOV

 

 

 

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Dec 012019
 


Arthur Rothstein Family leaving South Dakota drought for Oregon Jul 1936

 

Fastest-Growing Debt Category In US Not Student Loans Or Credit Cards (CNBC)
Automakers Offer Record Incentives As Trillion Dollar Auto Bubble Bursts (ZH)
The Fed’s Answer to the Ghastly Monster of its Creation (EP)
Germany Closes All Nuclear Plants, Must Bury Waste For 1 Million Years (CNN)
Spanish Judge To Question Assange Over Ecuador Embassy Spying Claims (El Pais)
‘We’re Working For The Dark Side’: Firm Accused Of Spying On Assange (RT)
Tulsi Gabbard: Wake Up And Smell Our $6.4 Trillion Wars (AC)
OPCW Manipulation Of Douma Report Requires Fresh Look At Skripal Case (MoA)
Prince Andrew Meeting With US Authorities Would Be A ‘Catch-22’ (G.)
Will The Epstein Story Ever be Fully Told? (Rice)
Scott Adams Has Some Ideas for a Calmer Internet (Wired)

 

 

Here, have some money.

Fastest-Growing Debt Category In US Not Student Loans Or Credit Cards (CNBC)

It’s the fastest-growing debt category in the country, but if you are thinking student loans or credit cards, you’re wrong. Personal loan balances now exceed $300 billion, as of the second quarter of this year, according to Experian, a whopping 11% yearly increase. For good reason, too, as personal loans can help to consolidate credit card debt, or make funds available for major projects, such as a home remodeling effort. For many of us, the allure is hard to ignore, but personal loans do differ in some key ways from other types of credit you might use, such as credit cards. It’s important to understand the key differences before signing on the dotted line.


As compared to credit cards, personal loan interest rates can vary much more dramatically, according to research by ValuePenguin. In fact, some borrowers with excellent credit may qualify for loans with interest rates as low as 5% or 6% with some lenders. On the other hand, borrowers with poor credit may encounter rates higher than the average credit card, sometimes exceeding 30%. This wide range of interest rates make personal loans more affordable for those with better credit, and may make the most sense for borrowers with excellent credit who can pay off the loan in a timely manner. On the other hand, borrowers with poor or fair credit may face interest rates higher than what they’d otherwise qualify for with a credit card.

Read more …

Can we recognize an industry that is dying? Or do we simply refuse?

Automakers Offer Record Incentives As Trillion Dollar Auto Bubble Bursts (ZH)

Early last month, we outlined how automobile sales deteriorated in late summer and prophesized how “this would set the stage for increased incentive spending by carmakers, who will be desperate to clear inventory heading into the end of the year.” It seems that we were right. Automakers are now offering the most discounts on record to entice deadbeat consumers in November, according to a new report from JD Power. The average incentive spending per vehicle is $4,538, an increase of 12% YoY. The previous high for the industry was $4,378 in 4Q17. Inventories for older model-year vehicles have soared in 2H19, forcing automakers to boost incentive spending to clear excess inventory. With the average APR to finance a vehicle around 5.3% for the month, the average transaction price remained above $34,000, down from $179 from last month but up $622 over the year.

As a result of low rates and record-high incentives, consumers spent $40.3 billion on new vehicles in November. This figure is up $2.7 billion from 2018. Thomas King, Senior Vice President of the Data and Analytics Division at JD Power, said, manufacturers will offer even greater incentives through December, and the trend could continue into early 2020. “Incentive spending typically rises by 3-4% in December, which would continue to drive overall spending to unprecedented territory,” King said. King warned: “This [incentive trend] is concerning for the health of the industry when combined with rising sub-prime sales, which are growing at the highest rate since August 2018.”

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“..the bull market in stocks is not a function of a booming economy. Rather, it’s a function of Fed madness. And its existence becomes ever more perilous with each passing day.”

The Fed’s Answer to the Ghastly Monster of its Creation (EP)

The launch angle of the U.S. stock market over the past decade has been steep and relentless. The S&P 500, after bottoming out at 666 on March 6, 2009, has rocketed up over 370 percent. New highs continue to be reached practically every day. Over this stretch, many investors have been conditioned to believe the stock market only goes up. That blindly pumping money into an S&P 500 ETF is the key to investment riches. In good time, this conditioning will be recalibrated with a rude awakening. You can count on it. In the interim, the bull market may continue a bit longer…or it may not. But, to be clear, after a 370 percent run-up, buying the S&P 500 represents a speculation on price. A gamble that the launch angle furthers its steep trajectory. Here’s why…

Over the past decade, the U.S. economy, as measured by nominal GDP, has increased about 50%. This plots a GDP launch angle that is underwhelming when compared to the S&P 500. Corporate earnings have fallen far short of share prices. Hence, the bull market in stocks is not a function of a booming economy. Rather, it’s a function of Fed madness. And its existence becomes ever more perilous with each passing day. Central planners at the Fed – like other major central banks – have taken monetary policy to a state of madness. Zero interest rate policy, negative interest rate policy, quantitative easing, operation twist, quantitative tightening, reserve management, repo market intervention, not-QE, mass-asset purchases, and more.

These schemes have fostered massive growth in public and private debt with nothing but lackluster economic growth to show. What’s more, these schemes have produced massive asset bubbles that have skyrocketed wealth inequality and inflamed countless variants of new populism. Yet the clever fellows at the Fed are blind to the fact that they’re most responsible for fabricating this monster. And now they want to rectify the ghastly deformities of their creation… Earlier this week, for example, Minneapolis Fed President Neel Kashkari remarked that: “Monetary policy can play the kind of redistributing role once thought to be the preserve of elected officials.”

How exactly Mickey Mousing with credit markets could attain this objective is unclear. But, like yield curve control (YCC), Kashkari wants to give it a go. These sorts of amorphous meddling operations is how he answers his higher calling. You see, Kashkari’s a man with crazy eyes. But he’s also a man with even crazier ideas. He’s an extreme economic interventionist – and a crackpot. Though he wears his burdens on his sleeve. If you recall, as federal bailout chief, Kashkari functioned as the highly visible hand of the market. When the sky was falling in early-2009, he awoke each morning, put on his pants one leg at a time, drank his coffee, and rapidly funneled Treasury Secretary Hank Paulson’s $700 billion of TARP funds to the government’s preferred financial institutions.

Read more …

No human being can guarantee anything for a million years. It’s a mad mad claim.

Germany Closes All Nuclear Plants, Must Bury Waste For 1 Million Years (CNN)

When it comes to the big questions plaguing the world’s scientists, they don’t get much larger than this. Where do you safely bury more than 28,000 cubic meters – roughly six Big Ben clock towers – of deadly radioactive waste for the next million years? This is the “wicked problem” facing Germany as it closes all of its nuclear power plants in the coming years, according to Professor Miranda Schreurs, part of the team searching for a storage site. Experts are now hunting for somewhere to bury almost 2,000 containers of high-level radioactive waste. The site must be beyond rock-solid, with no groundwater or earthquakes that could cause a leakage. The technological challenges – of transporting the lethal waste, finding a material to encase it, and even communicating its existence to future humans – are huge.


Germany decided to phase out all its nuclear power plants in the wake of the Fukushima disaster in 2011, amid increasing safety concerns. The seven power stations still in operation today are due to close by 2022. With their closure comes a new challenge — finding a permanent nuclear graveyard by the government’s 2031 deadline. Germany’s Ministry for Economic Affairs and Energy says it aims to find a final repository for highly radioactive waste “which offers the best possible safety and security for a period of a million years.” The country was a “blank map” of potential sites, it added.

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Took 3 months. Normally, a matter of days.

Spanish Judge To Question Assange Over Ecuador Embassy Spying Claims (El Pais)

The British justice system has finally agreed to let a Spanish judge question WikiLeaks founder Julian Assange as a witness in a case involving allegations that a Spanish security firm spied on him while he was living in the Ecuadorian embassy in London. Judge José de la Mata of Spain’s High Court, the Audiencia Nacional, will interview the cyber-activist via video link on December 20, said judicial sources. Assange will be transferred from Belmarsh prison in southeast London to Westminster Magistrates Court to answer questions from De la Mata, who is investigating alleged violations of client-attorney privilege between the cyber-activist and his lawyers, and allegations that these conversations were passed on to the CIA.


British civil servants visited Assange in prison last week, asked him whether he agreed to be questioned by De la Mata, and delivered a document listing the events under investigation by the judge, who had issued a European Investigation Order (EIO) in September requesting assistance from British authorities. It has not been easy to secure the UK’s permission to question the Australian cyber-activist. The Spanish judge sent London the EIO on September 25, requesting authorization to interview Assange as part of an investigation into Morales and his company for breach of privacy, violation of client-attorney privilege and illegal arms possession.

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Has the guy been arrested yet?

‘We’re Working For The Dark Side’: Firm Accused Of Spying On Assange (RT)

A private security firm that allegedly spied on Julian Assange in the Ecuadorian Embassy in London bragged about its nefarious activities and ties to US intelligence, according to German public broadcaster NDR. The troubling revelations are part of a criminal complaint filed by NDR against Undercover Global, a Spanish security company contracted by the Ecuadorian government to film and review guests at their embassy in London. The firm is accused of using the commission to carry out a vast spying operation targeting the WikiLeaks co-founder, who sought political asylum in the embassy for seven years before his hosts handed him over to British authorities. The German broadcaster claims to have a huge cache of documents detailing the illegal surveillance operation – which also targeted NDR journalists who visited Assange.


Former employees of Undercover Global said that the company’s CEO, David Morales, didn’t try to hide his ties to the US government. Upon returning from a trip to the United States, Morales allegedly told one of his employees: “From now on, we play in the first league… We are now working for the dark side.” He is said to have traveled up to twice a month to the States to deliver materials taken from the Ecuadorian Embassy. When asked by colleagues who his “American friends” were, Morales reportedly replied: “the US Secret Service.” Incredibly, a lawyer from Undercover Global acknowledged to NDR that the company works with US intelligence agencies – but denied any wrongdoing at the Ecuadorian Embassy.

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“..our wars have killed 801,000 directly and resulted in a multiple of that number dead indirectly..”

Tulsi Gabbard: Wake Up And Smell Our $6.4 Trillion Wars (AC)

The Democratic establishment is increasingly irritated. Representative Tulsi Gabbard, long-shot candidate for president, is attacking her own party for promoting the “deeply destructive” policy of “regime change wars.” Gabbard has even called Hillary Clinton “the queen of warmongers, embodiment of corruption, and personification of the rot that has sickened the Democratic Party.” [..] Gabbard recognizes that George W. Bush is not the only simpleton warmonger who’s plunged the nation into conflict, causing enormous harm. In the last Democratic presidential debate, she explained that the issue was “personal to me” since she’d “served in a medical unit where every single day, I saw the terribly high, human costs of war.”

Compare her perspective to that of the ivory tower warriors of Right and Left, ever ready to send others off to fight not so grand crusades. The best estimate of the costs of the post-9/11 wars comes from the Watson Institute for International and Public Affairs at Brown University. The Institute says that $6.4 trillion will be spent through 2020. They estimate that our wars have killed 801,000 directly and resulted in a multiple of that number dead indirectly. More than 335,000 civilians have died—and that’s an extremely conservative guess. Some 21 million people have been forced from their homes. Yet the terrorism risk has only grown, with the U.S. military involved in counter-terrorism in 80 nations. Obviously, without American involvement there would still be conflicts.

Some counter-terrorism activities would be necessary even if the U.S. was not constantly swatting geopolitical wasps’ nests. Nevertheless, it was Washington that started or joined these unnecessary wars (e.g., Iraq, Libya, Syria, and Yemen) and expanded necessary wars well beyond their legitimate purposes (Afghanistan). As a result, American policymakers bear responsibility for much of the carnage. The Department of Defense is responsible for close to half of the estimated expenditures. About $1.4 trillion goes to care for veterans. Homeland security and interest on security expenditures take roughly $1 trillion each. And $131 million goes to the State Department and the U.S. Agency for International Development, which have overspent on projects that have delivered little.

More than 7,000 American military personnel and nearly 8,000 American contractors have died. About 1,500 Western allied troops and 11,000 Syrians fighting ISIS have been killed. The Watson Institute figures that as many as 336,000 civilians have died, but that uses the very conservative numbers provided by the Iraq Body Count. The IBC counts 207,000 documented civilian deaths but admits that doubling the estimate would probably yield a more accurate figure. Two other respected surveys put the number of deaths in Iraq alone at nearly 700,000 and more than a million, though those figures have been contested. More than a thousand aid workers and journalists have died, as well as up to 260,000 opposition fighters. Iraq is the costliest conflict overall, with as many as 308,000 dead (or 515,000 from doubling the IBC count). Syria cost 180,000 lives, Afghanistan 157,000, Yemen 90,000, and Pakistan 66,000.

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“..a psycho agent 25 times stronger than LSD..”

OPCW Manipulation Of Douma Report Requires Fresh Look At Skripal Case (MoA)

The OPCW had send blood samples from the Skripals to the Spiez laboratory in Switzerland which found BZ, a psycho agent 25 times stronger than LSD. The OPCW hid this fact in its reports. An attack with BZ on the Skripals would be consistent with the observed symptoms that bystanders had described. The Skripals were indeed hallucinating and behaved very strangly with Sergei Skipal lifting his arms up to the sky while sitting on a bench. Exposure to BZ would also explain the Skripals’ survival. The OPCW explained the BZ find by claiming that it had mixed BZ into the probe to test the laboratory. Something which it said it regularly does. At that time I still believed in the OPCW and found that explanation reasonable:

“The OPCW responded to Russian question about the BZ and high rate of A-234 in the Spiez Laboratory probe and report. OPCW said today that it was a control probe to test the laboratory. Such probes are regularly slipped under the real probes to make sure that the laboratories the OPCW uses are able to do their job and do not manipulate their results. That explanation is reasonable. I guess we can close the BZ theories and go back to food poisoning as the most likely cause of the Skripals’ illness.” In light of the OPCW management manipulation or suppression of the reports of its own specialists for the purpose of attributing the Douma incident to the Syrian government I have to change my opinion. I hereby retract my earlier acceptance of the OPCW’s explanation in the Skripal case.

As we now know that the OPCW management manipulates reports at will we can no longer accept the ‘control probe’ excuse without further explanations or evidence. Here is what seems to have happened. The OPCW did not send a control sample to Spiez to test the laboratory. It sent the original samples from the Skripals. Spiez found BZ and reported that back to the OPCW. The OPCW suppressed the Spiez results in its own reports. Somehow Russia got wind of the Spiez results and exposed the manipulation. Acceptance that the Skripals had been ‘buzzed’, not ‘novi-shocked’ is central to the Skripal case. It makes the whole Skripal case as a British operation to prevent the repatriation of Sergei Skripal to Russia much more plausible.

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They can’t even serve him with a subpoena because his staff would shield him. Time for the Queen to do the right thing. Or abdicate.

Prince Andrew Meeting With US Authorities Would Be A ‘Catch-22’ (G.)

Prince Andrew is not charged with wrongdoing but with the BBC airing an interview with Giuffre on 2 December the controversy is only likely to ramp up. [..] If Prince Andrew were lawfully served with a subpoena – be it for a grand jury, or a trial or deposition – generally speaking, he will need to comply. However, it is far more difficult to serve him outside the US. “Due to the heightened measures of security that surround the royal family, it certainly is far more difficult to walk up to a member of the royal family and serve them a subpoena as you would a private citizen,” Weinstein said. While there are rules about how to serve subpoenas on a foreign national on US soil, such as surprising them at points of entry, diplomatic immunity and his being a high-profile royal could further complicate the issue.

Rebecca Roiphe, a New York Law School professor and former assistant district attorney in Manhattan, said there could be legal risks in Prince Andrew cooperating depending on his potential involvement with Epstein’s activities. “If he was peripherally involved in that, if he has information about others, I would say absolutely any attorney would take him in to cooperate,” Roiphe said. “The problem is, if he faces serious exposure and he’s a target of that information, most attorneys would not have him explain everything he knows – it really depends.” Mary Ellen O’Toole, who was formerly an FBI profiler deeply involved in finding the Unabomber killer, said that if Prince Andrew could provide information that would further the investigation and clear him at the same time, it “probably would be very helpful to him” to come forward.

O’Toole said the utility in cooperating with authorities largely depends on how he would handle the situation and that the pitfalls of such an interview were real as being untruthful with authorities can flout laws against making false statements, leading to further legal problems stemming from the interviews themselves. “I think it would be considered an adversarial situation – I don’t know how prepared he would be,” said O’Toole, who now directs the forensic science department at George Mason University in Virginia. “Sometimes people come in and say things that get them jammed up. “It is a catch-22 situation for him,” O’Toole said.

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Hell no.

Will The Epstein Story Ever be Fully Told? (Rice)

Every person named in court documents or press reports as allegedly or possibly having sex with an underaged girl or young woman at Epstein’s bequest has denied the allegations. Which begs the question: Who’s telling the truth and who’s lying? To form an opinion on this central question, authorities would presumably need to interview anyone with possible knowledge of alleged sexual or criminal acts. Investigators could then seek information that either corroborates or impeaches each person’s account. However, evidence is growing that the protocol in a typical “he-said, she-said” investigation is not being followed in the Epstein case. Instead, authorities may have simply accepted as truth the statements of denial issued by powerful public figures.

True or not, many Americans believe the Department of “Justice” will not prosecute (perhaps even question) scores of individuals who may have broken U.S. laws and who may have been victims of a disturbing blackmail operation. Perhaps authorities have concluded it’s better to not know. Perhaps they realize if they interview one suspected “John,” they’ll have to interview every potential “John.” if this number ends up being massive, and includes a Who’s Who of our society, important illusions about society’s leaders and our system of justice could be shattered. At its core, the Epstein case will reveal whether government prosecutors and investigators possess the courage and integrity to expose sordid truths about some of the wealthiest, most-connected, powerful people in the world, and perhaps reveal embarrassing truths about our government.

Americans might soon learn what objective is more important to Justice Department officials: Protecting the rich and powerful from the consequences of their behavior, or confirming that a system of justice grounded in trust can still be trusted. Sadly, many Americans are convinced authorities will not do the right thing. However, in proving skeptics wrong, authorities would accomplish at least four objectives, all noble. They would punish the guilty. They would provide justice to victims too long ignored. They would deter future Epsteins and future “Johns,” especially those unaccustomed to being held accountable for their actions. And, perhaps most importantly, they would allow a ray of sunshine to pierce the shadow of cynicism that’s spread across our country.

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“..the “48-hour rule,” states that everyone should be given a grace period of a couple of days to retract any controversial statement they’ve made..”

“..the “20-year rule,” which states that everyone should be automatically forgiven for any mistakes they made more than two decades ago—with the exception of certain serious crimes..”

Scott Adams Has Some Ideas for a Calmer Internet (Wired)

After expressing support for Donald Trump in 2016, Dilbert creator Scott Adams estimates that he lost about 30 percent of his income and 75 percent of his friends. He says that that level of political polarization has created a climate of genuine fear. “People will come up, and they’ll usually whisper—or they’ll lower their voice, because they don’t want to be heard—and they’ll say, ‘I really like what you’re doing on your Periscope, and the stuff you’re saying about Trump,’” Adams says in Episode 389 of the Geek’s Guide to the Galaxy podcast. “They’re actually afraid to say it out loud. They literally whisper it to me in public places.” Adams blames the current climate on social media and a clickbait business model that rewards sensationalism over fact-based reporting.

Since the technology is here to stay, he says we’re going to need new societal norms to help foster a calmer, more constructive political discourse. “When society changes, every now and then you need a new rule of manners,” he says. “So for example, when cell phones were invented, you needed a new set of rules about where can you use them and can you do it in a restaurant, etc. And social media has gotten so hot, I thought maybe we need a few new rules.” He lays out two such rules in his new book, Loserthink. His first proposal, which he calls the “48-hour rule,” states that everyone should be given a grace period of a couple of days to retract any controversial statement they’ve made, no questions asked. “We live in a better world if we accept people’s clarifications and we accept their apologies, no matter whether we think—internally—it’s insincere,” he says.

His other idea is the “20-year rule,” which states that everyone should be automatically forgiven for any mistakes they made more than two decades ago—with the exception of certain serious crimes. It used to be the case that people’s thoughtless remarks and embarrassing gaffes would naturally fade into obscurity, but social media has created a situation where it’s easy to endlessly dredge up a person’s worst moments. “We’re not the same people that we were 20 years ago,” Adams says. “We’ve learned a bunch, our context has changed. If you’re doing all the right stuff, you’re getting smarter and kinder and wiser as you’re getting older. So being blamed for something you did 20 years ago is effectively being blamed for something a stranger did, because you’re just not that person anymore.”

Read more …

 

 

 

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Nov 292019
 


Paul Gauguin Tahitians at rest (unfinished) 1891

 

To be completely honest, I wrote -most of- the second part of this a while ago, and then I was thinking this first part should be part of the second, if you can still follow me. But it doesn’t really, it’s fine. I wanted to write something to address how little people know and acknowledge about how disastrous central bank policies have been for our societies and economies.

Because they don’t, and they have no clue, largely and simply because of the way central banks are presented both by themselves and by the financial press that covers them. Make that “covers”. Still, going forward, we will have no way to ignore the damage done. All the QE and ZIRP and NIRP will turn out to be so destructive for us all they will rival climate change or actual warfare. That’s what I wanted to talk about.

 

You see, free markets are a great idea in theory. Or you can call it “capitalism”, or combine the two and say “free market capitalism”. There’s very little wrong with it in theory. You have an enormous multitude of participants in an utterly complex web of transitions, too complex for the human mind to comprehend, and in the end that web figures out what values all sorts of things, and actions etc., have.

I don’t think capitalism in itself is a bad thing; what people don’t like is when it veers into neo-liberalism, when everything is for sale, when communities or their governments no longer own anything, when roads and hospitals and public services and everything that holds people together in a given setting is being sold off to the highest bidder. There are many things that have values other than monetary ones, and neo-liberalism denies that. Capitalism in itself, not so much.

It’s like nature, really, like evolution, but it’s Darwin AND empathy, individuals AND groups. The problem is, and this is where it diverges from nature, you have to make sure the markets remain free, that certain participants -or groups thereof- don’t bend the rules in their own favor. In that sense it’s very similar to what the human race has been doing to nature for a long time, and increasingly so.

 

Now, if you limit the discussion to finance and economics, there would appear to be one institution that’s in an ideal place to make sure that this “rule-bending” doesn’t take place, that markets are fair and free, or as free as can be. That institution is a central bank. But whaddaya know, central banks do the exact opposite: they are the ones making sure markets are not free.

In the ideal picture, free markets are -or would be- self-correcting, and have an inbuilt self-regulating mechanism. If and when prices go up too much, the system will make sure they go lower, and vice versa. It’s what we know from physics and biology as a negative -self correcting- feedback loop. The self-correcting mechanism only activates if the system has veered too much in one direction, but we fail to see that as good thing when applied to both directions, too high and too low (yes, Goldilocks, exactly).

It’s only when people start tweaking and interfering with the system, that it fails. Negative feedback vs positive feedback are misunderstood terms simply because of their connotation. After all, who wants anything negative? But this is important in the free markets topic, because as soon as a central bank starts interfering in, name an example, housing prices in a country, the system automatically switches from negative feedback to positive -runaway- feedback, there is no middle ground and there is no way out anymore, other than a major crash or even collapse.

 

Well, we’re well on our way to one of those. Because the Fed refused to let the free market system work. They, and the banks they represent, wanted the way up but then refused the way down. And now we’re stuck in a mindless positive feedback loop (new highs in stocks on a daily basis), and there’s nothing Jay Powell and his minions can do anymore to correct it.

The system has its own correction mechanism, but Greenspan, Bernanke, Yellen and now Powell thought they could do better. Or maybe they didn’t and they just wanted their banker friends to haul in all the loot, it doesn’t even matter anymore. They’ve guaranteed that there are no free markets, because they murdered self-correction.

Same goes, again, for ECB and BOJ; they’re just Fed followers (only often even crazier). In fact since they have no petrodollar, they don’t just follow, they have to do the Fed one better. Which is why they have negative interest rates -and the US does not -yet-: it’s the only way to compete with the reserve currency. Of course today even the Fed, and “even even” the PBOC, are discussing moving to negative rates, and by now we’re truly talking lemmings on top of a cliff.

“Let’s throw $10 trillion at the wall just so home prices or stock prices don’t go down!” Yeah, but if they’ve been rising a lot, maybe that’s the only direction they can and should go. It may not be nice for banks and so-called “investors”, but it’s the only way to keep the system healthy. If you don’t allow for the negative feedback self-correction, you can only create much bigger problems than you already have. And then you will get negative feedback squared and cubed.

 

Unless, of course, you have stellar economic growth, and you find unparalleled amounts of oil, and you have a growing population with way more kids born than people dying. But in case you don’t, you’re merely making an initially relatively minor problem much much worse with QE and ZIRP.

What central banks have been doing is they’ve utterly destroyed savings and pensions, i.e. the only thing “ordinary” people had to stave off their own personal collapse and that of their communities. ZIRP and NIRP move all those savings and pensions towards the bankers. And yes, pension funds may have moved into equities from bonds, and they may look good momentarily, but the current parade of new highs in stock markets only exists because of central banks’ QE and ZIRP.

There are tons of zombie enterprises in the world, many of whom have been kept alive by central bank policies, but wait till it becomes evident that the pension funds and systems themselves have turned into zombies. That’ll wake you up. Because who’s going take care of grandma, or her daughter, in a few years’ time? One thing’s for sure, it won’t be Jay Powell.

 

This has gotten so long already I’ll leave the part 2 I mentioned above to be its own, separate, part 2. Soon.

 

 

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